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770 F.2d 177
Shortv.Department of Interior
84-624
United States Court of Appeals,Federal Circuit.
4/15/85
MSPB
Affirmed
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62 F.3d 789
Ricky RIMMER-BEY, Plaintiff-Appellant,v.Robert BROWN; Kenneth McGinnis; Daniel Bolden; RaymondPalmer; Bruce Wood; Z. Tyszkiewicz; John Hawley; RobertWood; and Kenneth Epps, in their individual and officialcapacities, Defendants-Appellees.
No. 93-2082.
United States Court of Appeals,Sixth Circuit.
Argued March 10, 1995.Decided Aug. 9, 1995.
Daniel E. Manville (argued and briefed), Ann Arbor, MI, for Ricky Rimmer-Bey.
Thomas A. Kulick, Asst. Atty. Gen. (argued and briefed), Office of Atty. Gen., Corrections Div., Lansing, MI, for Robert Brown, Jr., Daniel Bolden, Dennis Dyke, Z. Tyszkiewicz, John W. Hawley, Kenneth Epps, Bruce Wood and Raymond Palmer.
Before: KRUPANSKY, NELSON, and DAUGHTREY, Circuit Judges.
KRUPANSKY, Circuit Judge.
1
Plaintiff, a prisoner in the Michigan state prison system, brought suit under 42 U.S.C. Sec. 1983 against various officials within the Michigan Department of Corrections ("MDOC"), alleging that they violated his procedural due process rights by placing him in administrative segregation without a formal reclassification hearing and violated his substantive due process rights by failing to grant him meaningful reviews of his classification status thereafter. After a trial before a magistrate judge, a judgment was returned in favor of all defendants. The plaintiff filed a motion to amend or reconsider the decision, which the trial court denied. The plaintiff filed a timely notice of appeal.
2
The events giving rise to plaintiff's complaint are as follows. On October 15, 1987, Bey was an inmate in the general prison population at the Jackson state prison, serving four concurrent life sentences for murder and armed robbery. On that day, Correctional Officer Robert Wright was stabbed twice in the base of the neck by two hooded inmates. State law enforcement officials conducted a criminal investigation, and MDOC officials conducted an internal prison investigation of the incident. A prisoner informant identified plaintiff as one of the parties who was involved in the planning and commission of the assault. Pursuant to prison regulations, Bey was charged with a major prison misconduct, conspiracy to commit assault and battery.1
3
Bey received a hearing before prison officials on his major misconduct charge and was found guilty of conspiracy to commit assault and battery. He was sentenced to 30 days punitive detention, which was the maximum period of punitive detention allowed under Michigan regulations. Mich.Admin.Code r. 791.5505(1). Bey served the punitive detention from November 2 to December 2, 1987, and thereafter was placed into administrative segregation. Bey charged that Michigan Prison Regulations required that, after the 30 days of punitive detention, he should have been returned to the general prison population or granted a hearing on his reclassification to administrative segregation.2 Bey asserted that the mandatory language of the regulations created a liberty interest and that he was entitled to notice and a hearing as a condition precedent to his being placed into administrative segregation. Consequently, he commenced this action asserting that the failure to grant him a reclassification hearing violated his state-created liberty interest.
4
Bey's arguments are without merit for two reasons. First, Bey relies solely upon the mandatory language of Michigan prison regulations concerning placement into administrative segregation to support his claim of a liberty interest. However, the Supreme Court in Sandin v. Conner, --- U.S. ----, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995), instructed that a state regulatory scheme does not create a liberty interest merely because the regulations incorporate "language of an unmistakably mandatory character." Id. at ----, 115 S.Ct. at 2298. Apart from any mandatory language in a regulation, the plaintiff must also prove that he suffered restraint which imposed an "atypical and significant hardship on the inmate in relation to the ordinary incidents of prison life." Id. at ---- - ----, 115 S.Ct. at 2295. The plaintiff's placement in administrative segregation was not an atypical and significant hardship, as intended by Sandin, within the context of his life sentence.3
5
Furthermore, even if plaintiff had possessed a state-created liberty interest, he received the procedural protections required by the Due Process Clause. The procedure to classify a prisoner into administrative segregation under Michigan prison regulations requires notice of the intended reclassification and, in most cases, a hearing. Mich.Admin.Code r. 791.4405(2). However, a reclassification hearing is not required if the prisoner has already been found guilty of a major misconduct violation as the result of a hearing on that charge. Mich.Admin.Code r. 791.4405(4). Thus, the Michigan regulations provide that a second hearing, addressing a prisoner's reclassification, is not required if the prisoner has received a proper major misconduct hearing and if the subsequent reclassification was anchored in the findings of guilt that resulted from the previously conducted major misconduct hearing. Id. In this case, the plaintiff had been granted a full evidentiary hearing on the major misconduct charge against him, and the administrative segregation was based solely on that conduct. Consequently, affording the plaintiff notice and a hearing on the intended reclassification was unnecessary.4
6
Accordingly, the decision of the district court is AFFIRMED in all respects.
1
Bey was also charged as an accomplice to assault and battery, but prison officials dismissed that charge as duplicative
2
Unlike detention, which is imposed as a form of punishment, administrative segregation is used as a method to physically separate from the general population those prisoners who for certain reasons cannot be placed in the general prison population. Under Michigan regulations, segregation may only be imposed for the following reasons:
(a) the prisoner demonstrates an inability to be managed with general population privileges;
(b) the prisoner needs protection from other prisoners;
(c) the prisoner is a serious threat to the physical safety of staff or other prisoners or to the good order of the facility;
(d) the prisoner is an escape risk; or
(e) the prisoner is under investigation by outside authorities for suspected felonious behavior.
Mich.Admin.Code r. 791.4405(1).
3
In Sandin, the Supreme Court concluded that confinement in disciplinary segregation for 23 hours and 10 minutes per day "did not present the type of atypical, significant deprivation in which a state might conceivably create a liberty interest." Sandin, --- U.S. at ----, 115 S.Ct. at 2295
4
Plaintiff also asserted violations of his substantive due process rights. A plaintiff asserting a substantive due process claim faces a virtually insurmountable uphill struggle. He must show that the government conduct in question was so reprehensible as to "shock the conscience" of the court. Rochin v. California, 342 U.S. 165, 72 S.Ct. 205, 96 L.Ed. 183 (1952); Mertik v. Blalock, 983 F.2d 1353, 1367-68 (6th Cir.1993). A review of the record in this case reveals that it contains no evidence supporting such a charge
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929 A.2d 256 (2007)
SMITH
v.
BOYNES.
No. 1585 MDA 2006.
Superior Court of Pennsylvania.
May 23, 2007.
Affirmed.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 02-6585
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
TIMOTHY WAYNE COATS,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. James C. Fox, Senior
District Judge. (CR-00-60-FO, CA-02-67-5-F)
Submitted: June 25, 2002 Decided: July 8, 2002
Before WIDENER and KING, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Timothy Wayne Coats, Appellant Pro Se. Peter W. Kellen, OFFICE OF
THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Timothy Wayne Coats seeks to appeal the district court’s order
denying his motion filed under 28 U.S.C.A. § 2255 (West Supp.
2001). We have reviewed the record and the district court’s opinion
and find no reversible error. Accordingly, we deny a certificate
of appealability and dismiss the appeal substantially on the
reasoning of the district court.* United States v. Coats, Nos. CR-
00-60-FO; CA-02-67-5-F (E.D.N.C. Mar. 21, 2002). We dispense with
oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.
DISMISSED
*
We recently held in United States v. Sanders, 247 F.3d 139
(4th Cir. 2001), that the new rule announced in Apprendi v. New
Jersey, 530 U.S. 466 (2000), is not retroactively applicable to
cases on collateral review. Accordingly, Appellant’s Apprendi
claim is not cognizable.
2
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544 U.S. 1045
SHAFERv.OHIO.
No. 04-8186.
Supreme Court of United States.
May 16, 2005.
1
Petition for rehearing denied.
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967 F.2d 106
UNITED STATES of America, Plaintiff-Appellee,v.Larry URBANI, Defendant-Appellant.
No. 91-3696
Summary Calendar.
United States Court of Appeals,Fifth Circuit.
July 13, 1992.
Martin E. Regan, Jr. and Mark E. Hanna, Regan & Associates, New Orleans, La., for Larry Urbani.
Peter G. Strasser, Fred P. Harper, Jr., Asst. U.S. Attys. and Harry Rosenberg, U.S. Atty., New Orleans, La., for the U.S.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before GARWOOD, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.
GARWOOD, Circuit Judge:
1
Defendant-appellant Larry Urbani (Urbani) pleaded guilty to conspiracy to commit fraud and was sentenced following that plea to a term of imprisonment within the guidelines range. He brings this appeal challenging the government's refusal to move for a downward departure from the guidelines under U.S.S.G. § 5K1.1 and the district court's refusal to hold an evidentiary hearing to examine the extent of his assistance to the government. We affirm.
Facts and Proceedings Below
2
On October 18, 1990, Urbani and three others were named in a forty-one-count indictment concerning a fraudulent scheme of leasing vending and amusement machines, engaged in by several related companies of which Urbani was an employee. Urbani was named in twenty-seven counts, charging him with conspiring to commit mail and wire fraud and with the substantive fraud offenses, in violation of 18 U.S.C. §§ 371, 1341, and 1343. After the indictment was handed down, he entered into a plea agreement with the government. Under it, Urbani agreed to plead guilty to Count One of the indictment, the conspiracy count, to submit to debriefing whenever requested by law enforcement authorities, and to testify fully and truthfully before a grand jury or at any trial. In exchange, the government agreed not to pursue the remaining counts of the indictment (or other offenses--except crimes of violence, if any--related to the subject matter of the investigation leading to the indictment), and to "bring to the attention of the Court any cooperation rendered to law enforcement authorities by the defendant."1 The plea agreement expressly and unequivocally disclaimed, however, any obligation by the government to file a motion authorizing the district court to depart downward from the guidelines under U.S.S.G. § 5K1.1 for the defendant's substantial assistance to the authorities.2 Urbani entered a guilty plea pursuant to this agreement on April 11, 1991.
3
Between November 1990 and June 1991, Urbani attended seven debriefing sessions with the government. Prior to his scheduled sentencing on June 26, 1991, Urbani was informed by the Assistant United States Attorney that a motion from the government for a section 5K1.1 departure would not be forthcoming. Sentencing was continued at Urbani's request to permit him to try to resolve this disagreement with the government.
4
The presentence report (PSR) calculated a guidelines imprisonment range of twenty-four to thirty months and noted that "[n]o information has been developed which would indicate an upward or downward departure from the guidelines." Urbani did not challenge the calculation of the guideline range, but did object to the PSR on the ground that he was entitled to a section 5K1.1 departure. As described in the probation officer's addendum to the PSR, Urbani's objection was that "failure to grant a Section 5K1.1 in this circumstance is arbitrary on the part of the Government and violative of his due process rights."
5
The prosecutor did not change his mind about the 5K1.1 motion during the four-week continuance. However, on July 23 he did send a letter to the district court describing Urbani's cooperation. The letter noted that since the plea bargain Urbani had attended seven meetings with the investigating agents, and in the opinion of those agents had been truthful in responding to questions. However, the letter also stated that the information provided by Urbani had largely been known to the government already through Urbani's co-defendants and through various potential defendants, who had cooperated in the case before Urbani offered to assist the government, and through the investigative efforts of the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and Federal Trade Commission. The letter noted that although Urbani's cooperation further verified certain facts that the government was relying on in its prosecutions, it came only after he had initially turned down an offer to cooperate in the early stages of the investigation and the government had already sufficiently prepared its case to return an indictment. For those reasons, the letter indicated, the government would not move for a departure under section 5K1.1, but would also not object to the court's imposing a sentence at the lower end of the guideline range.
6
At the sentencing hearing on July 24, 1991, Urbani, through counsel, reiterated his contention that he was entitled to a downward departure. Counsel stated that
7
"while we agree at this point with the guidelines as suggested in the pre-sentence report, we thank the Government for the letter indicating that they recommend a lower end of the guidelines in this case, we believe, Your Honor, that there is evidence to present to the Court that indicates that our client is entitled to a downward departure under the 5K1.1.... The United States Government and defense disagree from a factual standpoint whether our client is entitled to that."
8
He requested an evidentiary hearing on this matter and permission to subpoena the FBI and IRS agents to whom he had provided information. The district court accepted Urbani's contention that it had authority, even in the absence of a 5K1.1 motion from the government, to examine whether he was entitled to such a departure, but noted that whether or not to hold a hearing remained a discretionary matter for the district court. The court declined to follow the course suggested by Urbani, choosing instead to rely on the PSR, on the government's letter of July 23, and on any information Urbani wished to provide orally at the sentencing hearing. Through his counsel Urbani informed the court that he had attended meetings totaling twenty to thirty hours, and that the information he had provided had enabled the government to recover valuable assets and had aided its ongoing investigations into other crimes. The government simply replied that its position was adequately outlined in the July 23 letter. The district court imposed a sentence of twenty-five months' imprisonment.
9
In a motion for reconsideration dated August 2, 1991, Urbani again asked the district court to exercise its discretion to hold a hearing on his entitlement to a section 5K1.1 reduction, or "[a]lternatively" to conduct such a hearing "to determine whether the government has not acted in an arbitrary and capricious manner."3 This motion was denied as moot.
10
Urbani brings this appeal challenging the government's refusal to move for a departure under section 5K1.1 and the district court's denial of an evidentiary hearing.
Discussion
11
U.S.S.G. § 5K1.1 (policy statement) provides that "[u]pon motion of the government stating that the defendant has provided substantial assistance in the investigation or prosecution of another person who has committed an offense, the court may depart from the guidelines." In considering the constraints, if any, on the government's decision whether or not to file a motion under this section, we must begin with the Supreme Court's recent decision in Wade v. United States, --- U.S. ----, 112 S.Ct. 1840, 118 L.Ed.2d 524 (1992). In Wade, the Supreme Court considered district courts' authority to review a prosecutor's refusal to file a motion under 18 U.S.C. § 3553(e), which authorizes a district court, upon motion of the government, to impose a sentence less than a statutory minimum in recognition of the defendant's substantial assistance to the government. Although the present case does not involve a statutory minimum sentence and thus implicates only section 5K1.1 and not section 3553(e),4 the Supreme Court in Wade indicated that the principles it announced were applicable to both sections.5
12
Like Urbani, Wade argued based solely on the extent of his assistance to the government that the government's refusal to move for a downward departure was arbitrary and hence violative of his constitutional rights. The Court first observed that the guideline provision and the statute condition a court's authority to depart on a motion from the government, but that this arrangement itself does not limit the government's discretion to decide whether to make such a motion in a particular case. See Wade, --- U.S. at ----, 112 S.Ct. at 1843 ("[I]n both § 3553(e) and § 5K1.1 the condition limiting the court's authority gives the Government a power, not a duty, to file a motion when a defendant has substantially assisted."). Rather, the Court noted, this decision by the government is reviewable only on the same basis as other discretionary decisions by a prosecutor: district courts may grant relief "if they find that the refusal was based on an unconstitutional motive" such as the defendant's race or religion. Id. The Court made plain, though, that absent a substantial threshold showing of such a constitutionally improper motive, district courts lack authority to scrutinize the level of the defendant's cooperation and interpose their own assessment of its value. Moreover, this limited scope of review forecloses even the need for an evidentiary hearing solely to document the defendant's assistance: "It follows that a claim that a defendant merely provided substantial assistance will not entitle a defendant to a remedy or even to discovery or an evidentiary hearing." Id.6
13
Urbani's contentions cannot survive the framework established by the Supreme Court in Wade. He has not at any point alleged an illicit motivation underlying the government's refusal to request a 5K1.1 departure. The entirety of his argument, both to this Court and to the district court, has been that given his level of cooperation with the government, withholding a 5K1.1 motion was arbitrary and without justification. Thus, it is exactly the type of claim--i.e., "a claim that a defendant merely provided substantial assistance"--that Wade indicates is unavailing and does not warrant an evidentiary hearing.
14
The standard applicable to other discretionary prosecutorial decisions, with which the Wade Court equated the decision to file a 5K1.1 motion, see supra, confirms this view. Decisions regarding whom to prosecute are committed to the government's discretion unless " 'deliberately based upon an unjustifiable standard such as race, religion, or other arbitrary classification,' including the exercise of protected statutory and constitutional rights." Wayte v. United States, 470 U.S. 598, 105 S.Ct. 1524, 1531, 84 L.Ed.2d 547 (1985) (citations omitted) (quoting Bordenkircher v. Hayes, 434 U.S. 357, 98 S.Ct. 663, 668, 54 L.Ed.2d 604 (1978)) (cited at Wade, --- U.S. at ----, 112 S.Ct. at 1843). Likewise, the prosecutor's discretion in selecting the criminal statute under which to prosecute is subject only to the limitation that the decision not involve deliberate discrimination against a class of defendants. United States v. Batchelder, 442 U.S. 114, 99 S.Ct. 2198, 2204, 60 L.Ed.2d 755 (1979); Bordenkircher v. Hayes, 434 U.S. 357, 98 S.Ct. 663, 668-69, 54 L.Ed.2d 604 (1978).
15
Under the principle expressed in these cases, although a defendant might conceivably state grounds for relief by alleging that refusal to move for a departure under section 5K1.1 was "arbitrary" because it was based on his membership in an identified group, or on some specified characteristic, that the government has no possibly legitimate grounds for treating in a discriminatory manner, Urbani's unadorned allegation of general arbitrariness must fail. It contains no suggestion that the government's decision was based on such a constitutionally suspect reason. Absent any such suggestion, it is difficult to see how his claim indicates anything more than his disagreement with the government's decision and an invitation to the district court to similarly disagree, which is exactly the type of judicial oversight that Wade, through its adoption of the Wayte standard, forbids as overly intrusive on the prosecution's broad discretion.
16
We understand the Supreme Court to have been reiterating this basic distinction in stating that "Wade would be entitled to relief if the prosecutor's refusal to move was not rationally related to any legitimate Government end." Wade, --- U.S. at ----, 112 S.Ct. at 1844 (citing Chapman v. United States, --- U.S. ----, 111 S.Ct. 1919, 114 L.Ed.2d 524 (1991)). Any inclination to give this statement broader meaning, so as to encompass Urbani's claim, is foreclosed not only by the preceding discussion in the Supreme Court's opinion but by the facts of the Wade case. In response to Wade's argument, which was evidently identical in substance to Urbani's, the district court ruled that it had no power to impose a sentence below the statutory minimum without a motion from the government and no authority to inquire into the government's motives for not filing a motion. Despite qualifying that approach somewhat by clarifying that district courts are authorized to inquire into the government's motives to the limited extent of ensuring that the decision was not driven by a constitutionally forbidden purpose, the Supreme Court found no obstacle to affirming Wade's sentence, because on its face Wade's claim did not raise such an issue. The Court thus by necessary implication held that Wade's contentions were sufficiently removed from ones that could state a claim to render harmless a denial of a hearing, even though the denial was possibly based on the district court's overly restrictive understanding of its own authority.
17
In the present case, by contrast, the district court assumed that it did have authority to consider the evidence of Urbani's cooperation in deciding whether to depart, yet chose to rely on the government's letter and on the statements made at the sentencing hearing. The district court's view of its authority was, if anything, too broad according to the subsequent pronouncements in Wade. Therefore, its refusal to conduct an evidentiary hearing was not based on an incorrect view of the law, but was essentially a decision based on the allegations before it.7 Even more than in Wade, therefore, the district court's decision cannot have constituted an abuse of discretion.
Conclusion
18
Because under the Supreme Court's Wade decision prosecutorial decisions to grant or withhold a motion under section 5K1.1 are insulated from challenge on the grounds raised by Urbani, he is entitled to no relief from the government's refusal to make such a motion, and the district court did not err in declining to hold an evidentiary hearing to examine the extent of Urbani's assistance. The district court's sentence is therefore
19
AFFIRMED.
1
It was also agreed that any statements or testimony furnished by Urbani (or anything derived therefrom) would not be used against him
2
The plea agreement, dated November 29, 1990, stated:
"However, defendant's cooperation does not automatically require the Government to request a departure from the sentencing guidelines for substantial assistance to the Government. That decision will be made by the Government after it evaluates the cooperation. If the Government decides to file a motion that the Court may depart pursuant to Section 5K.1 [sic] of the sentencing guidelines, the Government will file a motion at a time determined by the Government, and only after the Government evaluates the entire cooperation of defendant.... The defendant further understands that the Government is under no obligation whatsoever to file a motion with the Court at any time for the departure from the Sentencing Guidelines."
3
In a brief filed below in support of this motion, the passing and wholly unelaborated-on comment is made that the government "dishonored the plea agreement." That contention was not previously raised, and has not been raised on appeal. It is therefore abandoned. Moreover, the record contains absolutely no evidence, nor any factual allegations or elaborations, tending to support that contention
4
18 U.S.C. § 371, to which Urbani pleaded guilty, limits sentences to no more than five years, but does not impose a minimum limit
5
The guideline range for Wade's drug offenses was 97 to 121 months' imprisonment, but the pertinent statute required a ten-year minimum sentence. Apparently because the guidelines do not authorize a sentence below any statutorily mandated minimum, see U.S.S.G. § 5G1.1(c)(2), the Supreme Court observed that Wade's claim of entitlement to a motion allowing the court to depart below 120 months on these charges "implicates both 18 U.S.C. § 3553(e) and USSG § 5K1.1." Wade, --- U.S. at ----, 112 S.Ct. at 1843. The Court further noted that the parties had argued the case on the premise that in such a situation "the two provisions pose identical and equally burdensome obstacles." Id
6
This holding by the Court clarifies an issue to which we referred in a 1989 opinion sustaining section 5K1.1 against a challenge that, by requiring a motion by the government, it failed to implement the statutory directive to reflect the appropriateness of taking into account a defendant's assistance to the government. In that case we stated that section 5K1.1 "obviously does not preclude a district court from entertaining a defendant's showing that the government is refusing to recognize such substantial assistance." United States v. White, 869 F.2d 822, 829 (5th Cir.) (per curiam), cert. denied, 490 U.S. 1112, 109 S.Ct. 3172, 104 L.Ed.2d 1033 (1989). See also United States v. Paden, 908 F.2d 1229, 1234 (5th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 710, 112 L.Ed.2d 699 (1991)
7
We also observe that there was apparently little, if any, specific factual dispute about Urbani's cooperation; the government did not contest Urbani's counsel's statements at the sentencing hearing, and Urbani has not expressly challenged any factual particulars of the account given in the government's July 23 letter, either to the district court or to this Court
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626 F.2d 866
Robinsonv.Murphy
78-2832
UNITED STATES COURT OF APPEALS Ninth Circuit
8/25/80
1
N.D.Cal.
AFFIRMED
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376 F.2d 8
Donald W. BARNES, Appellant,v.B. F. MERRITT, Jr., et al., Appellees.
No. 23573.
United States Court of Appeals Fifth Circuit.
April 18, 1967.
H. T. O'Neal, Jr., Adams, O'Neal, Steele, Thornton & Hemingway, Macon, Ga., for appellant.
Trammell F. Shi, City Atty., Shi & Raley, Macon, Ga., for appellees.
Before GEWIN and AINSWORTH, Circuit Judges, and HUNTER, District Judge.
GEWIN, Circuit Judge:
1
Donald W. Barnes brought suit in the United States District Court for the Middle District of Georgia under 28 U.S.C. § 1343(3) and 42 U.S.C. § 1983 for declaratory and injunctive relief alleging that the Mayor of the City of Macon, Georgia, and the members of the City Council had unlawfully deprived plaintiff of due process and equal protection of the laws in violation of the Fourteenth Amendment in denying his application for a retail liquor license. The defendants' motion to dismiss the complaint was sustained by the district court on the ground that the complaint failed to allege any facts showing the denial of any right guaranteed to plaintiff under the Constitution or laws of the United States. Barnes appeals from the order of the court granting defendants' motion to dismiss. We reverse.
2
The record in this case consists entirely of appellant's complaint, appellees' motion to dismiss, and the district judge's memorandum opinion granting the above motion. The only recital of facts contained in the record is in appellant's complaint and such facts are set out below. Since the appellees have not denied any allegation of the complaint, for the purpose of this appeal they must be taken as true.
3
Appellant, a resident of Macon, Georgia, filed with the Alcohol Control Committee an application for a retail liquor license in order to operate a retail liquor store at a site owned by appellant on Forsyth Road in the City of Macon approximately 4 miles from the geographic center of the city. The application was properly made in accordance with city ordinances which specify that the applicant furnish the following information:
4
(a) Type of license desired (whether manufacturer, wholesaler, or retailer)
5
(b) Name and address of applicant
6
(c) Length of time a resident of the State, County and City
7
(d) Age, sex, height, and weight of applicant
8
(e) Name and address of agent in charge of business
9
(f) Names and addresses of real owner or owners of place of business and, if different from or additional to the applicant, all information as to such owner or owners as required of applicant
10
(g) Location of the place of business
11
The Alcohol Control Committee and the Chief of the Police Department are required by city ordinance to give preliminary approval or disapproval of an application as a condition to action thereon by the Mayor and Council. Consequently, a hearing was conducted in accord with the above ordinance and the Committee and the Chief of Police disapproved of appellant's application for the sole reason that the proposed location of appellant's store lies outside of the geographical area in which the policy of the Committee permits the granting of package store licenses, or as stated in the complaint, "the operation of retail liquor stores."1 Subsequently, appellant's application was brought on for a hearing before the Mayor and Council of the City of Macon and they adopted the rejection of the application by the Committee and the Chief of Police and thereby denied appellant's application for a liquor license.
12
Appellant then filed a complaint in the district court against the Mayor and the aldermen who compose the City Council of Macon, Georgia, alleging that such parties by rejecting his application for a liquor license had deprived him of his constitutional rights under the Fourteenth Amendment. Appellant alleged that he had complied with all the city ordinances regulating the licensing of retail liquor stores, including the submission of all required information as detailed above. In addition he alleged that "there are no ascertainable standards by which the qualifications and fitness of applicants can be determined, and * * * no geographical standards have been prescribed by the Ordinances of said City." Consequently, appellant contended in his complaint that in view of the lack of standards2 by which applicants for licenses are judged and particularly the lack of a geographical standard, the action of the appellees in denying his application was "arbitrary, capricious, and discriminatory" and that such action deprived appellant of his constitutional right to due process and equal protection of the laws in violation of 42 U.S.C. § 1983. Jurisdiction of the district court was invoked under 28 U.S.C. § 1343(3).3
13
Appellant sought a declaratory judgment under 28 U.S.C. § 2201 and an injunction restraining appellees from denying licenses when there are no ascertainable standards by which to judge an applicant's qualifications and sought to enjoin appellees from considering his application on any basis other than valid laws and ordinances in effect at the time the application was made. The appellees filed a motion to dismiss on the grounds that: (1) the complaint fails to state a claim upon which relief can be granted, (2) the court lacks jurisdiction and (3) the complaint fails to allege facts showing the denial to appellant of any right guaranteed to him under the Constitution or the laws of the United States.
14
The district court granted appellees' motion to dismiss the complaint on the third ground specified above. The court interpreted appellant's complaint as not alleging that standards, including geographic standards, by which the Alcohol Control Committee could judge the qualification of applicants were completely non-existent, but instead interpreted the complaint as only alleging that the ordinances of the City of Macon did not contain such standards. Particularly, in view of the fact that the Committee had denied the application on the ground that their policy did not permit liquor stores in appellant's geographic area, the court found that appellant had not alleged that pertinent standards had not been promulgated by policies of the Committee or that he was not cognizant of the policy of the Committee that new licenses would not be granted in certain geographic areas. Viewing appellant's complaint as a mere attack on the lack of standards in the ordinances, and considering the denial of the application by the Committee as a statement that geographic standards were embodied in their policies which are announced in a manner less formal than an ordinance, the court concluded that the complaint did not allege sufficient facts to show that appellant had been denied any constitutional right.4
15
While we agree with the district court's reading of the Alcohol Control Committee's rejection which concluded that according to the policy of the Committee licenses are not permitted in appellant's geographical area, we view appellant's complaint in a more favorable light. We think, reading the complaint as a whole, that it clearly alleges that standards for deciding the qualifications of liquor license holders are totally non-existent. In spite of the fact that in certain portions of the complaint appellant selected wording which implies that he rests his claim on the fact that the city ordinances do not contain standards, we read the complaint as asserting a much broader claim, namely that not only do the ordinances lack standards but that such standards are completely absent.
16
According to Hornsby v. Allen, et al., 326 F.2d 605 (5 Cir. 1964), rehearing denied 330 F.2d 55, the lack of ascertainable standards is a violation of due process actionable under 28 U.S.C. § 1343(3). Although the facts in Hornsby are not identical to those in the instant case, the decision is applicable. In Hornsby, an application for a license to operate a retail liquor store in Atlanta, Georgia, was denied by the Mayor and Board of Aldermen and the applicant brought suit under 28 U.S.C. § 1343 claiming that the denial violated due process in that she was afforded no hearing, knew of no standards which had to be met to obtain a license and was given no reason for the denial. The court held that the fundamental requirements of due process are applicable to the licensing process; and adherence to the principle of due process requires that prescribed standards be established and observed by city officials. We quote from the decision:
17
"If it develops that no ascertainable standards have been established by the Board of Aldermen by which an applicant can intelligently seek to qualify for a license, then the court must enjoin the denial of licenses under the prevailing system * * *."5
18
The district court granted appellees' motion to dismiss on the ground that the complaint failed to allege sufficient facts showing that appellant had been denied a constitutional right. Such a motion should not be granted unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his claim. Due v. Tallahassee Theatres, Inc., et al., 333 F.2d 630 (5 Cir. 1964); Arthur H. Richland Co. v. Harper, et al., 302 F.2d 324 (5 Cir. 1962); Millet v. Godchaux Sugars, Inc., 241 F.2d 264 (5 Cir. 1957).6
19
We conclude from our interpretation of the complaint and on the basis of the Hornsby decision that the complaint clearly alleges sufficient facts upon which, if such facts proved to be true, the trial court could grant relief, and therefore the complaint cannot be the victim of a motion to dismiss. However, whether there is any substance to the allegations depends on the proof offered either on a trial or possibly on a motion for summary judgment demonstrating that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).
20
Reversed and remanded.
Notes:
1
The Committee asserted that its recommendation for denial was, "based solely on the fact that the proposed location described in said application lies outside of the geographical limits to which the policy of this Committee restricts the granting of package store licenses." The Chief of Police concurred in the denial of the application for the same reason given by the Committee
2
In addition to contending that the lack of standards made the action of appellees in denying his application discriminatory, appellant alleged that at the time of his filing and on the date of his hearing there were several liquor stores in operation pursuant to licenses, all of which were further from the geographical center of Macon than appellant's proposed location and therefore granting licenses to others and refusing to grant a license to appellant on the basis of geography was discriminatory. In the light of the fact that the Alcohol Control Committee did not specify the characteristics of appellant's geographic location which made it necessary to reject his application, we are unable to conclude on the record before us that this allegation has any substance
3
These statutes read as follows:
28 U.S.C. § 1343(3):
"The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:
* * * * *
"(3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States;"
42 U.S.C. § 1983:
"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
4
The following is from the memorandum opinion of the district court:
"Plaintiff is dissatisfied with the geographical standards which apparently have been adopted by the City of Macon with respect to the issuance of liquor licenses and he points out that these standards have not been set forth in a formal ordinance, but we know of no requirement that such matters be embraced in an ordinance. This can reasonably be a matter of regulation or announcement of policy in a manner less formal than an ordinance so long as the regulations are reasonable and the information is available."
5
Hornsby v. Allen, et al., supra 326 F.2d at page 613. Appellant, appellees and the trial court relied on theHornsby decision.
6
In view of the wealth of cases where the dismissal of a claim on the basis of the pleadings alone has been reversed, it would be an understatement to say that such dismissals are looked upon unfavorably. Barber v. The Motor Vessel "Blue Cat", et al., 372 F.2d 626 f. n. 1 (5 Cir. 1967) and Millet v. Godchaux Sugars, Inc., supra 241 F.2d at page 265, f. n. 1 contain a myriad of examples
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554 N.W.2d 477 (1996)
1996 SD 114
STATE of South Dakota, Plaintiff and Appellee,
v.
Ricky Jay SIELER, Defendant and Appellant.
No. 19150.
Supreme Court of South Dakota.
Argued March 12, 1996.
Decided September 4, 1996.
Rehearing Denied October 9, 1996.
*478 Mark Barnett, Attorney General, Jason M. Harris, Assistant Attorney General, Pierre, for plaintiff and appellee.
Timothy J. Langley, Sioux Falls, for defendant and appellant.
AMUNDSON, Justice.
[¶ 1] Ricky Jay Sieler (Sieler) appeals his sentence for kidnapping, attempted first-degree murder, second-degree rape, first-degree burglary, and aggravated assault. We affirm.
FACTS
[¶ 2] Victim claims she was raped and assaulted by Sieler, her former boyfriend, in her Sioux Falls apartment on the morning of June 24, 1994. Victim's wrist, arm, stomach and throat sustained serious lacerations. During this ordeal, Victim alleges that Sieler threatened to kill her and himself.
[¶ 3] A jury trial commenced on January 9, 1995. The jury found Sieler guilty of attempted first-degree murder (SDCL 22-16-4 and 22-4-1),[1] kidnapping (SDCL 22-19-1),[2] second-degree rape (SDCL 22-22-1(2)),[3]*479 first-degree burglary (SDCL 22-32-1(3)),[4] and aggravated assault (SDCL 22-18-1.1(2)),[5] all stemming from the June 24, 1994, attack on Victim. Sieler was sentenced to serve consecutively twenty-five years on the attempted murder conviction, twenty-five years on the rape conviction, twenty-five years on the burglary conviction, and thirty years on the kidnapping conviction, for a total of one hundred five years. In addition, Sieler was sentenced to fifteen years on the aggravated assault conviction, to be served concurrently with the twenty-five years for attempted murder. Each written judgment and sentence denoted that all of the offenses were separate transactions.
[¶ 4] Sieler claims that there was no mention by the sentencing court at the original sentencing that all of the offenses were separate transactions. Since the offenses were classified as separate transactions, Sieler must serve twenty-seven years before he is eligible for parole instead of thirteen and one-half years. Sieler moved to have his sentence corrected pursuant to SDCL 23A-31-1 (Federal Rule 35)[6] and 23A-27-4.1,[7] at which time the sentencing court upheld its earlier decision as to classifying the kidnapping, rape and burglary as separate offenses and had the State redraft the attempted murder and aggravated assault judgments into one criminal transaction.
[¶ 5] Sieler appeals,[8] raising the following issues:[9]
I. Whether the addition of the words "separate transactions" to the written judgments and sentences illegally impose an enhanced sentence?
II. Was the sentencing as "separate transactions" illegal?
ARGUMENT
[¶ 6] The two issues presented by Sieler both challenge his sentence. The first issue asserts that the sentence was illegally imposed. "Sentences imposed in an illegal manner are within the relevant statutory limits but are imposed in a way which violates defendant's right" to not have his sentence enhanced once the defendant has left the judicial branch of government and is within the jurisdiction of the executive branch. 8A J. Moore, Moore's Federal Practice ¶ 35.04[3][a] (2d Ed. 1995); see State v. Bucholz, 403 N.W.2d 400, 403 (S.D.1987); State v. Oban, 372 N.W.2d 125, 129 (S.D.1985); *480 State v. Ford, 328 N.W.2d 263, 267 (S.D. 1982).
[¶ 7] The second issue maintains that, even if the sentence was not illegally imposed, the sentence is illegal in and of itself because the offenses may not be termed as separate transactions. "`[I]llegal sentences are essentially only those which exceed the relevant statutory maximum limits or violate double jeopardy or are ambiguous or internally contradictory." State v. Thomas, 499 N.W.2d 621, 622 (S.D. 1993) (quoting 8A J. Moore, Moore's Federal Practice § 35.06(a) (2d Ed. 1992) (now found at § 35.04[3] (2d Ed. 1995))).
DECISION
[¶ 8] I. Whether the addition of the words "separate transactions" to the written judgments and sentences illegally impose an enhanced sentence?
[¶ 9] Sieler was sentenced to a total of one hundred five years for the crimes he committed against Victim. Since the sentencing court pronounced that the kidnapping, rape and burglary were separate offenses, in addition to the offenses of attempted first-degree murder and aggravated assault, he is considered to have committed three or more felonies. Prior to this conviction, Sieler had not been convicted of a felony. Because Sieler is considered to have committed three or more felonies, his parole eligibility date is twenty-seven years compared to thirteen and one-half years if he was a first-time felon. See SDCL 24-15-7 and 24-15-5.[10] Sieler claims the sentencing court did not make this clear during oral sentencing and, therefore, cannot enforce the convictions as separate transactions.
[¶ 10] It is a well-established rule that a sentencing court cannot increase a valid sentence after the defendant has commenced serving the sentence. Ford, 328 N.W.2d at 267. However, Sieler's sentence was not enhanced or increased. The issue is whether Sieler's parole was illegally enhanced or increased.
[¶ 11] Reviewing the oral sentencing transcript, it is clear that the sentencing court intended for these convictions to be separate transactions.
In determining what is a proper time of incapacitation and in determining what is a proper punishment in this case, I think the Court has to look at the crimes that [Sieler] was convicted of by the jury individually.
.... .
... [U]nder the current parole guidelines, that will make [Sieler] eligible for parole, if he makes parole, when he is old enough to draw Social Security. And it's my opinion that at that time he should no longer be a significant danger to women [with whom he is involved].... [M]y 20-some years in the criminal field has taught me that the type of crime committed here is normally committed by a gentleman under the age of 60. Therefore, in my opinion, this sentence serves the purpose of punishing [Sieler] to the extent that the law would permit, and it also incapacitates him until such time as I believe he would no longer be dangerous to women in which he has a relationship. *481 Sieler was thirty-four years old at the time of sentencing. Using Sieler's argument, he would be eligible for parole at the age of forty-seven. It was clear that the sentencing court intended Sieler to serve time until retirement age, which is approximately sixty. By classifying the convictions as separate transactions, this goal is accomplished. The sentencing court clearly indicated it was treating the offenses individually or separately.
[¶ 12] In addition, even if the sentencing court was not patently clear at the oral sentencing as to its intent, there is guidance to interpret the intent. An orally pronounced sentence does control over the written judgment, however, if the verbal sentence is not clear, the intent of the sentencing court may be construed from the entire record. State v. Johnston, 478 N.W.2d 286, 288 (S.D. 1991); see also 8A J. Moore, Moore's Federal Practice § 36.02 (2d Ed. 1995); United States v. Tramp, 30 F.3d 1035, 1037 (8th Cir. 1994). Examining the entire record leads to one conclusion: the sentencing court intended for the offenses to be punished as separate transactions.
[¶ 13] Finally, SDCL 24-15-1.1 states:
Parole is the discretionary conditional release of an inmate from actual penitentiary custody before the expiration of his term of imprisonment. The prisoner remains an inmate under the legal custody of the department of corrections until the expiration of his term of imprisonment. A prisoner is not required to accept a conditional parole. A prisoner is never entitled to parole. However, parole may be granted if in the judgment of the board of pardons and paroles granting a parole would be in the best interests of society and the prisoner.
Neither this section or its application may be the basis for establishing a constitutionally protected liberty, property or due process interest in any prisoner. (Emphasis added.)
The United States Supreme Court has specifically held that a convicted person has no constitutional right to parole. Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 7, 99 S.Ct. 2100, 2104, 60 L.Ed.2d 668, 675 (1979); see also Winters v. Solem, 444 N.W.2d 722, 724 (S.D. 1989). Sieler's sentence was not increased by the words "separate transaction," only his parole eligibility is affected by these words.
[¶ 14] II. Was the sentencing as "separate transactions" illegal?
[¶ 15] Alternatively, Sieler argues that the sentencing court erred as a matter of law by describing the four convictions as separate transactions. Specifically, he alleges that, since the offenses all occurred during a short period of time at one place to one victim, he cannot have committed separate offenses.
[¶ 16] To evaluate Sieler's claim, we will start by analyzing SDCL 22-6-6.1. This is a matter of law to be reviewed de novo. State v. Karp, 527 N.W.2d 912, 913 (S.D. 1995). SDCL 22-6-6.1 provides:
If a defendant has been convicted of two or more offenses regardless of when the offenses were committed or when the judgment or sentence was entered, the judgment or sentence may be that the imprisonment on the subsequent conviction may run concurrently with the imprisonment on any prior conviction or the imprisonment for the subsequent offense may commence at the expiration of the imprisonment upon any other offense.
SDCL 22-6-6.1 is "specific on its face and... it allows for consecutive sentences `regardless of when the offenses were committed or when the judgment or sentence was entered.'" State v. Swallow, 405 N.W.2d 29, 43 (S.D. 1987) (quoting SDCL 22-6-6.1). This clear and unambiguous language allows the sentencing court to impose sentences consecutively and does not limit the scope as to what may be a separate transaction. Sieler concedes that consecutive sentences may be imposed for these offenses, however, he argues that the sentences may not be designated as separate transactions. There is no definition of separate transactions in the criminal statutes or the parole statutes.
[¶ 17] The evidence of what transpired during this nightmarish three to four hours showed the following. First, Sieler broke into Victim's apartment through a screened *482 window around 4:45 a.m. with the intent to commit a felony therein, constituting the offense of burglary. SDCL 22-32-1(3). This offense was complete upon Sieler's entering the apartment. Second, after Sieler committed the offense of burglary, Victim and Sieler entered into a heated discussion over Sieler's breaking into her apartment. Sieler demanded Victim have sexual intercourse with him, however, Victim refused. Sieler then forcibly raped Victim for the next ten to fifteen minutes. After Sieler completed the rape (SDCL 22-22-1(2)), Victim went into the bathroom to clean herself because Sieler appeared to have passed out on her bed. However, Sieler awoke and demanded that Victim come into the bedroom. When Victim did enter the bedroom, Sieler pulled a knife from underneath a pillow, placed his hand over Victim's mouth and told her he was going to kill her. Next, Sieler slashed Victim's throat. As Victim was attempting to thwart off another attack, she was able to break the knife. Sieler obtained a second knife from the kitchen and cut Victim four to six inches deep from her navel to her chest. After this, Sieler went into the bathroom and Victim attempted to flee. Sieler caught Victim at the door and slashed her wrist with a razor blade he obtained from the bathroom. These last incidents were treated by the sentencing court as a single transaction and constituted the basis for the aggravated assault and attempted murder convictions. SDCL 22-16-4, 22-4-1 and 22-18-1.1(2). Lastly, after the completion of these gruesome and vile acts, Sieler again entered the bathroom. Amazingly, Victim struggled to the door and into the hallway of her apartment building. At this time, Victim attempted to kick at her neighbor's door. When Sieler realized Victim had left the apartment, he then went into the hall and dragged Victim back into her apartment where he again cut her arm. These actions obviously constituted the elements of the kidnapping conviction by the jury. SDCL 22-19-1. The entire episode lasted three to four hours.
[¶ 18] This court has never directly ruled what constitutes "separate transactions" under our statutory scheme. Other courts have dealt with this issue. In People v. Sandoval, 30 Cal.App.4th 1288, 36 Cal.Rptr.2d 646, 651-52 (1994), the California Court of Appeal held that, although the defendant's attempt to rob and murder the same victim arose from the same intent, to obtain money, the offenses were "separate" for sentencing purposes. The defendant also argued that these actions "emanated from just one indivisible course of conduct." Id. 36 Cal. Rptr. 2d at 651. The Sandoval court went on to hold that "this is essentially a fact-bound determination.... We will not disturb the determination made below unless it is unsupported by the evidence received." Id. at 652. Further, in Commonwealth ex rel. Krell v. Banmiller, 56 SchLR 31 (PaC 1960), the court held that the sentencing for burglary and larceny occurring during the same episode was proper because separate sentences may be imposed upon each count upon conviction. These crimes were not the same transaction. The "same transaction" test is valid only when "transaction" means a single act. When the "transaction" consists of two or more criminal acts, the fact that the two are "successive" does not require the conclusion that they have merged. Krell, 56 SchLR at 38.
[¶ 19] The jury was instructed to "separately consider each count and the evidence which applies to it. The fact that you may find the defendant guilty or not guilty on any one count of the indictment must not control or influence your verdict on any other count of the indictment." Separate convictions were entered on each offense. Sieler's crimes were each distinct separate acts that were completed before the next act began as shown by the facts stated above.
[¶ 20] In Thomas, 499 N.W.2d at 622, we affirmed the imposition of consecutive sentences on three offenses arising from separate transactions. The defendant in Thomas pled guilty to: (1) possession (on or about February 14, 1989) of a controlled drug, cocaine, with intent to distribute; (2) possession (on or about February 14, 1989) of more than one-half pound but less than one pound of marijuana; and (3) possession (on or about October 25, 1988) of a controlled drug, cocaine. Id. at 621. Separate complaints and informations were filed against the defendant on each count. In addition, separate judgments for each of the three convictions were *483 entered. The sentences were to be served consecutively. The defendant moved to correct the sentences, alleging that the two convictions stemming from the February 14, 1989, arrest were the "same transaction" and the judgments did not reflect this. For parole purposes, the penitentiary was treating the defendant as having three convictions. We held that as long as the judgments meet the statutory requirements of SDCL 2327-4[11] the sentence is legal. Id. at 622. Therefore, if there are multiple convictions and separate judgments are entered, the sentence conforms to the statute and will be upheld. Id. The sentencing court did enter separate judgments for each conviction against Sieler, in conformity with SDCL 23A-27-4 and Thomas.
[¶ 21] Sieler relies on self-created analogies between the habitual offender statutes and the imposition of a sentence as separate transactions. This record does not reflect the Ming of any Part II Information under the habitual offender statutes. SDCL 22-7-7, SDCL 22-7-8, and SDCL 22-7-8.1. Under these statutes, the enhancement places the principal crime in an upper, more severe class for sentencing purposes. There is nothing in this record which shows that any of the sentences themselves were "enhanced." The sentencing court exercised its discretion to impose consecutive sentences as separate transactions. SDCL 22-6-6.1 and SDCL 23A-27-4. These sentences are within the parameters established by the legislature and do not violate double jeopardy. Thomas, 499 N.W.2d at 622 (citing 8A J. Moore, Moore's Federal Practice § 35.06(a) (2d Ed. 1992) (now found at ¶ 35.04[3][a] (2d Ed. 1995))).
[¶ 22] The sentencing court did not err in sentencing Sieler on these convictions as separate transactions. Therefore, we affirm as to both issues.
[¶ 23] MILLER, C.J., and KONENKAMP and GILBERTSON, JJ., concur.
[¶ 24] SABERS, J., dissents.
SABERS, Justice (dissenting).
[¶ 25] The addition of the words "separate transactions" to the written judgment after defendant began serving his sentence constitutes an illegal enhancement of sentence.
[¶ 26] Circuit Court Judge Hurd could have given defendant life for kidnapping in this case, but he did not. He cannot reopen the sentence or make the same transaction into separate transactions merely by saying it or by adding it after the sentence is being served. He may have made a mistake, but that does not mean we should further the mistake by ignoring the law in an attempt to correct it.
[¶ 27] South Dakota case law is clear that a sentence cannot be enhanced once it has been imposed and once the defendant has begun serving iteven if the enhanced sentence would have been a legal sentence had the court imposed it in the first place. "[O]nce an offender is within the jurisdiction of the executive branch of government, the judicial branchthe circuit courtloses jurisdiction and control." State v. Oban, 372 N.W.2d 125, 129 (S.D. 1985) (citation omitted). We have stated, on numerous occasions, that "as against an unwilling defendant, a valid sentence cannot be increased in severity after he has commenced the serving thereof[.]" State v. Ford, 328 N.W.2d 263, 267 (S.D. 1982) (citing State v. Hughes, 62 S.D. 579, 584, 255 N.W. 800, 802 (1934); State v. Jackson, 272 N.W.2d 102 (S.D. 1978); Ex parte Watt, 73 S.D. 436, 44 N.W.2d 119 (1950)). "[A] sentence commences as soon as the prisoner suffers some confinement in the custody of a sheriff." Id.
[¶ 28] In State v. DeMarsche, 68 S.D. 250, 1 N.W.2d 67 (1941), a judge sentenced a defendant to ten years imprisonment on the *484 principal felony and withheld action on a second "habitual offender" information. The State withdrew its second information and reified a more detailed information two to three weeks later, at which time a second judge set aside the ten-year sentence the defendant had already begun to serve and gave him a life sentence as enhanced by the second information. This court reversed because "[t]he sentence of the first trial judge is still in all respects valid and effective. The [second] sentence ... was without authority and void." 68 S.D. at 255, 1 N.W.2d at 69.
[¶ 29] In Ford, the trial court gave a defendant a sentence of three years with credit for thirty-three days served. Just three days later, before the defendant was transported to the penitentiary, the trial court, on its own motion, increased the sentence to ten years. After examining federal courts' disposition of the issue, this court held "that the oral sentence is the only sentence, and that the written judgment must conform to it." 328 N.W.2d at 267 (relying upon United States v. Marquez, 506 F.2d 620 (2d Cir. 1974); Chunn v. United States, 462 F.2d 1100 (5th Cir. 1972); United States v. Raftis, 427 F.2d 1145 (8th Cir. 1970); Borum v. United States, 409 F.2d 433 (D.C.Cir. 1967), cert. denied, 395 U.S. 916, 89 S.Ct. 1765, 23 L.Ed.2d 230 (1969); Rakes v. United States, 309 F.2d 686 (4th Cir. 1962)); see also State v. Cady, 422 N.W.2d 828, 830 (S.D. 1988) (collecting additional federal cases to support the proposition that it is settled law "that the oral sentence is the only sentence and the written sentence must conform to it"). On that basis, the court invalidated the second sentence and reinstated the first. We should do the same.
[¶ 30] The facts were even more extreme in State v. Bucholz, 403 N.W.2d 400 (S.D. 1987). In that case, the trial court pronounced oral sentence in reliance upon the defendant's self-reports about his reformed behavior since the offense date; almost immediately after sentencing, the court discovered that the defendant and a primary witness had lied about his conduct. The court had the defendant back before it within one hour and ordered a resentencing hearing. Approximately one week later, the court increased the sentence to more than four times the original sentence, which was still within permissible statutory limits. Despite the brief span of time and the defendant's fraud on the court, this court overturned the second sentence in favor of the first, quoting State v. Tibbetts, 333 N.W.2d 440 (S.D. 1983) that "a trial court may not use SDCL 23A-31-1 to increase the length of the sentence." Bucholz, 403 N.W.2d at 402. See also Application of Grosh, 415 N.W.2d 824 (S.D. 1987). In that case, the trial court's modification of its initial oral sentence did not, on its face, increase the length of the sentence; however, this court held that the elimination of a work release provision over five months after sentencing was an "impermissible augmentation of sentence." Id. at 828.
[¶ 31] Sieler was sentenced to a total of 105 years imprisonment. Even though he had five convictions, all five of the convictions arose from conduct that occurred within a period of approximately one and one-half hours in the early morning of June 24, 1994. He was the only defendant, there was only one victim, all five charges were handed down on the same day in one indictment, he was arraigned on the same day on all five charges, he was tried before the same jury on all five charges, and he was found guilty of all five charges on the same day. Absent the addition of the words "separate transactions," which appeared in the written Judgments and Sentences but which appear nowhere in the transcript of the oral sentence, Sieler would have become eligible for parole in the year 2008. The addition of those critical two words after a valid oral sentence had been pronounced substantially and impermissibly augmented his sentence by insuring that he would not become eligible for parole until the year 2022.
[¶ 32] The trial court candidly admitted that this term of art, "separate transactions" had not come up at the sentencing hearing: "I don't know that I used the word transaction. I probably didn't[.]" The court further stated: "I do recall that I did instruct counsel for the State ... although I don't think it was on the record ... I did instruct counsel for the State that I wanted these as separate transactions. But that was not at the sentencing *485 hearing, that was subsequent to the sentencing hearing." (Emphasis added.) In other words, the crucial modification was made after Sieler had already begun to serve his sentence and "was without authority and void." DeMarsche, 68 S.D. at 255, 1 N.W.2d at 69.
[¶ 33] As indicated above, even though Judge Hurd made a mistake and improperly second-guessed his initial sentence, it does not justify the majority's complete disregard of the settled law as set forth in this dissent. Accordingly, the words "separate transactions" should be stricken from the written Judgments and Sentences so that the original sentence may be reinstated "as it existed on [the date of original sentencing], in all respects." Grosh, 415 N.W.2d at 828.[*]
NOTES
[1] SDCL 22-16-4 provides:
Homicide is murder in the first degree when perpetrated without authority of law and with a premeditated design to effect the death of the person killed or of any other human being, or when committed by a person engaged in the perpetration of, or attempt to perpetrate, any arson, rape, robbery, burglary, kidnapping .... (Emphasis added.)
SDCL 22-4-1 states:
Any person who attempts to commit a crime and in the attempt does any act toward the commission of the crime, but fails or is prevented or intercepted in the perpetration thereof, is punishable where no provision is made by law for the punishment of such attempt, as follows:
.... .
(5) If the attempted crime is punishable by a sentence of life imprisonment or if the attempted crime is punishable by imprisonment in the state penitentiary for a minimum number of years and no maximum punishment is provided, the offender convicted of any such attempt may be punished as if he were guilty of a Class 2 felony [maximum of twenty-five years in the state penitentiary and a $25,000 fine].
[2] Under SDCL 22-19-1, kidnapping is defined as:
Any person who shall seize, confine, inveigle, decoy, abduct or carry away any person and hold or detain such person ... for any of the following reasons:
.... .
(3) To inflict bodily injury on or to terrorize the victim or another ...
is guilty of kidnapping. Kidnapping is a Class 1 felony [maximum life imprisonment in the state penitentiary and $25,000 fine], except if the person has inflicted a gross permanent physical injury on the victim, in which case it is a Class A felony [punishable by death or life imprisonment in the state penitentiary, a lesser sentence may not be given for a Class A felony].
[3] Sexual penetration through the use of force, coercion or threats of immediate and great bodily harm is classified as rape in the second degree, a Class 2 felony.
[4] First-degree burglary is committed by:
Any person who enters or remains in an occupied structure, with intent to commit any crime therein, is guilty of rust degree burglary when:
.... .
(3) The offense is committed in the nighttime. First degree burglary is a Class 2 felony.
[5] SDCL 22-18-1.1 states:
Any person who:
.... .
(2) Attempts to cause, or knowingly causes, bodily injury to another with a dangerous weapon;
.... .
is guilty of aggravated assault. Aggravated assault is a Class 3 felony [maximum punishment is fifteen years imprisonment in the state penitentiary and $15,000 fine].
[6] SDCL 23A-31-1 provides:
A court may correct an illegal sentence at any time and may correct a sentence imposed in an illegal manner within the time provided in this section for the reduction of sentence. A court may reduce a sentence:
(1) Within one year after the sentence is imposed;
(2) Within one hundred twenty days after receipt by the court of a remittitur issued upon affirmance of the judgment or dismissal of the appeal; or
(3) Within one hundred twenty days after entry of any order or judgment of the Supreme Court denying review of, or having the effect of upholding, a judgment of conviction;
whichever is later....
[7] SDCL 23A-27-4.1 provides:
Within a reasonable time but not more than one year after final judgment, a court on motion of a defendant or upon its own motion may relieve a defendant from final judgment if required in the interest of justice.
[8] Sieler's appellate counsel did not represent him at the trial level.
[9] Originally, Sieler's appeal claimed that his conviction for both attempted first-degree murder and aggravated assault stemming from the same episode violated the double-jeopardy clause of the state and federal constitutions. In his reply brief, Sieler conceded that these convictions did not violate his constitutional right against double jeopardy. See United States v. Dixon, 509 U.S. 688, 704, 113 S.Ct. 2849, 2860, 125 L.Ed.2d 556, 573 (1993).
[10] SDCL 24-15-7 states:
In the determination of an inmate's eligibility for consideration for parole, two or more convictions arising from the same transaction, for which the sentences are made to run consecutively, shall be considered as one conviction. Two or more sentences arising from different transactions for which the sentences are made to run consecutively shall be considered as separate convictions. In determining the eligibility date for a person receiving two or more sentences which are made to run consecutively, the sentences shall be added together and the total number of convictions shall then determine the total amount of time to be served before becoming eligible for consideration for parole subject to the provisions of § 24-15-5.
SDCL 24-15-5 provides:
A person is eligible for parole ... after deducting from his sentence the statutory time granted for good conduct pursuant to § 24-5-1:
(1) If convicted of a felony for the first time, when he has served one-fourth of the time remaining;
(2) If convicted of a felony for the second time, when he has served three-eighths of the time remaining; or
(3) If convicted of a felony three or more times, when he has served one-half of the time remaining.
[11] SDCL 23A-27-4 states:
In felony and Class 1 misdemeanor cases, judgment of conviction shall set forth the plea, the verdict or findings, and the adjudication and sentence. In the case of multiple convictions arising from different transactions, a separate judgment of conviction shall be entered for each conviction. If a defendant is found not guilty or for any other reason is entitled to be discharged, the judgment therefor shall be entered forthwith. Judgments of conviction shall be signed by the judge and filed with the clerk. (Emphasis added.)
[*] Defense counsel says it well:
Sieler began to serve [his] sentence. The court then enhanced the sentence by adding a critical phrase to four of the five Judgments and Sentences which at a stroke doubled the number of years Sieler would have to serve until becoming eligible for parole. Contrary to the spin the State wishes to put on this sequence of events, this was an illegal ex post facto enhancement of sentence which this court should rectify by striking the words "separate transactions" from the Judgments and Sentences where they appear.
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481 So.2d 1169 (1985)
Ex parte: John P. DAY.
(Re: John P. Day v. State.)
84-869.
Supreme Court of Alabama.
November 8, 1985.
*1170 Ian F. Gaston, Mobile, for petitioner.
Charles A. Graddick, Atty. Gen., and Mary Ellen Fike Forehand, Asst. Atty. Gen., for respondent.
SHORES, Justice.
Petitioner John P. Day was convicted of theft in the first degree, under Code 1975, § 13A-8-3, and sentenced to a term of ten years' imprisonment. The Court of Criminal Appeals, 481 So.2d 1164, affirmed Day's conviction and denied his application for a rehearing and his Rule 39(k), A.R. A.P., motion to supplement the facts stated in that court's opinion. Subsequently, Day submitted to this Court a petition for writ of certiorari, which we granted.[1] We reverse the judgment below.
Briefly stated, the facts are as follows: Judy Hix, an undercover FBI agent, learned that Day wanted to sell diamonds allegedly won in a poker game. Hix approached Day through a go-between, and Day eventually offered to sell Hix a 1.3-carat diamond for $3,300. Hix purchased the stone, which turned out to be a zirconia stone, not a diamond. Day was subsequently arrested and charged with theft by deception.
Day argues that the Court of Criminal Appeals erred in holding that the defendant's intent is the paramount consideration in theft by deception, codified at Code 1975, § 13A-8-2(2), and that the victim's reliance on the deception is not an element of the offense. Day asserts that: (1) reliance is an element of the offense; (2) Hix did not rely on Day's false representations; and (3) the trial court erred by refusing to charge the jury on the reliance element. Thus, the issue presented is whether reliance is an element of theft by deception. We have not directly addressed the issue since the legislature revised the Criminal Code in 1977, effective January 1, 1980. We address the issue now to eliminate confusion and uncertainty in the appellate decisions below.
Section 13A-8-2(2) provides:
"A person commits the crime of theft of property if he:
". . . .
"(2) Knowingly obtains by deception control over the property of another with intent to deprive the owner of his property."
Code 1975, § 13A-8-2(2). Section 13A-8-1 defines deception:
"(1) Deception occurs when a person knowingly:
"a. Creates or confirms another's impression which is false and which the defendant does not believe to be true; or
"b. Fails to correct a false impression which the defendant previously has created or confirmed; or
"c. Fails to correct a false impression when the defendant is under a duty to do so; or
"d. Prevents another from acquiring information pertinent to the disposition of the property involved; or
"e. Sells or otherwise transfers or encumbers property, failing to disclose a lien, adverse claim or other legal impediment to the enjoyment of the property when the defendant is under a duty to do so, whether that impediment is or is not *1171 valid, or is not a matter of official record; or
"f. Promises performance which the defendant does not intend to perform or knows will not be performed. Failure to perform, standing alone, however, is not proof that the defendant did not intend to perform.
"The term `deception' does not, however, include falsity as to matters having no pecuniary significance, or puffing by statements unlikely to deceive ordinary persons. `Puffing' means an exaggerated commendation of wares or services."
Code 1975, § 13A-8-1.
Under this definitional language, subsections (a), (b), and (c) require the existence of a false impression in the victim's mind due wholly or partly to the perpetrator's words, acts, or omissions. Therefore, reliance is obviously a necessary element under the first three subsections. On the other hand, subsections (d), (e), and (f) omit the phrase "false impression" and, thus, seem to indicate that the victim's awareness or nonawareness of the deception is not critical. However, not to require a victim's reliance under the latter three subsections would render the former three subsections practically meaningless; in particular, subsection (f) could almost subsume the other subsections. Therefore, in order to read all parts of the statute together and give each word meaning and effect, we hold that reliance is an element of the offense of theft by deception. The following review of authorities reinforces our reading of the statute.
The former general false pretense statute punished anyone "who, by false pretense or token and with the intent to injure or defraud, obtain[ed] from another any money or other personal property." Code 1975, § 13-3-90. In applying the statute, the courts read a reliance requirement into the law. The pretense itself must be a material one, furnishing an inducing, controlling motive for the victim in parting with his property, Ex parte Thaggard, 276 Ala. 117, 159 So.2d 820 (1963), though it need not be the sole or exclusive cause for the loss. Franklin v. State, 44 Ala.App. 521, 214 So.2d 924 (1968). The fact that the victim was not diligent, but imprudent, will not negate his reliance if the misrepresentation would have caused a reasonably prudent person to act. Elmore v. State, 138 Ala. 50, 35 So. 25 (1903). The gist of the offense is the deception imposed upon the victim's confidence which causes him to intend to part with his property (title) without a fair opportunity to bargain. See Carlisle v. State, 76 Ala. 75 (1884).
Despite its holding in the present case, the Court of Criminal Appeals, on at least one occasion, has followed the above-quoted pre-Criminal Code case law in regard to reliance. Last year in McMurphy v. State, 455 So.2d 924 (Ala.Crim.App.1984), the court held that the giving of a check, without contrary explanation, was a representation that the defendant had sufficient funds on hand and that the representation operated as an inducement for the injured party to part with the goods. The court added, "[T]he seller was thereby deceived...." 455 So.2d at 928. According to the McMurphy court:
"Generally, Alabama cases which involve deception are pre-Criminal Code cases tried under the charge of false pretenses. The crime of false pretenses now constitutes theft under the new criminal code. St. Paul Fire & Marine Ins. Co. v. Veal, 377 So.2d 962 (Ala. 1979); Commentary, Ala.Code §§ 13A-8-2 through §§ 13A-8-5 `False Pretenses,' at 269.
"The elements of false pretenses were: (1) the pretense, (2) its falsity, (3) obtaining property by reason of the pretense, (4) knowledge on the part of accused of falsity of the pretense, and (5) intent to defraud. Mitchell v. State, 56 Ala.App. 718, 325 So.2d 509 (1975), cert. denied, 295 Ala. 412, 325 So.2d 513 (1976); Holloway v. State, 37 Ala.App. 96, 64 So.2d 115, cert. denied, 258 Ala. 558, 64 So.2d 121 (1952).
"False pretense must have operated as an inducement for the injured party to part with goods or money. Smith v. *1172 State, 409 So.2d 927 (Ala.Cr.App.), cert. denied, 409 So.2d 930 (Ala.1981).[[2]] However, it was not necessary that the false pretense was the sole, exclusive or decisive inducement for the owner's parting with his property; it was sufficient if he would not have parted with it in the absence of the false pretense. Franklin v. State, 44 Ala.App. 521, 214 So.2d 924 (1968)."
455 So.2d at 927.
The theft by deception statute is based on § 223.3 of the Model Penal Code, which brought the common law offenses of larceny by trick and false pretenses under the general heading of theft by deception. W. LaFave and A. Scott, Jr., Handbook on Criminal Law § 91, at 677-78 (1972). Comment 1 of § 223.3 of the Model Penal Code addresses the role of the perpetrator's misrepresentations on the victim. The relevant portion of Comment 1 reads:
"Of course, a conviction is not necessarily precluded if the deception is ineffective. If the actor engages in conduct designed to deceive another for the purpose of obtaining his property but either does not obtain the property or does not obtain it as a result of the deception (as where the intended victim knows the truth), there would be liability under Section 501 of the Model Code for attempt."
Model Penal Code, § 223.3 (Proposed Official Draft 1982), at 181.
As mentioned previously, this Court has not directly addressed this issue. In Ex parte Williams, 451 So.2d 253 (Ala.1984), this Court quashed a writ as improvidently granted where venue was at issue under § 13A-8-2(2). However, Chief Justice Torbert, joined by Justices Maddox and Beatty, dissented and made the following observations concerning § 13A-8-2(2):
"Under § 13A-8-2(2) the defendant must knowingly obtain by deception the property of another. Code 1975, § 13A-8-1(1), states that `[d]eception occurs when a person knowingly ... [c]reates or confirms another's impression which is false and which the defendant does not believe to be true....' The statute under consideration here, unlike that in [Ex parte] Hunte [436 So.2d 806 (Ala.1983)], requires that the defendant's actions must have an effect on the victim. A victim cannot be deceived by someone if he has not been influenced by the perpetrator's action or inaction. In other words, the victim must have relied on the perpetrator's acts, so as to `create or confirm' an impression in the victim's mind."
451 So.2d at 254-55.
It is clear from the above discussion of authorities that the legislature did not intend to eliminate reliance as an element of theft by deception. The revision was meant only to erase the archaic distinctions among the common law offenses that allowed some to escape sanction because of improper forms of proof. See Commentary, Code 1975, §§ 13A-8-2 through 13A-8-5, "Larceny," at 266 (1982 repl. vol. 12). We can fairly assume that the legislature intended the elements of the offense to remain intact under the new Criminal Code.
In the case before us, all but one of the elements of theft by deception were present. Day made false representations; he knew of their falsity; and he had the intent to defraud. However, Day did not obtain Hix's money because she was deceived. The facts of the court's opinion below indicate that Hix, instead, was conducting a "sting" operation and did not actually rely on Day's misrepresentations when she purchased the stone. Because there was no reliance, the more appropriate charge would have been attempted theft by deception.
Neither Andersen v. State, 418 So.2d 967 (Ala.Crim.App.1982), nor Deep v. State, 414 So.2d 141 (Ala.Crim.App.1982), cited by the Court of Criminal Appeals, stands for the proposition that reliance by the victim on the perpetrator's misrepresentations is not an element of § 13A-8-2(2). Deep did not *1173 involve the theft by deception statute, but, instead, concerned the constitutionality of the general theft statute, Code 1975, § 13A-8-2(1). Andersen, although involving theft by deception, focused almost exclusively on intent; reliance was not an issue in the case.
In light of the above discussion, we reverse the judgment below.
REVERSED AND REMANDED.
TORBERT, C.J., and MADDOX, FAULKNER, JONES, ALMON, BEATTY and HOUSTON, JJ., concur.
ADAMS, J., not sitting.
NOTES
[1] Petitioner did not comply with Rule 39(k), A.R.A.P., in seeking to have supplemental facts considered with his petition for writ of certiorari. Specifically, he failed to include the additional facts in his petition to this Court, although he did include them in his brief in support of the petition. However, this failure is not fatal, in that the opinion of the Court of Criminal Appeals contains facts sufficient for our review of the issue raised.
[2] The defendant in Smith was charged and tried under the former general false pretense statute. The new Criminal Code became effective January 1, 1980.
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240 F.Supp.2d 823 (2003)
Jose BONSOL, Petitioner,
v.
Brian PERRYMAN, District Director of the Immigration and Naturalization Services, and the United States of America, Respondents.
No. 02 C 6530.
United States District Court, N.D. Illinois, Eastern Division.
January 3, 2003.
*824 Stanley J. Horn, Azulay, Horn, Villasuso & Yoo, Chicago, IL, for petitioner.
Sheila McNulty Entenman, U.S. Attorney's Office, Chicago, IL, for respondents.
MEMORANDUM OPINION AND ORDER
CASTILLO, District Judge.
Petitioner Jose Bonsol filed a petition for a writ of habeas corpus challenging the constitutionality of § 236(c) of the Immigration and Naturalization Act ("INA"), 8 U.S.C. § 1226(c), as amended by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA"), arguing that its mandatory detention provision violates his due process rights. He sought immediate release from Immigration and Naturalization Service ("INS") custody or, at the minimum, an individualized bond hearing to assess whether detention without bond was warranted in his case. Respondents filed a motion to dismiss Bonsol's habeas corpus petition for failure to state a claim and for lack of subject matter jurisdiction. On December 10, 2002, this Court issued an order granting Bonsol's petition in part and denying it in part, and ordered the INS to hold an individualized bond hearing within 10 days.[1] We also denied the INS' motion to dismiss. We issue this opinion to explain more fully our decision to grant Bonsol's request for an individualized bond hearing.
RELEVANT FACTS
Petitioner Jose Bonsol, a citizen of the Philippines, has been a permanent resident alien in the United States since November 1996. On June 29, 2001, he was convicted of possessing methamphetamine in violation of Illinois law and was sentenced to two years' probation. See 720 ILCS 570/410. As a result of this offense the INS initiated deportation proceedings *825 against Bonsol in August 2002. Pursuant to § 1226(c) of the INA, which requires the Attorney General to detain aliens deportable because of their criminal offenses, the INS detained Bonsol without bond. On September 4, 2002, the immigration judge, relying on § 1226(c), denied Bonsol's request for bond and ordered Bonsol removed to the Philippines. (R. 6, Resp't Mot. to Dismiss, Ex. 3, Immigration Judge Order.) Bonsol appealed the decision, contending that probation is not a "conviction" under Illinois law that triggers deportation proceedings under the INA. He presently awaits a final order of the Board of Immigration Appeals (BIA).
While awaiting the results of his BIA appeal, Bonsol filed a petition for a writ of habeas corpus in this Court under 28 U.S.C. § 2241. Bonsol argues that the broad sweep of the INA's mandatory detention requirement without prior individualized bond hearings violates both the procedural and substantive due process guarantees of the Fifth Amendment. Bonsol further contends that Congress's twin rationales for mandatory detention under § 1226(c)-flight risk and danger to the community-are not present in every case and thus an individualized bond hearing is necessary to ensure that his liberty interests are adequately protected.
In response, the INS filed a motion to dismiss Bonsol's petition for lack of subject matter jurisdiction and for failure to state a claim. Fed.R.Civ.P. 12(b)(1), 12(b)(6). Respondents argue first that Bonsol must exhaust his administrative remedies before seeking relief in federal court. The respondents further contend that the statute is constitutional and has been upheld by the Seventh Circuit in Parra v. Perryman, 172 F.3d 954, 958 (7th Cir.1999).
LEGAL STANDARD
A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. Autry v. N.W. Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir.1998). All wellpleaded facts are taken as true, and all inferences are drawn in favor of the non-movant. Dawson v. Gen. Motors Corp., 977 F.2d 369, 372 (7th Cir.1992). The motion will be granted only if it appears beyond a doubt that the non-movant can prove no set of facts entitling him to relief. Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 432 (7th Cir.1993).
ANALYSIS
I. This Court has jurisdiction over constitutional challenges to § 1226(c).
Federal district courts possess jurisdiction over constitutional questions raised in habeas corpus petitions. See Calcano-Martinez v. INS, 533 U.S. 348, 351, 121 S.Ct. 2268, 150 L.Ed.2d 392 (2001); Forbes v. Perryman, 222 F.Supp.2d 1076, 1077 (N.D.Ill.2002). Although § 1226(e) of the INA forecloses judicial review of discretionary INS decisions on bond or detention, the constitutionality of the statute itself may still be adjudicated in court. Parra, 172 F.3d at 957. Moreover, where habeas corpus petitioners question the constitutionality of a statute, they need not exhaust administrative remedies prior to filing their petition. Forbes, 222 F.Supp.2d at 1077; Yanez v. Holder, 149 F.Supp.2d 485, 489-90 (N.D.Ill.2001). This Court, therefore, may exercise jurisdiction over Bonsol's due process claims and consider the constitutionality of § 1226(c).
II. Without an individualized bond hearing, the INS' mandatory detention of Bonsol, a lawful permanent resident with a good-faith challenge to deportation, is unconstitutional.
Section 1226(c) states that "the Attorney General shall take into custody any alien who ... is deportable by reason of having *826 committed any offense" listed in the statute. 8 U.S.C. § 1226(c)(1)(B) (emphasis added). As Respondents note, the Seventh Circuit has ruled on the constitutionality of § 1226(c), at least as applied to aliens who concede their ultimate removability by the INS. Parra, 172 F.3d at 957. In Parra, the court held that mandatory detention under § 1226(c) did not implicate a fundamental liberty interest because the petitioner agreed with the INS that the drug offense to which he pled guilty made him eligible for deportation. Id. at 958. Because there was no possibility of avoiding deportation, the court opined that his request for a bond release was merely an attempt to "postpone[] the inevitable." Id. at 958. Significantly, however, Parra carved out an exception for three categories of aliens whose ultimate deportations, unlike Parra's own, are not certain: (1) aliens who claim they are citizens; (2) aliens who claim they have not been convicted of the offenses that trigger removal; and (3) aliens who have no country to which they can be removed. Id. at 957. Several courts have invoked these exceptions and have allowed aliens not conceding removability to bring due process challenges to § 1226(c). See, e.g., Vang v. Ashcroft, 149 F.Supp.2d 1027, 1035 (N.D.Ill.2001) (Pallmeyer, J.); Gill v. Ashcroft, No. 01 C 9879, 2002 WL 1163729, *4 (N.D.Ill. May 31, 2002) (Nordberg, J.).
Vang and Gill invoke Parra's second exception, holding that if the detained alien has a legitimate, potential defense to removal he may be eligible for release on bond while awaiting the final removal decision. In Vang, for example, the defendant's contention that he had not committed an aggravated felony cast sufficient doubt on the "inevitability" of his deportation that he deserved the possibility of release on bond. Vang, 149 F.Supp.2d at 1036. Similarly, in Gill, the petitioner claimed that his Illinois disposition was not a "conviction" for purposes of the immigration statutes. Gill, 2002 WL 1163729, at *1. Like these cases, we believe that our case is distinguishable from Parra because Bonsol has not conceded his removability and, like the petitioner in Gill, raises a good-faith challenge to his removal based on his assertion that he was not "convicted" under Illinois law. Thus, we turn to the constitutionality of § 1226(c) as applied to Bonsol.
The Fifth Amendment's guarantee of substantive due process protects Americans, including lawful permanent residents of the United States, Zadvydas v. Davis, 533 U.S. 678, 693, 121 S.Ct. 2491, 150 L.Ed.2d 653 (2001), against government conduct that "shocks the conscience" or "interferes with rights implicit in the concept of ordered liberty," Vang v. Ashcroft, 149 F.Supp.2d at 1034-5 (internal citation omitted). Where a fundamental liberty interest is at stake, the government's conduct must be narrowly tailored to meet a compelling interest. Reno v. Flores, 507 U.S. 292, 301-02, 113 S.Ct. 1439, 123 L.Ed.2d 1 (1993); United States v. Salerno, 481 U.S. 739, 750-51,107 S.Ct. 2095, 95 L.Ed.2d 697 (1987); Vang, 149 F.Supp.2d at 1035. At issue in this case is whether the mandatory detention of permanent resident aliens without possibility of bond is narrowly tailored to the INS' interest in: "(1) protecting the public from potentially dangerous criminal aliens; (2) preventing aliens from absconding during removal proceedings; and (3) correcting procedures under which twenty percent of criminal aliens released on bond did not report for deportation hearings; and (4) restoring public faith in the immigration system." Vang at 1037 (citing S.Rep. No. 104-48, at l-3 (1995)).
We believe that mandatory detention, as applied to lawful permanent resident aliens like Bonsol, is not necessary to ensure removal of criminals subject to *827 § 1226(c), and is not narrowly tailored to that objective. The provision is not narrowly tailored because it adopts a categorical approach to detention, based only on the criterion of lack of United States citizenship. It does not account for the severity of the criminal offense at issue, the detainee's alien status, his ties to the community versus his risk of flight, or any other factor that is otherwise determinative according to Congress's stated reasons for the mandatory detention provision. Although Congress has broad power over immigration and thus it may be argued that such detention of aliens falls within this power, see Flores, 507 U.S. at 294-95, 113 S.Ct. 1439, legal residents are entitled to heightened constitutional protection by virtue of their status and links to the community, Zadvydas, 533 U.S. at 694, 121 S.Ct. 2491; Landon v. Plasencia, 459 U.S. 21, 32, 103 S.Ct. 321, 74 L.Ed.2d 21 (1982); Plyler v. Doe, 457 U.S. 202, 210, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982) ("Aliens ... have long been recognized as `persons guaranteed due process of law'"); Patel v. Zemski, 275 F.3d 299, 310 (3d Cir.2001); Gill, 2002 WL 1163729, *5. But see Welch v. Ashcroft, 293 F.3d 213, 221 (4th Cir. 2002) (detention of permanent resident aliens pending the outcome of removal proceedings does not implicate a fundamental right); Parra, 172 F.3d at 958. Moreover, the relief sought in this case-an individualized bond hearing-does not in any way infringe on the political branches' plenary power with respect to immigration issues, Zadvydas, 533 U.S. at 695, 700, 121 S.Ct. 2491; Flores, 507 U.S. at 305, 113 S.Ct. 1439; our ruling simply accords detainees the opportunity to establish that detention pending removal is not warranted in their case. Because we hold that Bonsol's substantive due process rights are infringed by the mandatory detention provision of § 1226(c), he is entitled to the due process that an individualized bond hearing provides. This minimal accommodation will ensure that Petitioner's due process rights are not abridged and is not onerous when weighed against the liberty interest at stake.[2]
CONCLUSION
For the foregoing reasons, we granted in part and denied in part Bonsol's petition for habeas corpus, (R. 1-1), and denied the Government's motion to dismiss, (R. 6-1).
NOTES
[1] Pursuant to this Court's Order, the INS promptly granted Bonsol an individualized bond hearing, and the immigration judge set bond in the amount of $10,000.
[2] We emphasize that this opinion is limited to the narrow holding that a legal resident alien, who contests his removability, may not be detained without an individualized bond hearing pursuant to § 1226(c) because such mandatory detention violates his substantive due process rights. We do not hold that § 1226(c) is facially invalid, nor do we decide whether Bonsol's procedural due process rights were violated in this case. But see Welch, 293 F.3d at 218 n. 4 (noting that procedural due process challenge "collapses into" the substantive due process challenge).
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915 P.2d 720 (1996)
128 Idaho 490
In the Matter of Termination of the Parental Rights of Tawny Craven and John Craven, Husband and Wife, and Richard Countryman, an Individual; in the Matter of the Adoption of Scott Craven, a Minor Child.
John CRAVEN, Appellant-Appellant on Appeal,
v.
John and Jane DOE, husband and wife and prospective adoptive couple, Respondent-Respondents on Appeal.
No. 22398.
Supreme Court of Idaho.
April 25, 1996.
Raymundo G. Peña, Rupert, for appellant.
Ellsworth, May, Sudweeks, Stubbs, Ipsen & Perry, Twin Falls, for respondents.
*721 SILAK, Justice.
This is an appeal from the district court's order affirming the magistrate's order terminating the parental rights of Appellant John Craven, Sr. (Craven) and authorizing the adoption of the minor Scott Craven (Scott) by Respondents John and Jane Doe (the Does). We affirm.
I.
FACTS AND PROCEDURAL BACKGROUND
Scott was born on May 3, 1993. His mother is Tawny Craven (Tawny). Although Scott was conceived out of wedlock, Craven eventually married Tawny, and has since filed for divorce. According to Tawny, the natural father could either be Craven or another man with whom she had intercourse.
When Scott was approximately two months old Tawny transferred his custody voluntarily to the Department of Health and Welfare (the Department) which then placed him in foster care. At the expiration of the foster care license of Scott's foster parents, the Department, in conjunction with Tawny, transferred his custody to the Does. On March 8, 1994, pursuant to I.C. § 16-1501, et seq. and I.C. § 16-2001, et seq., the Does filed a petition seeking the termination of Tawny's parental rights and for adoption of Scott. At the hearing held on March 11, 1994, Tawny signed a consent to termination of parental rights and to adoption in front of the magistrate, and the court entered an order for temporary guardianship appointing the Does as temporary guardians for Scott. It is Tawny's wish that the Does adopt Scott.
On March 15, 1994, an amended petition for termination of parental rights and petition for adoption were filed by the Does identifying the other putative father as a potential natural father and seeking the termination of his parental rights. That individual then executed a consent to the termination of his parental rights before the magistrate.
A second amended petition for termination of parental rights was filed by the Does on April 13, 1994, seeking to terminate the parental *722 rights of Craven. The Does cited as the basis for the court's jurisdiction their residence in Blaine County pursuant to I.C. § 16-1506, the residence of the minor child in Blaine County and his presence in the state of Idaho pursuant to I.C. § 16-2003, and that the Does stood in loco parentis to the child. The Does sought termination of Craven's parental rights on the basis of abandonment and/or neglect pursuant to I.C. § 16-2005(a) and (b), and that it would be in the best interest of the child pursuant to I.C. § 16-2005(e).
On April 15, 1994, Craven was served with the second amended petition while serving a criminal sentence at the Idaho State Correctional Institution. The petition also advised Craven that the Does would seek to be appointed temporary guardians of Scott during the pendency of the matter.
On May 13, 1994, a motion was filed by the Does requesting the Department be appointed to do an investigation and report to the court on the issue of the termination of the parent/child relationship between Craven and Scott pursuant to I.C. § 16-2008(b), which the court granted. Thereafter, the court entered an amended order appointing a guardian ad litem.
The first day of a two day trial in this matter was held on August 31, 1994, in Blaine County, Idaho. Craven was present and represented by counsel. The second day of the trial was held on September 21, 1994, and Craven was again present and represented by counsel.
On November 10, 1994, the magistrate entered findings of fact and conclusions of law in support of the termination of Craven's parental rights. The court found that clear, convincing and substantial evidence supported termination of parental rights on the grounds of abandonment, neglect and best interests of parent and child. The district court's findings included the following: Craven was born on July 7, 1966; that Craven was incarcerated at the time of Scott's birth; that he has severe alcohol and substance abuse problems; that he is the father of four other children by two other women, and has not seen his other children since the summer of 1992; that Craven has an extensive criminal record, beginning when he was 14 to 16 years old in California; that Craven is not eligible for parole until June 1996, and could possibly be incarcerated until 2000; that Craven has a history of a lack of financial support for his children and has a sporadic work history; and that Craven's custody/parenting plan is unsuitable in that he wishes his sister to have custody of Scott until he is out of prison, but his sister has been diagnosed with a moderately severe learning disability, chronic depression, and an atypical personality disorder characterized by social avoidance and withdrawal, disorganization and distress and chronic depression and anxiety. The decree of termination of parent/child relationship was issued on November 22, 1994.
Craven appealed the magistrate's decision to the district court which issued a modified memorandum decision affirming the trial court's decree terminating Craven's parental rights. Craven appeals.
II.
ISSUES ON APPEAL
1. Whether the magistrate erred in the appointment of temporary guardian in the hearing held on March 11, 1994, thereby precluding the Does' right to file a petition for termination of parental rights.
2. Whether Craven's due process rights were violated by not having received notice of the hearing of March 11, 1994.
3. Whether substantial evidence supported the magistrate's finding that Craven's parental rights should be terminated on the grounds of abandonment, neglect, and best interests of child and parent.
III.
ANALYSIS
A. The Magistrate Did Not Err In The Appointment Of The Does As Temporary Guardians At The Hearing Held On March 11, 1994, And The Does' Right To File A Petition For Termination Of Parental Rights Was Therefore Not Precluded.
Craven argues that the trial court failed to follow the procedures for court appointment *723 of a guardian for Scott pursuant to I.C. § 15-5-309(a), and that since the Does were improperly appointed, they lacked standing to file the petition for termination of Craven's parental rights. This argument is without merit.
The Does were given custody of Scott by the Department on approximately March 5, 1994, after the foster parents' license expired and at the request of the child's mother, Tawny. At the hearing held on March 11, 1994, the court entered an order awarding temporary custody and guardianship to the Does, taking into account the mother's request and Craven's unavailability due to his incarceration. We affirm this decision.
In order to have standing to file a petition for termination of parental rights, a party must qualify under I.C. § 16-2004. Section 16-2004(b) provides that "a petition may be filed by the guardian of the person or the legal custodian of a child or person standing in loco parentis to the child." (Emphasis added). The Does came to stand in loco parentis to Scott on March 5, 1994, three days prior to the March 8, 1994 filing of the petition. This transfer of custody by the Department with the mother's consent was not contingent upon the court appointing the Does as Scott's custodians or guardians. Thus, we hold that because the Does stood in loco parentis to the child at the time they filed the petition, they had standing to file it, and it is irrelevant whether the court later appointed them temporary guardians.
B. Craven's Due Process Argument Was Not Preserved On Appeal.
Craven argues that after the petition was filed, the trial court was required to give him notice of the hearing pursuant to I.C. § 16-2007. Craven did not receive notice of this matter until May 1994 after the second amended petition was filed, and he claims that this deprived him of due process. This argument is also without merit because the issue was not preserved on intermediate appeal to the district court.
Before the trial actually began on August 31, 1994, the magistrate heard a series of motions filed by Craven's court appointed attorney, Sheila John. During one such motion, Ms. John argued that Craven was denied due process because of his lack of notice of the March 1994 hearing. The magistrate ruled from the bench that there was no due process violation because Craven's parental rights were not affected until the time of the trial, August 31, 1994, as opposed to March 11, 1994.
Craven thereafter filed a notice of appeal to the district court listing four issues on appeal. None of these issues concerned a due process violation. Accordingly, the district court's decision does not address due process. Thus, even though the due process issue was raised and determined in the magistrate court, because it was not raised in the intermediate court, i.e., the district court in this case, it cannot be considered by this Court on this second appeal. Cf. Nollenberger v. Nollenberger, 122 Idaho 186, 190, 832 P.2d 757, 761 (1992) (although appellant raised issue in district court, because he had not preserved issue by raising it before the magistrate, Supreme Court declined to address it); see, e.g., Wood v. Wood, 124 Idaho 12, 16-7, 855 P.2d 473, 477-78 (Ct.App.1993) (In order to be presented on appeal, issues must be correctly framed and preserved in the court below; an issue not raised in an intermediate appeal will not be decided by a higher court.); Wulff v. Peralta, 123 Idaho 567, 570, 850 P.2d 216, 219 (Ct.App.1993) (Bases for award of attorney fees which were not presented on appeal to the district court from the magistrate division would not be considered on appeal by the Court of Appeals); Desfosses v. Desfosses, 120 Idaho 354, 356, 815 P.2d 1094, 1096 (Ct.App.1991) (Appellants may not raise issues in a higher court different from those introduced in the intermediate court when a second appeal is taken.). We hold that when an issue is raised before a magistrate, but is not raised on appeal to the district court, such an issue has not been preserved for review by this Court.
C. Substantial Evidence Supported The Magistrate's Finding That The Parental Rights Of Craven Should Be Terminated On The Grounds of Abandonment, Neglect, And Best Interests Of Child And Parent.
In proceedings to terminate parental rights, the grounds for termination must *724 be established by clear and convincing evidence as required by the due process clause of the Fourteenth Amendment and I.C. § 16-2009. Matter of Aragon, 120 Idaho 606, 608, 818 P.2d 310, 312 (1991). This Court's review of the trial court's findings of fact is limited, and where the magistrate has granted a petition for the termination of the parent/child relationship, the court's "conclusion will not be disturbed on appeal so long as there is substantial competent evidence in the record to support the findings." 120 Idaho at 608, 818 P.2d at 312; In Interest of Bush, 113 Idaho 873, 876, 749 P.2d 492, 495 (1988).
In addition to affirming the magistrate's decision on the above procedural issues, we hold that there is substantial and competent evidence of a substantive nature that supports termination of Craven's parental rights. The magistrate court made extensive findings of fact to lead it to conclude that Craven's parental rights should be terminated pursuant to I.C. § 16-2005(a) on the grounds of abandonment, § 16-2005(b) on the grounds of neglect, and § 16-2005(e) on the grounds of best interest of the parent and child. The court considered Craven's alcohol and drug abuse, his extensive criminal record, his sporadic employment, his failure to financially support his four other children and his history of no parenting nor financial support of this child. The court relied on the testimony of Scott's mother, Tawny, the guardian ad litem, the court appointed social worker, and a qualified expert in the area of drug and alcohol abuse. The evidence supporting the magistrate's findings is clear and convincing, as the district court determined, and the magistrate's decision should therefore be affirmed.
CONCLUSION
We hold that the magistrate did not err in appointing the Does as temporary guardians at the March 11, 1994 hearing, and that the Does had standing to file the petition for termination of parental rights in that they stood in loco parentis to Scott at the time the petition was filed.
We further hold that Craven's due process issue was not preserved on appeal to the district court, and therefore, cannot be considered on appeal to this Court.
Finally, we hold that substantial and competent evidence supported the magistrate's findings of fact and conclusions of law that the parental rights of Craven should be terminated.
Accordingly, the magistrate's decree of termination of parent/child relationship is affirmed.
No attorney fees on appeal. Costs on appeal to respondents.
McDEVITT, C.J., and JOHNSON, TROUT and SCHROEDER, JJ., concur.
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} |
In the
United States Court of Appeals
For the Seventh Circuit
No. 06-3882
S ANDRA L. V ALENTINO,
Plaintiff-Appellant,
v.
V ILLAGE OF S OUTH C HICAGO H EIGHTS, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04 CV 2373—William J. Hibbler, Judge.
A RGUED M AY 12, 2008—D ECIDED JULY 30, 2009
Before R OVNER, E VANS, and W ILLIAMS, Circuit Judges.
W ILLIAMS, Circuit Judge. In 2001, nepotism was alive
and well in the Village of South Chicago Heights. Its small
municipal government employed at least six members of
its mayor’s extended family, and several of his friends and
campaign supporters. When Sandra Valentino allegedly
discovered that the Village was paying several of these
employees for hours that they did not actually work, she
2 No. 06-3882
discussed the situation with the future head of Citizens
Against Corruption, William Bramanti. Bramanti sent a
letter to the citizens of the Village detailing this alleged
ghost payrolling and otherwise criticizing Mayor David
Owen. Coincidentally, the next business day, Village
Administrator Paul Petersen surreptitiously searched
Valentino’s desk and discovered that she had been photo-
copying the office’s employee sign-in sheets. Later that
day, on the say-so of Mayor Owen, Petersen terminated
Valentino’s employment.
Valentino brought claims against Owen, Petersen, and
the Village for First Amendment retaliation in violation
of 42 U.S.C. § 1983 and for retaliatory discharge under
Illinois law. Although the district court found that
Valentino had stated a prima facie case for retaliation, it
granted summary judgment for Defendants because it
concluded that they had put forth a lawful, plausible
reason for terminating Valentino, which she could not
prove was pretextual. The district court also found that
the Village was immune to Valentino’s Illinois tort claim
under section 2-201 of the Illinois Tort Immunity Act.
We agree with the district court that Valentino was
speaking on a matter of public concern and that she
stated a prima facie case for retaliation. However, we
find that she has proffered sufficient evidence to cast
serious doubt on the legitimacy of Defendants’ stated
reason for terminating her, such that a reasonable jury
could conclude that it was a mere pretext for firing her
for speaking out against the purported ghost payrolling.
Further, we find that the district court erred in applying
No. 06-3882 3
section 2-201 of the Illinois Tort Immunity Act because
it failed to consider that in order to be immune under
this section, the alleged unlawful act must be a “policy
decision.” For these reasons, we reverse the district
court’s grant of summary judgment to Defendants.
I. BACKGROUND
Sandra Valentino began working as a part-time
secretary in the Village of South Chicago Heights’
building department in 1989. From 1995 until 1997, she
worked under William P. Bramanti, a building inspector
with the Village. In 1997, the Village transferred her to
the water department, where she performed various ad-
ministrative tasks.
In November 2001, the Village hired Joe Minotti as a
water inspector. Minotti allegedly told Valentino that he
was hired because he was a “vote getter” for Defendant
Mayor David Owen and an active supporter of his cam-
paign for office. Valentino also allegedly observed that
Minotti failed to send certain citizens appropriate
water bills, failed to shut off their water in a timely man-
ner, and fraudulently handled the purchase of his new
home. After Valentino presented Minotti with a list of
those water accounts that she believed he improperly
handled, and complained about his actions to Mayor
Owen, several Village Trustees, and Defendant Paul
Petersen, Village Administrator, both Minotti and
Valentino received reprimands.
Her concern about Minotti, whom the Village hired
without prior public works experience, caused Valentino
4 No. 06-3882
to become skeptical of the Village’s, or, more specifically,
Mayor Owen’s, hiring practices. Valentino notes that the
Village employs several of Mayor Owen’s friends and
relatives, including Eric Faoro, Owen’s son-in-law; Erika
and Yvette Owen, Owen’s daughters and Petersen’s
nieces; Scott Owen, Owen’s son and Petersen’s nephew;
Sally Marrufo, and Ron Diederich. Valentino became
suspicious that Mayor Owen sanctioned the “ghost
payrolling” of these persons—that is, Valentino believed
that the Village paid them salaries for hours that they
did not actually work. Valentino noticed that several of
these employees were rarely in the office but still received
weekly paychecks. She communicated her concerns to
Bramanti, who had quit in late 2001 or early 2002 because
of conflicts with Owen. In these conversations, Valentino
expressed her negative view of the nepotism in the Vil-
lage’s hiring practices.
After Valentino shared her suspicions with Bramanti,
he submitted a series of requests pursuant to the
Freedom of Information Act, looking to obtain copies of
the time cards and sign-in sheets for Owen’s associates
and relatives. Petersen initially denied Bramanti’s re-
quests. On February 3, 2003, the same day that Petersen
sent a letter to Bramanti denying his requests, Mayor
Owen told another employee, Rose Bautista, that
“[Valentino] is going to get her butt canned,” ostensibly
because of her relationship with Bramanti.1 Several days
1
Although there is no direct evidence that Owen or Petersen
knew that Valentino was communicating with Bramanti
(continued...)
No. 06-3882 5
later, Mayor Owen overruled Petersen and released
certain time records to Bramanti.
In the meantime, starting in February 2003, Valentino
began to make copies of the daily sign-in sheets, in part to
verify her suspicions regarding ghost payrolling and in
part to determine if the Village was unfairly docking
her pay when she was tardy, while not docking the pay
of other Village employees. These sign-in sheets were
left on the office counter, and employees, when they
arrived at and left from the office, were supposed to
sign in and out. Valentino communicated her observa-
tions regarding these sign-in sheets to Bramanti.
On February 28, 2003, when he did not receive a full
response to his FOIA requests and learned of Valentino’s
observations regarding ghost payrolling, Bramanti,
through his organization, Citizens Against Corruption,
sent a letter to the citizens of the Village accusing Owen
of ghost payrolling his relatives and of various other
indiscretions.
On March 3, 2003, the next business day after he sent
this letter, and days after he submitted another FOIA
request to the Village, Valentino arrived at her desk and
(...continued)
regarding ghost payrolling, it is undisputed that they knew
that both Bramanti and Valentino were concerned about
employment practices at the Village and that they were
friends. Moreover, Petersen testified that he told Sally Marrufo
not to talk to Valentino because she would pass informa-
tion along to Bramanti.
6 No. 06-3882
found Petersen waiting for her. Before Valentino’s
arrival, Petersen had searched her desk and found copies
of the employee sign-in sheets. Petersen consulted with
Owen, who instructed Petersen to ask the Village’s legal
counsel if Owen could fire Valentino because she
copied these sign-in sheets. Counsel told Petersen that
copying the sign-in sheets was a lawful reason to
terminate Valentino, and Petersen terminated her on
March 3, 2003, after fourteen years of service to the Village.
Valentino (and Bramanti, who is not a party to this
appeal) filed this section 1983 action, claiming that Owen,
Petersen, and the Village retaliated against her for exer-
cising her First Amendment rights and speaking out
against Defendants’ practices of nepotism and alleged
ghost payrolling. The district court granted summary
judgment for Defendants, and Valentino now appeals.
II. ANALYSIS
A. Valentino Has Satisfied All the Necessary Require-
ments to Reach Trial on Her Retaliation Claim
In order to establish a prima facie case of unlawful
First Amendment retaliation, a public employee must
establish that: (1) she engaged in constitutionally pro-
tected speech; (2) she suffered a deprivation likely to deter
her from exercising her First Amendment rights; and
(3) her speech was a motivating factor in her employer’s
adverse action. Massey v. Johnson, 457 F.3d 711, 716 (7th Cir.
2006). If a plaintiff establishes a prima facie case, the
burden shifts to the employer to demonstrate that it
No. 06-3882 7
would have taken the same action in the absence of the
protected speech. Id. at 717. If the employer carries this
burden, the plaintiff may still reach trial by producing
sufficient evidence to allow a reasonable fact finder
to determine that the employer’s reasons were merely
a pretext for firing the employee, at least in part, for exer-
cising her First Amendment rights. Id. We review
de novo the district court’s grant of summary judgment
to Defendants based on its finding that a plaintiff failed
to proffer sufficient evidence of pretext. Id. at 716.
1. Valentino Established a Prima Facie Case of Retali-
ation
There is no dispute that Defendants, in firing Valentino,
caused her to suffer an adverse action likely to chill her
freedom of speech. The only questions for us to resolve
in determining whether Valentino has stated a prima
facie case for retaliation is whether she engaged in con-
stitutionally protected speech and whether a reason-
able fact finder could determine that her speech was a
motivating factor behind her termination.
Valentino, as a public employee, does not relinquish
all First Amendment rights merely because she works
for the government. Brooks v. Univ. of Wisc. Bd. of Regents,
406 F.3d 476, 479 (7th Cir. 2005). That said, she does not
have an unfettered right to express herself on all matters
related to her public employment. Id. Instead, she has a
protected right, in certain circumstances, to speak as a
citizen addressing matters of public concern. Garcetti v.
8 No. 06-3882
Ceballos, 547 U.S. 410, 416-17 (2006). When “public em-
ployees make statements pursuant to their official duties,
the employees are not speaking as citizens for First
Amendment purposes, and the Constitution does not
insulate their communications from employer disci-
pline.” Id. at 421. In order for us to find that Valentino
engaged in constitutionally protected speech, we must
determine that she spoke in the capacity of a private
citizen and spoke on a matter of public concern. Renken
v. Gregory, 541 F.3d 769, 773 (7th Cir. 2008).
Defendants argue that Valentino did not direct her
speech at the public, but rather privately confided in
Bramanti because her main concern was the docking of
her pay, rather than ghost payrolling, which is arguably
a matter of public concern. True, speech that addresses
“a private or personal interest, as opposed to a com-
munity one, does not satisfy the standards for First
Amendment protection.” Spiegla v. Hull, 371 F.3d 928, 935
(7th Cir. 2004). However, we must look at the content of
the speech as a whole, Gazarkiewicz v. Town of Kingsford
Heights, Ind., 359 F.3d 933, 942-43 (7th Cir. 2004), when
determining if it addresses a matter of public concern. In
making this argument, Defendants confuse their stated
reason for firing Valentino (photocopying of the sign-in
sheets) with her speech as a whole. Valentino admits
that she photocopied the employee sign-in sheets in part
because she was privately concerned with the docking
of her pay. However, she communicated the information
on these sheets to Bramanti, and, more importantly,
discussed her suspicions regarding the issue of ghost
payrolling with Bramanti long before she began copying
them.
No. 06-3882 9
Whether a statement rises to the level of public concern
is a question of law, and in answering this question we
look to the “content, form, and context” of the statement.
Connick v. Myers, 461 U.S. 138, 147-48, 148 n.7 (1983). Then
we balance “the interests of the [employee], as a citizen,
in commenting upon matters of public concern and the
interest of the State, as an employer, in promoting the
efficiency of the public services it performs through
its employees.” Schad v. Jones, 415 F.3d 671, 674 (7th Cir.
2005) (quoting Pickering v. Bd. of Educ., 391 U.S. 563, 568
(1968)).
It is by now well-established that speech protesting
government waste addresses a matter of public concern
and is therefore entitled to constitutional protection. See,
e.g., Wainscott v. Henry, 315 F.3d 844, 849 (7th Cir. 2003)
(“An employee’s ability to highlight the misuse of
public funds or breaches of public trust is a critical
weapon in the fight against government corruption and
inefficiency.”); see also Miller v. Jones, 444 F.3d 929, 935
(7th Cir. 2006); Brooks, 406 F.3d at 484 (finding that gov-
ernment corruption is a quintessential matter of public
concern). Ghost payrolling—paying public employees
with taxpayer dollars for hours that they do not work—is
a prime example of such waste. Here, although Valentino
might have been personally concerned that the Village
was docking her pay, her comments to Bramanti
strongly implicate the public concerns of government
corruption and waste caused by ghost-payrolling. Her
speech need not be directed at supervisors or at a large
contingent of the public to be protected. It is enough
that she spoke on a matter of public concern to Bramanti,
10 No. 06-3882
a member of the public. Moreover, although we
consider the motive of the speaker as part of the “context”
in which the speech was made, see Miller, 444 F.3d at
937, “we have emphasized that speech of public impor-
tance is only transformed into a matter of private
concern when it is motivated solely by the speaker’s
personal interests.” Gazarkiewicz, 359 F.3d at 941-42 (em-
phasis added); see also Breuer v. Hart, 909 F.2d 1035, 1039
(7th Cir. 1990) (“[T]he fact that these serious allega-
tions arose in the context of what began as a personal
dispute does not in itself disqualify from protection all
speech on the topics arising from that dispute”). Given
that Defendants do not make an argument that their
efficiency concerns outweigh the public concern raised
by Valentino, we find that she has adequately shown
that she engaged in constitutionally protected speech.
The next question is whether Valentino proffered suffi-
cient circumstantial evidence to show that her protected
speech was a motivating factor in Defendants’ decision
to terminate her employment. See Massey, 457 F.3d at 717.
Valentino relies on her open complaints about her pay
being docked vis-à-vis Owen’s relatives, her relation-
ship with Bramanti, and the suspicious timing of her
firing to show that a reasonable jury could infer that
Defendants fired her because she complained about
ghost payrolling. Defendants retort that because Owen
and Petersen, the persons who made the final firing
decision, allegedly did not know that Valentino com-
municated with Bramanti regarding ghost payrolling, a
jury cannot possibly infer that they fired her in retaliation
for this communication. As the district court aptly noted,
No. 06-3882 11
it would be rare for a plaintiff to have smoking gun
evidence that a defendant knew of her protected speech
or for a defendant to admit such knowledge. Here, there
is no direct evidence that either Owen or Petersen knew
that Valentino was communicating with Bramanti. How-
ever, they knew that Valentino and Bramanti had a long-
standing personal relationship, that Bramanti was sub-
mitting FOIA requests for certain employees’ time
sheets, and that Valentino was examining the office’s
master time sheets. Further, Petersen told at least one
employee to stop talking with Valentino because she
was passing information to Bramanti. In addition, the
timing of Valentino’s termination occurred just one
business day after Bramanti released a letter to the
public regarding ghost payrolling in the Village, and
shortly after his series of FOIA requests. See id. (“Circum-
stantial proof, such as the timing of events or the
disparate treatment of similar individuals, may be suf-
ficient to establish the defendant’s retaliatory motive.”);
Culver v. Gorman & Co., 416 F.3d 540, 545-46 (7th Cir. 2005);
Holland v. Jefferson Nat’l Life Ins. Co., 883 F.2d 1307, 1314-15
(7th Cir. 1989). Although suspicious timing in and of
itself is usually insufficient to create a triable issue, Stone
v. City of Indianapolis Pub. Utils. Div., 281 F.3d 640, 644
(7th Cir. 2002), the suspicious timing in this case com-
bined with Defendants’ knowledge of Valentino’s rela-
tionship with Bramanti, Petersen’s surreptitious search of
her desk, and the timing of Owen’s purported statement
that she “is going to get her butt canned” is enough
circumstantial evidence upon which a jury could conclude
that Defendants terminated her, at least in part, because
12 No. 06-3882
she spoke out against the Village’s supposed ghost
payrolling.
2. Valentino Has Presented Sufficient Evidence
From Which A Jury Could Infer that Defendants’
Stated Reason for Terminating Her Employment
Was Pretextual
Defendants contend that Valentino’s “theft” of the office
sign-in sheets was their true motivation for firing her.
Defendants claim they were worried that such “theft”
could lower office morale, foster identify theft, constitute
an invasion of the Village’s employees’ privacy, or have
other deleterious effects. The district court, finding that
“Valentino has produced no evidence that the Village’s
concern about employee privacy was pretextual,” granted
Defendants’ motion for summary judgment. In doing so,
the district court suffered the misapprehension that a
plaintiff necessarily must proffer different or additional
evidence to rebut pretext from that she used to estab-
lish her prima facie case. This is not so. Often, the same
evidence used to establish the prima facie case is suf-
ficient to allow a jury to determine that a defendant’s
stated reason for terminating a plaintiff was a mere front
for an ulterior, unlawful motive. See, e.g., McGreal v.
Ostrov, 368 F.3d 657, 681 (7th Cir. 2004) (citing Glass v.
Dachel, 2 F.3d 733, 743-44 (7th Cir. 1993)) (finding defen-
dant’s post hoc explanation of employee’s termination
“too fishy” to allow summary judgment); Holland,
883 F.2d at 1313 (holding that plaintiff may reach trial
No. 06-3882 13
by showing, through circumstantial evidence, that em-
ployer’s articulated reason for its action was not worthy
of credence and was thus pretextual); Collin v. Illinois,
830 F.2d 692, 705 (7th Cir. 1987) (same).
Here, there are several factors that a jury may examine
in deciding not to give credence to Defendants’ stated
reason for firing Valentino. Valentino did not “steal” the
sign-in sheets. She did not remove them from the
Village’s office. She simply photocopied them and
stored them in her desk. We fail to see how this behavior
differs from Valentino simply writing down the times
that each employee clocks in and out. Any argument
pertaining to the privacy of the information on these
sheets is specious at best. The sign-in sheets were
publicly displayed in the office, and the Village enacted
the sign-in policy to create transparency in the arrival
and departure times of the Village’s employees. Moreover,
the Village had already publicly released some of the
information on these sign-in sheets when it partially
granted Bramanti’s FOIA requests. Given that these times
were available for all to see, a jury may be hard pressed
to find any substantial privacy concerns implicated in
Valentino’s copying of them. With regards to Defendants’
professed fear that Valentino was committing “identity
theft,” unless the employees were required to sign into
work using their social security and credit card numbers,
we fail to see any evidence that even remotely supports
this belief.
These factors, combined with the fact that Petersen
singled out Valentino’s desk to be searched after hours,
14 No. 06-3882
make the Village’s explanation “too fishy”, or, put another
way, “too convenient,” to allow summary judgment in
Defendants’ favor. It seems unlikely that Petersen would
randomly decide to search only Valentino’s desk and
terminate her shortly thereafter, coincidentally, on the
same day that Bramanti’s latest letter was released. See
McGreal, 368 F.3d at 681 (“The timing of these events
provides a genuine issue of fact regarding the true
reason for the Department’s actions against McGreal. The
timing demonstrates an extreme displeasure with
the content of McGreal’s statements just as easily as it
indicates a concern for potential disruption in the De-
partment.”). This is especially true because Valentino’s
termination occurred without warning after nearly
fifteen years of uninterrupted service. See Spiegla, 371
F.3d at 943 (“Taken together, the closely related sequence
of events, Spiegla’s long and uninterrupted tenure, and
Johnson’s anger with Spiegla demonstrate that Spiegla’s
speech was a motivating factor in the decisions to
transfer her and to change her shift.”).
This is not to say that it is impossible for Defendants
to have been motivated, in part, by Valentino’s photo-
copying of the sign-in sheets when they decided to termi-
nate her employment. However, as we have stated before,
a retaliatory animus need not be the sole motive behind
a termination decision for a plaintiff to have an
actionable claim. Id. at 942. Rather, it need be only one
factor in the employer’s decision. Id. (“[A] motivating
factor does not amount to a but-for factor or to the
only factor, but is rather a factor that motivated the de-
fendant’s actions.”). Since Valentino has shown that a
No. 06-3882 15
reasonable jury could find that an improper purpose was
a motivating factor in her termination, the burden shifts
to Defendants “to prove by a preponderance of the evi-
dence that the same actions would have occurred in the
absence of the protected conduct.” Id. at 943 (citing
Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274,
287 (1977)). Here, Defendants have failed to meet that
burden. Aside from showing that Defendants’ proffered
reason is specious at best, the evidence establishing
Valentino’s prima facie case is substantial enough to
allow a jury to infer that Defendants’ assertion that they
fired Valentino for “theft” of the sign-in sheets was
mere pretext. Given that the evidence Valentino has
offered established a prima facie case of retaliation, and
is enough to rebut Defendants’ proffered reason for
terminating her, we reverse the districts court’s grant of
summary judgment to Defendants.
B. Valentino’s Monell Claim May Proceed to Trial
Because the Evidence Indicates That Mayor Owen
Was a Policymaker for the Village Regarding Hir-
ing/Firing Decisions
A municipality, such as the Village, may be liable for a
section 1983 violation if, among other things: (1) it has a
permanent and well-settled municipal custom or prac-
tice that, although not authorized by official law or
policy, was the moving force behind the plaintiff’s consti-
tutional injury; or (2) an individual with final policy-
making authority for the municipality (on the subject
in question) caused the constitutional deprivation. Monell
16 No. 06-3882
v. City of New York, 436 U.S. 658, 690 (1978); Simmons v.
Chicago Bd. of Educ., 289 F.3d 488, 494 (7th Cir. 2002).
Monell liability is not a form of respondeat superior;
instead, a municipality can only be held liable “when
execution of [its] policy or custom, whether made by
its lawmakers or by those whose edicts or acts may fairly
be said to represent official policy, inflicts the injury that
the government as an entity is responsible for under
section 1983.” Monell, 463 U.S. at 694. Here, Valentino
seeks redress under both of the aforementioned theories.
As to the first theory, the district court correctly con-
cluded that Valentino could not show that the Village
had a custom or practice of sanctioning retaliation in
violation of the First Amendment. Valentino alleges
that Mayor Owen had denied benefits or otherwise at-
tempted to quash the speech of former political
opponents and their associates.2 “If the same problem
has arisen many times and the municipality has
acquiesced in the outcome, it is possible (though not
necessary) to infer there is a policy at work.” Lewis v. City
of Chicago, 496 F.3d 645, 656 (7th Cir. 2007) (quoting Phelan
v. Cook County, 463 F.3d 773, 789 (7th Cir. 2006) (quoting
2
Among other things, Valentino alleges that Owen and/or
Petersen: (1) denied a political opponent, Joe Kudra, insurance
benefits; (2) denied a supporter of Kudra, Rosario DelGroso,
“pickup of debris that would otherwise normally take place”;
(3) sent a letter to Valentino’s stepfather, demanding that he
pay $3.25 or have his water shut off; and (4) threatened to
fire George Ellis unless he moved out of the house of one of
Owen’s political rivals.
No. 06-3882 17
Calhoun v. Ramsey, 408 F.3d 375, 380 (7th Cir. 2005))).
Valentino has failed to establish that the Village has
condoned a continual practice of terminating employees
who speak out against Mayor Owen or his political allies.
Valentino does not contend that any of these alleged
instances of retaliation ever resulted in a meritorious
lawsuit or settlement. Further, she does not provide
tangible evidence of what exactly these persons’ “speech”
consisted of or whether it was constitutionally pro-
tected. She also fails to adequately delineate how
Owen’s response to these persons’ speech was designed
to quell their First Amendment expression. In short,
although Valentino presents evidence of possible retalia-
tion against others, she does not show how these separate
incidents weave together into a cognizable Village pol-
icy. She fails to “introduce evidence demonstrating that the
unlawful practice was so pervasive that acquiescence on
the part of policymakers was apparent and amounted to a
policy decision.” Phelan, 463 F.3d at 790.
Valentino’s second theory, that Owen was the official
policymaker for the Village on issues involving hiring
and firing, merits further scrutiny. It is well-established
that when a particular course of action is directed by
those who set municipal policy, the municipality is respon-
sible under section 1983, even if the action in question
is undertaken only once. Pembaur v. City of Cincinnati, 475
U.S. 469, 480-81 (1986). Valentino contends that because
Owen made the ultimate decision to fire her, Monell
liability should apply. But just because Owen is the
decisionmaker on hiring/firing decisions for the Village
government does not necessarily make him the
18 No. 06-3882
policymaker on those issues. “The fact that a particular
official—even a policymaking official—has discretion
in the exercise of particular functions does not, without
more, give rise to municipal liability based on an
exercise of that discretion.” Id. at 481-82. Rather, such an
official also must be responsible for establishing final
government policy on a particular issue. Id. at 482-83
(finding that prosecutor who had authority to make
final decision about warrantless entry into home was a
policymaker for municipality). The determination of
whether a person has policymaking authority is a
question of state law, and is to be decided by the court.
Id.; Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 737
(1989); Kujawski v. Bd. of Comm’rs of Bartholomew County,
Ind., 183 F.3d 734, 737 (7th Cir. 1999). Our inquiry is not
whether an official is a policymaker on all matters for
the municipality, but whether he is a policymaker “in a
particular area, or on a particular issue”; here, the
relevant question is whether Mayor Owen is a policy-
maker on personnel decisions. Kujawski, 183 F.3d at 738
(citing McMillian v. Monroe County, 520 U.S. 781, 785
(1997)). Officials with final decisionmaking authority are
deemed policymakers for Monell purposes, and we need
to look to state law to determine the scope of such author-
ity. See Pembaur, 475 U.S. at 480; City of St. Louis v.
Praprotnik, 485 U.S. 112, 134 (1988); Jett, 491 U.S. at 737.
Helpful in determining whether an official is a final
decisionmaker is an inquiry into: (1) whether the official
is constrained by policies of other officials or legislative
bodies; (2) whether the official’s decision on the issue
in question is subject to meaningful review; and
No. 06-3882 19
(3) “whether the policy decision purportedly made by
the official is within the realm of the official’s grant of
authority.” Randle v. City of Aurora, 69 F.3d 441, 448 (10th
Cir. 1995) (citing Praprotnik, 485 U.S. at 127). Also helpful
is an examination of not only “positive law, including
ordinances, rules and regulations, but also the relevant
customs and practices having the force of law.” Mandel v.
Doe, 888 F.2d 783, 793 (11th Cir. 1989) (finding that
custom dictated that physician’s assistant, and not super-
vising doctor, had final policymaking authority with
respect to medical decisions made at road prison) (citing
Jett, 491 U.S. at 722); Kujawski, 183 F.3d at 737 (“Customary
practices having the force of law may be considered
as proof of delegation.”).
It is clear that Mayor Owen is a decisionmaker with
regards to personnel decisions within the Village. He has
placed at least five of his family members and several
friends on the Village payroll. Owen, admittedly, had
the final say-so regarding the termination of Valentino.
Moreover, several Village ordinances indicate that
Mayor Owen makes personnel decisions regarding Village
employees. For example, Section 2-117 states: “The village
administrator shall not be responsible for the hiring,
firing, discipline, conducting of employment-related
hearings or other personnel matters, unless otherwise
specified herein or as lawfully instructed by the village
president 3 or board of trustees” (emphasis added). Section
2-115(3) states that the Village Administration has
3
It appears as though the terms “president” and “mayor” are
used interchangeably.
20 No. 06-3882
the power to: “Make recommendations to the village
president regarding hiring, discipline, and discharge of
employees . . . ,” indicating that the Owen, as mayor or
village president, has the ability to make personnel dis-
charge decisions (emphasis added).
However, just because Owen makes personnel decisions
does not necessarily mean that he is the final decisionmaker
on such matters such that he can be considered a
policymaker for the Village in this area. It is a
“well-established principle that the mere unreviewed
discretion to make hiring and firing decisions does not
amount to policymaking authority. There must be a
delegation of authority to set policy for hiring and
firing, not a delegation of only the final authority to hire
and fire.” Kujawski, 183 F.3d at 739 (citing Venters v. City of
Delphi, 123 F.3d 956, 966 (7th Cir. 1997)); Radic v. Chicago
Transit Auth., 73 F.3d 159, 161 (7th Cir. 1996); Auriemma v.
Rice, 957 F.2d 397, 401 (7th Cir. 1992). The Village argues
that the Board of Trustees, and not Owen, is the final
decisionmaker because it says the Board sets personnel
policy and reviews termination decisions, whereas Owen
merely has discretion to carry out the policy set by the
Board. See Partee v. Metropolitan Sch. Dist. of Washington
Twp., 954 F.2d 454, 462 (7th Cir. 1992) (holding that
where school board had final say-so on personnel
matters, principal of school was not policymaker for
municipality).
A defendant municipality in Kujawski sought refuge
from Monell liability under the same theory. 183 F.3d at
739. There, a plaintiff sued a municipality claiming that
No. 06-3882 21
it was liable under Monell for the actions of the municipal-
ity’s Chief Probation Officer, who fired the plaintiff from
his job as a probation officer after he complained about
some of the office’s policies. Id. We recognized the fact
that our precedent had established that unreviewed
discretion to make employment decisions does not rise
to the level of policymaking authority, but nonetheless
found that summary judgment was inappropriate
because a fact issue remained regarding whether
the municipality’s board had delegated policymaking
authority on the office’s personnel decisions to the Chief
Probation Officer. Id. at 740. Key in our reasoning was
that the plaintiff provided evidence that: (1) the board did
not review the Chief’s personnel decisions; and (2) the
Chief was completely in charge of the probation depart-
ment. Id. We concluded that the evidence “permits the
reasonable inference that the Commissioners delegated
to Officer Parker the authority to make employment
policy decisions with respect to community corrections
employees” and remanded the matter for trial on plain-
tiff’s Monell claim. Id.
Kujawski shares several important similarities, and
several important differences, with this case. Unlike here,
in Kujawski, because it was unambiguous that: (1) the
community corrections advisory board “may establish
personnel policies” for the probation department; (2) any
terminated probation officer had a right to a grievance
hearing in front of the county board of commissioners;
and (3) the county judges had the authority to hire proba-
tion officers, we found that there was a question of fact
regarding whether the Chief’s decisions were reviewed
or constrained in such a way that he was not actually
22 No. 06-3882
the final decisionmaker on personnel decisions for the
county’s probation office. Id. at 738-39. In other words,
several concrete hiring/firing policy mechanisms existed
that were in the hands of various quasi-legislative
bodies and not in the hands of the Chief Probation
Officer, which could have had an impact on who was the
actual final decisionmaker on personnel matters. See id.
Therefore, to the extent that the evidence indicated that
the Chief had unfettered discretion to hire and fire em-
ployees on his whim and that his decisions were not
meaningfully constrained or reviewed, we found it neces-
sary to remand for a factual determination of whether
these legislative bodies had in fact delegated their
policy making authority to the Chief, thus subjecting the
municipality to the possibility of Monell liability. Id. at 740.
Not so here. Defendants do not point to any laws,
statutes, or ordinances which place policy setting
authority in the hands of the Village’s board of trustees.
To the contrary, all the evidence suggests that Mayor
Owen had the unfettered discretion to hire and fire whom-
ever he pleased. Indeed, he hired several of his relatives
and fired Valentino and others without as much as a
whisper from the board of trustees. Given that the Village
has a population of only a few thousand people and is
run by a small government, a legislative framework for
personnel decisions may not actually exist, and Defen-
dants have not provided evidence of any. Rather, the
evidence suggests that as head of the government, Mayor
Owen may hire or fire whomever he wants in the
routine course of business. Therefore, in this case, unlike
in Kujawski, given that there is no presumption of
policymaking authority in the hands of any quasi-legisla-
No. 06-3882 23
tive body, it is unnecessary for there to be any factual
inquiry into whether that body delegated its authority
to Mayor Owen. To the contrary, given Mayor Owen’s
preference to hire his relatives and campaign supporters
to government jobs, it appears to be a Village cus-
tom/practice to allow Owen to set whatever hiring/firing
criteria he sees fit.
As in Kujawski, Defendants cannot point to any edicts
from the board of trustees that in any way govern the
manner in which Mayor Owen may make his hiring or
firing decisions. Nor do they point to any instances in
which the board provided any meaningful oversight of
Mayor Owen’s decisionmaking process or meaningfully
reviewed his termination decisions. Instead, all the evi-
dence indicates that Mayor Owen, either personally or by
his own delegation, makes the personnel decisions for
his office. Therefore, it is clear to us that Mayor Owen is
the de facto policymaker for the Village with regard to
personnel decisions in his office. Given this, we reverse
the district court’s decision on Valentino’s Monell claim
and find that Valentino has shown that Owen is a
final policymaker for the Village, such that the Village
may be held liable if the jury finds that Mayor Owen
and Village Administrator Petersen retaliated against her
in violation of her First Amendment rights.
C. The Illinois Tort Immunity Act Does Not Immunize
Defendants Against Valentino’s Retaliatory Dis-
charge Claim
Valentino also alleges that the Village is liable under the
Illinois tort of retaliatory discharge based on her
24 No. 06-3882
unlawful termination. In Illinois, to recover for retaliatory
discharge, a plaintiff must show that he was discharged
“in retaliation for his activities, and that the discharge be
in contravention of a clearly mandated public policy.”
Horton v. Miller Chem. Co., Inc., 776 F.2d 1351, 1355 (7th
Cir. 1985) (quoting Palmateer v. Int’l Harvester Co., 421
N.E.2d 876, 881 (Ill. 1981)) (holding that there is no
precise definition of public policy and that “concerns
what is right and just and what affects the citizens of the
State collectively”). Terminating a government employee
for speaking out against corruption in her workplace
is surely contrary to clearly mandated public policy
(the intersection of the First Amendment and the public’s
right not to be defrauded by its government); the Village
does not contend otherwise. Nor does the Village assert
that she cannot state a prima facie case for this tort (other
than the same arguments it raises against her section 1983
claim). Cf. Fellhauer v. City of Geneva, 568 N.E.2d 870, 877
(Ill. 1991) (recognizing that this tort is to be construed
narrowly, but noting that it may be viable in speaking
against municipal corruption).
Instead, the Village contends that section 2-201 of the
Illinois Tort Immunity Act exempts Owen and Petersen
from liability, thus negating the claim against the Village.
This section provides that “a public employee serving in
a position involving the determination of policy or the
exercise of discretion is not liable for an injury resulting
from his act or omission in determining policy when acting
in the exercise of such discretion even though abused.”
745 ILCS 10/2-201 (emphasis added). The Village essen-
tially reasons, and the district relies on the fact, that
No. 06-3882 25
section 2-201, “together with section 2-109 (745 ILCS
10/2-109 (‘a local public entity is not liable for an injury
resulting from an act or omission of its employee
where the employee is not liable’)), provides both public
employees and the public employer with immunity
against allegations that challenge discretionary policy
determinations.” Murray v. Chicago Youth Ctr., 864
N.E.2d 176, 185-86 (Ill. 2007) (citations omitted).4
The Village is not immune under the Act, however,
because, in order to receive immunity under section 2-201,
the municipal official must have been making a “policy
decision” when committing the alleged retaliatory act.
Section 2-201 immunizes an individual defendant only
to the extent that the action he is being sued for
involves both the making of a policy choice and the
exercise of discretion. Van Meter v. Darien Park Dist., 799
N.E.2d 273, 285 (Ill. 2003) (“[O]ur cases have made clear
that there is a distinction between situations involving
the making of a policy choice and the exercise of discre-
tion. Municipal defendants are required to establish
both of these elements in order to invoke immunity
4
The Illinois Supreme Court, in Smith v. Waukegan Park Dist.,
896 N.E.2d 232, 236-37 (Ill. 2008), called into doubt a municipal-
ity’s ability to combine sections 2-201 and 2-109 to extend im-
munity from a municipal official to the municipality itself.
It reasoned that where the municipality is the pertinent actor
that performed the alleged retaliatory action, section 2-109
is not implicated. We need not delve into this line of rea-
soning, however, because we determine that section 2-201
does not immunize the Village.
26 No. 06-3882
under section 2-201.”) (citations omitted). The Illinois
Supreme Court has defined “ ‘discretionary’ actions to
be those ‘unique to a particular public office.’ ” Id. at 286
(citations omitted). It also has “held that decisions re-
quiring a governmental entity to balance competing
interests and to make a judgment call as to what solution
will best serve those interests are ‘policy decisions’
within the meaning of section 2-201.” Id. (citations omit-
ted). Last, we note that “because the Tort Immunity Act
is in derogation of the common law, it must be strictly
construed against the public entities involved.” Id. (citing
Zimmerman v. Vill. of Skokie, 697 N.E.2d 699, 707 (Ill. 1998)
(quoting Aikens v. Morris, 583 N.E.2d 487 (Ill. 1991))).
Defendants’ attempt to argue that Owen’s decision to
fire Valentino was a “policy decision” is futile. The
Village argues in one breath that Owen’s series of hirings
and firings for the Village do not mean that he is a
policymaker, and in another breath that his decision to
fire Valentino was a policy decision. As discussed above,
its first argument is without merit as it applies to the
facts of this case. The second argument fails as well.
Here, Owen’s one-time decision to fire one employee,
Valentino, does not amount to a “judgment call between
competing interests.” In fact, we are at a loss to identify
any competing interests at all. Rather, Owen either
made a one-time decision to fire Valentino because she
copied the sign-in sheets or because she spoke out
against the Village’s practice of ghost payrolling, or some
combination thereof. The Village offers no evidence that
it had a policy against copying the sign-in sheets either
before or after Valentino’s termination. Even if such a
No. 06-3882 27
policy did exist, we cannot see how the decision to
create it might involve competing interests and judg-
ment calls that would meet the Illinois courts’ definition
of a “policy decision”. See id. Therefore, the decision to
fire Valentino does not amount to a policy decision as
defined by the Illinois courts. So, the Village is not
entitled to immunity under section 2-201.
III. CONCLUSION
For the foregoing reasons, the judgment of the district
court is R EVERSED and this matter is R EMANDED on all
counts against all Defendants.
7-30-09
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
AMBER KELSEY,
Plaintiff,
Civil Action No. 13-1956 (BAH)
v.
Chief Judge Beryl A. Howell
DISTRICT OF COLUMBIA,
Defendant.
MEMORANDUM OPINION
The plaintiff, Amber Kelsey, brings this action under the Individuals with Disabilities
Education Act, as amended, 20 U.S.C. §§ 1400 et seq. (“IDEA”), against the District of
Columbia. See Compl. at 1, ECF No. 1. Pending before the Court is the plaintiff’s Motion for
Attorney’s Fees (“Pl.’s Mot.”), ECF No. 48. The Magistrate Judge to whom this motion was
randomly referred submitted a report recommending that the motion be granted in part and
denied in part, see Report and Recommendation, Oct. 7, 2016, 2015 (“R&R”), ECF No. 53, and
the plaintiff has timely filed a number of objections to that recommendation, see Pl.’s Objections
to the Report and Recommendation of the Magistrate Judge (“Pl.’s Objs.”), ECF No. 54. For the
reasons explained below, the plaintiff’s objections are sustained in part and overruled in part.
Accordingly, the plaintiff’s Motion for Attorney’s Fees is granted in part and denied in part.
I. BACKGROUND
The background of the present dispute has been described in the R&R and by this Court
in its two prior decisions involving this plaintiff. See Kelsey v. District of Columbia, 85 F. Supp.
3d 327, 330–32 (D.D.C. 2015); Clay v. District of Columbia, Mem. & Order, No. 09-1612
(D.D.C. April 24, 2013), ECF No. 59. In Clay, this Court ruled that the plaintiff “was denied a
1
[Free Appropriate Public Education (“FAPE”)] by the defendant during the period between
March 19, 2007 and June 2008 because of the denial of speech therapy.” Clay, Mem. & Order at
32. Following that ruling, the case was remanded to a Hearing Officer to conduct “fact-finding
to establish the amount of speech and language therapy or other specialized instruction [the
plaintiff] was deprived in the period between March 19, 2007 and June 2008, and determine the
level of compensatory education services [she] requires to place her in the same position she
would have been but for DCPS’ IDEA violations during the period at issue.” Id. at 33. At the
conclusion of that hearing, the plaintiff was awarded ninety-six hours of speech language
services—approximately eight times the number of hours urged by the defendant. Kelsey, 85 F.
Supp. 3d at 331; see also AR at 20, ECF No. 16-1.
In December 2013, the plaintiff initiated the present action to challenge that award and to
recover the attorney’s fees incurred in the administrative proceeding. See Compl. ¶¶ 24–29. In
her substantive challenge to the Hearing Officer’s award, the plaintiff alleged that “the evidence
showed that she required 480 hours of Speech therapy.” Id. at 2. The plaintiff and the defendant
filed cross-motions for partial summary judgment on the plaintiff’s appeal of the award, see Pl.’s
Mot. Summ. J., ECF No. 24; Def.’s Opp’n Pl.’s Mot. Summ. J. & Cross-Mot. Summ. J., ECF
No. 27, and the Magistrate Judge recommended that the plaintiff’s motion be denied and the
defendant’s motion be granted, see Report and Recommendation, Jan. 13, 2015 (“Jan. 13, 2015
R&R”), ECF No. 32. This Court adopted that report over the plaintiff’s objections, thus denying
the plaintiff’s motion and granting the defendant’s motion. See Kelsey, 85 F. Supp. 3d at 337.
Following that decision, the plaintiff filed a motion for summary judgment on her request
for attorney’s fees in the amount of $46,597.50 as the prevailing party in the IDEA
administrative proceeding. See Pl.’s Mot. Summ. J. at 1, ECF No. 40. In opposing the plaintiff’s
2
request, the defendant argued that the proposed billing rate of $450.00 per hour was
unreasonable and, in addition, that the overall award should be reduced by at least sixty percent
to reflect the plaintiff’s limited success. See Def.’s Mem. P. & A. at 1, 9, ECF No. 43. The
Magistrate Judge recommended that both motions be granted in part and denied in part. Report
and Recommendation, Mar. 18, 2016 (“Mar. 18, 2016 R&R”), at 1, ECF No. 46. Specifically,
while finding reasonable the requested billing rate of $450.00 per hour, the Magistrate Judge
recommended reducing the amount requested by the plaintiff by fifteen percent, to $39,607.45,
to account for “the disparity between the relief Plaintiff requested and the actual relief she was
awarded” in the underlying administrative proceeding. Id. at 12. The parties filed no objections
to the Magistrate Judge’s report, and this Court adopted it in its entirety, thus granting in part and
denying in part both motions. See Mem. & Order, Apr. 5, 2016, ECF No. 47.
In the present motion, the plaintiff seeks a so-called fees-on-fees award, requesting
reimbursement for attorney time expended that was “reasonably necessary” to prevail on her
request for attorney’s fees in connection with the administrative proceedings, as well as for fees
incurred in the present motion. Pl.’s Mem. P. & A. Supp. Pl.’s Mot. Attorney’s Fees (“Pl.’s
Mem.”) at 2–3, ECF No. 48. Specifically, the plaintiff sought reimbursement for (1)
“$70,200.00 in fees for attorney time expended through the date of the Court’s [March 31, 2015,]
Memorandum & Order,” comprising 157.2 of the 363.3 total hours expended in the course of this
action at a billing rate of $450.00 per hour, and (2) $4,230.00, comprising 9.4 hours of attorney
time at the same rate, for the preparation of the instant motion for fees-on-fees. Id. at 3.
The defendant opposed the plaintiff’s motion on the grounds that the plaintiff “seeks
compensation for hours spent on the unsuccessful appeal, and any award should be reduced to
account for Plaintiff’s degree of success on the merits of the first fees petition.” Def.’s Opp’n
3
Pl.’s Mot. Attorney’s Fees & Costs (“Def.’s Opp’n”) at 1, ECF No. 50. The defendant
acknowledged that the plaintiff prevailed in the fees dispute, but pointed out that she did not
prevail on her substantive appeal of the Hearing Officer’s determination. Id. at 3. According to
the defendant, only 98.5 of the hours claimed by the plaintiff were expended for the fees dispute.
Id. at 8. Moreover, the defendant contended that “Plaintiff’s requested number of hours more
than triples the hours reasonably devoted to substantially the same tasks in other, very similar
litigation” and thus “the Court should reduce the number of hours to no more than 45 hours.” Id.
at 9. In reply, the plaintiff conceded 6.2 of the requested hours, which were expended during the
period from July 23, 2013, to February 3, 2014, and contested by the defendant. See Pl.’s Reply
Def.’s Opp’n Pl.’s Mot. Fees at 5–6, ECF No. 51.
The R&R recommends three adjustments to the plaintiff’s request for attorney’s fees,
resulting in a total award of $29,947.50. 1 R&R at 10. First, since the plaintiff “has not proffered
any evidence that the fee litigation in the matter was particularly complex or novel,” the R&R
recommends that “Plaintiff is not entitled to full Laffey” rates but instead the “compensable rate
. . . reduced by 50%, to $225.00 per hour.” R&R at 8. Second, the R&R recommends, in
addition to the plaintiff’s concession of 6.2 hours, that the number of hours expended during that
same period, from July 23, 2013, to February 3, 2014, be further reduced by fifty percent
because “Plaintiff’s efforts were expended in equal part, if not in large part, to further an
unsuccessful appeal of the [administrative proceeding].” Id. at 9. Finally, the R&R
“recommends that Plaintiff’s overall award be reduced by 15% for limited success at the remand
1
Minor discrepancies exist between the parties’ assertions regarding the amount of time expended. See
Def.’s Opp’n Pl.’s Objs. R&R at 4–5, ECF No. 56. Given that neither party objected to the hours used in the R&R,
those hours will be used to calculate the award here. See R&R at 9–10 & n.8. The R&R does not focus on the
plaintiff’s counsel’s travel time, which amounts to 2.4 hours expended on October 14, 2013, and February 11, 2014,
for which the plaintiff requested to be compensated at $225.00, see Pl.’s Mem. at 7–8, and the plaintiff’s suggested
values also will be used here.
4
hearing stage in accordance with this Court’s findings in the original Report and
Recommendation and Memorandum and Order regarding attorneys’ fees.” Id. at 8.
II. LEGAL STANDARD
Motions for attorneys’ fees may be referred to a Magistrate Judge for a report and
recommendation, and any objections thereto are subject to de novo review by the district court.
FED. R. CIV. P. 54(d)(2)(D) (stating that a court “may refer a motion for attorney’s fees to a
magistrate judge under Rule 72(b) as if it were a dispositive pretrial matter”); see also David v.
District of Columbia, 252 F.R.D. 56, 58 (D.D.C. 2008) (noting “the limited jurisdiction granted
by Congress to a magistrate judge in Federal Rules 54(d)(2)(D) and 72(b) to issue a
recommendation on a motion for attorneys’ fees”). Federal Rule of Civil Procedure 72(b)
provides that “[t]he district judge must determine de novo any part of the magistrate judge’s
disposition that has been properly objected to,” and “may accept, reject, or modify the
recommended disposition.” FED. R. CIV. P. 72(b)(3); see also LCvR 72.3(c) (“A district judge
shall make a de novo determination of those portions of a magistrate judge's findings and
recommendations to which objection is made . . . .”).
The IDEA provides that “the court, in its discretion, may award reasonable attorneys’
fees . . . to a prevailing party who is the parent of a child with a disability.” 20 U.S.C.
§ 1415(i)(3)(B)(i). Such fees must be “be based on rates prevailing in the community in which
the action or proceeding arose for the kind and quality of services furnished,” with no “bonus or
multiplier . . . used in calculating” a final IDEA fee award. Id. § 1415(i)(3)(C). This statutory
language makes plain that a prevailing party in an IDEA action may seek the award of attorneys’
fees that are “reasonable.” Id. § 1415(i)(3)(B)(i). The D.C. Circuit has developed a “three-part”
analysis for assessing whether a requested fee award is reasonable under federal statutes
5
authorizing fee-shifting. Eley v. District of Columbia, 793 F.3d 97, 100 (D.C. Cir. 2015). “First,
the court must determine the number of hours reasonably expended in litigation. Second, it must
set the reasonable hourly rate. Finally, it must determine whether use of a multiplier is
warranted.” Id. (internal citations and quotation marks omitted). 2 With regard to the proposed
hourly rate, the Court considers three sub-elements: “(1) ‘the attorney[’s] billing practices,’ (2)
‘the attorney[’s] skills, experience, and reputation’ and (3) ‘the prevailing market rates in the
relevant community.’” Id. (alterations in original) (quoting Covington v. District of Columbia,
57 F.3d 1101, 1107 (D.C. Cir. 1995)).
The availability of reasonable attorneys’ fees applies to fees incurred in IDEA litigation
both before administrative agencies and in federal court, as well as to fees incurred to vindicate a
plaintiff’s right to fees. Thus, the D.C. Circuit held in Kaseman v. District of Columbia that
“[p]arties who prevail at the administrative level can also recover fees-on-fees, as [the D.C.
Circuit’s] general rule is that the court may award additional fees for ‘time reasonably devoted to
obtaining attorney’s fees.’” 444 F.3d 637, 640 (D.C. Cir. 2006) (quoting Envtl. Def. Fund v.
EPA, 672 F.2d 42, 62 (D.C. Cir. 1982)). In allowing successful plaintiffs to obtain fees-on-fees,
the D.C. Circuit has emphasized that the availability of such awards “is essential to carrying out
Congress’ goal in including [fee-shifting] provision[s] in the first place.” Am. Fed’n of Gov’t
Emps., AFL–CIO, Local 3882 v. Fed. Labor Relations Auth., 994 F.2d 20, 22 (D.C. Cir. 1993).
Without them, a litigant would not be made “whole when she is wronged under a statute,” even
if she succeeds on the merits of her claim, and potential litigants might be discouraged from
bringing their claims because of the “costs of pursuing such suits.” Id. Consequently, “such fees
2
Since the IDEA prohibits application of any bonus or multiplier, see 20 U.S.C. § 1415(i)(3)(C), only the
first and second elements of this analysis are relevant in IDEA cases.
6
are often necessary to fulfill the purposes of the statutory scheme on which the action is based.”
Id.
“The ‘fee applicant bears the burden of establishing entitlement to an award,
documenting the appropriate hours, and justifying the reasonableness of the rates.’” Eley, 793
F.3d at 100 (quoting Covington, 57 F.3d at 1107). Once an applicant meets this initial burden, a
presumption applies that the number of hours billed and the hourly rates are reasonable.
Covington, 57 F.3d at 1109 (citing Blum v. Stenson, 465 U.S. 886, 897 (1984)); see also Jackson
v. District of Columbia, 696 F. Supp. 2d 97, 101 (D.D.C. 2010) (citing Blackman v. District of
Columbia, 677 F. Supp. 2d 169, 172 (D.D.C. 2010)). At that point, the burden shifts to the
opposing party to “provide specific contrary evidence tending to show that a lower rate would be
appropriate.” Covington, 57 F.3d at 1109–10 (quoting Nat’l Ass’n of Concerned Veterans v.
Sec’y of Def., 675 F.2d 1319, 1326 (D.C. Cir. 1982)).
While the IDEA authorizes the court to award reasonable attorneys’ fees “in its
discretion,” 20 U.S.C. § 1415(i)(3)(B)(i), the D.C. Circuit has observed, “notwithstanding the
apparently permissive language of the statute, the Supreme Court has interpreted similar
language in other fee-shifting contexts to mean that the prevailing plaintiff ‘should ordinarily
recover an attorney’s fee unless special circumstances would render such an award unjust.’”
Price v. District of Columbia, 792 F.3d 112, 114–15 (D.C. Cir. 2015) (quoting Newman v. Piggie
Park Enters., Inc., 390 U.S. 400, 402 (1968) (per curiam)). A district court’s award of attorneys’
fees is reviewed for an abuse of discretion, Eley, 793 F.3d at 103 (citing King v. Palmer, 950
F.2d 771, 785 (D.C. Cir. 1991) (en banc)), and the D.C. Circuit will not upset such an award
“absent clear misapplication of legal principles, arbitrary fact finding, or unprincipled disregard
7
for the record evidence,” id. at 103–04 (quoting Kattan ex rel. Thomas v. District of Columbia,
995 F.2d 274, 278 (D.C. Cir. 1993)).
III. DISCUSSION
The plaintiff raises objections to the following five recommendations in the R&R: (1) the
recommendation that the plaintiff’s attorney’s Laffey rate is $450.00 per hour, Pl.’s Objs. at 4;
(2) the recommended reduction of the plaintiff’s proposed billing rate from $450.00 to $225.00,
id.; (3) the characterization of 22.4 hours expended as spent “drafting the Complaint,” id. at 7;
(4) the recommended application of a fifty percent reduction in the number of hours expended
during the period July 23, 2013, to February 3, 2014, id. at 8–9; and (5) the recommended
application of a global reduction of fifteen percent to the fees-on-fees award, id. at 10. While
raising no objections if its own, the defendant opposes any substantive alteration to the R&R.
See Def.’s Opp’n Pl.’s Objs. R&R (“Def.’s Opp’n Pl.’s Objs.”), ECF No. 56. Each of the
plaintiff’s objections is considered seriatim below.
A. Reasonableness of the Plaintiff’s Proposed Hourly Rate
The plaintiff’s first two objections both relate to the hourly rate used to calculate her fees-
on-fees award. See Pl.’s Objs. at 4–5. First, the plaintiff notes the hourly rate of $450.00 she has
requested throughout this litigation, and which was previously found reasonable in this case, see
Mem. & Order, Apr. 5, 2016, is in fact lower than the rate dictated by the Laffey Matrix.
Specifically, she asserts that her attorney began practicing law in 1985 and, consequently, that
her rate of compensation under the Laffey Matrix is $568.00 per hour, not $450.00 as the R&R
indicates. Id. at 4. In addition, the plaintiff contends that the R&R errs in recommending a
reduction by half in the requested $450.00 rate in view of both the R&R’s earlier finding that the
plaintiff “had met her burden of proof, under Covington [v. District of Columbia, 57 F.3d 1101
8
(D.C. Cir. 1995)], with respect to counsel’s hourly rate” and the defendant’s accession to the
$450.00 per hour rate. Id. at 4. For its part, the defendant acknowledges its accession to the
plaintiff’s proposed hourly rate, but nevertheless contends, “That the District did not first raise
these issues does not negate the Court’s discretion to make determinations relevant to [the IDEA
fees provision].” Def.’s Opp’n Pl.’s Objs. at 4. With respect to the recommendation to reduce
the rate by half, the defendant notes that “[t]he Magistrate Judge appropriately . . . rel[ied] on
similar district court fees on fees decisions as evidence of the reasonable rate to be applied here.”
Id. at 3.
The plaintiff has the better of both arguments. As the plaintiff notes, the R&R states that
“Plaintiff’s pre-determined Laffey rate is $450.00 per hour,” citing the R&R submitted on the
original fee award. See R&R at 7 (citing Mar. 18, 2016 R&R at 11). In fact, however, as
acknowledged in the earlier R&R, the plaintiff’s proposed $450.00 rate is significantly below the
plaintiff’s attorney’s rate under any of the Laffey Matrices. See Mar. 18, 2016 R&R at 3 n.4.
Under the applicable 2015–2016 USAO Laffey Matrix,3 the plaintiff’s attorney’s Laffey rate is
$568.00 per hour for time expended in 2016 and $530.00 per hour for all other time currently
claimed by the plaintiff. See USAO Attorney’s Fees Matrix – 2015–2016 (“2015–2016 USAO
Laffey Matrix”) at 1, https://www.justice.gov/usao-dc/file/796471/download. Thus, the $450.00
per hour rate itself reflects a more than fifteen percent discount on the applicable Laffey rate.
Consequently, the R&R’s finding that “Plaintiff’s pre-determined Laffey rate is $450.00 per
hour” is rejected. R&R at 7.
3
This Court has found appropriate the application to pending requests for attorney’s fees of the current
Laffey Matrix rates for the level of an attorney’s experience at the time of billing. See Eley v. District of Columbia,
No. 11-309 (BAH), 2016 WL 4435187, at *11 (D.D.C. Aug. 22, 2016); Young v. Sarles, No. 14-1203 (BAH), 2016
WL 3747528, at *9–10 (D.D.C. July 11, 2016).
9
Turning to the plaintiff’s objection to the R&R’s application of a fifty percent reduction
to the applicable Laffey rate, the report’s suggestion that an award for fees expended in fee
litigation must reduce by half an attorney’s full Laffey rate to be “reasonable” is also rejected.
The R&R’s conclusion that “Plaintiff is not entitled to full Laffey” rates and recommendation
that “Plaintiff’s compensable rate be reduced by 50%, to $225.00 per hour,” R&R at 8, finds
support in some decisions in this District. See, e.g., Means v. District of Columbia, 999 F. Supp.
2d 128, 136 (D.D.C. 2013) (adopting half the applicable Laffey rate after noting the defendant
did not dispute the reasonableness of the proposed rate); Garvin v. Gov’t of D.C., 910 F. Supp.
2d 135, 140 (D.D.C. 2012) (adopting half the applicable Laffey rate because “the litigation for
which the plaintiffs seek an award of attorneys’ fees does not concern complex issues regarding
the application of the IDEA, but is rather fairly straightforward litigation over an award of
attorneys’ fees under the IDEA’s fee-shifting provision”); Wright v. District of Columbia, 883 F.
Supp. 2d 132, 135 (D.D.C. 2012) (adopting half the applicable Laffey rate and noting “the
undersigned has previously held that ‘fee litigation is not complex federal litigation and does not
necessarily entail specialized expertise and experience’” (quoting Smith v. District of Columbia,
No. Civ.A.02-0373(AK), 2005 WL 914773, at *3 (D.D.C. Apr. 18, 2005))). Yet, as this Court
has noted previously, there exists “a lack of unanimity among judges on this Court regarding the
reasonable rate for attorneys’ fees stemming from IDEA litigation,” with some decisions
applying three-quarters of the Laffey rate, some adopting reductions proposed by the plaintiff,
and some applying full Laffey rates. Jones v. District of Columbia, No. 15-cv-155 (BAH), 153 F.
Supp. 3d 114, 128 & nn.8–11 (D.D.C. 2015). In recent cases, the predominant view has been to
apply full Laffey rates in IDEA fee litigation. See id. at 128 n.11 (citing cases); see also Flood v.
District of Columbia, No. 15-497 (BAH), 172 F. Supp. 3d 197, 219 (D.D.C. 2016).
10
This lack of uniformity notwithstanding, relevant authorities support the conclusion that
the $450.00 per hour rate proposed by the plaintiff, acceded to by the defendant, and adopted by
this Court in its original award of attorney’s fees is reasonable. In Jones, this Court explained
that “a successful fee applicant seeking fees-on-fees [need not] demonstrate anew the
reasonableness of her proposed rate for time expended in her successful fee application.” 153 F.
Supp. 3d at 123. In view of the “‘essential’ role of fees-on-fees in ‘carrying out Congress’ goal
in including fee-shifting provisions,’” it makes little sense to impose “redundant barriers to
recovery of fees-on-fees” by requiring plaintiffs to litigate the reasonableness of their attorneys’
billing rates at each stage of IDEA litigation. Id. at 123–24 (quoting Am. Fed’n of Gov’t Emps.,
994 F.2d at 22). For this reason, to the extent the R&R recommends an adjustment to the
previously determined reasonable rate such that the plaintiff must now relitigate that issue, the
recommendation stands on shaky ground.
Moreover, the R&R’s finding that “traditional ‘fees-on-fees’ litigation is not the type of
‘complex federal litigation’ to which the Laffey rate applies” does not warrant adjusting the pre-
determined reasonable rate. R&R at 8. As this Court also explained in Jones, “the Supreme
Court recently reiterated that the purported complexity of a particular case generally may not
serve as a basis for adjusting an otherwise reasonable fee award.” 153 F. Supp. 3d at 124 (citing
Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553 (2010)). According to the Perdue Court, the
relative complexity or simplicity of a case is “fully reflected in the number of billable hours
recorded by counsel.” 559 U.S. at 553. Consequently, “any consideration of the relative
complexity of the present fees litigation as compared to the plaintiff’s underlying administrative
11
action is already incorporated into the reasonableness of the number of hours spent in litigating
her request for fees before this Court.” Jones, 153 F. Supp. 3d at 125. 4
Thus, the Court finds reasonable the $450.00 per hour rate, which rate reflects a
significant discount of the plaintiff’s counsel’s Laffey rate, and has been acceded to by the
defendant and deemed reasonable by this Court earlier in these proceedings. Accordingly, the
plaintiff’s objections to the Report and Recommendation’s rejection of the billing rate proposed
by the plaintiff and acceded to by the defendant are sustained, and that portion of the R&R is
rejected.
B. Time Spent “Drafting the Complaint”
The plaintiff next objects to the R&R’s characterization of 22.4 hours of counsel’s time
as spent “drafting the Complaint,” when, the plaintiff argues, only 6.9 hours were spent on that
task, with the remaining hours from that “time period . . . all spent on tasks essential to initiating,
pursuing and prevailing on Plaintiff’s successful fees claim.” Pl.’s Objs. at 7. The defendant
suggests that the R&R is best understood to characterize that time period as the “‘drafting and
filing the complaint’ phase.” Def.’s Opp’n Pl.’s Objs. at 4–5.
At first blush, this objection appears to be directed toward semantics and, consequently,
to lack legal significance. The gravamen of the plaintiff’s concern, however, appears to be that
by characterizing those hours as time spent only “drafting the Complaint,” the R&R understated
the proportion of those hours essential to the fee litigation upon which the plaintiff prevailed.
The question of the appropriate percentage reduction to be applied to counsel’s time spent during
this period will be addressed in the following section.
4
The separate question of the reasonableness of the number of hours requested by the plaintiff is addressed
in considering the plaintiff’s objections discussed below in Part III.C.
12
C. Compensable Hours Expended from July 23, 2013, to February 3, 2014
The plaintiff objects to the R&R’s application of a fifty percent reduction to 55.4 hours of
time expended between July 23, 2013 and February 3, 2014. See Pl.’s Objs. at 8–10; R&R at 9.
According to the plaintiff, during that six-month period, “all tasks on which counsel worked
were essential to initiating[, maintaining, and prevailing upon] Plaintiff’s claim for attorney’s
fees.” Pl.’s Objs. at 9. Acknowledging that Hensley v. Eckerhart, 461 U.S. 424 (1983), provides
for reduction of fees “for work on . . . claims on which plaintiff did not prevail,” the plaintiff
nevertheless contends Hensley “nowhere authorizes elimination or reduction of fees for work
that was necessary to pursue and prevail on a successful claim solely because that work also
benefited an unsuccessful claim.” Pl.’s Objs. at 10 (citing Hensley, 461 U.S. at 434–35). The
defendant responds that “much of the time [expended in this period] by necessity relates only to
the unsuccessful substantive appeal, which Plaintiff brought concomitant to the fee petition.”
Def.’s Opp’n Pl.’s Objs. at 5. According to the defendant, “[i]n these circumstances, Hensley
recommends a reduction.” Id.
The law is well-settled that where a plaintiff has not prevailed on every claim asserted,
“[a] plaintiff’s overall success on the merits . . . must be considered in determining the
reasonableness of a fee award.” Judicial Watch, Inc. v. U.S. Dep’t of Commerce, 470 F.3d 363,
369 (D.C. Cir. 2006) (citing Farrar v. Hobby, 506 U.S. 103, 114 (1992)). If a plaintiff “presents
‘distinctly different claims for relief that are based on different facts and legal theories,’ the limit
on awards to ‘prevailing parties requires that these unrelated claims be treated as if they had been
raised in separate lawsuits, and therefore no fee may be awarded for services on the unsuccessful
claim.’” Id. (quoting Hensley, 461 U.S. at 434–35). At the same time, the Supreme Court has
rejected a rigid, “mathematical approach comparing the total number of issues in the case with
13
those actually prevailed upon” and cautioned that “[w]here a plaintiff has obtained excellent
results, his attorney should recover a fully compensatory fee[;] . . . the fee award should not be
reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit.”
Hensley, 461 U.S. at 435 & n.11.
In the present action, the plaintiff initially sought relief related to the administrative
proceedings, as well as to the analytically distinct matter of attorney’s fees. See Compl. at 9–10.
Having not prevailed on her appeal of the administrative proceedings, the plaintiff seeks fees for
less than half of the 363.3 hours expended in this action, excluding time billed for “two motions
that Plaintiff lost.” Pl.’s Objs. at 5–6. The 55.4 hours for which the R&R recommends a fifty
percent reduction consist of (1) 22.4 hours preparing, drafting, and filing the Complaint and (2)
39.2 hours preparing an opposition to the defendant’s motion to dismiss, reduced by 6.2 hours
for time spent drafting the Complaint and meeting with the plaintiff and her grandmother, which
the plaintiff conceded was not related to her success on the fee petition. See R&R at 9.
Inspection of those entries leads to the conclusion that the R&R’s recommendation on
this question should be accepted and the plaintiff’s objections overruled. As the plaintiff
contends, some of the expended time, such as time spent filing the Complaint, was essential to
her claim for attorney’s fees, though incidentally supporting her substantive appeal of the
administrative decision. Yet, much of the legal argumentation appearing in the Complaint and
the opposition to the defendant’s motion to dismiss pertains solely to issues raised by the
plaintiff’s substantive appeal. On balance, a fifty percent reduction to time spent initiating the
lawsuit and responding to the defendant’s motion to dismiss appropriately accounts for the
necessity of some portion of that time to the plaintiff’s fees-on-fees request while also heeding
14
the Supreme Court’s admonition in Hensley that “no fee may be awarded for services on [an]
unsuccessful claim.” 461 U.S. at 435.
Accordingly, the plaintiff’s objection to the R&R’s application of a fifty percent
reduction to 55.4 hours spent during the time period from July 23, 2013, to February 3, 2014, is
overruled, and the recommendation on this issue is accepted.
D. Global Reduction of Fifteen Percent to Reflect Success in the
Fee Litigation
Finally, the plaintiff objects to the R&R’s proposal that “an overall reduction of 15% be
applied to all fees.” Pl.’s Objs. at 11. Specifically, the plaintiff contends that while Hensley
contemplates such a reduction where “hours spent during the merits fees proceeding . . . were
excessive, redundant, unproductive or unnecessary,” the report identifies no such hours here. Id.
Thus, the plaintiff suggests, because the hours expended on the original fee motion were
reasonable, no basis is presented to reduce those hours further to reflect that the plaintiff failed to
recover all of the fees for which she originally argued.
The plaintiff is incorrect. Although as the plaintiff suggests, Hensley requires courts to
consider whether hours were “reasonably expended,” i.e., whether they are “excessive,
redundant, or otherwise unnecessary,” the primary holding of Hensley was that “[t]he product of
reasonable hours times a reasonable rate does not end the inquiry”; rather, after determining the
number of hours reasonably expended on the successful claim or claims, courts must then
consider whether, inter alia, “the plaintiff achieve[d] a level of success that makes the hours
reasonably expended a satisfactory basis for making a fee award.” Hensley, 461 U.S. at 434. Put
another way, even assuming the plaintiff expended a “reasonable” amount of time on her fee
litigation, her fees-on-fees award may nevertheless be “adjust[ed] . . . upward or downward”
based on the “important factor of the ‘results obtained.’” Id. Thus, “the degree of the plaintiff’s
15
success in relation to the other goals of the lawsuit is a factor critical to the determination of the
size of a reasonable fee.” Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782,
790 (1989) (emphasis in original). In evaluating the degree of success, “the district court should
focus on the significance of the overall relief obtained by the plaintiff in relation to the hours
reasonably expended on the litigation.” Hensley, 461 U.S. at 435.
In accordance with Supreme Court precedent, this Court has explained that to determine
“what portion of the fees-on-fees [a plaintiff] reasonably incurred are recoverable . . . , the Court
first determines what portion of the fees and costs the plaintiff requested in connection with her
underlying administrative action is recoverable and, second, applies this recovery rate to the total
fees and costs reasonably incurred in connection with the follow-on fee litigation.” Eley, 2016
WL 4435187, at *11. In this case, the R&R appropriately takes into account the extent to which
the plaintiff prevailed in her original fees motion and recommends applying that percentage to
the fees reasonably expended in pursuit of the original fee award, as well as the present motion
for fees-on-fees. 5
Accordingly, the plaintiff’s objection to the R&R’s application of a fifteen percent
reduction to the overall fees-on-fees award is overruled, and the recommendation on this issue is
accepted.
5
In reply, the plaintiff emphasizes that a reduction of a fees-on-fees award may only be approved “where the
applicant had, during the course of the fees litigation expended time in litigating a claim, cost or expense that the
court ultimately [found] unsuccessful,” and thus, that the fifteen percent global reduction at issue here constitutes an
impermissible “double deduction” on her award. Pl.’s Reply Def.’s Opp’n Pl.’s Objs. at 15 (emphasis in original),
ECF No. 57. To the extent the plaintiff argues she was entirely successful in her original fee litigation, she is
incorrect. In that litigation, the Court adopted the Mar. 18, 2016 R&R’s finding that the plaintiff’s request for fees
was too high in view of her degree of success in the administrative proceedings and recommended reduction of
fifteen percent. See Mar. 18, 2016 R&R at 11–12. Consequently, having argued for more fees than she was
ultimately awarded, the plaintiff was only eighty-five percent successful in the original fee litigation and is entitled
to only eighty-five percent of the fees and costs incurred in that litigation.
16
IV. CONCLUSION
For the foregoing reasons, the plaintiff’s motion for fees is granted in part and denied in
part. The plaintiff is entitled to reimbursement for 121.3 hours ((half of 55.4 hours) + 14.9 hours
+ 81.1 hours – 2.4 hours of travel) of attorney time expended in the original fee litigation, plus
9.4 hours of attorney time expended on the present motion, at a rate of $450.00 per hour; plus 2.4
hours of travel time at a rate of $225.00 per hour; reduced by fifteen percent. The plaintiff is
thus entitled to reimbursement of a total of $50,451.75 in additional attorney’s fees.
An appropriate Order accompanies this Memorandum Opinion.
Digitally signed by Hon. Beryl A.
Howell
DN: cn=Hon. Beryl A. Howell,
o=U.S. District Court for the
District of Columbia, ou=Chief
Date: December 1, 2016 Judge,
[email protected]
ourts.gov, c=US
Date: 2016.12.01 10:41:29 -05'00'
__________________________
BERYL A. HOWELL
Chief Judge
17
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673 A.2d 448 (1996)
Simone M. RUESCHEMEYER et al.
v.
LIBERTY MUTUAL INSURANCE COMPANY.
No. 95-133-Appeal.
Supreme Court of Rhode Island.
April 1, 1996.
Jeffrey Michaelson, Julius Michaelson, Elizabeth Colt, Providence, for Plaintiff.
Patricia K. Asquith, Harry W. Asquith, Jr., Providence, for Defendant.
*449 OPINION
PER CURIAM.
This matter came before the Supreme Court for oral argument pursuant to an order directing the parties to appear and show cause why the issues raised by this appeal should not be summarily decided. After hearing the arguments of counsel and examining the memoranda submitted by the parties, we are of the opinion that cause has not been shown and that this matter should be summarily decided.
The defendant, Liberty Mutual Insurance Company (defendant), appeals from an order entered by a Superior Court motion justice concerning an insurance policy it issued which covered a vehicle operated by plaintiff Simone M. Rueschemeyer (plaintiff).
On May 28, 1992 a motor vehicle owned by plaintiff Dietrich Reuschemeyer and operated by plaintiff was involved in a collision with a Providence police cruiser. At the time of the collision, the automobile operated by plaintiff was covered by an insurance policy issued by defendant. The city of Providence, a self-insured municipality, owned the Providence police cruiser.
The plaintiffs filed a claim with defendant under the uninsured-motorist provision of the insurance policy issued by defendant. In a letter dated June 29, 1993, from a claims supervisor to plaintiffs' counsel, defendant denied coverage. The letter specifically quoted language from the insurance policy's uninsured-motorist-coverage section which provided that:
"Under Part C of the uninsured motorist coverage:
Uninsured motorist vehicle does not include any vehicle or equipment:
*450 1. Owned or furnished or available for the regular use by you or any family member.
2. Owned or operated by a self-insurer under any applicable motor vehicle law.
3. Owned or operated by any governmental unit or agency.
4. Operated on rails or crawler trends.
5. Designed mainly for the use off public roads .... not on public roads.
6. Well located for use as a residential premises." (Emphasis added.)
The letter concluded as follows:
"COVERAGE INTERPRETATION
There is no coverage under your client's auto policy as the police vehicle was owned by a governmental unit or agency.
For at least the reasons cited here, Liberty Mutual cannot indemnify your client for the alleged injuries sustained as a result of the accident on 5/23/92." (Emphasis added.)
On March 21, 1994, plaintiffs filed a complaint for declaratory relief in the Superior Court against defendant. The plaintiffs claimed that the exclusion of governmentowned vehicles from the definition of "uninsured motorist" is contrary to this state's uninsured-motorist statute, G.L.1956 § 27-7-2.1, and is therefore void and unenforceable. It was plaintiffs' contention that the definition of "uninsured motorist" contained in § 27-7-2.1 is all-inclusive.
The defendant filed an answer to plaintiffs' complaint and raised the government-owned-vehicle exclusion as an affirmative defense. Subsequently, defendant filed a written brief wherein it contended that the government-owned-vehicle exclusion was not void. The defendant further argued that the policy excluded vehicles owned by self-insurers and that the city of Providence is a self-insurer.
Following a hearing in the Superior Court, a motion justice concluded that the exclusion from the definition of "uninsured motor vehicle" of any vehicle or equipment owned by a governmental unit or an agency contained in the policy issued by defendant violates § 27-7-2.1 and is therefore void and unenforceable as a matter of law. He also found that the exclusion from the definition of "uninsured motor vehicle" of any vehicle owned or operated by a solvent and statutory self-insurer contained in the policy issued by defendant does not violate the uninsured-motorist statute but that defendant had waived its right to rely on this exclusion. The motion justice found that in defendant's June 29, 1993 letter to plaintiffs' counsel, defendant specifically relied on the government-owned-vehicle exclusion and failed to rely specifically upon or to assert the self-insured-vehicle exclusion. An order was subsequently entered on February 10, 1995, containing these findings from which defendant has filed the instant appeal.
On appeal defendant argues that the motion justice erred in finding that the government-owned-vehicle exclusion was void as a matter of law. Moreover, defendant contends that the motion justice erred in finding that it waived its right to enforce the self-insurer exclusion.
This court has held that in enacting § 27-7-2.1 the Legislature intended that as a matter of public policy, protection should be given to the named insured against economic loss resulting from injuries sustained by reason of the negligent operation of an uninsured vehicle. Malo v. Aetna Casualty and Surety Co., 459 A.2d 954, 956 (R.I.1983) (citing Aldcroft v. Fidelity Casualty Co., 106 R.I. 311, 318, 259 A.2d 408, 413 (1969)). "This statute was premised on the concept that responsible motorists who carry liability insurance should not be uncompensated when they are without recourse against an uninsured tortfeasor." Amica Mutual Insurance Co. v. Streicker, 583 A.2d 550, 553 (R.I.1990). Moreover we have stated that "contract provisions, particularly those delineating uninsured-motorist coverage, are to be interpreted in light of the public policy for which the Legislature enacted the uninsured-motorist-coverage statute." Bartlett v. America Mutual Insurance Co., 593 A.2d 45, 49 (R.I.1991). Provisions of insurance policies that restrict coverage afforded by the uninsured-motorist statute are void as a matter of public policy. Sentry Insurance Co. v. Castillo, 574 A.2d 138, 140 (R.I.1990).
*451 We are of the opinion that to exclude from the definition of uninsured-motor vehicles those motor vehicles owned by a governmental entity does not further the legislative intent of the uninsured-motorist statute. An insured is as susceptible of economic loss resulting from the operation of a vehicle owned and operated by a governmental entity as he or she is from the operation of a vehicle owned by another; hence, we are persuaded that to carve out an exception from the definition of uninsured-motor vehicles is contrary to the legislative intent of the statute. This exclusion impermissibly restricts coverage afforded by the statute. Accordingly, we hold that the motion justice correctly found that the government-owned-vehicle exclusion contained in the policy at issue is void as a matter of law and as a matter of public policy.
We next address defendant's contention that the motion justice erred in finding that it had waived its defense to plaintiffs' claim on the basis of the self-insurer exclusion in the policy. We find that defendant sufficiently raised this defense in two denial letters it forwarded to plaintiffs' counsel. In the denial letter dated June 29, 1993, defendant's claims supervisor delineated, verbatim, the exclusions to the uninsured-motorist coverage in the policy. One such exclusion was vehicles "[o]wned or operated by a self-insurer under any applicable motor vehicle law." That letter concluded that the claim was being denied "for at least the reasons cited [in the letter]." Additionally, in a prior letter from defendant to plaintiffs' counsel dated June 15, 1992, defendant implied that it intended to deny the claim on the basis of the self-insurer exclusion contained in the policy.
We are of the opinion that the two denial letters forwarded by defendant to plaintiffs' counsel were sufficient to give plaintiffs notice of its intent to raise the self-insurer exclusion contained in the policy. Hence, we conclude the motion justice erred in finding that defendant had waived this defense.
Having found that defendant did not waive the defense of the self-insurer exclusion, this court must address the question of whether that exclusion is valid and otherwise enforceable as found by the motion justice. We find that it is.
The statute governing self-insurers, G.L. 1956 § 31-33-9, permits an owner of more than twenty-five registered vehicles in this state to qualify as a self-insurer by obtaining a certificate of self-insurance issued by the registry. A certificate may be issued by the registry "when it is satisfied that the person is possessed and will continue to be possessed of the ability to pay judgment obtained against the person." Section 31-33-9(b).
In the instant case it appears that at the time of the accident the city of Providence did hold a valid certificate of self-insurance. The fact that the city held a valid certificate indicates that it possessed the ability to pay judgment obtained against it. The city's status as a self-insurer does not deem it uninsured. We find, therefore, that the selfinsurer exclusion in the policy is not void.
For these reasons the defendant's appeal is sustained in regard to the issue of waiver, and the motion justice's ruling finding that the defendant had waived its defense on the basis of the self-insurer exclusion contained in the policy is reversed. The motion justice's determinations in regard to the government-owned-vehicle exclusion and to the selfinsurer exclusion as it pertains to the definition of uninsured motorist in the policy are affirmed. The case is remanded to the Superior Court for further proceedings in accordance with this opinion.
SHEA, J., not participating.
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437 So.2d 1212 (1983)
Larry Van WEST, Appellant
v.
STATE of Mississippi, Appellee.
No. 53918.
Supreme Court of Mississippi.
September 28, 1983.
*1213 Thomas Tucker Buchanan, Billie J. Graham, Buchanan & Graham, Laurel, for appellant.
Bill Allain, Atty. Gen. by Amy D. Whitten, Sp. Asst. Atty. Gen., Jackson, for appellee.
Before PATTERSON, C.J., and BOWLING and ROBERTSON, JJ.
ROBERTSON, Justice, for the Court:
Larry Van West was convicted in the Circuit Court of Forrest County, Mississippi, of the crime of attempted sexual battery. Miss. Code Ann. §§ 97-3-95 and 97-3-97 (Supp. 1982) and § 97-1-7 (1972). He was sentenced to serve a term of 20 years in the custody of the Mississippi Department of Corrections.
The evidence establishes without serious contradiction that on March 2, 1981, West inveigled his victim, a female student at the University of Southern Mississippi, into an apartment near where she lived, made a few suggestive comments, and without her consent, fondled her breasts, put his hand inside her panties, and later exposed himself. The question is not whether what West did was criminal or whether it offends sensibilities. We inquire whether what West did constitutes the specific crime of attempted sexual battery as defined in a combined reading of three statutes, Section 97-3-95, -97 and 97-1-7. We answer in the negative.
We begin with Section 97-3-95 which makes sexual battery a crime. At the time of the act in question, that statute read as follows:
A person is guilty of sexual battery if he or she engages in sexual penetration with:
(a) Another person without his or her consent; . .. .
Miss. Code Ann. § 97-3-95 (Supp. 1982).
Sexual penetration is the essence of the offense of sexual battery. Section 97-3-97 defines sexual penetration as follows:
(a) "Sexual penetration" includes cunnilingus, fellatio, buggery or pederasty, any penetration of the genital or anal openings of another person's body by any part of a person's body, and insertion of any object into the genital or anal openings of another person's body.
Miss. Code Ann. § 97-3-97 (Supp. 1982).
Attempted sexual battery becomes a criminal offense by virtue of the two statutes just mentioned when read in combination with Section 97-1-7 which in pertinent part provides:
Every person who shall design and endeavor to commit an offense, and shall do any overt act toward the commission thereof, but shall fail therein, or shall be prevented from committing the same, on conviction thereof, shall, ... be punished... .
Our concern is whether there is in the record evidence sufficient to support the jury's verdict that Larry Van West was *1214 guilty of attempted sexual battery. As we have said repeatedly, the jury is charged with the responsibility for weighing and considering conflicting evidence and the credibility of witnesses. See, e.g., Gathright v. State, 380 So.2d 1276, 1278 (Miss. 1980); Pearson v. State, 428 So.2d 1361, 1364 (Miss. 1983). Once the jury has returned a verdict of guilty in a criminal case, we are not at liberty to direct that the defendant be discharged short of a conclusion on our part that on the evidence, taken in the light most favorable to the verdict, no reasonable, hypothetical juror could find beyond a reasonable doubt that the defendant was guilty. Jackson v. Virginia, 443 U.S. 307, 324, 99 S.Ct. 2781, 2791, 61 L.Ed.2d 560, 576 (1979); Pearson v. State, 428 So.2d 1361, 1364 (Miss. 1983).
The facts are uncontradicted. There was no penetration. Moreover, the prosecution, in effect, has conceded that there was no attempt to penetrate. West had every opportunity to penetrate if he had wished to do so. His failure was not the product of his victim's admittedly ineffective resistance or the intervention of extraneous causes. In this setting what the State proved falls short of an attempt under Section 97-1-7.
Attempt requires "design" on the part of the defendant. By design the statute contemplates "intent". Whatever West's intent may have been when he originally inveigled his victim into the apartment (leaving the door open), that intent had dissipated by the time he committed his so-called "overt acts". Whether he lost his nerve, changed his mind, or whatever, his failure to consummate the crime of sexual penetration was obviously his own decision.
If one walks into a bank with a loaded pistol in his pocket intending to rob the bank and walks up to the teller's window, but then changes his mind, he has not committed the crime of attempted bank robbery. See Smith v. State, 279 So.2d 652, 653 (Miss. 1973). By the same token, Larry Van West on the evidence in this case has not committed the crime of attempted sexual penetration.
The attempt statute requires that, before one may be convicted of attempt, he "shall fail therein, or shall be prevented from committing the same". The gravamen of this offense of attempt is that the accused have done an overt act toward sexual penetration "and be prevented from its commission". State v. Lindsey, 202 Miss. 896, 899, 32 So.2d 876, 877 (1947). The State was thus required to prove that Larry Van West attempted sexual penetration but failed therein or that he was prevented from committing the same.
The proof shows neither an attempt nor a failure but a volitional stopping short.
Under our attempt statute prevention or frustration must have resulted from extraneous causes. Bucklew v. State, 206 So.2d 200, 202 (Miss. 1968); c.f. Murray v. State, 403 So.2d 149, 152 (Miss. 1981). We have no such intervening extraneous cause here. McDole v. State, 229 Miss. 646, 91 So.2d 738 (1957) was an attempted rape case. The defendant's attempt to commit the crime of rape was interrupted by a third person. This is the sort of intervening extraneous cause contemplated in the Bucklew and Murray cases, as well as by the statute. We have no such interruption here.
We repeat, what Larry Van West did was neither lawful nor laudable behavior. There are other criminal statutes under which he might have been charged.[1] To be sure, the State could have requested a lesser included offense instruction, but it did not. Having placed all of its eggs in one basket, our sole inquiry is whether there was sufficient evidence to support a jury verdict of attempted sexual battery. We hold that there was not.
REVERSED AND RENDERED.
*1215 PATTERSON, C.J., WALKER and BROOM, P.JJ., and ROY NOBLE LEE, BOWLING, HAWKINS, DAN M. LEE and PRATHER, JJ., concur.
NOTES
[1] See, e.g., Miss. Code Ann. § 97-3-7(1) (Supp. 1982) (simple assault); Miss. Code Ann. § 97-29-31 (Supp. 1982) (indecent exposure).
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544 U.S. 950
SANCHEZ-PARRA ET AL.v.UNITED STATES.
No. 04-7521.
Supreme Court of United States.
March 28, 2005.
1
C. A. 5th Cir. Certiorari denied. Reported below: 108 Fed. Appx. 895.
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United States Court of Appeals,
Eleventh Circuit.
No. 97-4896.
UNITED STATES of America, Plaintiff-Appellee,
v.
Jonathan S. EDWARDS, Defendant-Appellant.
Feb. 11, 1999.
Appeal from the United States District Court for the Southern District of Florida. (No. 96-8091-CR-
DTKH), Danniel T. K. Hurley, Judge.
Before TJOFLAT and DUBINA, Circuit Judges, and SMITH*, Senior Circuit Judge.
TJOFLAT, Circuit Judge:
The defendant, Jonathan Edwards, was convicted of one count of possession with intent to
distribute crack cocaine, in violation of 21 U.S.C. § 841(a)(1). Because the Government failed to
prove its case, we reverse.
I.
Patrick Flannery, a West Palm Beach police officer, was working undercover as a narcotics
supplier as part of a "reverse sting" operation. An informant put him in touch with Edwards, and
the two arranged to meet at a local restaurant. At the meeting, Flannery and Edwards discussed the
possibility of a narcotics sale; the next day, the two negotiated a deal in which Edwards agreed to
pay $8000 for one-half kilogram of crack cocaine.
Flannery and Edwards met in a parking lot—under the watchful eye of a group of DEA
agents—to complete the deal. Flannery walked over to Edwards' car and asked to see the money
*
Honorable Edward S. Smith, Senior U.S. Circuit Judge for the Federal Circuit, sitting by
designation.
for the purchase; Edwards responded by flashing a bundle of cash. Edwards then followed Flannery
back to his car, where Flannery opened the trunk and pointed to a manila envelope containing
one-half kilogram of crack cocaine. Edwards reached into the trunk, picked up the envelope, and
pulled out the inner plastic bag containing the cocaine. After inspecting the contraband, Edwards
slid the plastic bag back into the envelope, returned the envelope to Flannery's trunk, and said, "Let's
go for a ride."1 Flannery closed the trunk, and, as he and Edwards were getting into Flannery's car,
Flannery contacted the DEA agents (via cellular telephone) who proceeded to arrest Edwards.
Edwards was tried before a jury in the United States District Court for the Southern District
of Florida. At the conclusion of the Government's case, Edwards moved pursuant to Fed.R.Crim.P.
29 for a judgment of acquittal. The district court reserved ruling on the motion until the close of the
evidence, at which time the motion was denied. The case then went to the jury, which convicted
Edwards as charged.
II.
In order to convict a defendant for possession with intent to distribute a controlled
substance, the Government must establish that the defendant possessed the controlled substance.
Possession can be either actual or constructive. A defendant has actual possession of a substance
when he has direct physical control over the contraband. See United States v. Munoz, 150 F.3d 401,
416 (5th Cir.1998).2 The only point at which Edwards had any physical control over the cocaine
1
According to Edwards' post-arrest statement, he planned to deliver the cocaine to his partner
at a nearby gas station.
2
Munoz, like many other cases on the topic of possession, defines actual possession as
including knowledge—the defendant must "knowingly" have direct physical control over the
contraband. Such a definition conflates the possession element of the offense with the mens rea
element of the offense. It is quite possible to have possession of an object without knowing what
it is, or even knowing that you possess it. For criminal culpability to attach, however, the
possession must be knowing.
was when he picked up the manila envelope and briefly inspected its contents. We have previously
held that mere inspection of contraband, standing alone, is not sufficient to establish possession. See
United States v. Derose, 74 F.3d 1177, 1186 (11th Cir.1996); see also United States v. Kitchen, 57
F.3d 516, 524 (7th Cir.1995). Edwards therefore never had actual possession of the cocaine.
In the absence of actual possession, the Government must prove constructive possession.
A defendant has constructive possession of a substance when he has some form of control other than
direct physical control. See United States v. Pruitt, 763 F.2d 1256 (11th Cir.1985). For instance,
a defendant has constructive possession of a substance if it is being held by an agent of the
defendant, or if it is in a safe deposit box to which the defendant has the key, or if it is in a cookie
jar at the defendant's house. The Government contends that Edwards had constructive possession
of the cocaine while it was in Flannery's trunk. We disagree. The cocaine was in a locked
automobile trunk to which only Flannery had the key. Edwards had no access to the cocaine except
through Flannery. Thus, the only way Edwards could have had constructive possession would be
if Flannery were Edwards' agent. There is nothing in the facts of this case to suggest that
Flannery—a narcotics officer—was under the control of Edwards. We therefore find no
constructive possession.
Because Edwards was not in possession of the cocaine, he could not be found guilty of
possession with intent to distribute.3 Therefore, Edwards' conviction and sentence are VACATED
and the case is REMANDED with the instruction that the district court enter an order dismissing the
3
Edwards was also charged with aiding and abetting possession with intent to distribute crack
cocaine, in violation of 18 U.S.C. § 2. His conviction cannot be sustained on that ground,
however, because no one committed the underlying offense—Edwards had the intent to
distribute, but never had possession; Flannery had possession, but never had the intent to
distribute. See United States v. Martin, 747 F.2d 1404, 1407 (11th Cir.1984) (reversing the
defendant's aiding and abetting conviction in the absence of evidence that the principal offense
was committed).
indictment.
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524 F.2d 62
173 U.S.App.D.C. 241
UNITED STATES of Americav.Earlie EDMONDS, Jr., also known as Earlie Edmund, Jr., Appellant.
No. 72-1988.
United States Court of Appeals,District of Columbia Circuit.
Submitted Without Argument May 22, 1973.Decided Dec. 4, 1975.
John M. Steadman and Sherman L. Cohn, Attys., Washington, D.C., and Warren E. Connelly and Alan D. Gordon, Student Counsel, were on the brief for appellant.
Harold H. Titus, Jr., U. S. Atty., at the time the brief was filed, and John A. Terry, Brian W. Shaughnessy and Julius A. Johnson, Asst. U. S. Attys., were on the brief for appellee.
Before ROBINSON and WILKEY, Circuit Judges, and KAUFMAN,* United States District Judge for the District of Maryland.
SPOTTSWOOD W. ROBINSON, III, Circuit Judge:
1
Appealing from jury-trial convictions of armed rape1 and assault with a dangerous weapon,2 appellant contends solely, and on constitutional grounds principally, that the District Court erred in admitting, for purposes of impeaching his testimony, evidence of his conviction at age of 16 of a burglary allegedly committed in North Carolina.3 The appeal has been successively held in abeyance pending our disposition of a series of other cases presenting substantially the same constitutional arguments,4 and our decision in the last group of those cases has stripped appellant of his federal claims.5 Remaining to be answered, however, is the question whether the North Carolina conviction is encompassed by the statute authorizing conviction-impeachment in trials of District of Columbia offenses.6 We hold that it is.7
2
Shortly before appellant's rape trial began, the prosecutor stated that should appellant testify, he intended to introduce the burglary conviction in an effort to impeach. Over objection by defense counsel,8 the trial judge held that the conviction might be offered to that end.9 Thereafter, early on direct examination, appellant acknowledged that he had been so convicted,10 explaining his youthfulness and other surrounding circumstances, and later the judge instructed the jury as to the limited purpose which that information permissibly could serve.11 Appellant now complains that the ruling prompting this line of testimony was erroneous because "North Carolina . . . failed to provide the kind of enlightened treatment of juveniles which Congress intended would exist in the District of Columbia before impeachment by means of prior convictions would be permitted. . . ."12 Put somewhat differently, appellant, as a 16-year-old, might not have been subjected to criminal prosecution in the District as an adult,13 and thus might have been spared the conviction utilized for impeachment in this case. While this contrast between District and North Carolina procedure cannot be doubted,14 we find the conclusion drawn therefrom unacceptable.
3
All charges on which appellant was standing trial were grounded on provisions of the District of Columbia Code.15 Consequently, resort to the District's impeachment statute was entirely in order.16 The statute enables impeachment of a witness by proof that he "has been convicted of a criminal offense" meeting stated conditions.17 Indisputably, the conviction in question satisfied the statutory specifications unless exempted by the age-based difference in treatment of juveniles accused of crime in the District and North Carolina, respectively.18 We are satisfied that the dissimilarity cannot serve to remove the North Carolina conviction from the ambit of the District statute.
4
To be sure, had the episode leading to the conviction transpired in the District, the ruling on its admissibility could have been diametrically opposite. Because appellant was only 16 years old,19 he could not have been tried in the District as an adult unless juvenile jurisdiction over him was waived.20 A waiver would have involved a discretionary determination, upon "full investigation," that the criminal process should be substituted for juvenile proceedings and disposition.21 Of course, such a determination as to appellant may or may not have been made, and if not the juvenile disposition could not have been used for impeachment.22 We are told that by statute in force in North Carolina, when the burglary prosecution occurred, persons 14 years or older who are charged with felonies punishable by more than ten years' imprisonment must be prosecuted as adults.23 Since, as appears, the maximum punishment for the burglary for which appellant was indicted exceeded the ten-year limit,24 treatment as an adult was mandatory.
5
Nonetheless, the trial judge ruled correctly on the Government's conditional proffer of the North Carolina conviction as a factor reflecting adversely on appellant's credibility. For nearly three-quarters of a century, Congress has regulated conviction-impeachment in the District with relatively little change in language denoting the types of convictions that might be employed for that purpose.25 During the long era when the critical legislative expression was "convicted of crime,"26 this court indulged the statutory words a range consistent with the aims and ends of witness-impeachment. Thus it has frequently been held that the "crime" to which the statute referred included not just felonies27 but also misdemeanors capable of assisting an evaluation of truthtelling,28 despite the readier assimilation of "felony" with "crime."29 In like vein, we have left untouched impeachments by conviction under the Federal Youth Corrections Act,30 despite the similarity of its goals with those of juvenile legislation.31 On the other hand, the very nature of witness-impeachment has outlawed some low-value misdemeanor convictions,32 as well as some low-level penal adjudications,33 although in a sense all could be deemed species of "crime."
6
By our appraisal, a construction of the impeachment statute which would exclude use of his North Carolina burglary conviction is wholly unwarranted. At the time of the rape trial, the statute permitted, as it now does, impeachment by "evidence that the witness has been convicted of a criminal offense."34 The legislative history of the current text reveals that the shift in language from "crime"35 to "criminal offense" was intended, not to constrict, but to broaden the category of convictions usable under the statute.36 And we have construed even the narrower word "crime" as embracing adult convictions of persons who but for waiver would have been proceeded against only as juveniles. In Luck v. United States,37 the prosecutor was allowed, over objection, to elicit from the accused on cross-examination that he had previously pleaded guilty to grand larceny. The basis of the objection was that the accused was a juvenile at the time of the larceny, on account of which it was argued that the conviction could not be introduced for impeachment. Juvenile jurisdiction over the accused had been waived as to the larceny charge, however, and he had been tried as an adult in the District Court and sentenced under the Youth Corrections Act. In sustaining the conviction, we said:
7
Appellant relies in this regard upon the (statutory) provisions which are designed to relieve proceedings in the Juvenile Court38 from the consequences which customarily accompany conviction of crime in a tribunal of general jurisdiction. The Government points out, however, that that statute is in terms addressed to adjudications made by the Juvenile Court in the exercise of its jurisdiction, and that it has no application when that jurisdiction has been expressly waived by the Juvenile Court. Here, appellant was waived out of the jurisdiction of the Juvenile Court, and the District Court was authorized to, and did, try and sentence him as an adult. Such a conviction, so it is said, carries with it the usual incidents, including subsequent exposure to impeachment by reason of the earlier conviction authorized by (the impeachment statute).
8
We agree with the Government to this extent, namely, that we find no clear purpose on the part of Congress to withdraw from the reach of this last-mentioned statute convictions of juveniles in the District Court as adults following upon waivers of jurisdiction by the Juvenile Court. Just as more severe sentencing provisions are available for the punishment of those who are waived, so does conviction entail the consequence that the Government may seek to use it to attack credibility in a later proceeding. Such harsher consequences are always arguments against the wisdom of waiver in an individual case, but their very persuasiveness for this purpose rests upon the existence of such consequences.39
9
That construction settles the issue here. No more under the present statute than under its forerunner can we discern a congressional purpose to exclude adult convictions of waived juveniles.40 So, had the questioned conviction occurred in the District of Columbia after a waiver, it could have done service as impeachment material notwithstanding appellant's age at the time of the offense. We perceive no difference in legal result from the fact that the adult conviction involved in this case emanates from another jurisdiction in which at that age no waiver was required.41 The statutory text suggests none,42 and its legislative history discloses none.43 We hold that there is none.44
10
Appellant's conviction of assault with a dangerous weapon is vacated,45 and as thus modified the judgment appealed from is affirmed.
11
So ordered.
*
Sitting by designation pursuant to 28 U.S.C. § 292(d) (1970)
1
D.C.Code §§ 22-2801, 22-3202(a) (1973)
2
D.C.Code § 22-502 (1973). See note 7 Infra
3
At trial, appellant testified that he was 14 years old when the burglary occurred. In their brief on appeal, however, his counsel inform us that appellant was mistaken in that regard, and that he was 15 at the time of the burglary and 16 when convicted on a plea of guilty entered on advice of counsel. Both sides have argued and submitted the appeal on the latter premises and, accordingly, we accept them for purposes of our decision. See note 44 Infra
4
United States v. Henson, 159 U.S.App.D.C. 32, 486 F.2d 1292 (En banc 1973), decided together with No. 71-1491, United States v. Marshall ; No. 71-1497, United States v. Brown ; and No. 71-1356, United States v. Jeffries, The present litigants having adopted the opposing briefs therein on similar constitutional points raised but not reached because we concluded that the District of Columbia statute governing conviction-impeachment, D.C.Code § 14-305 (1973), quoted Infra note 6, was unconstitutional as an Ex post facto Law when applied to offenses committed prior to the effective date of an amendment rendering admission of covered convictions nondiscretionary, a problem not present here; United States v. Hairston, 161 U.S.App.D.C. 466, 495 F.2d 1046 (1974), wherein the constitutional claims again were not reached because we held as a matter of statutory construction that the statute does not apply to trials of federal offenses in the District Court; United States v. Belt, 169 U.S.App.D.C. ---, 514 F.2d 837 (En banc 1975), decided together with No. 72-1738, United States v. Robinson; No. 73-1165, United States v. Lewis ; and No. 73-1167, United States v. Walls, Wherein we held the statute applicable to trials of post-amendment nonfederal offenses in the District Court and fully sustained its constitutionality as so applied
5
United States v. Belt, supra note 4, 169 U.S.App.D.C. at ---, ---, 514 F.2d at 842-844, 846-850
6
D.C.Code § 14-305 (1973), which provides:
(a) No person is incompetent to testify, in either civil or criminal proceedings, by reason of his having been convicted of a criminal offense.
(b)(1) Except as provided in paragraph (2), for the purpose of attacking the credibility of a witness, evidence that the witness has been convicted of a criminal offense shall be admitted if offered, either upon the cross-examination of the witness or by evidence aliunde, but only if the criminal offense (A) was punishable by death or imprisonment in excess of one year under the law under which he was convicted, or (B) involved dishonesty or false statement (regardless of punishment). A party establishing conviction by means of cross-examination shall not be bound by the witness' answers as to matters relating to the conviction.
(2)(A) Evidence of a conviction of a witness is inadmissible under this section if
(i) the conviction has been the subject of a pardon, annulment, or other equivalent procedure granted or issued on the basis of innocence, or
(ii) the conviction has been the subject of a certificate of rehabilitation or its equivalent and such witness has not been convicted of a subsequent criminal offense.
(B) In addition, no evidence of any conviction of a witness is admissible under this section if a period of more than ten years has elapsed since the later of (i) the date of the release of the witness from confinement imposed for his most recent conviction of any criminal offense, or (ii) the expiration of the period of his parole, probation, or sentence granted or imposed with respect to his most recent conviction of any criminal offense.
(c) For purposes of this section, to prove conviction of crime it is not necessary to produce the whole record of the proceedings containing the conviction, but the certificate, under seal, of the clerk of the court wherein the proceedings were had, stating the fact of the conviction and for what cause, shall be sufficient.
(d) The pendency of an appeal from a conviction does not render evidence of that conviction inadmissible under this section. Evidence of the pendency of such an appeal is admissible.
7
In another respect, however, we do modify the judgment appealed from. Concurrent sentences of 3 to 10 years on the armed assault conviction and 8 to 24 years on the armed rape conviction were imposed. Finding guilt on the armed rape count, the jury conformably with the trial judge's instructions, returned no verdict on an additional count of unarmed rape, D.C.Code § 22-2801 (1973), which was a lesser offense included within the armed rape. See cases cited Infra this note. So too, however, was the armed assault, which was an essential part of the proof, that the rapist was armed. Accordingly, we vacate the assault conviction. Compare, E. g., United States v. Belt, supra note 4, 169 U.S.App.D.C. at --- n. 3, 514 F.2d at 839 n. 3; United States v. Toy, 157 U.S.App.D.C. 152, 154-155, 482 F.2d 741, 743-744 (1973); United States v. Holiday, 157 U.S.App.D.C. 140, 142 n. 6, 482 F.2d 729, 731 n. 6 (1973); United States v. Johnson, 155 U.S.App.D.C. 28, 29, 475 F.2d 1297, 1298 (1973)
8
Not his counsel on appeal
9
The record makes clear that the ruling was nondiscretionary, allowance of the impeachment being deemed the mandate of the statute. Beyond peradventure, that view was correct if the conviction fell within the purview of the statute. See note 6 Supra; H.R.Rep.No.91-907, 91st Cong., 2d Sess. 62-63 (1970); United States v. Belt, supra note 4, 169 U.S.App.D.C. at ---, 514 F.2d at 839
10
Since the acknowledgement obviously was an attempt to soften the impact of the revelation which the Government expectably would have made pursuant to the judge's ruling, we cannot accept the argument that appellant is now foreclosed from attacking the ruling. See United States v. Lewis, 157 U.S.App.D.C. 43, 47-48, 482 F.2d 632, 636-637 (1973); Jones v. United States, 131 U.S.App.D.C. 88, 91 n. 5, 402 F.2d 639, 642 n. 5 (1968). The situation here differs critically from those in which evidence of the prior conviction complained of was truly volunteered. See Dear Check Quong v. United States, 82 U.S.App.D.C. 8, 10, 160 F.2d 251, 253 (1947). See also Felton v. United States, 83 U.S.App.D.C. 277, 279, 170 F.2d 153, 155, Cert. denied, 335 U.S. 831, 69 S.Ct. 18, 93 L.Ed. 385 (1948)
11
The trial judge's general charge to the jury incorporated an instruction limiting consideration of the conviction to an assessment of appellant's credibility as a witness. Defense counsel did not request the instruction, nor was it given, at the time appellant testified to the conviction. See, E. g., United States v. McClain, 142 U.S.App.D.C. 213, 217-218, 440 F.2d 241, 245-246 (1971). The apparent explanation is that appellant was the only defense witness, and when he left the stand the Government was uncertain about rebuttal evidence, with the result that the general charge was expected to follow shortly on this same day which, aside from one short rebuttal witness and summation, it did. Compare United States v. Bell, 165 U.S.App.D.C. 146, 154 n. 42, 506 F.2d 207, 215 n. 42 (1974); United States v. Henson, supra note 4, 159 U.S.App.D.C. at 39-40 n. 6, 486 F.2d at 1299, 1300 n. 6; United States v. Fench, 152 U.S.App.D.C. 325, 332, 470 F.2d 1234, 1241 (1972), Cert. denied, 410 U.S. 909, 93 S.Ct. 964, 35 L.Ed.2d 271 (1973). In any event, since no issue in this regard is raised or briefed on appeal, we do not consider the matter further. See, E. g., Rone v. Rone, 78 U.S.App.D.C. 369, 141 F.2d 23 (1944); Minnesota Min. & Mfg. Co. v. Coe, 73 App.D.C. 146, 148, 118 F.2d 593, 595 (opinion on rehearing), Cert. denied, 314 U.S. 624, 62 S.Ct. 89, 86 L.Ed. 501 (1941); Brown v. Sielaff, 474 F.2d 826, 828 (3d Cir. 1973). See also Fed.R.App.P. 28(a)(2), (4)
12
Appellant's Brief at 11
13
See text Infra At notes 19-21
14
See text Infra At notes 19-24
15
See text Supra at notes 1-2 and note 7 Supra. They were triable in the District Court because the indictment charging them was returned during the transitional period established by D.C.Code § 11-502(2) (1973)
16
United States v. Belt, supra note 4, 169 U.S.App.D.C. at ---, 514 F.2d at 842-844
17
See note 6 Supra
18
The conviction was of burglary, an offense punishable under North Carolina law by imprisonment in excess of a year. See note 24 Infra and accompanying text. It is thus unnecessary to inquire as to whether it "involved dishonesty or false statement" within the meaning of the statute. See, however, H.R.Rep.No.91-907, 91st Cong., 2d Sess. 62 (1970). The conviction charged and not denied as appellant's most recent occurred in 1960, and appellant was on parole therefrom at the time of trial in the instant case. The statute does not differentiate between criminal conviction in the District of Columbia and elsewhere. None of the conditions which would remove the conviction as a basis of impeachment appears. See note 6 Supra
19
See note 3 Supra
20
D.C.Code § 11-914 (1961). See also Kent v. United States, 383 U.S. 541, 560, 86 S.Ct. 1045, 1047, 16 L.Ed.2d 84, 97 (1966); Harling v. United States, 111 U.S.App.D.C. 174, 177-178, 295 F.2d 161, 164-165 (1961). The matter is now covered by D.C.Code § 16-2307 (1973)
21
D.C.Code § 11-914 (1961). See also Kent v. United States, supra Note 20, 383 U.S. at 554-555, 86 S.Ct. at 1053-1054, 16 L.Ed.2d at 93-94; Haziel v. United States, 131 U.S.App.D.C. 298, 301-304, 404 F.2d 1275, 1278-1281 (1968); Kent v. United States, 130 U.S.App.D.C. 343, 346, 401 F.2d 408, 411 (1968)
22
Brown v. United States, 119 U.S.App.D.C. 203, 206-208, 338 F.2d 543, 546-548 (1964); Thomas v. United States, 74 App.D.C. 167, 169-170, 121 F.2d 905, 907-908 (1941)
23
See State v. Burnett, 179 N.C. 735, 102 S.E. 711, 713 (1920). See also State v. Alexander, 279 N.C. 527, 184 S.E.2d 274, 280 (1971); State v. Rogers, 275 N.C. 411, 168 S.E.2d 345, 353 (1969). But see State v. Miller, 281 N.C. 70, 187 S.E.2d 729, 733-735 (1972)
24
Appellant testified, and the parties agree, that a sentence of 52 to 55 years' imprisonment was imposed upon the North Carolina burglary conviction
25
Act of Mar. 3, 1901, ch. 854, § 1067, 31 Stat. 1357 ("convicted of crime other than perjury"); amended, Act of June 30, 1902, ch. 1329, 32 Stat. 540 ("convicted of crime"); amended, Pub.L.No. 88-241, § 1, 77 Stat. 519 (1963) ("convicted of crime"); amended, Pub.L.No. 91-358, tit. I, § 133(a), 84 Stat. 550 (1970) ("convicted of a criminal offense"); now codified as D.C.Code § 14-305 (1973)
26
See note 25 Supra
27
See Campbell v. United States, 85 U.S.App.D.C. 133, 135, 176 F.2d 45, 47 (1949)
28
Id. at 134-135, 176 F.2d at 46-47 (petit larceny); Bostic v. United States, 68 App.D.C. 167, 168-169, 94 F.2d 636, 637-638, Cert. denied, 303 U.S. 635, 58 S.Ct. 523, 82 L.Ed. 1095 (1937) (simple assault); United States v. Boyer, 80 U.S.App.D.C. 202 n. 3, 150 F.2d 595 n. 3, 166 A.L.R.2d 209 (1945); Sanford v. United States, 69 App.D.C. 44, 46, 98 F.2d 325, 327 (1938); Clawans v. District of Columbia, 61 App.D.C. 298, 299, 62 F.2d 383, 384 (1933); Murray v. United States, 53 App.D.C. 119, 125, 288 F. 1008, 1014, Cert. denied, 262 U.S. 757, 43 S.Ct. 703, 67 L.Ed. 1218 (1923)
29
See Campbell v. United States, supra note 27, 85 U.S.App.D.C. at 135, 176 F.2d at 47
30
Act of Sept. 30, 1950, ch. 1115, § 2, 64 Stat. 1085, as amended, 18 U.S.C. § 5005 Et seq. (1970)
31
See Weaver v. United States, 133 U.S.App.D.C. 66, 68-69 & n. 2, 408 F.2d 1269, 1271-1272 & n. 2, Cert. denied, 395 U.S. 927, 89 S.Ct. 1785, 23 L.Ed.2d 245 (1969); Luck v. United States, 121 U.S.App.D.C. 151, 154, 348 F.2d 763, 767 (1965)
32
Convictions of misdemeanors not inherently wicked are not usable for impeachment. Clawans v. District of Columbia, supra Note 28, 61 App.D.C. at 299, 62 F.2d at 384. See also cases cited Infra Note 33
33
Convictions for violations of municipal ordinances: Pinkney v. United States, 124 U.S.App.D.C. 209, 211, 363 F.2d 696, 698 (1966); Bostic v. United States, supra note 28, 68 App.D.C. at 169, 94 F.2d at 636; Clawans v. District of Columbia, supra Note 28, 61 App.D.C. at 299, 62 F.2d at 384; those for petty offenses not triable by jury: Pinkney v. United States, supra, 124 U.S.App.D.C. at 211-212, 363 F.2d at 698-699, but see note 36 Infra; Those for offenses punishable only by fine: Clawans v. District of Columbia, supra note 28, 61 App.D.C. at 299, 62 F.2d at 384, citing Schick v. United States, 195 U.S. 65, 70, 24 S.Ct. 826, 827, 49 L.Ed. 99, 102 (1904); those involving merely a forfeiture of collateral: Kitchen v. United States, 95 U.S.App.D.C. 277, 279, 221 F.2d 832, 834 (1955), Cert. denied, 357 U.S. 928, 78 S.Ct. 1378, 2 L.Ed.2d 1374 (1958)
34
See note 6 Supra
35
See note 25 Supra
36
The House Committee of the District of Columbia explained the change as follows:
The decision of Pinkney v. United States (Supra note 33) applied the word "crime" in existing section 14-305 to limit impeachment to offenses triable by jury. This artificial limitation has prevented impeachment by offenses such as false report to the police and soliciting prostitution which manifestly involve dishonesty or false statement. The rule adopted by the Committee ends this artificial distinction by substituting the word "offense" for the word "crime".
H.R.Rep.No.91-907, 91st Cong., 2d Sess. 62 (1970).
37
Supra note 31
38
The jurisdiction then exercised by the Juvenile Court of the District of Columbia is for the most part now vested in the Family Division of the Superior Court of the District of Columbia. D.C.Code § 11-1101 (1973)
39
Luck v. United States, supra note 31, 121 U.S.App.D.C. at 153-154, 348 F.2d at 765-766 (footnotes omitted). See also Hood v. United States, 125 U.S.App.D.C. 16, 17-18, 365 F.2d 949, 950-951 (1966)
40
We have already observed that the current provision was designed to expand, not contract, the category of convictions available for impeachment. See note 36 supra and accompanying text
41
We are mindful that a waiver of juvenile jurisdiction contemplates due consideration of the offender's rehabilitative prospects, and that a decision to waive reflects a conclusion that no feasible alternative to criminal prosecution exists. We find no indication, however, that Congress intended to exclude state convictions in instances where the accused was below the age at which a waiver determination would have been required in the District of Columbia. We believe it more likely that Congress recognized that legislative judgments might differ as to the age at which minors should become unqualifiedly subject to the jurisdiction of the criminal courts. Moreover, Congress has defined a part that rehabilitation is to play in the conviction-impeachment area. A prior conviction is inadmissible where "the conviction has been the subject of a certificate of rehabilitation or its equivalent and (the) witness has not been convicted of a subsequent criminal offense," D.C.Code § 14-305 (b)(2)(A)(ii) (1973), or where "a period of more than ten years has elapsed since the latter of (i) the date of the release of the witness from confinement imposed for his most recent conviction of any criminal offense, or (ii) the expiration of the period of his parole, probation, or sentence granted or imposed with respect to his most recent conviction of any criminal offense." Id. § 14-305(b)(2)(B). These specifications hardly leave a basis for assuming the greatly enlarged role for rehabilitation which appellant urges in this case
42
See note 6 supra
43
See note 36 Supra and accompanying text. We have seen nothing else in the legislative history which even remotely touches the question
44
We have noted that appellant was 15 years old when the burglary was committed and 16 when he was convicted. See note 3 supra. Under the District of Columbia statute as it stood in 1960, juvenile jurisdiction over him could not have been waived earlier than his arrival at age 16. D.C.Code § 11-914 (1961). But see D.C.Code § 16-2307(a)(1) (1973) (lowering the age to 15). As we have had occasion to admonish, "proceedings against a child should not be delayed in order that it may become possible to try him as adults are tried," Williams v. Huff, 79 U.S.App.D.C. 31 n. 1, 142 F.2d 91 n. 1 (1944), but here, as in that case, there is no basis for assuming that any delay in proceeding on the burglary charge was for that purpose
45
See note 7 supra
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642 F.2d 453
U. S.v.White
80-5009
UNITED STATES COURT OF APPEALS Sixth Circuit
12/18/80
1
E.D.Mich.
AFFIRMED
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331 F.2d 309
Alvin H. FRANKEL, Guardian of the Estate of Carol Tillman, aminor, Appellant,v.Edward Hoge VICK, M.D. and Clarence C. Briscoe, M.D.
No. 14679.
United States Court of Appeals Third Circuit.
Argued April 21, 1964.Decided May 14, 1964.
James E. Beasley, Philadelphia, Pa. (Sheldon L. Albert, Philadelphia, Pa., on the brief), for appellant.
Francis E. Shields, Philadelphia, Pa. (Pepper, Hamilton & Scheetz, Philadelphia, Pa., on the brief), for appellee Clarence C. Briscoe, M.D.
Perry S. Bechtle, Philadelphia, Pa. (Krusen, Evans & Byrne, Philadelphia, Pa., on the brief), for appellee Edward Hoge Vick, M.D.
Before KALODNER, FORMAN and SMITH, Circuit Judges.
PER CURIAM.
1
On review of the record we find no error. The judgment of the District Court of February 1, 1963, entered pursuant to the jury's verdict in favor of the defendants will be affirmed.
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683 N.W.2d 126 (2004)
SECURITY STATE BANK v. SOULTS FARMS, INC.
No. 03-0494
Court of Appeals of Iowa
April 14, 2004.
Decision without published opinion. Affirmed.
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IN THE COURT OF APPEALS OF IOWA
No. 15-0475
Filed July 9, 2015
IN THE INTEREST OF J.S., J.S.,
and J.S.,
Minor Children,
B.S., Father,
Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Scott County, Mark R. Fowler,
District Associate Judge.
The father appeals from an order placing his child with the child’s paternal
grandmother. AFFIRMED.
Steven W. Stickle of Stickle Law Firm, P.L.C., Davenport, for appellant.
Thomas J. Miller, Attorney General, Bruce Kempkes, Assistant Attorney
General, Michael Walton, County Attorney, and Julie Walton, Assistant County
Attorney, for appellee.
Martha L. Cox, Bettendorf, for mother.
Dana L. Copell of Law Office of Dana L. Copell, Davenport, for child.
Timothy Tupper of Tupper Law Firm, Davenport, guardian ad litem for
child.
Considered by Tabor, P.J., McDonald, J., and Goodhue, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2015).
2
MCDONALD, J.
This is the second time this family and this proceeding has come before
this court. In the prior case, the father appealed an order adjudicating his
children, Je.S., Ja.S., and Ju.S., in need of assistance pursuant to Iowa Code
section 232.2(6)(c)(1) and (c)(2) (2013) and the dispositional order placing Je.S.
in foster care. See In re J.S., No. 14-1014, 2014 WL 4938012, at *2 (Iowa Ct.
App. Oct. 1, 2014). This court affirmed the adjudication and disposition orders.
See id. at *3-4. The evidence supporting the adjudication and disposition orders
is set forth in the prior decision and need not be repeated here. In short, the
children suffered from severe emotional distress, including suicidal ideation,
caused by the parents’ volatile, contentious, and argumentative relationship.
After the appeal in the first case was concluded, the State filed a motion to
modify disposition and visitation with respect to child Je.S. Independent of the
State’s motion to modify disposition, review of the disposition order was
necessary because Je.S.’s placement with the foster care family was set to end.
The foster family reported to the Iowa Department of Human Services (“IDHS”)
that they were “worn out” by the father’s harassing emails and vague threats and
no longer wished to provide foster care for the child. The foster family’s report
regarding the father’s conduct was consistent with other reports received.
Specifically, evidence adduced during the disposition review hearing showed the
father continually harassed IDHS employees and Je.S.’s therapist regarding
minutiae related to this proceeding without focusing on his own behaviors. At
hearing on the matter, the State recommended the child be placed with her
3
paternal grandmother rather than returned home. The child also requested she
be placed with her paternal grandmother rather than returned home. The child
did not wish to have any further contact with her father because of his past
behaviors. The juvenile court concluded the permanency goal for Je.S. should
remain reunification with the family. The juvenile court also concluded the best
way to achieve the permanency goal was to place the child with the paternal
grandmother, require continued therapy and other services for the family, and
require the father and Je.S. reinitiate communication, progressing from electronic
communication to, hopefully, in-person visitation.
The father filed an application for interlocutory appeal, which the State
resisted. The supreme court determined the order appealed from was a final
order for the purposes of this appeal and transferred the matter to this court. The
mother also sought appellate review of the same order. The supreme court
dismissed the mother’s appeal for failure to file a petition on appeal within fifteen
days of filing her notice of appeal. On appeal, the father contends the juvenile
court should have continued placement of Je.S. in foster care rather than with his
own mother. The basis for his argument is that he does not like his mother and
believes that placement with her will interfere with reunification efforts. Indeed,
there is a no-contact order prohibiting the father and his mother from having
contact with each other.
We review the juvenile court’s order de novo. In re J.S., 846 N.W.2d 36,
40 (Iowa 2014). Our primary concern is the child’s best interests. See id. The
requested change of placement here constituted a request for modification of the
4
disposition order. See In re Leehey, 317 N.W.2d 513, 515 (Iowa Ct. App. 1982).
“[The] party seeking a modification of the custody provisions of a prior
dispositional order must show the circumstances have so materially and
substantially changed that the best interest of the child requires such a change in
custody.” In re C.D., 509 N.W.2d 509, 511 (Iowa Ct. App. 1993). The father
does not contest the evidence establishing a material and substantial change in
circumstances. The child’s current placement cannot continue because of the
father’s behavior toward the foster family.
In determining disposition, the juvenile court is required to reach the “least
restrictive disposition appropriate considering all the circumstance of the case.”
Iowa Code § 232.99. The code sets forth possible dispositions in sections
232.100 through 232.102, from least restrictive to most restrictive. Suspending
judgment is the least restrictive alternative. See Iowa Code § 232.100. Transfer
of legal custody and placement away from the parent is the most restrictive. See
Iowa Code § 232.102. Within section 232.102 several alternatives are provided,
including placement with another parent, relative, or suitable person; placement
with a child-placing agency, facility or institution; or placement with IDHS. See
Iowa Code § 232.102(1)(a)(1)-(3). Our supreme court has interpreted these
sections to favor placement with a relative over placement with a non-relative.
See In re N.M., 528 N.W.2d 94, 97 (Iowa 1995). However, because the best
interests of the child must be the primary concern, the district court is not
required to order placement with relatives over other alternatives. See, e.g., In re
5
T.H., No. 02–1844, 2003 WL 21543837, at *2 (Iowa Ct. App. July 10, 2003)
(affirming placement in foster care over placement with grandmother).
The father makes no claim that Je.S. can be returned to his care. He
instead argues “Je.S. should have been placed in a local foster home so that
regular visits can be facilitated between the father and daughter.” As the juvenile
court noted, although placement with a foster family may allow Je.S. to reside
locally, there is no guarantee that she would be placed with a foster family in the
same area. Furthermore, the issue giving rise to the modification—namely, the
father’s conduct toward the foster family—would be likely to reoccur if Je.S. was
placed with another foster family in the area. See In re D.C., 436 N.W.2d 644,
645 (Iowa Ct. App. 1988) (noting a parent’s past conduct is a good indication of
how the parent will behave in the future). The record is rife with evidence of the
father’s harassing behavior toward the foster family, the child’s therapist, and
IDHS employees. Finally, the father concedes he has not had visitation with
Je.S. since November 2013 because the father rejected the visitation
arrangement suggested by Je.S.’s therapist.
We conclude Je.S.’s placement with her paternal grandmother is in the
child’s best interest, and we affirm the juvenile court’s order. The child requested
to be placed with her paternal grandmother. While the father and his mother
appear to have no relationship, there is no evidence she would interfere with
reunification efforts. The juvenile court’s order specifically instructed that the
father and daughter are to resume supervised communication via telephone and
digital conferencing, progressing to in-person visitation. The juvenile court also
6
specifically instructed the family to continue with services to facilitate
communication and reunification. We are confident IDHS will monitor this family
and provide the appropriate services.
The “goals of chapter 232 [are] to provide for the child’s welfare and
promote placement with parents or relatives.” N.M., 528 N.W.2d at 97. Thus,
the home of a relative is considered less restrictive than placement in a private
agency, facility, or institution or placement with IDHS. See id. This interpretation
is in harmony with federal regulations, which require states to consider “giving
preference to an adult relative over a non-related caregiver when determining a
placement for a child.” 42 U.S.C. § 671(a)(19). Given the foregoing, we affirm
the order of the juvenile court.
AFFIRMED.
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530 So.2d 1026 (1988)
UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellant/Cross Appellee,
v.
Linda V. STRASSER, Etc., Appellee/Cross Appellant.
No. 87-1216.
District Court of Appeal of Florida, Fourth District.
August 31, 1988.
Rehearing and Certification Denied October 6, 1988.
*1027 William G. Liston of Steven R. Berger, P.A., and Peterson & Fogarty, P.A., West Palm Beach, for appellant/cross appellee.
Theodore A. Deckert of Mathison & Deckert, West Palm Beach, for appellee/cross appellant.
PER CURIAM.
This is an appeal and a cross appeal from a declaratory judgment in an insurance case.
Doctor Harold Strasser was killed on February 10, 1983 when he stopped to give medical assistance to the passengers of an overturned car. A second car hit the overturned car, caused it to collide with Strasser, and fatally injured him. Dr. Strasser was insured by United Services Automobile Association, the defendant, and had uninsured/underinsured motorist coverage with limits of $200,000. The other two cars were insured under separate policies for bodily injury liability coverage in the total amount of $65,000. Dr. Strasser's estate argued that his insurer should be liable for the full $200,000, whereas United Services asserted that there should be a setoff of $65,000 for the coverage provided by the other drivers because Dr. Strasser had only underinsured motorist coverage, not excess underinsured motorist coverage.
The applicable statute is section 627.727, Florida Statutes (Supp. 1982), which provides:
(1) No motor vehicle liability insurance policy shall be delivered ... unless uninsured motor vehicle coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles... . However, the coverage required under this section is not applicable when, or to the extent that, any insured named in the policy rejects the coverage in writing... . Unless the named insured .. . requests such coverage in writing, the coverage need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy issued to him by the same insurer, when the named insured or lessee had rejected the coverage in connection with a policy previously issued to him by the insurer. Each insurer shall at least annually notify the named insured of his options as to coverage required by this section. Such notice shall be part of the notice of premium, shall provide for a means to allow the insured to request such coverage, and shall be given in a manner approved by the department... .
... .
(2)(b) In addition, the insurer shall make available, at the written request of the insured, excess underinsured motor vehicle coverage, providing coverage for an insured motor vehicle when the other person's liability insurer has provided limits of bodily injury liability for its insured which are less than the damages of the injured person purchasing such excess underinsured motor vehicle coverage. Such excess coverage shall provide the same coverage as the uninsured motor vehicle coverage provided in subsection (1), except that the excess coverage shall also be over and above, but shall not duplicate, the benefits available under the other person's liability coverage. The amount of such excess coverage shall not be reduced by a setoff against any coverage, including liability insurance. An insurer shall not provide both uninsured motor vehicle coverage and excess underinsured motor vehicle coverage in the same policy. [emphasis added]
Under section 627.727(1) an insurance company is required to provide uninsured motor vehicle coverage unless it is specifically rejected in writing. Under this *1028 type of policy the insured is covered in the full amount of the limits of the policy with a reduction or setoff for other available insurance coverage. Subsection (1) required each insurer to annually notify the insured of his options as to coverage "required by this section". In contrast the excess underinsured motor vehicle coverage described in section 627.727(2) does not allow the insurance company a setoff for other available insurance coverage.
United Services argued that Strasser's policy was not excess underinsured motor vehicle coverage and therefore United Services was entitled to a setoff of $65,000. Dr. Strasser's estate responded that United Services was not entitled to any setoff because the insurance company failed to advise Dr. Strasser of the availability of excess underinsured motor vehicle coverage as required by statute.
The trial court ruled that United Services failed to comply with section 627.727, Florida Statutes (Supp. 1982) because there was no evidence that the insurer advised Strasser of the availability of the excess underinsured motor vehicle coverage. Therefore, the trial court ruled that United Services was required to provide the full limits of coverage in the amount of $200,000 with no setoff. The trial court also ruled that Dr. Strasser's estate was not entitled to any award of prejudgment interest but the ruling was specifically without prejudice to Strasser's right to seek recovery of prejudgment interest in any later proceeding or action based upon any breach of contract. United Services appeals from the final judgment and Dr. Strasser's estate cross appeals from denial of prejudgment interest.
We affirm the main appeal on the basis of the language of the statute which provides, "Each insurer shall at least annually notify the named insured of his options as to coverage required by this section." The legislature must have intended to make the notice provision applicable to the entire section 627.727 and not just subsection 627.727(1) because of the use of the term "section." If the legislature had intended only to require the insurance companies to give notice of the uninsured/underinsured coverage available and not the excess coverage then it would have used the term "subsection" rather than "section." We also affirm the main appeal on authority of Spira v. Guaranty National Insurance Company, 468 So.2d 540 (Fla. 4th DCA 1985) and the cases cited therein. In Spira this court reversed the denial of excess uninsured motorist coverage because "the record does not reveal any evidence that the carrier offered uninsured motorist coverage equal to excess liability limits pursuant to section 627.727(1), Florida Statutes (1983)." This indicates that this court has found the notice requirement to be applicable to all of section 627.727, including the subsection on excess uninsured motorist coverage. Our research found no cases other than Spira and the cases cited therein which would support reversal.
Next, we address the cross appeal which seeks review of the denial of prejudgment interest. Dr. Strasser's estate argues that it was entitled to interest at the legal rate from the date the debt was due even though there was a dispute as to the amount or the obligation to pay. We affirm the denial of prejudgment interest on authority of Cooper v. Aetna Casualty and Surety Company, 485 So.2d 1367 (Fla. 2d DCA 1986) which holds that prejudgment interest is not recoverable under these circumstances because the action is essentially one for the recovery of personal injury damages. We also rely on footnote number one in Argonaut Insurance Company v. May Plumbing Company, 474 So.2d 212 (Fla. 1985) wherein the supreme court acknowledged that, "We are mindful that this Court has ruled that prejudgment interest is not recoverable on awards for personal injury. Zorn v. Britton, 120 Fla. 304, 162 So. 879 (1935); Farrelly v. Heuacker, 118 Fla. 340, 159 So. 24 (1935)." We recognize the contra authority contained in Standard Accident Insurance Company v. Gavin, 184 So.2d 229 (Fla. 1st DCA 1966).
Although the cross appellant has brought to our attention other cases in *1029 which courts awarded prejudgment interest, we distinguish those cases because they do not deal with personal injury damages. Nevertheless, because the issue is one of great public importance we certify the following question to the supreme court:
May prejudgment interest be allowed in an action seeking benefits under uninsured/underinsured motorist coverage where the action is based upon a contract of insurance when the action is essentially one for the recovery of personal injury damages?
ANSTEAD, LETTS and WALDEN, JJ., concur.
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448 F.Supp.2d 1330 (2005)
CSX TRANSPORTATION, INC., Plaintiff,
v.
The STATE BOARD OF EQUALIZATION OF the State of GEORGIA; Bart L. Graham, Commissioner of Revenue of the State of Georgia; Russell W. Hinton, State Auditor of the State of Georgia; and Ray J. Crawford, Director of the Georgia State Properties Commission, Defendants.
Civil Action No. 1:02-CV-2634-CAP.
United States District Court, N.D. Georgia, Atlanta Division.
September 29, 2005.
*1331 *1332 Anne M. Stolee, James W. McBride, Baker Donelson Bearman & Caldwell, Washington, DC, Gregory G. Fletcher, Stephen D. Goodwin, Baker Donelson Bearman Caldwell & Berkowitz, Memphis, TN, Timothy Harold Kratz, Milo S. Cogan, McGuire Woods LLP, Atlanta, GA, for Plaintiff.
Daniel M. Formby, Thurbert E. Baker, Office of State Attorney General, Warren R. Calvert, State of Georgia Law Department, Atlanta, GA, Peter J. Crossett, John D. Cook, Hiscock & Barclay, LLP, Syracuse, NY, for Defendants.
ORDER
PANNELL, District Judge.
The plaintiff, CSX Transportation, Inc. ("CSXT") filed this suit under Section 306 of the Railroad Revitalization and Regulatory Reform Act of 1976, Pub.L. 94-210, 90 Stat. 54 (Feb. 5, 1976), which is now codified at 49 U.S.C. § 11501 (the "4-R Act"). The 4-R Act confers concurrent jurisdiction on federal district courts to enforce its provisions, so long as "the ratio of assessed value to true market value of rail transportation property exceeds by at least 5 percent the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction." Id. § 11501(c). Such jurisdiction lies notwithstanding the Tax Injunction Act of 1937, 28 U.S.C. § 1341, which ordinarily prohibits district courts from enjoining, suspending or restraining the assessment, levy or collection of taxes under state law where the party may have a plain, speedy, and efficient remedy in state court. Id.; Southern Railway Co. v. State Board of Equalization, 715 F.2d 522, 526 (11th Cir.1983).
For the 2002 tax year, the Department of Revenue of the State of Georgia (the "Department") determined that the unit value of CSXT's rail transportation property was $82 billion and that the fair market value of CSXT's taxable railroad operating property in Georgia was $514,862,671 (the "Proposed Valuation"). The Department presented that value to the State Board of Equalization for the State of Georgia (the "Board") for approval. The Board approved the Proposed Valuation and issued a Notice of Proposed Assessment dated November 25, 2002.
CSXT makes three claims under the 4-R Act based on the Department's Proposed Valuation. First, CSXT claims that the Proposed Valuation is excessive and discriminatory in that the Department assessed CSXT's rail transportation property for ad valorem tax purposes at a higher ratio of assessed value to true market value than the ratio applicable to other commercial and industrial property in Georgia in violation of 49 U.S.C. § 11501(b)(1). Specifically, CSXT claims that the true *1333 market value of its rail transportation property on a unitary basis for the 2002 tax year does not exceed $6 billion, and that the true market value of its taxable rail transportation in Georgia does not exceed $369,253,752. This valuation claim is based primarily on an appraisal done by Mr. Thomas Tegarden, whose credentials are impeccable.
Second, CSXT claims that it has been singled out for discriminatory tax treatment by the defendants for the tax year 2002 in violation of 49 U.S.C. § 11501(b)(4). In particular, CSXT claims the Department's assessment of other centrally-assessed property is not based on the fair market value of those properties. CSXT also claims that it is the only major centrally-assessed taxpayer in Georgia that suffered a significant tax increase for the tax year 2002.
Third, CSXT contends that the defendants discriminated against it in violation of 49 U.S.C. § 11501(b)(4) because the Department's Proposed Valuation for the tax year 2002 improperly included its intangible property, while the intangible property of all other commercial and industrial taxpayers is excluded from taxation. CSXT argues that the Department's valuation methods improperly compound intangible value, and CSXT urges the court to order the Department to use a yield capitalization approach, which CSXT claims will minimize the inclusion of intangible assets in the Department's valuation.
The matter was tried by the court sitting without a jury from May 16, 2005, through May 25, 2005. The court took the case under advisement pending the filing of post-trial briefs. The following order constitutes the court's findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52.
Factual Background
I. The Parties
A. CSXT
CSXT, the taxpayer in this case, is a Class 1 interstate common carrier by rail that operates in more than 71 counties in Georgia. It is subject to the jurisdiction of the Surface Transportation Board ("STB").
CSXT is a wholly-owned subsidiary of CSX Corporation. CSX Corporation's stock is publicly traded. As of January 1, 2002, CSX Corporation also owned several other subsidiaries including: (1) CSX World Terminals; (2) CSX Intermodal, Inc.;[1] (3) CSX Lines; (4) CSX Technology, Inc.; and (5) CSX Hotels, Inc.
As of the fiscal year ending December 28, 2001, CSXT accounted for 75% of CSX Corporation's total operating revenues and 78% of its operating income.[2] CSXT's operating revenues for that year alone amounted to $6.082 billion with an adjusted operating income of $803 million.
By the mid-1990's only three Class 1 railroads existed and competed for freight traffic in the eastern half of the United States: (1) Consolidated Rail Corporation ("Conrail"), (2) Norfolk Southern Corporation ("Norfolk Southern"), and (3) CSXT. In August 1998, the STB approved the joint acquisition of Conrail by Norfolk Southern and CSX Corporation. The acquisition included an outright buyout of Conrail's assets by Norfolk Southern and CSX Corporation for approximately $10.5 *1334 billion and the assumption of net debt of $1.9 billion.
In June 1999, CSXT began operating portions of Conrail's system. By January 1, 2002, CSXT was operating approximately 42% of the former Conrail system. At that time, CSXT provided rail freight transportation over a network of approximately 40,000 miles of track and 23,000 route miles.[3] CSXT's network included a route through the southeastern United States, including Georgia, as well as a route from the New York/New Jersey area down the east coast to Florida.
CSXT's rail transportation property consists of a variety of items, including land, rail, track material, stations, and equipment. CSXT also operates rolling stock and equipment that it leases. During the time period in question, CSXT had between 34,000 and 36,000 employees and operated between 230,000 to 240,000 freight cars on its system.
Maintaining a rail transportation system requires heavy investment in capital expenditures.[4] Mr. Lewis, a Vice President of CSXT, testified that for the calendar years 2000 and 2001, CSXT's total capital expenditures were between $800 and $900 million.
The acquisition of Conrail had a noticeable effect on CSXT's revenues. For example, in 1997, CSXT's unlevered free cash flow was $467 million. In 1998, after the STB approved the Conrail merger, CSXT's unlevered free cash flow plummeted to negative $115 million. In 1999, CSXT' s unlevered free cash flow again plunged to negative $309 million. By 2000-2001, some efficiencies were beginning to be realized, and CSXT's unlevered free cash flow rose by 154.9% in two years.[5]
Similarly, the Conrail merger also had an effect on CSXT's operating ratio.[6] CSXT's operating ratio prior to the acquisition of Conrail was 75.4%. After acquiring Conrail, CSXT's operating ratio rose to a high of 89.9% and then began to decline again (to a more profitable ratio) in 2001.
Although the acquisition of Conrail had a negative effect on CSXT's financial success in the short-run, the evidence at trial showed that it was likely that some efficiencies would be achieved in the future due to the merger. In fact, even CSXT's own expert, Mr. Tegarden, testified that some costs may be eliminated, which would increase future net operating income.
The evidence at trial also showed that railroads face considerable competition from other modes of transportation, such as trucks. Unlike trucks, however, railroads have to pay for and maintain their own infrastructure. Beginning in 1980, this competition steadily forced rates down. Taking trucks off the highways was the stated goal of the Conrail merger. To that end, the Conrail merger created a huge growth opportunity for CSXT. For instance, in 2001, CSXT was able to move 350,000 truckloads of merchandise off the roads and onto their rails.
B. The Defendants
The defendants are the Board and its individual members, including Bart L. Graham, the State Commissioner of Revenue.
*1335 The appraised and assessed values of most property in Georgia are determined by county boards of assessors. The parties refer to this property as "locally-assessed" property. Pursuant to O.C.G.A. § 48-5-6, most locally-assessed property subject to taxation in Georgia is to be appraised for assessment purposes at its fair market value. After any such nonexempt locally-assessed property in Georgia is appraised at its fair market value, an assessment ratio of 40% is applied to the appraised value to derive the assessed value. It is this assessed value against which property tax is levied and collected.
Companies classified in Georgia as "public utilities" are commonly referred to as "centrally-assessed" taxpayers. Centrally-assessed taxpayers include railroads, investor-owned electric utilities, investorowned telephone companies, pipeline companies, and gas distribution companies. The State Revenue Commissioner issues proposed assessments of the operating and non-operating property of public utilities such as CSXT.
The Property Tax Division of the Department annually prepares a proposed assessment of CSXT's railroad transportation operating property for every Georgia county in which CSXT's taxable property is located.
II. The Department's Proposed Valuation of CSXT
In Georgia, the procedure for assessing rail transportation property is set forth in O.C.G.A. § 48-2-18. Under that statute, the Board approves an initial, proposed assessment of the taxpayer's property, and certifies that assessment to the counties in which the taxpayer owns taxable property. Id. § 48-2-18(c). See also Telecom USA, Inc. v. Collins, 260 Ga. 362, 364-65, 393 S.E.2d 235, 238 (1990) (discussing revised Georgia tax assessment procedures); Colonial Pipeline Co. v. Collins, 921 F.2d 1237 (11th Cir.1991) (same). Each county must then issue its final assessment to the taxpayer within 30 days; in doing so, "a county may, but is not required to, use the[] figures [provided by the Board] as the county's own tax assessment." Colonial Pipeline, 921 F.2d at 1240-41.
The Department used the unit rule method to value CSXT's railroad transportation operating property for 2002 ad valorem tax purposes. The unit rule method values the entire operating system of CSXT as a going concern and integrated whole irregardless of where it is located and without functional or geographic division of the whole into its component parts. A unit value determined pursuant to the unit rule method is meant to capture all of the operating assets of the company whether owned or used. The parties agree that the unit rule method is appropriate under Georgia law.
Gregg Dickerson is the Program Manager in the Public Utilities Section of the Local Government Services Division of the Department. Mr. Dickerson first joined the Department in 1983 and spent ten years doing valuations pursuant to the unit rule method for centrally-assessed public utilities, including railroads. In 1993, he left the Department and went to work for Norfolk Southern railroad as a property tax manager, where his duties included reviewing and negotiating unit values with various states.
In the fall of 2001, Mr. Dickerson was approached by the then-director of the Department, Mr. Larry Griggers, who asked him to return to the Department. Mr. Griggers stated that he was concerned that the public utility digest for Georgia had decreased from 10% to 5% of the total state property tax digest since Mr. Dickerson's departure. Mr. Dickerson agreed to return, but stated that he would not come back for the purpose of "raising the numbers." *1336 He would only come back if Mr. Griggers' purpose was to "get[] the numbers right." Mr. Griggers agreed and Mr. Dickerson returned to work for the Department in September 2001. Mr. Dickerson was the individual responsible for preparing the valuation worksheets that served as the basis for the Department's Proposed Valuation of CSXT for the tax year 2002.
Applying the unit rule method, Mr. Dickerson first prepared a Railroad Valuation Worksheet. The Railroad Valuation Worksheet calculated CSXT's unit value using three valuation methods: (1) a stock and debt approach, (2) a discounted cash flow ("DCF") approach, and (3) a market multiple approach. These different approaches yielded the following values:
Stock and Debt $12.022 billion
DCF $ 8.126 billion
Market Multiples[7] $12.346 billion
$10.769 billion
$ 8.474 billion
After coming up with this range of values for CSXT, Mr. Dickerson selected $8.2 billion as the lower limit of what the going concern unit value of CSXT could reasonably be. He then used $8.2 billion as the foundation for the Department's Proposed Valuation.
After determining the unit value for CSXT, Mr. Dickerson then estimated a working capital adjustment of $400 million and deducted that from his unit value estimate of $8.2 billion to eliminate the effect of certain intangible assets. Next, Mr. Dickerson allocated the adjusted unit value estimate of $7.8 billion to the state of Georgia by using the percentage of Georgia road miles to system road miles. For the tax year 2002, the percentage so applied equaled 7.194059%, resulting in an allocated value of $561,136,602 for the state of Georgia.
To arrive at CSXT's proposed taxable fair market value in Georgia, Mr. Dickerson then deducted amounts for motor vehicles, exempt pollution control equipment, and exempt railroad lines. As a result, Mr. Dickerson determined that CSXT's taxable fair market value in Georgia for the tax year 2002 was $514,862,671 and presented this number to the Board.
Following the Board's approval, the Department issued a Notice of Proposed Assessment dated November 25, 2002 (the "Proposed Assessment"), to CSXT and to the counties in which CSXT had taxable property. The Proposed Assessment included three components: (1) the portion of the Department's proposed taxable fair market value of CSXT's operating property in Georgia attributable to each county, (2) the level of assessment that the Board determined each county should use, and (3) a proposed assessment for each Georgia county in which CSXT had taxable property, which was derived by multiplying the county's distributed value by 40% or the prevailing level of assessment in that county.
After this litigation commenced, in November 2003, Mr. Dickerson prepared a complete appraisal of CSXT using essentially the same three valuation methods that he employed with the Proposed Valuation. The purpose of this appraisal was to provide the court with Mr. Dickerson's point estimate of CSXT's unit value, rather than a figure at the lower end of his range of fair market values.
Following the close of fact discovery in this case, Mr. Dickerson prepared a revised full appraisal of CSXT in support of the Proposed Valuation. The only difference between Mr. Dickerson's November 2003 appraisal and the revised appraisal involved a change in the calculation of the *1337 cost of equity used in deriving the weighted cost of capital. The range of values Mr. Dickerson arrived at in his second appraisal were:
Stock and Debt $12.128 billion
DCF $10.960 billion
Market Multiples $12.434 billion
$10.871 billion
$ 8.986 billion
Based on this range of values, Mr. Dickerson opined that the fair market system value of CSXT as of January 1, 2002, prior to adjustments for leases was $11 billion. Mr. Dickerson then added $807 million to this value to account for the value of CSXT's operating leases. He ultimately opined that the fair market unit value of CSXT was $11.807 billion.
III. An Overview of the Parties' Valuation Approaches
As noted above, in Georgia, as in most states, a railroad's operating property is valued for property tax purposes as a unit. Under the unit concept of value, the fair market value of the railroad is measured by appraising the whole property as a going concern. To determine the unit value of a company, the appraiser must first choose from and apply a variety of valuation methods.
There are three general approaches to valuing a company or property: (1) the sales comparison approach, (2) the income approach, and (3) the cost approach. The standard sales comparison approach determines the value of a property or company by examining and comparing actual sales of comparable properties or companies. Conversely, the cost approach determines the value of a property by totaling the original costs of the various components of the property, and then making adjustments to account for depreciation or obsolescence. The theory behind the income approach is that anyone who buys a company buys it only for the income the company will generate.
Mr. Dickerson's responsibilities in preparing proposed assessments for centrally-assessed property for the tax year 2002 included reviewing the valuation methods that had been used by the Department in the past. As a result of his analysis, Mr. Dickerson made certain changes to the valuation methods used for all centrally-assessed taxpayers subject to the unit rule method. Those changes, which were applied on an across-the-board basis, included replacing the existing capitalized earnings approach with a DCF model. He also replaced what had been labeled as a direct capitalization approach with a market multiple approach.
For CSXT, Mr. Dickerson used three different valuation methods: (1) a stock and debt approach, (2) a DCF approach, and (3) a market multiple approach. In rough terms, the stock and debt method is a surrogate for the sales comparison approach. It assumes that the value of a company equals all of the outstanding debt owned by that company plus the company's equity. Similarly, the market multiple approach is also a substitute for the sales comparison approach. Under a market multiple approach, the appraiser derives market multiples from the stock prices of companies that are engaged in similar lines of business and compares those multiples with the subject company to determine the value of that company.
Unlike the stock and debt and market multiple approaches, the DCF approach is a version of the income approach. Under the DCF approach, the appraiser makes assumptions to project cash flows for the company for a designated number of years after the assessment date, and then discounts those expected cash flows to their present value. The appraiser then calculates a terminal or reversion value representing the value of the company at the end of the projection period. The total of the discounted cash flows during the projection *1338 period and the terminal value gives the appraiser his unit value for the company.
CSXT's valuation expert, Mr. Tegarden, also used three valuation methods to value CSXT: (1) a stock and debt approach, (2) a cost approach, and (3) a yield capitalization approach. The yield capitalization approach is another variation of the income approach. It can perhaps be described as a cousin of the Department's DCF approach. For example, the Department's DCF model is expressed as:
V = (CF1) + ... (CFn) + T
_______ _______ _______
(1 + k) (1 + k) (1 + k)
Cfn = net cash flow for the year n, k = discount rate, T = terminal value, and n = year. Mr. Tegarden's yield capitalization approach is expressed by the formula:
V = I
_
r
I = income and r = discount rate.
Mr. Tegarden gave no weight to his stock and debt value, very little weight to his calculations under the cost approach, and primary weight to his yield capitalization value. Using this weighted scale, Mr. Tegarden picked approximately $6 billion as the unit value of CSXT.
Legal Analysis
I. The 4-R Act
The 4-R Act prohibits a state from "[a] ssess[ing] rail transportation property at a value that has a higher ratio to [its] true market value . . . than the ratio that the assessed value of other commercial and industrial property in the same assessment jurisdiction has to [its] true market value. . . ." 49 U.S.C. § 11501(b)(1). The 4-R Act also prohibits states from levying or collecting taxes based on such an assessment, or otherwise discriminating against rail carriers in taxation. Id. § 11501(b)(2)(4). "Assessment" is defined in the 4-R Act as "valuation for a property tax levied by a taxing district." Id. § 11501(a)(1).
II. Burden of Proof
The burden of proof in a case brought under the 4-R Act is determined by state law. 49 U.S.C. § 11501(c). The 4-R Act requires a district court to use the burden of proof generally applicable to civil proceedings. See Burlington Northern Railroad Co. v. Bair, 766 F.2d 1222, 1226 (8th Cir.1985); Atchison, Topeka, and Santa Fe Railway v. Lennen, 732 F.2d 1495, 1500 (10th Cir.1984). In Georgia, a preponderance of the evidence is "the essential quantum of evidence . necessary to satisfy the minds of the fact finders in civil cases." Ocean Accident & Guarantee Corp. v. Bates, 104 Ga.App. 621, 622, 122 S.E.2d 305, 307 (1961). Thus, CSXT' s burden is the preponderance of the evidence standard.[8]
*1339 III. Whether the Department Assessed CSXT's Operating Property in Georgia for the Tax Year 2002 in Excess of its True Market Value, Resulting in a Ratio of Assessed Value to True Market Value for CSXT's Property which Exceeds by More than 5% the Ratio of Assessed Value to True Market Value of Other Commercial and Industrial Property in Georgia
A. May CSXT Challenge the Department's Chosen Valuation Methods?
In this case, the parties disagree over the proper way to calculate the value of CSXT under each valuation method. Significantly, the parties also disagree over which valuation method the Department should use to value CSXT.
One of the problems with subjecting complex issues like valuation to judicial determination is that the court generally must choose among the competing claims of experts. Unless the court performs its own appraisal, the court must rely either on CSXT's experts or the Department's experts. The court, of course, may adjust an expert's appraisal up or down based on other experts' critiques of the appraisal, but the starting point for judicial determination is always one appraisal or another, and each appraisal is based on a particular methodology that, to a large extent, predetermines the result. Thus, implicit in the court's holding is a decision as to the proper valuation method.
The evidence shows that all five approaches used by CSXT and the Department, the yield capitalization, DCF, stock and debt, market multiple, and cost approaches, are widely used to value property. The question, then, is whether the Department is free to choose among accepted valuation methods or whether the 4-R Act compels the use of one particular method.
The United States Supreme Court in Burlington Northern Railroad Co. v. Oklahoma Tax Commission, 481 U.S. 454, 463 n. 5, 107 S.Ct. 1855, 1861 n. 5, 95 L.Ed.2d 404 (1987), expressly left open the question of "whether a railroad may, in an action under [the 4-R Act], challenge the appropriateness of the accounting methods by which the state has determined the railroad's value, or is instead restricted to challenging the factual determinations to which the state's preferred accounting methods were applied." Id.
Since the Burlington Northern decision, several courts have answered this question. Perhaps the most followed decision is the Fourth Circuit's decision in Chesapeake Western Railway v. Forst, 938 F.2d 528, 533 (4th Cir.1991), cert. denied, 503 U.S. 966, 112 S.Ct. 1577, 118 L.Ed.2d 220 (1992). See also Burlington Northern Railroad Co. v. Bair, 815 F.Supp. 1223, 1228-29 (S.D.Iowa 1993) (following Chesapeake and holding that a railroad may not challenge the state's chosen methodology); cf. Union Pacific Railroad Co. v. State Tax Commission of Utah, 716 F.Supp. 543, 556-57 (D.Utah 1988) (holding that as long as the state's method has a rational basis and was not chosen for a discriminatory purpose, the court will not disturb the state's choice). In Chesapeake, the railroad brought an action challenging Virginia's "over the fence" method of valuing railroad property and arguing for use of the unit method. Chesapeake, 938 F.2d at 530. Relying primarily on the 4-R Act's legislative history, the Fourth Circuit concluded that the 4-R Act "does not provide a basis for railroads to challenge a state's preferred methodology for ascertaining *1340 the true market value of railroad property." Id. at 533; see also Richmond, Fredericksburg & Potomac Co. v. Forst, 4 F.3d 244, 250 (4th Cir.1993) ("[A] railroad may present independent evidence of the fair market value of its property, provided, of course, that it limits its evidence to factors that may properly be taken into account under the state's chosen methodology.").
As support for its argument that the court should allow it to challenge the Department's valuation methods, CSXT cites to decisions from the Second and Ninth Circuit. Neither of these circuits, however, allowed a railroad to freely challenge the state's methodology. For instance, in Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 482 (2d Cir.1995), the Second Circuit held that the state must apply the "same valuation standard and methods to the railroad property as are used on the commercial and industrial properties to which [the railroad] is compared." The implicit holding in Hyde Park, therefore, is that a railroad cannot challenge the state's valuation methods as long as the state uses the same methods for other commercial taxpayers. Here, the evidence at trial showed that the Department used essentially the same valuation methods for CSXT that it used for other centrally-assessed taxpayers.
Similarly, while the Ninth Circuit allowed a railroad to challenge the state's chosen methodology, it also held that the state's chosen methodology is presumed correct and can be defeated only by clear, cogent, and convincing evidence. Burlington Northern Railroad v. Department of Revenue of the State of Washington, 23 F.3d 239, 241 (9th Cir.1994).
Although the Eleventh Circuit has yet to address this question, the court finds that the legislative history, which is admittedly rather thin, supports the Fourth Circuit's determination that the 4-R Act does not confer jurisdiction upon this court to order the Department to use a specific accounting method to determine the value of CSXT. The committee report on Senate Bill 927, one of several precursors to the 4-R Act, states that:
[The bill] does not suggest or require a State to change its assessment standards, assessment practices, or the assessments themselves. It merely provides a single standard against which all affected assessments must be measured in order to determine their relationship to each other. It is not a standard for determining value; it is a standard to which values that have already been determined must be compared.
S.Rep. No. 1483, 90th Cong., 2d Sess.App. B (1968).
Similarly, in hearings on House Bill 16245, another forerunner of the 4-R Act, Mr. Lanier, a railroad representative, testified that, "[t]he standards and methods of valuation that any state wishes to use would be totally unaffected by this legislation." Chesapeake, 938 F.2d at 531 (citing Hearing Before the Subcommittee on Interstate and Foreign Commerce on H.R. 16245, 91st Cong., 1st Sess. 138 (1970)). Thus, the legislative history suggests that the statute was not meant to require a state to use a particular accounting method, at least as long as the state's chosen methods are rational and were not chosen for a discriminatory purpose.
After eight days of trial, it is apparent to the court that valuation is an art, not a science. Valuing a business requires an appraiser to make "judgment calls," even under CSXT's yield capitalization method. Absent a willing buyer and a willing seller, the determination of true market value for purposes of ad valorem taxation is always an estimate, always an expression of judgment, and always a result built on "judgment calls." The appraisals in this case *1341 are good examples of this. Mr. Tegarden and Mr. Dickerson each used at least three different valuation methods to arrive at the market value of CSXT. Both Mr. Tegarden and Mr. Dickerson arrived at different conclusions as to the value of CSXT under each method that they utilized. For example, CSXT's own expert, Mr. Tegarden, arrived at the following three values for CSXT for the tax year 2002:
Cost Approach $6.150 billion
Income Approach $5.983 billion
Stock and Debt Approach $9.637 billion
The $3 billion difference in Mr. Tegarden' s values makes clear that the determination of the true market value of CSXT in this case is, at best, an educated guess. The fact that the determination of CSXT's true market value is an educated guess weighs against the court requiring the Department to use a particular valuation method.
In addition to the fact that all appraisals are at best educated guesses, the court is unwilling to dictate a particular valuation method to the Department for other reasons. From the testimony of the Department's witnesses, the court concludes that the Department sincerely seeks to arrive at what it considers to be CSXT's true market value, and that, to that end, it constantly reevaluates its methods and changes them when the Department becomes convinced that they are erroneous. If this court were to conclude that the 4-R Act required the Department to adopt the yield capitalization method of valuation, it would prevent the Department from critically examining its appraisal methods and would discourage it from adopting new and better methods as they become accepted by the appraisal profession.
For all of these reasons, the court concludes that the 4-R Act does not generally allow a railroad to challenge the state's chosen methodology. As long as the Department's chosen valuation methods are rational and were not chosen for the purpose of discriminating against CSXT, the court will not second guess the Department's choice of methods.
Even if the court were forced to choose between competing valuation methods, the court finds that the Department's chosen methods have much to commend them. Not only does the Department consistently use essentially the same approach for all centrally-assessed property, but its valuation methods are based on historical and market data readily available to investors and to the defendants. All three of the Department's valuation methods are widely accepted and used by valuation experts. The fact that these methods are widely used and accepted is evidenced not only by the testimony of the majority of experts, but also by the fact that they have been approved by other courts. See, e.g., Bair, 815 F.Supp. at 1228-29 (approving of the use of the stock and debt approach to valuing the BN railroad); Burlington Northern Railroad Co. v. Department of Revenue of the State of Washington, No. C90-5417, 1992 WL 201947, at * 4-5 (W.D.Wash. Aug.13, 1992), aff'd 23 F.3d 239 (9th Cir.1994) (giving deference to the state's use of the stock and debt, DCF, and cost approaches).
(1) Whether the Department's Chosen Valuation Methods Are Irrational
The court finds that the Department's chosen valuation methods are rational. As noted above, the stock and debt approach, market multiple approach, and DCF approach have much to commend them. They are widely accepted and generally based on historic and market data readily available to the public and investors.
CSXT' s primary criticism of the Department's valuation methods is that they compound intangible values at a higher rate than CSXT's yield capitalization method does. For example, CSXT introduced *1342 testimony showing that stock prices include value attributable to intangible property. Because all three of the Department's valuation methods utilize stock prices derived from CSX Corporation, CSXT's parent company, CSXT argues that the Department's approaches are flawed.
The court agrees that stock prices include intangible value, whether it is "intangible influences" or "intangible property." By extension, therefore, any approach that utilizes stock prices includes some intangible value. Nevertheless, the fact that the Department's approaches include intangible value does not make their use irrational. Both parties' experts agree that the fair market value of a business is meant to value what a willing buyer would pay for that business. Stock prices, thus, are particularly relevant for appraisal purposes because absent a recent sale of the business, the company's stock price is the only real example of what a willing buyer would pay for a share of that business.
The court also points out that CSXT's own valuation methods are not exempt from the same criticism. It is undisputed that CSXT's yield capitalization method relies to some extent on stock prices and includes at least some value attributable to intangible property.
(2) Whether the Department's Chosen Valuation Methods Were Adopted for a Discriminatory Purpose
The court also finds that the evidence at trial does not support the conclusion that the Department selected the DCF approach, the stock and debt approach, or the market multiple approach for the purpose of discriminating against CSXT. The evidence at trial showed that the Department utilizes essentially these same methods when valuing non-railroad centrally-assessed property.
Accordingly, the court concludes that CSXT cannot challenge the Department's chosen valuation methods in this case. This ruling, of course, does not prevent CSXT from challenging the manner in which the Department calculated the value of CSXT using its stock and debt, DCF, and market multiple approaches.
B. Can the Court Consider Mr. Tegarden's Appraisal of CSXT?
The court is required to weigh the evidence and make its own factual findings regarding the true market value of CSXT. The question then arises as to whether the court can consider evidence of the true market value of CSXT' s operating property determined by a valuation method not employed by the Department. The court finds that it cannot do so in this case because the valuation methods chosen by the Department are rational and were not adopted for a discriminatory purpose.
The court must make its factual findings as to the value of CSXT using the methods utilized by the Department. Otherwise, the court will be, in effect, ordering the Department to use a different valuation method.
It is undisputed that the Department used a DCF approach, a stock and debt approach, and a market multiple approach to value CSXT. CSXT's expert, Mr. Tegarden, appraised CSXT using a yield capitalization approach, a stock and debt approach, and a cost approach. Mr. Tegarden testified that he placed no weight on his calculations under the stock and debt approach and little emphasis on his calculations under the cost approach. Therefore, the court concludes that Mr. Tegarden's appraisal is based primarily on the yield capitalization approach with some small emphasis on the cost approach.[9]
*1343 The court concludes that both the cost approach and the yield capitalization approach are different valuation methods than the Department's valuation methods. Although the yield capitalization approach is undoubtedly a cousin of the Department's DCF approach, the fact that it is truly a different valuation method is most aptly illustrated by the fact that CSXT spent much of its time at trial arguing that the court should order the Department to adopt the yield capitalization approach because the other methods used by the Department to value CSXT were flawed.
Because the yield capitalization and cost approaches are different valuation methods than the methods used by the Department the court cannot consider Mr. Tegarden's valuation of CSXT under these approaches. Since CSXT has introduced into evidence no other appraisal of its property using the valuation methods employed by the Department, the court must necessarily limit its analysis to the criticisms presented by CSXT as to the manner in which the Department calculated the value of CSXT under its DCF, stock and debt, and market multiple approaches.
C. The Department's Appraisals
Before the court reaches CSXT' s criticisms of the Department's calculations, the court must first address the two appraisals created by the Department after the commencement of this litigation. As noted earlier, after this litigation commenced, the Department prepared two appraisals of CSXT. The purpose of these appraisals was to provide the court with Mr. Dickerson's point estimate of CSXT's unit value, rather than a figure at the lower end of his range of fair market values. The only difference between the two appraisals was a change in the calculation of the cost of equity used in deriving the weighted cost of capital.
The fact that the Department created two appraisals significantly complicates this case. The Department urges the court to disregard its original Proposed Valuation and hold that the actual fair market unit value of CSXT is $11.807 billion, which is the value derived from Mr. Dickerson' s revised appraisal. CSXT, however, focused the majority of its time at trial and in its post-trial briefs challenging the Department's Proposed Valuation.
The court has considered the Department's revised appraisal. As noted earlier, in its revised appraisal, the Department changed the way it calculated the cost of equity used in deriving the weighted cost of capital for CSXT. It appears to the court that the Department created this new method of calculating the cost of equity in late 2003 or early 2004 and, thus, did not apply this formula to any other taxpayer in 2002. The court questions the relevancy of the revised appraisal for use in this lawsuit. The methods used were not applied to other taxpayers for the year 2002, and the revised appraisal was not used by the Department in assessing the values at issue here. The controversy before the court is the methods and the amounts used, not what could have been used. The court's analysis and approval (or disapproval) of the revised appraisal essentially amounts to an "advisory" opinion. Further, applying this new method of calculating the cost of equity to CSXT when it was not used for any other taxpayer would be inherently discriminatory. Accordingly, the court will focus the remainder of this order on the Department's Proposed Valuation.
*1344 D. CSXT's Criticisms of the Department's Calculations
As noted above, the Department utilized three methods for determining the fair market value of CSXT: (1) the stock and debt approach, (2) the DCF approach, and (3) the market multiple approach. Each of these approaches yielded a different unit value for CSXT. From this range of values, Mr. Dickerson then chose a number, $8.2 billion, that was closest to the lowest value in that range. The $8.2 billion unit value became the foundation for the Department's Proposed Valuation.
CSXT challenges the calculations made by Mr. Dickerson under his Proposed Valuation on four grounds. First, CSXT claims that the Department made errors in its DCF analysis. Second, CSXT claims that the Department calculated excessive stock and debt figures. Third, CSXT claims that the Department utilized excessive market multiple figures. Finally, CSXT claims that the Department improperly double-counted the value of CSXT's leased equipment.
(1) CSXT's Criticisms of the Department's DCF Analysis
To arrive at the DCF value of CSXT, the Department first calculated CSXT's anticipated future operating free cash flows for a ten-year period from 2002 to 2011 based on projections regarding the growth rate of CSXT's revenues, expenses, and capital expenditures. The Department then calculated a terminal value for CSXT (i.e., what a purchaser would expect to pay for the company at the end of the period). Next, the Department discounted this cash flow to January 1, 2002, using as the discount rate a 9.90% after-tax average weighted cost of capital. This calculation yielded a figure of $7,518,317,142, to which the Department added an amount for leased equipment of $607,976,209 to come up with a DCF value of CSXT of $8,126,293,350.
In particular, the Department's DCF model projected an increase in CSXT's cash flow of 69% from 2001 to 2002. The Department's model also projected a declining growth rate in cash flows from 5.32% in 2003 to 3.58% in 2011 and then assumed a constant terminal growth rate of 6.3% from 2011 into perpetuity. In addition, the Department assumed a 2% growth in revenues per year and projected that CSXT could achieve an 80% operating ratio by 2011.
According to CSXT, several of the assumptions in the Department's DCF model are erroneous because they allegedly have no basis in the historic record of CSXT's performance. In particular, CSXT claims that the Department erroneously projects: (1) a 69% increase in cash flow from 2001 to 2002, (2) a 6.3% terminal growth rate, and (3) an operating ratio of 80% by 2011. CSXT argues that these allegedly erroneous financial projections cause the Department's DCF model to overstate the value of CSXT.
(a) The Department's Selection of 69% as the First Year's Cash Flow
As noted above, the first year of the Department's DCF model assumes that CSXT's cash flow will increase by 69% over CSXT's actual cash flow for 2001. CSXT argues that this increase is bizarre and unsupported by the record. CSXT, however, introduced no evidence at trial as to what increase, if any, the Department should have projected or how that change would have affected the Department's value. In fact, instead of presenting testimony as to what the percentage increase or decrease the Department should have used and how changing that number affects the Department's DCF value for CSXT, CSXT argued that the court should correct the *1345 Department's projected terminal growth rate.
Regardless, the court finds that a 69% increase in projected cash flow from 2001 to 2002 is not bizarre. The evidence at trial showed that CSXT' s cash flow from 1991-2001 increased annually from 5.6% to 154.9% and sometimes declined. In fact, from 2000 to 2001, CSXT's unlevered free cash flow increased by more than 100%. Furthermore, as noted by CSXT' s expert at tria1,[10] it is likely that some efficiencies may be achieved in the future due to the integration of CSXT and Conrail. These efficiencies will likely increase cash flow and reduce costs.
(b) The Department's Selection of 6.3% as the Terminal Growth Rate
CSXT next argues that the Department's decision to choose 6.3% as the terminal growth rate is excessively optimistic. CSXT points out that 6.3% is much higher than the growth rate that the Department projected for the years 2003-2011.
CSXT also argues that the logical incongruence of the Department's terminal growth rate is indicated by the fact that the Department estimated that CSXT' s revenue would grow at only 2%. CSXT points out that if revenue grows at only 2%, while free cash flow (roughly revenue minus expenses) grows at 6.3% then at some point in time expenses would have to decline and become negative to sustain the 6.3% growth in free cash flow.
The court finds that the Department's decision to adopt a 6.3% terminal growth rate is not erroneous. First, to the extent that CSXT's experts opined that 6.3% was an unrealistic terminal growth rate, the court finds that their testimony was not credible. Second, the court notes that none of CSXT's experts testified as to what a proper terminal growth rate should be. At most, these experts suggested that the Department should have adopted 3.5% or 4.5% as the terminal growth rate. These "suggested" rates also suffer from some of the same infirmities that the rate selected by the Department does. For example, if revenues grow at 2%,[11] but free cash flow grows at any number higher than 2% (e.g., 3.5% or 4.5%) then eventually costs will have to decrease to a negative number.
(c) The Department's Projected Operating Ratio
CSXT also criticizes the operating ratio forecasted in the Department's Proposed Valuation. CSXT points out that it did not achieve its planned operating income or ratio from June 1999December 2002. CSXT also presented evidence from Mr. Lewis, CSXT's Vice President of Finance, that the business risks facing the railroad industry make it "difficult to imagine . . . hav[ing] a lower operating ratio."
While it is true that CSXT did not achieve its planned operating ratios from 1999-2002, this fact alone does not indicate that the target operating ratios predicted by the Department were erroneous. Among other things, the Department estimated that CSXT would achieve an operating ratio of 80% by the year 2011. Eighty percent is consistent with CSXT' s strategic plan, its presentations to bond rating agencies, and the average historic operating *1346 ratios achieved by railroads, including CSXT, from 1995-2001. In fact, in 1998, prior to CSXT's acquisition of Conrail, CSXT achieved a 78.6% operating ratio. By 2001, CSXT's operating ratios had begun to decrease from a high of 89.9% in 2000. CSXT's 2001 Annual Report noted this change in trend stating, "With revenues expected to go up this year, the railroad's operating ratio, i.e., total costs as a percentage of total revenues, should improve considerably." Thus, it was reasonable for the Department to project that CSXT would achieve an operating ratio of 80% by the year 2011.
(2) CSXT's Criticisms of the Department's Stock and Debt Analysis
The Department determined the stock and debt value of CSXT by taking normalized year-end price data from Standard & Poor's Stock Guide and information from CSX Corporation's 2001 Annual Report. The Department concluded that the total market value of CSX Corporation's stock, its long-term debt, and the excess of current liabilities over current assets as of January 1, 2002, was $15,219,745,138. The Department next performed several calculations to determine what portion of this total was properly attributable to CSXT. The ratios the Department calculated were: 74. 91%, 81. 89%, 77. 93%, and 75. 47%. The Department selected 75% as a conservative number within that range. The Department then multiplied $15,219,745,138 by 75% to come up with the portion of CSX Corporation's debt and equity which was allocable to CSXT. After adding $607 million for leased equipment, the Department arrived at $12,022,785,209 as the stock and debt value of CSXT.
In CSXT' s post-trial brief, CSXT points out a host of problems with the stock and debt approach generally, as opposed to problems with the Department's calculation of CSXT's stock and debt value. For example, CSXT argues that there is a disconnect between stock and debt values and the value of the taxable assets being valued in this case. CSXT points out that a company's stock price inevitably includes intangible values and assets not in existence on the date of the assessment, whereas an appraiser is only supposed to value tangible operating assets that are in existence as of the date of the appraisal.
As the court has previously indicated, it was proper for the Department to use the stock and debt approach to come up with a range of values for CSXT. See Bair, 815 F.Supp. at 1239 (approving of the use of the stock and debt approach in the appraisal of a railroad). The court, moreover, has already held that CSXT may not challenge the Department's chosen valuation methods.
In addition to criticisms of the stock and debt approach generally, CSXT argues that the stock and debt approach is not appropriate in this case because CSXT is not a publicly traded company. Although the stock of CSX Corporation is publicly traded and CSXT is wholly-owned by CSX Corporation, CSXT claims that it is difficult to identify a stock value attributable to CSXT' s railroad assets.
The court finds this argument unpersuasive. The mere fact that the Department must calculate and allocate a portion of CSX Corporation's stock to CSXT does not justify rejecting the Department's stock and debt value. Notably, CSXT does not argue that the Department allocated the wrong proportion of CSX Corporation's equity to CSXT. In fact, it appears to the court that the parties agree that CSXT constitutes between 75-80% of CSX Corporation's total equity. CSXT's own expert, Mr. Tegarden, attributed 78.9% of CSX Corporation's total equity to CSXT when he calculated the discount rate in his yield capitalization approach.[12]
*1347 CSXT's final argument is that the Department erred by failing to make an adjustment to reflect the liquidity of stocks, as opposed to assets. CSXT points out that it is easier to buy a few units of stock, as opposed to the entire operating assets of a railroad. Because it is easier to buy stock, shares of stock reflect a liquidity premium that is not shared by the hard assets of a company.
Even if the court were to conclude that CSXT was correct, CSXT failed to present any expert testimony attesting as to how large an illiquidity discount the Department should have applied. At most, Mr. Tegarden' s report suggests that an illiquidity discount plus an adjustment for minority interests of 37.5% may be appropriate.[13] Pl.'s Ex. 1 at 60, n. 46 ("Some studies have suggested that the effect of these two adjustments would be a reduction of the stock prices by approximately 37.5%."). This statement, however, is not specific to CSXT, nor does the court construe it as Mr. Tegarden's opinion regarding the actual illiquidity discount that should be applied to CSX Corporation's stock. In fact, Mr. Tegarden failed to include an illiquidity discount when arriving at his own stock and debt value.[14]
Nor is the court convinced that an illiquidity discount should be applied here. While stocks are undoubtedly more liquid than the entire operating assets of CSXT, buying the entire operating assets of a company gives the purchaser something that buying a few shares of stock cannot give him: control. One of CSXT's experts, Dr. Heaton, testified that an acquiring company will sometimes pay a control premium when the acquiring company believes that they can add value (create synergy) to the existing company. To the extent that any illiquidity discount may have been necessary, it may also have been completely offset by the necessity of adding a control premium.
(3) CSXT's Criticisms of the Department's Market Multiple Analysis
For the Department's market multiple approach, the Department identified six comparable railroads: (1) Burlington Northern, (2) Canadian National, (3) Canadian Pacific, (4) CSX Corporation, (5) Norfolk Southern, and (6) Union Pacific. The Department then multiplied the number of shares for these railroads by their year-end stock price to come up with the value of their equity. Next, the Department totaled the book value of the debt of these railroads, added the value of their equity, and subtracted cash items to derive each railroad's total market capitalization number. The Department then divided the *1348 total market capitalization number for each railroad by three different measures of income: revenues, EBIT,[15] and EBITDA.[16] This resulted in "multiples," which the Department applied against the same measures of income for CSXT to estimate the value of CSXT. The Department's market multiple values of CSXT were: (1) $12,246,460,000; (2) $10,769,011,960; and (3) $8,474,781,660 respectively.
CSXT primarily complains that the Department's calculation of its market multiple values is erroneous because the Department failed to make adjustments to its calculations to account for differences between these companies and CSXT. For example, CSXT argues that the Department failed to account for differences between the size of the comparator railroads and CSXT, whether they are eastern or western railroads, and the total amount of their assets. According to CSXT, if the Department had made the appropriate adjustments to reflect the differences between those railroads and CSXT, the appropriate market multiple value of CSXT would be approximately $6.08 billion.
Although the court applauds the Department's use of publicly traded Class 1[17] major railroads as comparable companies, the court finds that the Department erred when it failed to make adjustments to the size of the comparator companies. CSXT, however, has failed to introduce sufficient evidence for the court to determine what the appropriate adjustments should have been. At trial, CSXT introduced into evidence Plaintiff's Exhibit 51, which purports to adjust the values of Burlington Northern, Norfolk Southern, and Union Pacific to account for their size in comparison to CSXT. In addition to the fact that it does not make adjustments for all of the railroads used by the Department, it is not clear to the court whether the exhibit properly adjusts CSXT' s size to account for the purchase of Conrail. Nevertheless, because the Department erred in calculating its market multiple approach, the court will disregard the values the Department arrived at under its market multiple approach.
(4) CSXT's Criticisms of the Department's Add-Back to Account for CSXT's Leased Equipment
CSXT, like most railroads, leases substantial numbers of "rolling stock," such as locomotives and freight cars. The Conrail transaction was also structured using leases. CSXT uses operating leases to pay for various Conrail road assets. To account for this leased equipment and the Conrail road assets, the Department added $607 million to the unit value of CSXT under each of its valuation methods.
According to CSXT, the addition of $607 million to account for CSXT's leased assets is unnecessary because the Department's unit value of CSXT under all three valuation methods includes the value of all operating property owned or used by CSXT, including its leased assets. CSXT also argues that if the Department was going to treat CSXT's leased assets as if they were owned, the Department should have recognized that CSXT's capital expenditures would have increased if CSXT purchased its leased assets. If capital expenditures increased, then CSXT's cash flow would have been lower. The failure to make this adjustment to capital expenditures results in double counting the value of the leased assets.
*1349 In response, the Department points out that CSXT's operating leases are off-balance sheet financing. Because the operating leases do not show up on CSXT's balance sheet, the full value of the operating leases are not captured in CSXT's stock and debt prices or in the Department's income approach, unless certain adjustments are made.
After much deliberation, the court concludes that the Department did not improperly double count CSXT's leased assets. In particular, the court finds Dr. Ifflander and Mr. Dickerson's testimony on this issue credible.
There are two types of leases: capital leases and operating leases. A capital lease generally lasts for the life of an asset and the lease can be renewed at the end of the asset's life or the asset may be acquired at a favorable price. An operating lease usually lasts for a period of time much shorter than the actual life of the asset, and the present value of lease payments is generally much lower than the actual price of the asset. At the end of the life of the operating lease, the equipment usually reverts back to the lessor.
Under standard accounting rules, a capital lease is treated like a purchase. It shows up on a company's books as an asset, and the lease obligations show up as a liability or debt. Operating leases, on the other hand, do not show up on a company's books as an asset or a debt they are off-balance sheet.[18] Instead, payments for operating leases show up as cash outflows from operations.[19]
When a lease arrangement is treated as off-balance sheet financing, the court is satisfied that there are "real current or future cash flow consequences." See 1 D.R. Carmichael & Paul Rosenfield, ACCOUNTANTS' HANDBOOK 33 (10th ed.2003). There are also consequences for reported earnings, book value of debt and capital, and return ratios for the company. The court finds that operating[20] and net income are lower, debt and capital for the firm are understated, and return on equity and capital are much higher. Unless an adjustment is made to the income statements to treat CSXT's leased Conrail road assets as if they were owned, the estimated market value CSXT will be understated.[21] In this case, the Department properly *1350 made such an adjustment$607 million to the unit value of CSXT under each of the Department's valuation methods.[22]
E. The Court's Conclusions Regarding the True Market Value of CSXT
After parsing through days of expert testimony, the court concludes that the Department's DCF value as set out in its Proposed Valuation is the most accurate indicator of CSXT's unit value. As a result, the court holds that, for purposes of applying the 4-R Act to the defendants' assessments of CSXT, the true market unit value of CSXT for the tax year 2002 was $7,726,293,350.[23]
The court finds that the portion of CSXT's true market value that should be allocated to Georgia for the tax year 2002 is 7.194059%. The true market value of CSXT's taxable rail transportation property in Georgia for the tax year 2002, therefore, was $509,560,171.[24]
Determining the true market value of CSXT does not end, the inquiry. CSXT is only entitled to relief if the "ratio of [its] assessed value to [its] true market value . . . exceeds by at least 5% the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction." 49 U.S.C. § 11501(c). The parties have stipulated that the ratio of assessed value to true market value for all other commercial and industrial property in Georgia is 40%. For CSXT to succeed against the defendants, therefore, the ratio of assessed value to true market value of CSXT's rail transportation property in each assessment jurisdiction must be at least 42%.[25]
Regardless of whether the assessment jurisdiction is the county or the state, the ratio of assessed market value to true market value for CSXT's rail transportation property is less than 42%. As a result, the court concludes that the defendants have not discriminated against CSXT in violation of 49 U.S.C. § 11501(b)(1).
*1351 IV. Whether the Defendants Singled Out CSXT for Discriminatory Treatment by Applying a Higher Valuation Approach to CSXT's Property than the Valuation Approach Applied to Other Centrally-Assessed Taxpayers in Georgia for the Tax Year 2002 in Violation of 49 U.S.C. § 11501(b)(4)
The provisions of 49 U.S.C. § 11501(b)(4) forbid the imposition of any tax that discriminates against a railroad. The United States Supreme Court has held that when railroads are singled out for discriminatory treatment, discrimination under 49 U.S.C. § 11501(b)(4) has occurred. See Department of Revenue of Oregon v. ACF Industries, Inc., 510 U.S. 332, 346 47, 114 S.Ct. 843, 851, 127 L.Ed.2d 165 (1994).
CSXT claims that it has been singled out for discriminatory treatment because the Department did not attempt to assess the fair market value of other centrally-assessed taxpayers. Instead, CSXT claims that other centrally-assessed taxpayers are being taxed at whatever the Department determines is the lowest estimate of value that it could reasonably accept. CSXT argues that it is entitled to taxation on the same basis as these other centrally-assessed utilities-taxation based on the lowest possible value.
CSXT also argues that it has been treated differently than Norfolk Southern, the only other major railroad in Georgia. As evidence of this discrimination, CSXT points out that the Department consistently valued Norfolk Southern higher than CSXT, yet in the course of other litigation, the Department agreed to value Norfolk Southern at less than $8.2 billion for the tax year 2002.
A. Whether CSXT Has Been Taxed Differently Than Other Centrally-Assessed Taxpayers
CSXT first claims it has been singled out for discriminatory treatment because the Department's assessments of non-railroad centrally-assessed taxpayers are not based on the appraiser's opinion of the fair market value of those properties. In support of this claim, CSXT points out that Mr. Dickerson testified that he prepared proposed assessments for non-railroad utilities that represented the "lowest number he could come up with" and a "number at the lower end of his range of fair market value." Presumably because CSXT can come up with a lower number for its value than the Department, CSXT argues that it was treated differently than other centrally-assessed taxpayers.
The court finds CSXT's argument unpersuasive. The evidence at trial showed that in preparing the Department's proposed valuations of CSXT and other taxpayers subject to the unit rule method, Mr. Dickerson first determined the range within which he thought a particular company's fair market value could lie and then chose a number at the lower end of this range. CSXT was treated in the same manner as other public utilities; Mr. Dickerson came up with a range of values for CSXT and then picked a number that was closest to the lower end of that range. Further, the evidence at trial showed that Mr. Dickerson used essentially the same valuation methods to determine the unit value of all taxpayers subject to the unit rule method. The court finds Mr. Dickerson' s testimony on this issue to be credible.
Moreover, the fact that CSXT could come up with a lower number than the Department is meaningless. The Department did not base its valuation of other centrally-assessed taxpayers on the lowest number those taxpayers could come up with.[26] Instead, centrally-assessed taxpayers *1352 were taxed at the lowest number that Mr. Dickerson could come up with, just as CSXT was.
As further evidence that CSXT has been singled out for discriminatory treatment, CSXT argues that the Department's Proposed Valuation for 2002 is 47.1% higher than CSXT's 2001 assessment, whereas other non-railroad centrally-assessed taxpayers suffered only minimal increases. According to CSXT, this large increase was primarily caused by the exceedingly high terminal growth rate that Mr. Dickerson used in his DCF approach.
The fact that CSXT's 2002 assessment was 47.1% higher than its 2001 assessment, and that this percentage increase is much higher than the percentage increase of other centrally-assessed taxpayers, does not in and of itself show that CSXT has been discriminated against. An equally likely proposition is that CSXT was undervalued in 2001. Further, absent evidence of the fair market value of CSXT in 2001 or the fair market value of other taxpayers in 2002, the court cannot determine that CSXT has been singled out for discriminatory treatment.
Mr. Dickerson, moreover, testified that the largest part of the increase in CSXT's 2002 assessment was due to a change he instituted that year for all railroads, which was not needed for non-railroad public utilities. Specifically, he began using income data taken from CSX Corporation's annual reports instead of CSXT's R-1[27] reports to project future cash flows in his DCF analysis. Because those income figures can differ significantly from each other, the choice of which to use can greatly affect the DCF indicator of value. The evidence at trial showed that CSX Corporation's annual reports reflect management's view of CSXT's financial performance.
Finally, CSXT argues that the Department's treatment of other centrally-assessed taxpayers for the tax year 2004 is potent evidence that CSXT was singled out in 2002. In the tax year 2004, Mr. Dickerson devised a new way of calculating the risk premium for centrally-assessed taxpayers, which he then applied to his valuation worksheets for the tax year 2004. This new calculation increased the Department's initial valuation of the majority of centrally-assessed taxpayers, which, in turn, caused a "stir." The Department, in an attempt to avoid litigation, had a meeting with six representatives from centrally-assessed taxpayers, including CSXT. At the conclusion of the meeting, CSXT and the other five companies agreed that for the tax year 2004, all centrally-assessed taxpayers would receive an assessment equal to their assessment for the previous year or the average of their past three years of assessments, whichever was greater. For 2004, CSXT was assessed at $6.5 billion, a slight increase over the Department's 2001 assessment. Because the Department reverted to CSXT's 2001 values in 2004, CSXT argues that this is an indication that CSXT was singled out for different tax treatment in 2002 and 2003.
The Department's 2004 assessment of CSXT indicates little about the Department's 2002 valuation of CSXT. The Department negotiated an agreement with all public utilities in 2004 to avoid litigation. The agreement mandated that these taxpayers receive an assessment equal to their assessment for the previous year or the average of their past three years of assessments. As a practical matter, the Department could not have used either formula for CSXT because CSXT had filed suits challenging the Department's 2002 and 2003 valuations. The only avenue left *1353 to the Department was to revert to CSXT's 2001 assessment.
B. Whether CSXT Has Been Treated Differently Than Norfolk Southern
CSXT next argues that it has been treated differently than the only other major railroad in Georgia, Norfolk Southern. Like CSXT, Norfolk Southern filed suit against the defendants challenging the Department's 2002 assessment. The Department, however, settled Norfolk Southern's lawsuit and agreed to only minimal increases in value over the Department's 2001 assessment of Norfolk Southern. Ultimately, this meant that Norfolk Southern's 2002 value in Georgia was less than $8.2 billion.
CSXT argues that valuing Norfolk Southern less than CSXT for the tax year 2002 is wrong and discriminatory. CSXT points out that the Department consistently valued Norfolk Southern higher than CSXT for the tax years 2002-2004 and consistently projected higher cash flows for Norfolk Southern. If the Department truly believed that Norfolk Southern was worth more than CSXT, how, asks CSXT, could the Department assert in this suit that CSXT's value is higher than the agreed-to value of Norfolk Southern for the tax year 2002?
The court finds CSXT's arguments unpersuasive. Nothing in the 4-R Act requires the court to compare the treatment of CSXT to just one company, another railroad. In Atchison, Topeka, and Santa Fe Railway, 78 F.3d at 442, the railroad argued that the court could measure whether Arizona's tax statutes discriminated against it solely by looking at the treatment of other motor carriers, as opposed to comparing all commercial and industrial taxpayers. The Ninth Circuit rejected this argument stating, "Although subsection(b)(4) is silent as to the proper comparison class, congressional intent behind the 4-R Act dictates that the comparison class of `other commercial and industrial taxpayers subject to the tax' be used." Id.
The court finds the logic of the Ninth Circuit persuasive. By narrowing the comparison class to just one company, CSXT attempts to greatly expand the reach of the 4-R Act and increase the likelihood of future litigation. Accordingly, the court finds that it is improper to compare CSXT's treatment to just one other company, Norfolk Southern, for purposes of determining whether CSXT has been discriminated against in violation of the 4-R Act.
Even if it was proper to compare solely CSXT and Norfolk Southern, the court still finds that CSXT has not been singled out for discriminatory treatment. CSXT did not present any evidence that it was treated differently than Norfolk Southern when the Department made its initial proposed valuation of Norfolk Southern. If anything, the fact that Norfolk Southern also filed suit challenging the Department's proposed valuation suggests that Norfolk Southern was treated similarly to CSXT.
In addition, the fact that the Department ultimately settled with Norfolk Southern does not compel the court to conclude that CSXT was treated differently from Norfolk Southern. Lawsuits are settled for numerous reasons, including the need to allocate scarce legal resources differently.
V. Whether the Department Improperly Included the Value of CSXT's Intangible Property in Its Proposed Valuation in Violation of 49 U.S.C. § 11501(b) (4)
CSXT's last claim is that the Department's Proposed Valuation includes amounts attributable to intangible property that is not taxed to locally-assessed *1354 taxpayers, resulting in a violation of 49 U.S.C. § 11501(b)(4). When a railroad is valued as a unit on a going concern basis, it is undisputed that the unit value of that railroad necessarily includes all of the railroad's assets, both tangible and intangible. The trend in a majority of states, however, is to exclude intangible property from ad valorem taxation. In 1996, the state of Georgia followed this trend and repealed its ad valorem tax on intangible property. See O.C.G.A. § 48-6-21. Thus, the intangible property of CSXT is not taxable in Georgia.
As an initial matter, the court must address the definition of the term "intangible property." Intangible property is generally defined as property that lacks a physical existence, such as stock options and business goodwill. Black's Law Dictionary 1253 (8th ed.2004). The court is not aware of any decision by the Georgia Department of Revenue or by Georgia courts that articulates a list of property included within the definition of "intangible property" for purposes of tax valuation. Under the repealed Georgia statute subjecting intangible property to an ad valorem tax, the Georgia legislature defined intangible property as:
(1) Money;
(2) Collateral Security Loans;
(3) Stocks;
(4) Accounts receivables and notes not representing credits secured by real estate;
(5) Bonds and debentures of all corporations;
(6) Long term notes secured by real estate;
(7) Short term notes secured by real estate;
(8) Restricted foreign intangibles;
(9) Patents, copyrights, franchises, and all other classes of intangible personal property not otherwise enumerated; and
(10) Computer software defined by statute.
O.C.G.A. § 48-6-21.
Although it has been repealed, O.C.G.A. § 48-6-21 is an indication that the Georgia legislature believed that the assets listed above constitute intangible property. Further, by repealing the statute, the legislature implicitly indicated that these types of intangible property were no longer subject to taxation. The court, therefore, finds that, at the very least, the list of property included in O.C.G.A. § 48-6-21 is a good starting point for defining the term "intangible property."
Despite the repeal of O.C.G.A. § 48-6-21, CSXT claims that its intangible property has been included within the Department's Proposed Valuation. The Department admits that its unit valuation of CSXT initially included CSXT's tangible and intangible property, but claims that it deducted $400 million from its unit value to account for CSXT's intangible property.
Instead of attempting to identify and value its intangible property, CSXT contends that it is impractical to identify and value its intangible property, and, thus, the court should require the Department to use the yield capitalization approach, which CSXT contends does not compound intangibles. CSXT claims that the court should require the defendants to use the yield capitalization approach because the Department's market multiple and stock and debt approaches allegedly unnecessarily compound intangible values.[28] For example, *1355 CSXT has presented evidence that a company's stock prices may increase when that company hires a new CEO. This increase in the stock price is not attributable to tangible assets. Because the stock and debt and the market multiple approaches both rely on a company's stock price,[29] they compound intangible assets.
As support for its argument that the court should adopt the yield capitalization approach, CSXT cites to a decision by the Utah Tax Commission ("Commission") in WilTel, Inc. v. Beaver County, Nos. 95-0789 and 95-0824 (Utah Tax Commission December 5, 1997)("WilTel II"). WilTel, Inc. is a provider of long-distance telecommunications services. In 1995, the Utah State. Property Tax Division (the "Division") calculated WilTel's unit value based on the stock and debt and income approaches. WilTel appealed the assessment to the Utah Tax Commission and moved for partial summary judgment arguing, in part, that Utah's assessment improperly included intangible property, which was not taxable under Utah law. WilTel, Inc. v. Beaver County, No. 95-0789, 1997 Utah Tax LEXIS 111, at *2-3 (Utah Tax Commission April 21, 1997) ("WilTel I"). The Utah Tax Commission found that the income and stock and debt approaches tend to compound intangible values. The Utah Tax Commission then remanded the case to the parties to identify, value, and remove WilTel's intangible property using the cost approach." Id. at *14-15.
On remand, the parties were unable to agree on the valuation of WilTel's taxexempt intangible property, and, thus, the matter came before the Utah Tax Commission again for a formal hearing to determine the value of WilTel's intangible property. WilTel II at *2. The Commission finally concluded that "separately valuing intangibles and deducting them from a unit valuation is impractical." WilTel II at *3. In an attempt to minimize the inclusion of intangibles in the unit rule method, the Utah Tax Commission concluded that the parties should use a yield capitalization approach and a cost approach and that each approach should be weighted at 50%. The Utah Tax Commission then remanded the case to the Division to calculate the value of WilTel under a yield capitalization approach (minus growth) and to time adjust its cost approach. WilTel II at *6.
While the WilTel II decision is attractive because of its simplicity, the court finds that the reasoning of WilTel II is not appropriate in this case. First, this is a case brought under the 4-R Act, and not merely an appeal of a state tax valuation. The court has already held that CSXT may not challenge the Department's valuation methods in this case. If this court were to adopt the reasoning of WilTel II, the court would be dictating to the Department a particular valuation method.
Second, CSXT has not convinced the court that it is impossible or impractical to value its intangible property. While CSXT's local assessment expert, Ms. Judith Ross, testified that identifying and valuing a company's intangible property would be extremely difficult, she also testified that performing a unit valuation in general is difficult. Ms. Ross further testified that intangible property can be identified and valued by a person with expertise. Thus, the court finds that it is not impractical or impossible to identify and value CSXT's intangible property.
Third, while the court believes that the stock and debt approach undoubtedly includes value attributable to intangible property in its initial unit value, the court *1356 also finds that the yield capitalization method touted by CSXT includes some value attributable to intangible property. In fact, CSXT has admitted that Mr. Tegarden's yield capitalization value includes some value attributable to intangible property. This is further illustrated by the fact that CSXT deducts 5400 million from Mr. Tegarden's unit value of CSXTthe same $400 million deduction that the Department took to account for certain intangibles owned by CSXT.
Fourth, this case differs[30] from the Wiltel decisions in that in Wiltel I, the Utah Tax Commission remanded the case so that the taxpayer could identify its intangible property. The parties, however, could not agree on the value of Wiltel's intangible property. In this case, CSXT has not even presented any evidence that it owns intangible property.
Here, it is undisputed that Mr. Dickerson deducted $400 million from his unit value of CSXT to account for certain intangibles. He testified that the $400 million deduction was his attempt to eliminate the value of CSXT's intangible property that was previously separately taxed under O.C.G.A. § 48-6-21. When asked why he did not attempt to value and deduct other intangible property from his initial assessment, Mr. Dickerson testified that CSXT did not present the Department with any evidence that CSXT owned other intangible property. Consistent with its statement to Mr. Dickerson, at trial CSXT failed to identify any specific intangible property that it owned as of January 1, 2002.[31] CSXT also failed to present evidence as to how much its intangible property was worth. Cf. Burlington N.R.R. Co. v. Huddleston, 94 F.3d 1413, 1415 (10th Cir.1996) (in its complaint alleging a violation of the 4-R Act, the railroad also alleged that the value of its intangible property, computer software, was at least $8 million); Bair, 815 F.Supp. at 1239 (separately identifying and valuing intangible property of a railroad for purposes of 4-R Act claim). Nor has CSXT provided the court with any evidence that the Department's 8400 million intangible property deduction was under-inclusive.
The court, therefore, concludes that CSXT has not carried its burden of showing by a preponderance of evidence that the Department improperly included intangible property in the Department's Proposed Valuation of CSXT.
Conclusion
For the reasons discussed above, the court concludes that the defendants have not discriminated against CSXT in violation of 49 U.S.C. § 11501(b)(4).
The court also holds that the true market unit value of CSXT for the tax year 2002 was $7,726,293,350.[32] The true market value of CSXT's taxable rail transportation property in Georgia for the tax year 2002 was $509,560,171.[33] The defendants, *1357 therefore, have not discriminated against CSXT in violation of 49 U.S.C. § 11501(b)(1) because the ratio of assessed value to true market value of CSXT's property does not exceed the jurisdictional threshold set out in the 4-R Act of 42%. Thus, CSXT is not entitled to relief under the 4-R Act for the tax year 2002.
The clerk is DIRECTED to close this file and issue judgment for the defendants in accordance with this order.
NOTES
[1] CSX Intermodal ("CSXI") moves trailers or containers on flat cars to trucks. In addition, CSXI operates 33 terminals across the United States. When CSXI moves intermodal traffic over CSXT's system, CSXI pays CSXT a "transfer price" of approximately $350 to $400 million annually for CSXI's use of CSXT's resources and routes.
[2] Operating income is operating revenues minus total operating expenses.
[3] The acquisition of Conrail added 4,400 miles of track to CSXT's rail system in the Northeast United States and Canada.
[4] The term "capital expenditure" refers to purchases of depreciable assets with long lives.
[5] In 2001 and 2002, CSXT Surface Transportation had a positive cash flow of around $150 million. Mr. Lewis testified that the positive cash flow was primarily due to real estate sales of $325 million.
[6] The term operating ratio refers to the ratio of operating expenses to revenue.
[7] The market multiple approach yielded three different values because the Department calculated three different "multiples."
[8] The defendants contend that the court must accept their tax assessment as prima facie correct, and that the burden is on CSXT to show that their assessment is in error. The defendants' argument is based on their belief that the burden of proof applicable in this case is the same burden of proof used when a taxpayer litigates the assessment they received in Georgia. This is not, however, a case where CSXT is simply appealing the Department's assessment. This is a case brought under the 4-R Act and the court must determine the true market value of CSXT. CSXT, in turn, has the burden of proving by a preponderance of the evidence that the true market value of its property is $6 billion. To do this, CSXT presented two types of evidence. First, it criticized the Department's calculations. Second, it presented a valuation of its property by Mr. Tegarden. In a more typical case, the court would look at both Mr. Tegarden's appraisal and the Department's appraisal to determine the true market value of CSXT. If the court found by a preponderance of the evidence that CSXT's true market value was $6 billion, as proposed by CSXT, then the court would compare the Department's Proposed Valuation to CSXT's true market value to determine if discrimination occurred. However, as explained later in this order, the court cannot consider Mr. Tegarden's valuation because it was prepared using different valuation methods than the Department. The court, therefore, is limited to looking solely at CSXT's criticisms of the Department's valuation.
[9] CSXT admits that the cost approach is not particularly reliable for use in valuing railroad assets because of the substantial obsolescence affecting railroad property. Pl.'s Post-Trial Br. at 22 [Doc. No. 113].
[10] This statement was made by Mr. Tegarden in the context of explaining how he came up with $700 million as his estimate of CSXT's future net operating income.
[11] Because the growth rate for revenue slowed to .4% per year from 1996 to 2001, CSXT also argues that the Department's projected growth rate of 2% per year for revenue is unduly optimistic. The court disagrees. CSXT admits that a 2% annual growth in revenue is not inconsistent with national trends for railroads between 1991 and 2001.
[12] In other parts of its brief, CSXT suggests that the Department may have miscalculated the amount of debt attributable to CSXT. Even if the court were to accept this criticism, as well as CSXT's liquidity criticism described later in this opinion, according to the court's calculations the unit value of CSXT would be approximately $7.6 billion. This number is much higher than the $6 billion value proposed by CSXT.
Further, the court notes that the value of CSX Corporation's debt is $8.296 billion. If the court were to attribute 75% of CSX Corporation's debt to CSXT, the value of CSXT would be $6.2 billion. If, as CSXT claims, the value of CSXT was $6 billion, CSXT would have a negative equity value. CSX Corporation, however, held investment grade bond ratings implying a profitability level in excess of that needed to pay both current interest expenses and the principal balance of debt.
[13] If the court were to assume that CSXT's stock has a value in the market that is 37.5% higher than its underlying assets, according to the court's calculations the Department's stock and debt value of CSXT would be approximately $9.3 billion, much higher than Mr. Tegarden's $6 billion value for CSXT.
[14] In his appraisal report, Mr. Tegarden valued CSXT under the stock and debt approach at $9.637 billion. He testified that he gave little to no weight to this value because it did not include an illiquidity discount.
[15] "EBIT" stands for "earnings before interest and tax."
[16] "EBITDA" stands for "earnings before interest, tax, and depreciation."
[17] As noted by Mr. Tegarden, the two Canadian railroads, Canadian National and Canadian Pacific, have enough revenue to be considered Class 1 railroads if they were U.S. companies.
[18] The term "off-balance sheet" debt has been the focus of much attention in the last few years due to the Enron scandal. One of the principal ways in which Enron was able to deceive investors as to its value was by engaging in extensive off-balance sheet financing transactions, which shifted debt off Enron's balance sheet, making the company's balance sheet look far stronger than it actually was. See Lawrence E. Mitchell, The Sarbanes-Oxley Act and the Reinvention of Corporate Governance? Vill. L.Rev. 1189, 1212 (2003).
[19] "Off-balance sheet financing has been used for many years as a source of capital financing for acquiring heavy equipment, especially aircraft. . . ." John C. Murray, Recharacterization and Title Issues in Synthetic Leasing Transactions, 479 Practicing L. Inst./Real Est. Handbook 889 (2000).
[20] Operating income is a key input in both parties' valuation methods, but especially the DCF method.
[21] The court is aware of the fact that the Southern District of Iowa in Burlington Northern Railroad Co. v. Bair, 815 F.Supp. 1223, 1231 (S.D.Iowa 1993), reached a seemingly different conclusion. Although the Bair decision is not binding upon this court, the court points out that the Bair court's analysis on this issue is rather perfunctory. Further, in Bair, the court appears to have held that because commercial and industrial personal property is exempt from taxation, adding it back to the state's unit value estimations improperly double-counts the value of the leased rolling stock. Id. at 1231. In Georgia, however, taxable property is defined as "all real property, including but not limited to leaseholds, interests less than fee, and all personal property. . . ." O.C.G.A. § 48-5-3. Furtherly more, Georgia law also states that a railroad's rolling stock and other personal property appurtenant to the rolling stock shall be taxed on "as much as the whole value of the rolling stock and personal property as the length of the railroad in this state bears to the whole length of the railroad, without regard to the location of the head office of the railroad. . . ." O.C.G.A. § 48-5-520. Thus, there does not appear to be a comparable tax exemption in Georgia.
[22] Except for arguing that no adjustment is necessary, CSXT has offered no evidence as to what the amount of the adjustment should have been.
[23] The court arrived at this number by taking the Department's $8,126,293,350 DCF value for CSXT and subtracting $400 million to account for CSXT's intangible property.
[24] The court reached this number by taking the $7,726,293,350 true market unit value of CSXT and allocating 7.194059% to Georgia. The court then deducted $4,156,193 to account for CSXT's motor vehicles, $2,907,467 to account for pollution control, and $39,210,271 to account for W & A exempt line.
[25] Section 11501(c) states that relief may be granted under this section "only if the ratio of assessed value to true market value of rail transportation property exceeds by at least 5% the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction." Once the 5% threshold is satisfied, the court is empowered to prevent all discrimination against the railroad. The 5% threshold is calculated by measuring 5% of 40%, which yields two percentage points. See Southern Railway Co. v. State Board of Equalization, 712 F.Supp. 1557, 1565-66 (N.D.Ga.1988).
[26] The court has no doubt that other centrally-assessed taxpayers could have come up with values lower than Mr. Dickerson's proposed valuation of their property.
[27] An R-1 report is a report made by a rail-road, such as CSXT, to the STB.
[28] It is undisputed here that the Department does not and did not intend to value the intangible property of other commercial and industrial property. It is also undisputed that all three of the valuation methods used by the Department initially included the value of CSXT's intangible property.
[29] For clarification purposes, unlike the stock and debt approach, the market multiple approach relies on the stock prices of comparable companies, as opposed to CSX Corporation's stock prices.
[30] The court also notes that holdings in the Wiltel cases are not binding upon this court for numerous reasons: (1) the Wiltel decisions were made by the Utah State Tax Commission; (2) the taxpayer in the Wiltel cases was a telecommunications company, not a railroad; and (3) the Wiltel cases were not decided under the 4-R Act.
[31] For example, CSXT did not provide the court with any evidence that it owns any trademarks, copyrights, or patents.
[32] The court arrived at this number by taking the Department's $8,126,293,350 DCF value for CSXT and subtracting $400 million to account for CSXT's intangible property.
[33] The court reached this number by taking the $7,726,293,350 true market unit value of CSXT and allocating 7.194059% to Georgia. The court then deducted $4,156,193 to account for CSXT's motor vehicles, $2,907,467 to account for pollution control, and $39,210,271 to account for W & A exempt line.
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FILED
Jul 17, 2019
02:15 PM(CT)
TENNESSEE
WORKERS' COMPENSATION
APPEALS BOARD
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Jason Dziadosz ) Docket No. 2018-06-1641
)
v. ) State File No. 69336-2018
)
Whitestone Investments, Inc., et al. )
)
)
Appeal from the Court of Workers’ )
Compensation Claims )
Joshua D. Baker, Judge )
Affirmed and Remanded
In this interlocutory appeal, the employee alleges suffering a repetitive injury to his left
hand working in his employer’s warehouse. The employer provided workers’
compensation benefits, including a panel of physicians and authorized medical treatment.
The authorized physician placed the employee at maximum medical improvement and
opined he did not retain any permanent impairment from his work injury. The employer
denied further benefits, and the authorized physician declined to see the employee again,
prompting him to seek treatment on his own. Following an expedited hearing, the trial
court ordered the employer to provide reasonable and necessary medical care with the
employee’s physician but denied his request for temporary disability benefits. The
employer has appealed. We affirm the trial court’s decision and remand the case.
Presiding Judge Marshall L. Davidson, III, delivered the opinion of the Appeals Board in
which Judge David F. Hensley and Judge Timothy W. Conner joined.
Tyler D. Smith, Knoxville, Tennessee, for the employer-appellant, Whitestone
Investments, Inc.
Jason Dziadosz, Nashville, Tennessee, employee-appellee, pro se
1
Memorandum Opinion 1
Jason Dziadosz (“Employee”) worked for Whitestone Investments, Inc.
(“Employer”), in its warehouse. On September 1, 2018, Employee went to Vanderbilt
Health explaining that he needed a note clearing him to return to work from the flu, as he
had missed three consecutive days of work. He also complained of left hand pain
localized in his index finger. X-rays were negative for an acute injury, and the attending
medical provider prescribed anti-inflammatory medication, released him with no
restrictions, and referred him to Dr. Todd Wurth, a hand specialist.
Dissatisfied with the treatment from Vanderbilt Health, Employee went the same
day to Physicians Urgent Care. The record from that visit reflects that Employee “was
advised that this is an overuse syndrome and will most likely continue if he stays at this
job” and that he was prescribed medication. He returned three weeks later with ongoing
complaints, although he reported that he was “75% improved.” The attending medical
provider stated that Employee’s work “at the distribution center accounted for 50% or
more of the cause for his tendonitis.” He was referred to physical therapy but was
assigned no work restrictions.
Employee returned to work on September 4 and informed his supervisor of his left
hand complaints. 2 Employer provided a panel of physicians from which Employee
selected Dr. Dave Alexander. Dr. Alexander saw Employee on two occasions, October
24 and 31, and diagnosed him with extensor tenosynovitis and took him off work for a
total of two weeks. He was returned to work with restrictions on November 7, 2018, at
which time Dr. Alexander placed him at maximum medical improvement and assigned
no impairment. He also indicated he did not anticipate Employee would need additional
treatment for the work injury. Employee requested a return visit with Dr. Alexander, but
Dr. Alexander declined to see him.
Employee saw Dr. Wurth on his own on January 29, 2019, with continued
complaints with his hand. Dr. Wurth provided a steroid injection and discussed possible
surgery. He assigned no work restrictions.
Employee was terminated on September 5, 2018 for attendance issues. Employer
asserted that it had provided all medical treatment recommended by the authorized
1
“The Appeals Board may, in an effort to secure a just and speedy determination of matters on appeal and
with the concurrence of all judges, decide an appeal by an abbreviated order or by memorandum opinion,
whichever the Appeals Board deems appropriate, in cases that are not legally and/or factually novel or
complex.” Appeals Bd. Prac. & Proc. § 1.3.
2
The parties dispute whether Employee explained that he believed his hand complaints were causally
related to his work. However, there is no dispute that Employer became aware Employee was alleging a
work-related injury within the timeframe mandated by statute. See Tenn. Code Ann. § 50-6-201 (2018).
2
physician and that it had paid all temporary disability benefits owed. Specifically,
Employer paid temporary total disability benefits for the two weeks Employee was taken
off work and maintained it terminated him for cause, excusing it from paying temporary
partial disability benefits. Employee argued that he was entitled to additional medical
care because his symptoms persisted and that his termination was not for cause, entitling
him to temporary partial disability benefits.
Following an expedited hearing, the trial court found that, regardless of whether
Employee sustained any permanent impairment, he was entitled to medical care for his
injury. Because the authorized physician refused to see Employee, the court found
Employee acted reasonably in obtaining medical care on his own and deemed Dr. Wurth
the authorized physician. However, concluding that no physician had assigned work
restrictions or taken Employee off work outside of the two weeks for which Employee
had already received temporary disability benefits, the trial court denied Employee’s
request for additional temporary disability benefits.
Employer asserts on appeal that the trial court erred in finding Employee will
likely prevail at trial with respect to causation, in naming Dr. Wurth the authorized
physician, and in requiring it to provide ongoing medical care. For his part, Employee
argues the trial court erred in not ordering additional temporary disability benefits and in
not ordering reimbursement of some medical expenses.
With respect to causation, Employee described suffering a cumulative trauma
injury resulting from his work activities. His attending medical provider at Physicians
Urgent Care opined he had an injury resulting from repetitive use of his hand. In
addition, Employee complained of ongoing symptoms related to his index finger
diagnosed by the authorized physician. While it is true that Dr. Alexander did not believe
Employee retained any permanent impairment, the fact that he suffered no permanent
impairment is insufficient to terminate his right to medical treatment for a work-related
injury. See Wilkes v. Res. Auth. of Sumner Cnty., 932 S.W.2d 458, 461 (Tenn. 1996)
(“[A]n employee’s injury need not affect the employee’s employability or otherwise
result in vocational impairment. Rather, the medical treatment sought must be
‘reasonably necessary.’”).
Furthermore, the trial court did not err in designating Dr. Wurth as Employee’s
authorized physician. In circumstances where an employer refuses to provide medical
treatment and/or denies an employee’s claim, such employer runs the risk that a physician
of the employee’s choosing will be designated the authorized physician and that the
employer will be responsible for paying for treatment provided by that physician. See
GAF Bldg. Materials v. George, 47 S.W.3d 430, 433 (Tenn. Workers’ Comp. Panel
2001). Even though Employer initially provided authorized medical care, it later
declined to provide additional medical care, and the authorized physician declined to see
Employee despite ongoing problems with his hand. We agree with the trial court that
3
Employee acted reasonably in seeking medical care on his own and, having established a
doctor-patient relationship, should not now be required to begin treating with another
physician.
With respect to Employee’s assertion that he is entitled to additional temporary
disability benefits, we conclude the trial court did not err in declining to award those
benefits, although for reasons other than those upon which the trial court relied. The trial
court based its decision on its conclusion that “no doctor has taken [Employee] off work
or imposed any workplace restrictions other than for the two-week period for which he
received temporary-total disability benefits.” However, at Employee’s last visit with Dr.
Alexander on October 31, 2018, Dr. Alexander took him off work until November 7 and
then allowed him to return to light duty on November 7 with restrictions of no heavy
gripping or twisting and no lifting over ten pounds. Dr. Alexander did not provide a date
on which those restrictions would expire. Thus, the court erred in finding Employee had
not been given work restrictions outside the two-week period for which he received
temporary disability benefits. The error is harmless, however, as Dr. Alexander placed
Employee at maximum medical improvement on November 7, 2019. An employee’s
entitlement to temporary disability benefits terminates when the employee returns to
work or reaches maximum medical improvement. See Simpson v. Satterfield, 564
S.W.2d 953, 955 (Tenn. 1978). Therefore, Employee’s entitlement to temporary
disability benefits ended on the date he was placed at maximum medical improvement.
Finally, Employee asserts that he should be reimbursed for medical bills he paid
for treatment at Physicians Urgent Care on September 22, 2018. This issue was not
raised in or addressed by the trial court and is thus waived. See Simpson v. Frontier
Comty. Credit Union, 810 S.W.2d 147, 153 (Tenn. 1991).
For the foregoing reasons, we affirm the decision of the trial court and remand the
case. Each party is responsible for its own costs on appeal.
4
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Jason Dziadosz ) Docket No. 2018-06-1641
)
v. ) State File No. 69336-2018
)
Whitestone Investments, Inc., et al. )
)
)
Appeal from the Court of Workers’ )
Compensation Claims )
Joshua D. Baker, Judge )
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Appeals Board’s decision in the
referenced case was sent to the following recipients by the following methods of service
on this the 17th day of July, 2019.
Name Certified First Via Fax Via Sent to:
Mail Class Fax Number Email
Mail
Jason Dziadosz X [email protected]
Tyler D. Smith X [email protected]
Joshua D. Baker, Judge X Via Electronic Mail
Kenneth M. Switzer, Chief Judge X Via Electronic Mail
Penny Shrum, Clerk, Court of X [email protected]
Workers’ Compensation Claims
Jeanette Baird
Deputy Clerk, Workers’ Compensation Appeals Board
220 French Landing Dr., Ste. 1-B
Nashville, TN 37243
Telephone: 615-253-0064
Electronic Mail: [email protected]
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926 F.Supp. 1002 (1996)
Peggy DEGHAND, Plaintiff,
v.
WAL-MART STORES, INC., Defendant.
No. 94-4172-SAC.
United States District Court, D. Kansas.
April 11, 1996.
*1003 *1004 *1005 *1006 *1007 *1008 Amy C. Bixler, Alan G. Warner, Topeka, KS, for plaintiff.
Mark D. Katz, Sherman, Taff & Bangert, P.C., Leawood, KS, Steven D. Steinhilber, Sherman, Taff & Bangert, P.C., Kansas City, MO, for defendant.
MEMORANDUM AND ORDER
CROW, District Judge.
The case comes before the court on the defendant's motion for summary judgment (Dk. 43), the defendant's motion to strike (Dk. 49) the affidavits of the plaintiff and her husband, the defendant's motion for summary judgment on the defamation claim (Dk. 69), and the defendant's motion to strike or disallow the plaintiff's proposed additions to the pretrial order (Dk. 71). This is an employment discrimination case in which the plaintiff alleges seven claims: three of which are alleged as violations of the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 12101, et seq. and the other four are alleged as state common-law actions. The defendant seeks summary judgment on all seven claims, and the plaintiff opposes the same.
SUMMARY JUDGMENT STANDARDS
A court grants a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure if a genuine issue of material fact does not exist and if the movant is entitled to judgment as a matter of law. The court is to determine "whether there is the need for a trial whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will ... preclude summary judgment." Id. There are no genuine issues for trial if the record taken as a whole would not persuade a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). "[T]here are cases where the evidence is so weak that the case does not raise a genuine issue of fact." Burnette v. Dow Chemical Co., 849 F.2d 1269, 1273 (10th Cir.1988).
The initial burden is with the movant to "point to those portions of the record that demonstrate an absence of a genuine issue of *1009 material fact given the relevant substantive law." Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir.), cert. denied, 506 U.S. 1013, 113 S.Ct. 635, 121 L.Ed.2d 566 (1992). If this burden is met, the nonmovant must "come forward with specific facts showing that there is a genuine issue for trial as to elements essential to" the nonmovant's claim or position. Martin v. Nannie and the Newborns, Inc., 3 F.3d 1410, 1414 (10th Cir.1993) (citations omitted). The nonmovant's burden is more than a simple showing of "some metaphysical doubt as to the material facts," Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356; it requires "`present[ing] sufficient evidence in specific, factual form for a jury to return a verdict in that party's favor.'" Thomas v. International Business Machines, 48 F.3d 478, 484 (10th Cir.1995) (quoting Bacchus Industries, Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991)). The court views the evidence of record and draws all reasonable inferences in the light most favorable to the nonmovant. Id. A party relying on only conclusory allegations cannot defeat a properly supported motion for summary judgment. White v. York Intern. Corp., 45 F.3d 357, 363 (10th Cir.1995).
More than a "disfavored procedural shortcut," summary judgment is an important procedure "designed `to secure the just, speedy and inexpensive determination of every action.' Fed.R.Civ.P. 1." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). At the same time, a summary judgment motion does not empower a court to act as the jury and determine witness credibility, weigh the evidence, or choose between competing inferences. Windon Third Oil and Gas Drilling Partnership v. Federal Deposit Ins. Corp., 805 F.2d 342, 346 (10th Cir.1986), cert. denied, 480 U.S. 947, 107 S.Ct. 1605, 94 L.Ed.2d 791 (1987).
For purposes of this motion, the court considers the following facts to be uncontroverted.
The defendant Wal-Mart Stores, Inc. hired the plaintiff, Peggy Deghand, in October of 1991 to work as a cashier supervisor at Sam's Club in Topeka, Kansas ("Sam's Club"). At the time of hiring, Peggy received and signed for an employee handbook and other written information concerning her employment.
Later in 1991, Sam's Club also hired the plaintiff's husband, Anthony Deghand. He worked as a team leader[1] in the grocery department. In October of 1992, Anthony suffered a hernia that required surgical care and six weeks of medical leave from work. Anthony filed a workers' compensation claim for the hernia.
When he returned to work in December of 1992, Anthony Deghand avers that he asked for a transfer to the membership department, because this would be less physically demanding than his current position in the grocery department and because it was considered a management track position. Anthony did not receive his requested transfer; instead, he was transferred to team leader of the receiving department. According to Anthony, this new position was more physically demanding than the membership department work. John Festa, assistant manager, supervised Anthony in the receiving department after June 4, 1993.
In late June of 1993, Anthony Deghand spoke privately with John Festa and became quite emotional. Anthony worked July 2, 1993, and then took two weeks of leave. He returned on July 19, 1993, worked six hours and then was sent home. He has never returned to work at Sam's Club. Anthony says he suffered a mental breakdown in the summer of 1993 that caused him to take medical leave from Sam's Club. In July of 1993, Anthony was diagnosed as suffering from depression. The parties have stipulated that the defendant knew that from and after July 18, 1993, Anthony was a disabled person within the meaning of the ADA.
In July of 1993, Anthony Deghand filed a worker's compensation claim asserting that the depression was a compensable injury. Wal-Mart opposed Anthony's worker's compensation claim. The administrative law *1010 judge in the worker's compensation proceedings denied Anthony's application for preliminary benefits in an order dated June 9, 1994.
On September 28, 1993, Lori Falkenstein, an employee at Sam's Club assigned to the jewelry counter, telephoned an assistant manager of the Sam's Club store, Dawn Miller, at home and described some incidents involving Peggy Deghand. The next day, September 29, 1993, Lori Falkenstein was asked by Dawn Miller and the general manager of the Sam's Club store, Don Bradley, to put in writing what she had told Miller the previous evening. Falkenstein wrote the letter while sitting in the management office. Falkenstein's letter complained in part that Peggy Deghand had revealed to Falkenstein confidential payroll information and other confidential information. By affidavit, the plaintiff denies the allegation that she revealed to Falkenstein the salary increases of any Sam's Club employee.
Don Bradley testified that before receiving Falkenstein's letter he had heard that his unit managers suspected the plaintiff of some activities. Bradley said that Falkenstein's letter "basically put it [the suspicion] into perspective." (Bradley Dep. at 66). Dawn Miller also testified that others had come to her with complaints about the plaintiff. Miller also testified that she believed what was found in Falkenstein's letter because it was consistent with what others had said and with what she had observed.
On October 6, 1993, Don Bradley evaluated Peggy's work and gave her at least a satisfactory rating in all categories evaluated for the period. He further recommended that she receive a pay increase.
On October 7, 1993, Harley Lowe, acting at the direction of Don Bradley, removed the plaintiff from her supervisory position over the cashiers. Bradley testified he took this employment action because Peggy Deghand had divulged confidential information. The plaintiff avers that on October 7, 1993, Lowe first told her that "it's a dirty job but somebody's got to do it," and then he explained that he had been given orders to remove her from the cashier supervisory position. She further avers that Lowe said the removal was due to circumstances and that Lowe then talked about the plaintiff's husband and her stressful home life. She also avers that Lowe gave her no other explanations for the removal.
According to Bradley, when Lowe removed the plaintiff, he also offered her a position in marketing at the same rate of pay and with similar hours but without access to confidential information. The plaintiff stated that Lowe referred to two possible part-time positions but never mentioned that her pay and hours would remain the same. The plaintiff also avers that based on her experience and knowledge the positions offered were seasonal, required persons to work hours different from her previous schedule, and were compensated at a lower rate than what she had been receiving.
Beginning October 7, 1993, Peggy Deghand took a vacation that was scheduled to end on October 18, 1993. During her vacation, a physician diagnosed the plaintiff as suffering from hypertension or high blood pressure. The defendant did not know that the plaintiff had high blood pressure when it removed her from the supervisory position. Her physician placed the plaintiff on medical leave because of the hypertension. The plaintiff took the medical leave slips to the Sam's Club and told Don Bradley that she was being treated for hypertension.
According to the plaintiff's affidavit, on November 10, 1993, Peggy Deghand told Lowe that her physician would be releasing her from medical leave on November 15, 1993, and that she would be ready to resume work then. Lowe did not give her a work schedule at that time. The plaintiff called Dawn Miller on November 15, 1993, and asked for her work schedule. Dawn Miller said she didn't know that Peggy was coming back and that she would talk with Don Bradley and then contact her. After waiting for four days without call from anyone at Sam's Club, the plaintiff filed for unemployment compensation on November 19, 1993, and subsequently received it over the defendant's opposition. The plaintiff wrote Don Bradley a letter dated December 6, 1993, in which she declined an apparent offer of employment and explained that she considered herself *1011 "constructively discharged" by reason of her demotion and the differences between her former supervisory position and the offered position.
In January of 1994, Peggy Deghand's claim for unemployment compensation proceeded to hearing before the Kansas Department of Human Resources Office of Appeals. Don Bradley and the plaintiff were present at the hearing. Bradley told the hearing officer that an employee, in writing, had complained that Peggy Deghand had divulged confidential information, taken extended breaks, and had been unable or unwilling to perform certain job duties. At the hearing, the plaintiff denied these allegations.
Summary judgments are "used sparingly in employment discrimination cases." Hardin v. Hussmann Corp., 45 F.3d 262, 264 (8th Cir.1995). This is because discrimination claims often turn on the employer's intent, McCoy v. WGN Continental Broadcasting Co., 957 F.2d 368, 370-71 (7th Cir.1992), and courts ordinarily consider summary judgment inappropriate to settle an issue like intent, Cone v. Longmont United Hosp. Ass'n, 14 F.3d 526, 530 (10th Cir.1994). Even so, summary judgment is not "per se improper," Washington v. Lake County, Ill., 969 F.2d 250, 253 (7th Cir.1992), and may be useful in weeding out claims and cases obviously lacking merit, Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d 700, 709 (10th Cir.1988), overruled on other grounds, McKennon v. Nashville Banner Pub. Co., ___ U.S. ___, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995). Thus, if the plaintiff's evidence fails to create any reasonable doubts about the employer's expressed lawful motive for taking the adverse employment action, summary judgment is proper. Cone, 14 F.3d at 530.
ADA CLAIM: DISCHARGE BECAUSE OF THE PLAINTIFF'S DISABILITY
The plaintiff's first ADA claim is that the defendant constructively discharged her in late November of 1993 due to her disability of hypertension. The defendant seeks summary judgment arguing first, that the plaintiff did not suffer a "disability" as that term is defined under the ADA, and second, that the defendant did not know of the plaintiff's hypertension during the relevant time period.
The ADA prohibits discrimination "against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment." 42 U.S.C. § 12112(a). To state a prima facie case of disability discrimination on an employment termination claim, the plaintiff must demonstrate: "(1) that [s]he is a disabled person within the meaning of the ADA; (2) that [s]he is qualified, that is, with or without reasonable accommodation (which [s]he must describe), [s]he is able to perform the essential functions of the job; and (3) that the employer terminated [her] ... because of [her] ... disability." White v. York Intern. Corp., 45 F.3d at 360-61 (citations omitted).
"The term `disability' means, with respect to an individual (A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment." 42 U.S.C. § 12102(2). To decide whether someone is disabled as defined above, one must know the meaning of three other important terms, "physical or mental impairment," "substantially limits," and "major life activities." Because the ADA does not define any of these terms, we are guided by the definitions adopted by the Equal Employment Opportunity Commission ("EEOC") in regulations issued pursuant to 42 U.S.C. § 12116. See Bolton v. Scrivner Inc., 36 F.3d 939, 942 (10th Cir.1994), cert. denied, ___ U.S. ___, 115 S.Ct. 1104, 130 L.Ed.2d 1071 (1995).
The ADA regulations adopt the definition of "physical or mental impairment" found in the Rehabilitation Act regulations, 34 C.F.R. Pt. 104. See 29 C.F.R. Pt. 1630, Appendix to Part 1630 Interpretative Guidance on Title I of the Americans with Disabilities Act, § 1630.2(h) Physical or Mental Impairment; Hamm v. Runyon, 51 F.3d 721, 725 (7th Cir.1995) ("[T]he ADA borrows extensively from the Rehabilitation Act and *1012 uses many of the same terms."). The term means "any physiological disorder or condition, ... affecting one or more of the following body systems: neurological, musculoskeletal, special sense organs, respiratory ..., cardiovascular, reproductive, digestive, genito-urinary, hemic and lymphatic, skin, and endocrine; or ... [a]ny mental or psychological disorder, ... and specific learning disabilities." 29 C.F.R. § 1630.2(h) (1995).
"Many impairments do not impact an individual's life to the degree that they constitute disabling impairments." 29 C.F.R. Pt. 1630, App., § 1630.2(j); Hamm, 51 F.3d at 726. An impairment or a combination of impairments are considered disabling if they substantially limit one or more of a person's major life activities. Id. The ADA regulations define "substantially limits" as follows:
(i) Unable to perform a major life activity that the average person in the general population can perform; or
(ii) Significantly restricted as to the condition, manner or duration under which an individual can perform a particular major life activity as compared to the condition, manner, or duration under which the average person in the general population can perform that same major life activity.
29 C.F.R. § 1630.2(j)(1). In short, the disability determination does not depend as much on the name or diagnosis of the impairment as it does on the effect the impairment has on a particular individual. 29 C.F.R. Pt. 1630 App. § 1630.2(j); see Chandler v. City of Dallas, 2 F.3d 1385, 1396 (5th Cir.1993) ("[T]he effect of a given type of impairment, both on major life activities in general and on a person's ability to perform specific tasks, can vary widely from individual to individual."), cert. denied, ___ U.S. ___, 114 S.Ct. 1386, 128 L.Ed.2d 61 (1994).
The EEOC has adopted the definition of "major life activities" found in the Rehabilitation Act. Bolton, 36 F.3d at 942. This term "means functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working." 29 C.F.R. § 1630.2(i). "Working" in this definition "does not necessarily mean working at the job of one's choice." Welsh v. City of Tulsa, Okl., 977 F.2d 1415, 1417 (10th Cir.1992).
The plaintiff here argues the medical leave slips from her doctor are enough to show that her hypertension substantially limited her ability to work. With respect to the major life activity of working, the ADA regulations provide that:
The term substantially limits means significantly restricted in the ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills and abilities. The inability to perform a single, particular job does not constitute a substantial limitation in the major life activity of working.
29 C.F.R. § 1630.2(j)(3)(i); see also Bolton, 36 F.3d at 942. To defeat the summary judgment motion, the plaintiff must present evidence from which it could be reasonably found that her impairment restricts her ability to perform either a class of jobs or a broad range of jobs in various classes.
The ADA regulations specify three factors relevant in considering whether the impairment is one that substantially limits a major life activity: "(i) [t]he nature and severity of the impairment; (ii) [t]he duration or expected duration of the impairment; and (iii) [t]he permanent or long term impact, or the expected permanent or long term impact of or resulting from the impairment." 29 C.F.R. § 1630.2(j)(2); see Bolton, 36 F.3d at 943; cf. Joyce v. Suffolk County, 911 F.Supp. 92, 96 (E.D.N.Y.1996) (The need for eyeglasses and blood pressure medication are "minor" and "widely shared."). There are three additional factors to consider when the issue is whether the impairment substantially limits the individual's life activity of work:
(A) The geographical area to which the individual has reasonable access;
(B) The job from which the individual has been disqualified because of an impairment, and the number and types of jobs utilizing similar training, knowledge, skills or abilities, within that geographical area, from which the individual is also disqualified because of the impairment (class of jobs); and/or
*1013 (C) The job from which the individual has been disqualified because of an impairment, and the number and types of other jobs not utilizing similar training, knowledge, skills or abilities, within that geographical area, from which the individual is also disqualified because of the impairment (broad range of jobs in various classes).
29 C.F.R. 1630.2(j)(3)(ii); see also Bolton, 36 F.3d at 943; Welsh v. City of Tulsa, Okl., 977 F.2d at 1419 noting the relevant factors to include "(1) the number and type of jobs from which the impaired individual is disqualified, (2) the geographical area to which the individual has reasonable access, and (3) the individual's job expectations and training." (quoting Jasany v. United States Postal Service, 755 F.2d 1244, 1249 (6th Cir. 1985)).
The plaintiff has not come forth with any evidence, much less competent and unambiguous medical evidence, that her high blood pressure substantially limited any one or more of her major life activities. Not surprising, other courts too have found that similar disability claims lacked evidence and, therefore, have held that high blood pressure, by itself, typically is not a disability within the meaning of the Act. Oswalt v. Sara Lee Corp., 889 F.Supp. 253, 257 (N.D.Miss.1995) (citations omitted), aff'd, 74 F.3d 91 (5th Cir.1996). The Fifth Circuit said:
According to Oswalt, his physical impairment was his high blood pressure, and this impairment substantially limited a major life activity when his doctor authorized him to miss work while he adjusted to medication.
....
In this case, Oswalt has provided no evidence to show that either the high blood pressure or the alleged side effects from the medication substantially limited his job. We agree with the district court that "[h]igh blood pressure alone, without any evidence that it substantially affects one or more major life activities, is insufficient to bring an employee within the protections of the ADA." Oswalt, 889 F.Supp. at 258. We do not imply that high blood pressure in general can never be a "disability," as defined by the statute. We hold only that Oswalt failed to provide any evidence that his high blood pressure substantially limited a major life activity.
74 F.3d at 92. Like Oswalt, the plaintiff here wants the finding of disability based on nothing more than a physician's general diagnosis without any evidence that the plaintiff's condition substantially limited her work activity. In addition, the medical leave slips that Deghand submitted say simply that she is excused from work "to run tests" or "due to testing." (Dk. 44, Dep. Ex. 16 and 17). The slips, therefore, are not proof that the hypertension itself was the reason for Deghand's medical leave of absence rather than the temporary condition of testing or adjusting to medication. See Oswalt v. Sara Lee Corp., 889 F.Supp. at 257. The defendant is entitled to summary judgment on this claim.
ADA CLAIM: DISCHARGE AND MISTREATMENT BECAUSE OF THE PLAINTIFF'S ASSOCIATION WITH A DISABLED PERSON
The plaintiff alleges that the defendant mistreated and constructively discharged her because of her association with her husband who is a disabled person. The defendant argues that the plaintiff's allegations do not fall within the express terms or intended purpose of 42 U.S.C. § 12112(b)(4), which provides that the discrimination prohibited under the ADA includes:
excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability with whom the qualified individual is known to have a relationship or association; ....
The defendant argues this provision was to protect people who care for disabled persons and who might suffer employment discrimination because of the likelihood of rising health care insurance or increased absenteeism. The defendant also contends that the plaintiff's evidence does not show any causal nexus between the alleged adverse employment actions and her relationship to a disabled person. The plaintiff's burden in proving causation, in the defendant's opinion, is particularly heavy, because she alleges the *1014 defendant treated her worse than her husband who is the disabled employee.
In the final proposed pretrial order, the plaintiff alleges on this claim that upon her husband becoming disabled:
her supervisors' treatment of her began to change drastically. This change of treatment commencing July 1993, includes exclusion from supervisory meetings and decisions, requiring the plaintiff to follow company policies that other employees were not required to follow, asking plaintiff to demote herself, informing plaintiff that other employees were uncomfortable working with her since her husband was disabled, blaming plaintiff for her husband's disability and verbally harassing the plaintiff about her appearance. Plaintiff's supervisors continually questioned her about her ability to perform her job and to also take care of her husband and informed plaintiff that taking care of a disabled person was affecting her ability to work. The defendant demoted plaintiff on October 7, 1993.
In response to the defendant's motion, the plaintiff contends that she comes within § 12112(b)(4) and that there is no legal prerequisite that the employer treat the disabled employee worse than the related employee. The plaintiff avers that following her husband's mental breakdown she was mistreated in several different respects and eventually constructively discharged.
Absent direct evidence, the McDonnell-Douglas burdenshifting scheme of proof applies to appropriate claims under the ADA. Ennis v. National Ass'n of Business & Educational Radio, Inc., 53 F.3d 55, 58 (4th Cir.1995); see White v. York Intern. Corp., 45 F.3d at 361. In an ADA discharge case, the plaintiff's prima facie case consists of the following elements:
(1) she was in the protected class; (2) she was discharged; (3) at the time of the discharge, she was performing her job at a level that met her employer's legitimate expectations; and (4) her discharge occurred under circumstances that raise a reasonable inference of unlawful discrimination.
Ennis, 53 F.3d at 58. As for an ADA denial of benefits claim, the elements would not change significantly other than to substitute "denied benefits" for "discharge."
The defendant cites no authority for reading § 12112(b)(4) more narrowly than its literal terms. Her marriage to a person that has suffered a mental breakdown brings the plaintiff within the protected class. The defendant's remaining argument focuses on whether the circumstances of the adverse employment actions raise a reasonable inference of unlawful discrimination. The fact that the defendant did not mistreat the plaintiff's husband as an employee after he became disabled may be relevant in considering whether the defendant discriminated against the plaintiff by reason of her association. The defendant cites no authority that suggests this fact alone, whatever its weight in irony, would preclude the plaintiff's claim. "[T]he ADA association provision is targeted at prohibiting unfounded stereotypes and assumptions against employees who associate with disabled people." Den Hartog v. Wasatch Academy, 909 F.Supp. 1393, 1400 (D.Utah 1995); see Tyndall v. National Educ. Centers, 31 F.3d 209, 214 (4th Cir. 1994). The plaintiff avers that all or most of the relevant adverse employment actions occurred soon after her husband's mental breakdown. The plaintiff further avers that supervisors told her that her husband's condition caused too much stress for her and that the employees supervised by the plaintiff were uncomfortable with her partly because of her husband's disability. Based on the record as it now stands, the court finds that these averments sustain a reasonable inference of unlawful discrimination. The defendant's motion for summary judgment on this ADA claim is denied.
ADA CLAIM: RETALIATION FOR OPPOSITION TO UNLAWFUL TREATMENT OF DISABLED PERSON
In the proposed pretrial order submitted by the magistrate judge,[2] the plaintiff limits her claim to these specific allegations:
*1015 Plaintiff alleges that she was subject to retaliation due to her opposition to the defendant's treatment of her husband. Plaintiff alleges that the retaliation is in violation of the Americans with Disabilities Act. She claims that the retaliation commenced in early July, after her husband had suffered a mental breakdown. The defendant did not call or send flowers, it opposed his worker's compensation claim, and blamed the plaintiff for her husband's condition. Plaintiff informed her supervisors that she was opposed to their treatment of her husband. As a result of this opposition, the plaintiff's supervisors became increasingly hostile toward her and drastically changed in their treatment of her. Plaintiff was eventually discharged as a result of this opposition.
In her response to the summary judgment motion and her accompanying affidavit, the plaintiff now asserts for the first time other incidents of mistreatment and opposition. The plaintiff claims that her husband suffered retaliation and mistreatment when he was transferred to the receiving department after his hernia. The plaintiff says she opposed this treatment by telling Don Bradley the transfer was the cause of her husband's mental breakdown. The plaintiff also claims her husband was mistreated when she was told that if her husband returned it would be to a non-supervisory position. The plaintiff's response does not show how she opposed this last alleged mistreatment of her husband.
The defendant objects to the new facts and issues first alleged in the plaintiff's response to the summary judgment motion. The court sustains the defendant's objection, as these allegations have not been properly pleaded and appear to be offered now only in an effort to avoid summary judgment. See Hanson v. Beloit Newspapers, Inc., No. 944023-SAC, 1995 WL 646808 at *11 n. 1 (D.Kan. Sept. 15, 1995) (A party may not amend its claims merely by arguing new facts and theories in opposition to the summary judgment motion); Hullman v. Board of Trustees of Pratt Community College, 732 F.Supp. 91, 93 (D.Kan.1990) (A party cannot avoid the binding effect of the pretrial order by arguing new issues in its response to summary judgment), aff'd, 950 F.2d 665 (10th Cir.1991).
The ADA prohibits a person from discriminating against "any individual because such individual has opposed any act or practice made unlawful by this chapter or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this chapter." 42 U.S.C. § 12203(a). To succeed on a claim of discriminatory retaliation, the plaintiff must prove first a prima facie case: (1) that she engaged in conduct protected by the ADA; (2) that she suffered adverse employment action subsequent to the protected conduct; and (3) that there exists a causal link between the protected activity and the adverse employment action. Kindle v. Mid-Central/Sysco Food Services, Inc., No. 95-2123, 1996 WL 99766, at *9 (D.Kan. Feb. 2, 1996); Howard v. Navistar Intern. Transport. Corp., 904 F.Supp. 922, 931 (E.D.Wis.1995); Henry v. Guest Services, Inc., 902 F.Supp. 245, 251 (D.D.C. 1995). The employee's opposition may be protected activity, even if the employer's challenged conduct ultimately proves to be lawful. Roth v. Lutheran General Hosp., 57 F.3d 1446, 1459 (7th Cir.1995); see Plakio v. Congregational Home, Inc., 902 F.Supp. 1383, 1392 (D.Kan.1995). To be protected, the employee must oppose what she sincerely and reasonably believes is unlawful discrimination. Id. "`[I]t is good faith and reasonableness, not the fact of discrimination, that is the critical inquiry in a retaliation case.'" Roth, 57 F.3d at 1460 (quoting Rucker v. Higher Educ. Aids Bd., 669 F.2d 1179, 1182 (7th Cir.1982)). "An informal complaint to management qualifies as protected activity." Plakio, 902 F.Supp. at 1392-93 (citations *1016 omitted); See Sumner v. United States Postal Service, 899 F.2d 203, 209 (2nd Cir.1990).
Based on what is alleged in the proposed final pretrial order, the plaintiff is unable to show she was engaged in protected conduct. The plaintiff could not reasonably believe she was opposing disability discrimination when she complained about the defendant opposing her husband's workers' compensation claim, not calling or sending him flowers, and blaming her for her husband's condition. The plaintiff offers no factual or legal basis for how she could reasonably believe that an employer violates the ADA when in the exercise of its statutory rights the employer appears in a state workers' compensation proceeding and opposes the disabled employee's application for benefits. Flowers and personal phone calls are simple courtesies which no one would reasonably believe are a matter of federal right. Nor would anyone think that the ADA was violated by an employer's mere speculation over the cause of an employee's disability. Unable to show she was engaged in protected activity, the plaintiff cannot prove a prima facie case of retaliation.
STATE LAW CLAIM: RETALIATION FOR HER HUSBAND FILING A WORKERS' COMPENSATION CLAIM
The plaintiff alleges the defendant retaliated against her because her husband exercised rights under the Kansas Workers' Compensation Act. After her husband filed his second workers' compensation claim for the mental breakdown, the plaintiff alleges her supervisors treated her differently and scrutinized her work. The defendant argues the plaintiff's proof falls far short of clear and convincing for several reasons. The plaintiff alleges retaliation only after her husband's second workers' compensation claim. The defendant did not remove the plaintiff from the cashier supervisor position until it received written confirmation that the plaintiff had disseminated confidential payroll information. The transfer only limited the plaintiff's access to payroll information, and it did not reduce the plaintiff's salary or hours. The court finds that the plaintiff has come forth with sufficient evidence from which a reasonable jury could find retaliation.
Kansas employment law is grounded on the doctrine of employment-at-will, that is, absent an express or implied contract "between an employee and his employer covering the duration of employment, the employment is terminable at the will of either party, and the employee states no cause of action for breach of contract by alleging that he has been discharged." Morriss v. Coleman Co., 241 Kan. 501, 510, 738 P.2d 841 (1987) (citing Johnson v. National Beef Packing Co., 220 Kan. 52, 551 P.2d 779 (1976)). This means an employer may discharge an employee-at-will "for good cause, for no cause, or even for wrong cause" without subjecting itself to legal liability. Id. at 508, 738 P.2d 841. The only exceptions to this rule are based on public policy. Dickens v. Snodgrass, Dunlap & Co., 255 Kan. 164, 176, 872 P.2d 252 (1994). Relevant here is the exception that an employer may not discharge an employee in retaliation for filing a workers' compensation claim, Murphy v. City of Topeka-Shawnee County Dept. of Labor Svcs., 6 Kan.App.2d 488, Syl. ¶ 7, 630 P.2d 186 (1981) or for being absent or not calling in an anticipated absence because of a work-related injury, Coleman v. Safeway Stores, Inc., 242 Kan. 804, Syl. ¶ 3, 752 P.2d 645 (1988), or for intending to file a worker's compensation claim, Chrisman v. Philips Industries, Inc., 242 Kan. 772, 775, 751 P.2d 140 (1988). Particularly relevant here is the Kansas Court of Appeals' decision in Marinhagen v. Boster, Inc., 17 Kan.App.2d 532, Syl. ¶ 5, 840 P.2d 534 (1992), rev. denied, 252 Kan. 1092 (1993), which extended this tort to cover spouses who are co-employees:
When a married couple both work for the same employer, and one exercises his or her rights under the Workers Compensation Act following an on-the-job injury, the employer may not retaliate against the non-injured spouse by terminating him or her from employment any more than the employer can retaliate against the injured spouse. To allow such would frustrate the purpose of our opinion in Murphy v. City of Topeka[-Shawnee County Dept. of Labor Svcs.], 6 Kan.App.2d 488, 630 P.2d 186 *1017 (1981), to protect employees by allowing them to freely exercise their rights under the Act.
See also Ortega v. IBP, Inc., 255 Kan. 513, 518, 874 P.2d 1188 (1994).
An employer rarely admits to a retaliatory intent; therefore, the employee must look to circumstantial evidence in proving the claim. Marinhagen v. Boster, Inc., 17 Kan.App.2d at 540, 840 P.2d 534. Because reasonable persons may differ on the inferences critical in determining a person's state of mind, summary judgment is more often the inappropriate way of resolving the issue of an employer's retaliatory intent. See Koopman v. Water Dist. No. 1 of Johnson County, 972 F.2d 1160, 1164 (10th Cir.1992). Nevertheless, when the employee fails to come forth with sufficient evidence to raise a genuine issue regarding the employer's intent or an essential element of her retaliatory discharge claim, the district court may properly grant an employer's motion for summary judgment. See Koopman, 972 F.2d at 1164.
The burden rests with the employee to prove that the employer terminated him or her in retaliation for filing a claim under the Workers' Compensation Act. See Ortega, 255 Kan. at 528, 874 P.2d 1188. The employee can recover only upon proving that the discharge was "based on," "because" of, "motivated by" or "due to" the employer's intent to retaliate. Brown v. United Methodist Homes for the Aged, 249 Kan. 124, 146-148, 815 P.2d 72 (1991). The employee need not prove that retaliation was the employer's sole motive or reason for the termination. Brown, 249 Kan. at 147, 815 P.2d 72. The employee must prove her claim "by a preponderance of evidence, but the evidence must be clear and convincing in nature."[3]Ortega, 255 Kan. at 528.
The federal district courts in Kansas have adapted the burden-shifting approach applied in discrimination cases for use in analyzing state-law retaliatory discharge claims. Ramirez v. IBP, Inc., 913 F.Supp. 1421, 1429 (D.Kan.1995); Huffman v. Ace Elec. Co., Inc., 883 F.Supp. 1469, 1475 (D.Kan.1995); Lawrence v. IBP, Inc., No. 94-2027-EEO, 1995 WL 261144, at *13 n. 2, 1995 U.S. Dist. LEXIS 6118, at *29 n. 2 (D.Kan. Apr. 21, 1995); see, e.g., Rosas v. IBP, Inc., 869 F.Supp. 912, 916 (D.Kan.1994); cf. Ortega, 255 Kan. at 526, 874 P.2d 1188 (After noting that the plaintiff must prove a causal nexus between the employee's protected activity and the employer's decision to terminate, the Kansas Supreme Court referred to the burden-shifting scheme from McDonnell-Douglas as the approach it utilize, in discrimination and free speech employment cases). To establish a typical prima facie case of retaliatory discharge here, the plaintiff must show (1) that her husband worked for the defendant employer and either exercised statutory rights under the Workers' Compensation Act or sustained a work-related injury for which he could assert a future claim for such benefits; (2) that the employer had knowledge of either her husband's exercise of statutory rights under the Workers' Compensation Act or the fact that her husband had sustained a work-related injury for which he could file a future claim for benefits; (3) that the employer terminated her employment; and (4) that a causal connection existed between the protected activity or injury, and the termination. See Huffman, 883 F.Supp. at 1475; Rosas, 869 F.Supp. at 916; Chaparro v. IBP, Inc., 873 F.Supp. 1465, 1472 (D.Kan.1995). Proof of a prima facie case raises "`a rebuttable presumption'" of a retaliatory intent. See Ingels v. Thiokol Corp., 42 F.3d 616, 621 (10th *1018 Cir.1994) (quoting Branson v. Price River Coal Co., 853 F.2d 768, 771 (10th Cir.1988)); Rosas, 869 F.Supp. at 916.
Once the plaintiff employee establishes a prima facie case, it becomes the employer's burden to produce a legitimate, nondiscriminatory reason for the discharge. Huffman, 883 F.Supp. at 1475. While its reason must be specific and clear, the employer need not litigate the merits of its reason, prove its reason was bona fide, or prove its reason was applied in a nondiscriminatory fashion. E.E.O.C. v. Flasher Co., Inc., 986 F.2d 1312, 1316 (10th Cir.1992) (citations omitted). Once the employer produces such a reason, the presumption of retaliatory intent raised by the prima facie case "`simply drops out of the picture.'" Ingels, 42 F.3d at 621 (quoting St. Mary's Honor Center v. Hicks, 509 U.S. 502, 511, 113 S.Ct. 2742, 2749, 125 L.Ed.2d 407 (1993)). The burden of persuasion now falls back to the employee to prove with clear and convincing evidence that the employer acted with a retaliatory intent. Rosas, 869 F.Supp. at 916.
To avoid summary judgment at this point in the analysis, the employee must assert specific facts establishing a triable issue as to whether the employer's reason for discharge is a mere cover-up or pretext for retaliatory discharge. Rea v. Martin Marietta Corp., 29 F.3d 1450, 1455 (10th Cir. 1994). "If no facts relating to the pretextuality of the defendant's action remain in dispute, summary judgment is appropriate." Hooks v. Diamond Crystal Specialty Foods, Inc., 997 F.2d 793, 798 (10th Cir.1993), overruled in part on other grounds, Buchanan v. Sherrill, 51 F.3d 227, 229 (10th Cir.1995). On the other hand, should the plaintiff come forth with a prima facie case and evidence that the defendant's reasons are pretextual, the case must go to the jury. Jones v. Unisys Corp., 54 F.3d 624, 630 (10th Cir. 1995).
Construing the facts in the light most favorable to the plaintiff, the defendant's treatment of the plaintiff changed for the worse shortly after her husband filed his second workers' compensation claim. The defendant began limiting her supervisory authority over subordinates, excluded her from team leader meetings, directed her to train her subordinates on her job duties, and kept her uninformed about company changes and policy and procedure matters. The assistant manager, Dawn Miller, admitted to the plaintiff that she was uncomfortable working with the plaintiff after her husband's mental breakdown and his workers' compensation claim. Miller also revealed to the plaintiff that Don Bradley had instructed management personnel not to speak with the plaintiff. These actions by the defendant's management and other conduct observed and averred by the plaintiff establish a prima facie case of retaliation with clear and convincing evidence.
The plaintiff also comes forth with clear and convincing evidence establishing a triable issue as to whether the defendant's reason for removing her and then constructively discharging her is a mere cover-up or pretext for retaliation. First, the defendant's business reason does not explain the general adverse treatment which the plaintiff alleges she received from management after her husband filed his second workers' compensation claim. Second, the defendant accepted the allegations made in Falkenstein's letter without investigating them and acted on the allegations without questioning or confronting the plaintiff with them. Third, the plaintiff avers that as a supervisor she had been instructed to document all activities by employees who had filed workers' compensation claims to check if they were really injured and to find cause for terminating them. Fourth, the plaintiff avers that she was followed and her work scrutinized after her husband's workers' compensation claim. Fifth, over a week before Falkenstein submitted her letter, Bradley encouraged the plaintiff to take a non-supervisory position due to the situation with her husband. The court denies the defendant's motion for summary judgment on this retaliation claim, as the defendant has not shown that there is an absence of evidence to support it.
STATE LAW CLAIM: INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
The plaintiff alleges the defendant intentionally inflicted emotional distress by asking her to request a demotion and when *1019 she refused by increasing its harassment and adverse treatment of her.[4] The plaintiff further alleges that the defendant conspired with an hourly employee to record false statements about the plaintiff in order to create cause for removing her from the supervisor position. The defendant seeks summary judgment arguing that the alleged conduct does not reach the level of extreme and outrageous.
Kansas recognizes the tort of intentional infliction of emotional distress or outrage. Moore v. State Bank of Burden, 240 Kan. 382, 388, 729 P.2d 1205 (1986), cert. denied, 482 U.S. 906, 107 S.Ct. 2484, 96 L.Ed.2d 376 (1987). Liability under this tort arises when a person engages in extreme and outrageous conduct and thereby intentionally or recklessly causes severe emotional distress to the plaintiff. Id. To prevail on this claim, the plaintiff must prove:
(1) The conduct of the defendant must be intentional; (2) the conduct must be extreme and outrageous; (3) there must be a causal connection between the defendant's conduct and the plaintiff's mental distress; and (4) the plaintiff's mental distress must be extreme and severe.
Id. (citing Hoard v. Shawnee Mission Medical Center, 233 Kan. 267, Syl. ¶ 3, 662 P.2d 1214 (1983)). Conduct is not extreme and outrageous unless regarded as exceeding the bounds of decency or as utterly intolerable in a civilized society. Wiehe v. Kukal, 225 Kan. 478, 482, 592 P.2d 860 (1979). Liability also depends on clearing two threshold determinations by the court that "the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery; and ... [that] the emotional distress suffered by plaintiff is in such extreme degree the law must intervene because the distress inflicted is so severe that no reasonable person should be expected to endure it." Roberts v. Saylor, 230 Kan. 289, 292-93, 637 P.2d 1175 (1981).
The alleged actions here taken by the defendant are more akin to the kind of "ordinary business decisions ... made every day ... across the nation" as opposed to what a civilized society would call atrocious, indecent and utterly intolerable. Anspach v. Tomkins Industries, Inc., 817 F.Supp. 1499, 1508 (D.Kan.1993), aff'd, 51 F.3d 285 (10th Cir. 1995) (Table). Asking an employee to volunteer for a demotion is an example of the kind of business actions ordinarily expected from employers. As for the alleged harassment, the plaintiff's own conclusory opinion that the defendant's conduct is extreme and outrageous is not enough to create a genuine issue of fact. The plaintiff must come forth with specific facts showing that the conduct occurred with such frequency and was of such a nature as to reach the threshold of extreme and outrageous.
"`[L]iability does not arise from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities.'" West v. Boeing Co., 843 F.Supp. 670, 677 (D.Kan.1994) (quoting Roberts, 230 Kan. at 293, 637 P.2d 1175), vacated in part on other grounds, 851 F.Supp. 395 (D.Kan.1994). Both as a member of the public and as an employee, the plaintiff is necessarily expected *1020 to be inured to some "`amount of criticism, rough language and to occasional acts and words that are definitely inconsiderate and unkind.'" Id. The employer's actions do not become actionable in tort simply because they are driven by a retaliatory motive. See Anspach v. Tomkins Industries, Inc., 817 F.Supp. at 1507; Fletcher v. Wesley Medical Center, 585 F.Supp. 1260, 1262 (D.Kan.1984). "There must be something more, something about the manner in which the retaliation occurred, that makes the conduct actionable...." Anspach, 817 F.Supp. at 1508. Adding the defendant's solicitation of Falkenstein's letter to the balance of the defendant's other actions still does not create an actionable tort of outrage. The defendant is entitled to summary judgment on this claim.
STATE LAW CLAIM: BREACH OF ORAL EMPLOYMENT CONTRACT
The plaintiff alleges that after her husband's mental breakdown she had to obtain day care services for their child. According to the plaintiff, the defendant orally offered and she accepted a work schedule compatible with the day care services she had arranged. The plaintiff alleges she detrimentally relied on the defendant's offer by securing day care services. In the proposed final pretrial order, the plaintiff further alleges:
Defendant constructively discharged her from her supervisory position by demoting her and offering her an inferior seasonal position. The inferior position offered by the defendant would have required the plaintiff to work different hours and possibly travel to different parts of the state. The removal of plaintiff from her position affected the plaintiff's ability to perform according to the terms of her contract with the day care provider. Plaintiff asserts that on October 7, 1993, defendant breached its contract of employment by offering plaintiff a position which required the plaintiff to work varied hours and to possibly travel outside the Topeka, Kansas, area.
The defendant contends that the plaintiff was a terminable at-will employee and that the terms of her employment were not governed by any express or implied contract. The defendant further points out that at the time of the plaintiff's hiring she was informed that her completion of the ninety-day, new-hire period did not "guarantee" her any specific length or type of employment. She also was informed at the same time that "associates' working hours must remain flexible." The plaintiff concedes she was an employee-at-will but argues the defendant orally "guaranteed" her regular work hours to accommodate her day care arrangements.
The plaintiff's evidence does not establish a binding oral agreement with sufficiently definite terms from which one could determine what duties and rights were involved and whether performance was complete. See Lessley v. Hardage, 240 Kan. 72, 79, 727 P.2d 440 (1986). The plaintiff testified that Bradley and Miller told her they "would be very flexible with" her. (Plaintiff's Dep. at 341). In her affidavit, the plaintiff avers:
Consequently, I could only work hours during which our son's day care was open for business. As Don Bradley and Dawn Miller stated that they would accommodate me in any way necessary for me to care for my husband and son, I established working hours conducive to day care with their knowledge and permission. Thus upon my demotion I was allegedly offered a job which I knew and which management (sic) to have hours I could not work due to my husband's disability and son's day care requirements.
(Dk. 47, Ex. A at 5). A reasonable jury could not find from this evidence that the parties had agreed the plaintiff would work indefinitely a specific schedule or a specific assignment and that the defendant breached any such contract simply by offering the plaintiff a position in marketing.[5] The defendant is entitled to summary judgment on this claim.
*1021 STATE LAW CLAIM: DEFAMATION
In March of 1995, the plaintiff filed her second motion to amend complaint (DK. 32) seeking to add, inter alia, a defamation claim. The plaintiff's proposed defamation claim alleged that Falkenstein's letter dated September 29, 1993, contained false and defamatory statements concerning her and was provided "to the management of `Sam's Club' of Topeka, a third party who understood the communication." (Dk. 32). The district court granted the plaintiff leave to add her defamation claim and gave the parties time "to submit their respective contention and theories sections adding the defamation claim and any defenses." (Dk. 67). The plaintiff has submitted proposed contentions that include two additional publications of the alleged defamatory letter. The court disregards those new allegations as they were not the subject of a motion to amend and they exceed the scope of the district court's order (Dk. 67). The plaintiff's counsel do not have cause for summarily adding these allegations without first filing a motion to amend or seeking leave from the court.
The defendant seeks summary judgment on this claim on the strength of two contentions. First, the plaintiff is not able to prove that the letter damaged her reputation, because the letter simply confirmed the suspicions of Bradley and Miller. The deposition testimony of Bradley and Miller on this point, however, does not show the absence of a genuine issue of material fact. Their testimony on what they had heard from other sources or had observed does not coincide closely with all the alleged false statements in the letter. More importantly, if Bradley already held a low opinion of Deghand's abilities and reliability, then why did he wait to take any action to remove the plaintiff from supervision until after he received the letter. These are matters for the jury to decide.
The defendant's second contention is that the plaintiff's defamation claim is barred by the one-year statute of limitations. It is uncontroverted that the alleged defamatory letter was published on September 29, 1993. The plaintiff filed her original complaint on September 20, 1994, and her motion to amend her complaint to add a defamation claim on March 28, 1995. The plaintiff relies on the "relation back" provisions of Rule 15(c) of the Federal Rules of Civil Procedure to avoid summary judgment on limitations grounds.
Rule 15(c)(2) provides that "[a]n amendment of a pleading relates back to the date of the original pleading when ... the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading." The premise underlying Rule 15(c) is "that once notified of pending litigation over particular conduct or a certain transaction or occurrence, the defendant has been given all the notice required for purposes of the statute of limitations." Marsh v. Coleman Co., Inc., 774 F.Supp. 608, 612 (D.Kan.1991) (citing Baldwin County Welcome Center v. Brown, 466 U.S. 147, 149 n. 3, 104 S.Ct. 1723, 1725 n. 3, 80 L.Ed.2d 196 (1984)). "The linchpin to Rule 15(c) is notice before the limitations period expires." Id. (citing Schiavone v. Fortune, 477 U.S. 21, 31, 106 S.Ct. 2379, 2385, 91 L.Ed.2d 18 (1986)). Put another way, the "`[d]efendant is not deprived of the protection of the statute of limitations if the original complaint fairly discloses the general fact situation out of which the new claims arise.'" Spillman v. Carter, 918 F.Supp. 336, 340 (D.Kan.1996) (quoting Masters v. Daniel Intern. Corp., 1991 WL 107410, at *10 (D.Kan. May 3, 1991)).
As a general rule, amendments will relate back if they amplify the facts previously alleged, correct a technical defect in the prior complaint, assert a new legal theory of relief, or add another claim arising out of the same facts. See F.D.I.C. v. Conner, 20 F.3d 1376, 1385-86 (5th Cir.1994); Marsh, 774 F.Supp. at 612. On the other hand, amendments generally will not relate back if they interject entirely different facts, conduct, transactions or occurrences. Id.
*1022 The court finds that the plaintiff's defamation claim based on the publication of Falkenstein's letter to Bradley and Miller arises out of the same conduct, transaction, and occurrence alleged in the plaintiff's original complaint. The original complaint put the defendant on notice that its reasons and bases for removing or demoting the plaintiff from a supervisory position would be an issue. Specifically, the defendant knew that the plaintiff would be challenging the validity and truthfulness of any business reasons the defendant would have for demoting her. Since the defendant apparently knew as of the original complaint that it demoted the plaintiff based on what was stated in the Falkenstein letter, a reasonably prudent person in the defendant's position would have expected that the truthfulness of the letter, the manner in which the defendant learned of or acquired the letter and the defendant's reliance on the letter, all would be matters at issue in the discrimination and retaliation claims. The court concludes that the plaintiff's defamation claim relates back to the filing of her original complaint. Thus, her claim is not barred by the one-year statute of limitations.
IT IS THEREFORE ORDERED that the defendant's motion for summary judgment (Dk. 43) is granted as to the plaintiff's ADA claim for discrimination on the basis of her disability, ADA claim for retaliation, state law claim for intentional infliction of emotional distress, and state law claim for breach of oral contract of employment; and is denied as to the plaintiff's ADA claim for mistreatment and constructive discharge due to association with a disabled person and the state law claim of retaliation on the basis of her husband's workers' compensation claim;
IT IS FURTHER ORDERED that the defendant's motion to strike (Dk. 49) the affidavits of the plaintiff and her husband are granted in part and denied in part;
IT IS FURTHER ORDERED that the defendant's motion for summary judgment on the defamation claim (Dk. 69) is denied;
IT IS FURTHER ORDERED that the defendant's motion to strike or disallow the plaintiff's proposed additions to the pretrial order (Dk. 71) is granted, and the court disallows those proposed additions that exceed the scope of this court's prior order.
NOTES
[1] At all times relevant here, the chain of authority at Sam's Club started at the top with the store's general manager, followed by the assistant managers, and continued with hourly associates that encompassed team leaders and supervisors, and ended with the hourly employees.
[2] The district court has yet to sign and file the final pretrial order, as the plaintiff was granted additional time to supplement her claim for intentional infliction of emotional distress and to add a claim for defamation. The plaintiff's proposed contentions concerning these two claims are the subject of the defendant's motion to strike (Dk. 71). As for all other claims, defenses and issues, the proposed final pretrial order functions for all intents and purposes as a pretrial order. Thus, the court considers it as superseding the pleadings and as controlling the future course of this action absent a pending motion to modify.
[3] "Clear and convincing" refers to the quality of proof, not the quantum. Newell v. Krause, 239 Kan. 550, 557, 722 P.2d 530 (1986). For the evidence to be clear and convincing, the witnesses to a fact must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the details in connection with the transaction must be narrated exactly and in order; the testimony must be clear, direct and weighty; and the witnesses must be lacking in confusion as to the facts at issue. Modern Air Conditioning, Inc. v. Cinderella Homes, Inc., 226 Kan. 70, 78, 596 P.2d 816 (1979) (citations omitted). The evidence is clear "if it is certain, unambiguous, and plain to the understanding. It is convincing if it is reasonable and persuasive enough to cause the trier of facts to believe it." Ortega, 255 Kan. at 528, 874 P.2d 1188 (citing Chandler v. Central Oil Corp., 253 Kan. 50, 58, 853 P.2d 649 (1993)).
[4] In the proposed final pretrial order submitted by the magistrate judge, the plaintiff generally alleged the following adverse treatment:
"exclusion from supervisory meetings and decisions, requiring the plaintiff to follow company policies that other employees were not required to follow, asking plaintiff to demote herself, informing plaintiff that other employees were uncomfortable working with her since her husband was disabled, blaming plaintiff for her husband's disability and verbally harassing the plaintiff about her appearance. Plaintiff's supervisors continually questioned her about her ability to perform her job and to also take care of her husband and informed plaintiff that taking care of a disabled person was affecting her ability to work."
On October 13, 1995, the district court subsequently allowed the plaintiff to add "the defendant's solicitation of Falkenstein's letter as one of several instances of conduct alleged in count five, which if considered as a whole, may amount to extreme and outrageous conduct." (Dk. 67 at 10). On October 30, 1995, the plaintiff filed her proposed amended pretrial order. To her intentional infliction of emotional distress claim, she adds more than just this additional instance of conduct. The district court shall not consider those allegations that exceed the scope of its prior order and the proposed final pretrial order submitted by the magistrate judge.
[5] The plaintiff's contract claim is a thinly disguised effort to circumvent the employment-at-will doctrine. She does not seek to enforce her rights under the alleged oral contract but to recover economic losses and future economic losses caused by the loss of employment. Her rights under the alleged oral contract ended when she either quit or was terminated. Quite simply, there is no evidence that the defendant breached the alleged oral contract as the plaintiff never worked and was never asked to work under a schedule other than her regular one.
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758 So.2d 396 (1999)
In re Petition of Daniel B. SMITH for Reinstatement to the Practice of Law.
No. 1998-BR-01828-SCT.
Supreme Court of Mississippi.
June 17, 1999.
Daniel B. Smith, Hattiesburg, Appellant, pro se.
J. David Wynne, Madison, Attorney for Appellee.
EN BANC.
SMITH, Justice, for the Court:
INTRODUCTION
¶ 1. Daniel B. Smith, a suspended former member of the Mississippi Bar, has petitioned this Court for reinstatement of his license to practice law in Mississippi. We find that Smith has met the necessary requirements and that his license to practice law in Mississippi should be reinstated contingent upon his taking and passing the Multi-State Professional Responsibility Exam as provided in Rule 12.5 of the Mississippi Rules of Discipline.
STATEMENT OF FACTS
¶ 2. Smith was originally admitted as a member of the Mississippi Bar in May 1982 and was engaged in the private practice of law in Hattiesburg.
¶ 3. The Bar filed a formal complaint against Smith on January 11, 1994, for unprofessional conduct in the handling of an appeal on behalf of his client, Willie Wells. The Complaint Tribunal entered a default judgment because Smith failed to answer, plead or otherwise defend the formal complaint against him, and failed to *397 appear at the hearing on the Bar's Motion for Entry of Default Judgment. On April 24, 1994, Smith was suspended from the practice of law for a period of one year and ordered to pay the Bar the sum of $44.73.
¶ 4. On June 8, 1994, the Bar filed a formal complaint against Smith for unprofessional conduct in failing to communicate with his client, Frances Snyder. The Complaint Tribunal entered a default judgment against Smith for his failure to answer, plead or otherwise defend the formal complaint and his failure to appear at the hearing on the Bar's Motion for Entry of Default Judgment. On September 19, 1994, the Complaint Tribunal imposed on Smith a suspension of two years from the practice of law which was to run consecutive to any prior suspension that had been imposed upon him. Further, the Complaint Tribunal required that Smith pay restitution in the amount of $50 to Frances Snyder and pay the Bar the amount of $27.38 previously assessed plus all costs and expenses associated with the litigation. Smith's subsequent appeal to this Court was dismissed on the joint motion of Smith and the Bar. Smith v. Mississippi Bar, 665 So.2d 189 (Miss.1995).
¶ 5. On March 28, 1995, the Bar filed a formal complaint against Smith for failure to communicate with his client, Shirley Ruth Wilson. Smith filed an answer on April 20, 1995. On September 11, 1995, the Complaint Tribunal imposed a suspension of two and one-half years upon Smith which was not to run consecutively with any other discipline Smith may have imposed upon him. Also, the Complaint Tribunal ordered Smith to pay the sum of $32.88 previously assessed plus all costs associated with this complaint.
¶ 6. On December 11, 1998, Smith petitioned this Court for reinstatement and alleged that he 1) paid Ms. Snyder restitution required by the Complaint Tribunal, 2) underwent rehabilitation of his mind, his financial condition, and his spirit, 3) read the published decisions of this Court and reviewed other publications and continuing legal education material, and 4) has been gainfully employed since just after the beginning of his suspension.
¶ 7. On March 12, 1999, the Bar filed its response to Smith's petition for reinstatement, in which it took no position on whether Smith's petition should be granted.
¶ 8. The Bar admitted that Smith paid restitution to Snyder. The Bar admitted that, although not paying the Bar's costs and expenses within the time ordered by the Complaint Tribunal, Smith paid these costs and expenses by money order dated June 1, 1998, prior to filing his Petition for Reinstatement. Also the Bar admitted that, although Smith failed to file timely affidavits of notices of his suspension to his clients, counsel opposite and courts, he satisfied this prerequisite to his reinstatement. The Bar stated that Smith has been cooperative during this investigation and has continually expressed remorse over his actions leading to his suspensions. The Bar also stated its willingness to conduct any additional investigation which this Court might find appropriate.
LEGAL ANALYSIS
¶ 9. The standard of reviewing questions of attorney reinstatement is well-settled:
The Supreme Court of Mississippi (the Court) has exclusive and inherent jurisdiction of matters pertaining to attorney discipline, reinstatement, and appointment of receivers for suspended and disbarred attorneys. When reviewing disciplinary matters this Court reviews the evidence de novo, on a case-by-case basis sitting as triers of fact.
* * * *
The guidelines for reinstatement to the Mississippi State Bar are set forth in Miss.Code Ann. § 73-3-337 and in Rule 12 of the Rules of Discipline for the Mississippi Bar. Rule 12 reads in pertinent part as follows ...
All reinstatement petitions shall be addressed to the Court, shall state the cause or causes for suspension or disbarment, give the names and current *398 addresses of all persons, parties, firms, or legal entities who suffered pecuniary loss due to the improper conduct, the making of full amends and restitution, the reasons justifying reinstatement, and requisite moral character and legal learning to be reinstated to the privilege of practicing law.... The matters set out in this paragraph shall be jurisdictional.
In Re Pace, 699 So.2d 593, 595 (Miss.1997) (quoting In re Underwood, 649 So.2d 825, 827 (Miss.1995)).
WHETHER DANIEL SMITH HAS COMPLIED WITH ALL NECESSARY REQUIREMENTS FOR REINSTATEMENT TO PRACTICE LAW.
¶ 10. The Court's fundamental inquiry is whether Smith has rehabilitated himself in conduct and character since the suspension was imposed. In re Steele, 722 So.2d 662, 664 (Miss.1998); In re Mathes, 653 So.2d 928, 929 (Miss.1995); Haimes v. Mississippi State Bar, 551 So.2d 910, 912 (Miss.1989). Certain jurisdictional requirements must be met for reinstatement. The requirements are:
(1) Each petitioner must include a list of names and addresses of persons, parties, firms, or legal entities who suffered pecuniary loss due to the attorney's misconduct; (2) There must be a showing that the petitioner has made full amends and restitution or a statement to the effect that full amends and restitution is not appropriate or has been imposed; (3) The petitioner must show that he has the requisite moral character to be reinstated; and (4) The petitioner must show that he has the requisite legal learning to be reinstated to the privilege of practicing law. Mississippi Rules of Discipline 12.7; Burgin v. Mississippi State Bar, 453 So.2d 689, 691 (Miss. 1984).
¶ 11. Requirements (1) & (2) above have been clearly met as verified by the Bar and the submitted money order to Ms. Snyder on June 2, 1998. No restitution was ordered to Wells or Wilson. Smith paid the Bar's costs and expenses in all three disciplinary matters.
¶ 12. With regard to requisite moral character, the record indicates that due to Smith's travel required for his job, he is not as involved as he would like to be with community activities, but is extremely involved with his church activities. Smith is a Sunday School teacher, Chairman of his church's Mission Committee, and is Mission Trip Chairman for a mission trip scheduled for a group in his church to travel to Mexico. In his deposition, Smith stated that he attends church on Sunday mornings, Sunday evenings and Wednesday nights. Forty-nine attorneys in the Hattiesburg area agree because they have supported Smith's reinstatement petition.
¶ 13. After the suspension, Smith sought medical treatment from a local psychiatrist who prescribed Prozac and referred Smith to a local psychologist. Smith was never admitted in-house anywhere nor placed on any other medication. Smith is not seeing a physician at this time and feels that he is now back on his feet from a psychological standpoint. Further Smith believes that he is ready to be entrusted with the responsibilities of client matters.
¶ 14. Smith is currently employed with the Mississippi Department of Transportation as a title or right-of-way agent. Just after his suspension until February 1997, Smith was employed by a friend at a loan company and was the manager of the Hattiesburg branch until it closed its Hattiesburg office. Smith has no future plans, if reinstated, to return to private practice. However, Smith has been told that it would open up other employment opportunities within the Department of Transportation for him if he were reinstated. With regard to requisite legal learning, Smith indicated that he has read recent Supreme Court decisions and advance sheets. Smith is married with three children, and throughout the hard financial times of his law practice and his suspension from the practice of law, he has still been able to provide for his family.
¶ 15. Throughout his deposition, Smith expressed remorse for his misconduct. Further, the Bar was somewhat impressed *399 by the frankness with which Smith responded to his questions and acknowledged his failing in the representation of the clients in the above disciplinary matters. We conclude that Smith has the requisite moral character for reinstatement.
¶ 16. The Bar takes no position on Smith's petition for reinstatement and stands ready to perform any additional investigation, if requested, in whatever area this Court deems appropriate. We reiterate that forty-nine Hattiesburg area attorneys support Smith's reinstatement. Based upon this proof, we conclude that Smith's license to practice law in Mississippi should be reinstated contingent upon his taking and passing the Ethics portion of the Multi-State Professional Responsibility Exam as provided in Rule 12.5 of the Mississippi Rules of Discipline.
CONCLUSION
¶ 17. Smith has met the conditions for reinstatement set forth by the Complaint Tribunal. In addition, he has met the jurisdictional requirements for reinstatement, including: 1) a proper petition; 2) full amends and restitution; 3) requisite moral character; and 4) requisite legal learning. For this reason, his petition for reinstatement is granted.
¶ 18. PETITION FOR REINSTATEMENT TO THE PRACTICE OF LAW GRANTED CONTINGENT UPON TAKING AND PASSING OF THE ETHICS PORTION OF THE MULTI-STATE PROFESSIONAL RESPONSIBILITY EXAM AS PROVIDED IN RULE 12.5 OF THE MISSISSIPPI RULES OF DISCIPLINE.
PRATHER, C.J., PITTMAN, P.J., BANKS, McRAE, MILLS, WALLER AND COBB, JJ., CONCUR.
SULLIVAN, P.J., NOT PARTICIPATING.
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UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
Nos. 97-3660 and 97-4133
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri
Juan Ramon Velasquez and *
Fidel Antonio Velasquez, *
*
Appellants. *
Submitted: March 13, 1998
Filed: April 21, 1998
Before FAGG, Circuit Judge; ROSS, Senior Circuit Judge; and EISELE,1 Senior
District Judge.
EISELE, Senior District Judge.
Juan Ramon Velasquez and Fidel Antonio Velasquez, who are half
brothers, were charged with one count of possessing with the intent to
distribute cocaine and marijuana in violation of 21 U.S.C. § 841(a)(1).
Juan Velasquez pled guilty to the charge, and Fidel Velasquez was convicted
after trial by jury. On appeal, Juan Velasquez contends that the district
court2 committed certain errors at sentencing, and Fidel Velasquez
maintains that the district court made erroneous rulings at trial and
sentencing. We affirm.
1
The Honorable G. Thomas Eisele, Senior United States District Judge for the Eastern
District of Arkansas, sitting by designation.
2
The Honorable E. Richard Webber, United States District Judge for the Eastern District
of Missouri.
I.
On March 21, 1997, a federal grand jury returned a single-count
indictment against Juan and Fidel Velasquez for possessing with the intent
to distribute cocaine and marijuana in violation of 21 U.S.C. § 841(a)(1).
The district court scheduled a joint jury trial for June 23, 1997.
Juan Velasquez pled guilty to the indicted charge on June 19, 1997.
Fidel Velasquez proceeded to trial. At trial, Fidel Velasquez moved
the district court to compel Juan Velasquez’ testimony. Juan Velasquez
asserted his Fifth Amendment privilege against self-incrimination, and the
district court denied Fidel Velasquez’ motion. Fidel Velasquez then asked
the district court to continue his trial until after Juan Velasquez’
sentencing and to compel Juan Velasquez’ testimony then. The district
court denied that motion as well. On June 24, 1997, after a two-day trial,
a jury convicted Fidel Velasquez of the crime charged.
At sentencing, the district court refused to grant each defendant’s
request pursuant to § 3B1.2 of the United States Sentencing Guidelines for
a two-point reduction in his sentencing level as a “minor participant” in
the offense committed. The district court also rejected Juan Velasquez’
argument that he was entitled to benefit from the “safety valve” of § 5C1.2
of the Guidelines. The district court sentenced Juan Velasquez to 135
months in prison and Fidel Velasquez to 195 months in prison.
II.
Fidel Velasquez argues that the district court erred in refusing to
compel Juan Velasquez to testify at his trial over Juan Velasquez’
assertion of his Fifth Amendment privilege against self-incrimination. In
the alternative, Fidel Velasquez contends that the district court abused
its discretion in declining to continue his trial until after Juan
Velasquez’ sentencing so that Juan Velasquez could testify. On both
fronts, we disagree.
Juan Velasquez could have subjected himself to new criminal charges,
not only for conspiracy to commit the charged offense but also for
unrelated crimes, by testifying at Fidel Velasquez’ trial. See Tr. Trans.
at 6-7 (arguments of counsel for Government and counsel for Juan
Velasquez), 17 (conclusions of district court). Moreover, he remained
susceptible to state charges for the same acts to which he had pled guilty
in federal court. See United States v. L.Z., 111 F.3d 78, 79 (8th Cir.
-2-
1997) (indicating that dual prosecutions by dual sovereigns are
constitutional). Juan Velasquez’ plea of guilty to a federal charge in
Missouri did not waive his Fifth Amendment privilege as it relates to other
charges. See United States v. Mejia-Uribe, 75 F.3d 395, 399 (8th Cir.),
cert. denied, 117 S.Ct. 151 (1996). Thus, Juan Velasquez properly asserted
the Fifth Amendment.3
It appears, then, that a genuine conflict arose between Fidel
Velasquez’ right to compulsory process and Juan Velasquez’ privilege to be
free of self-incrimination. We have not embraced the balancing test used
by the District of Columbia Circuit Court of Appeals in United States v.
Pardo, 636 F.2d 535, 544 (D.C. Cir. 1980), upon which Fidel Velasquez
relies. Rather, it is well settled in our precedent that, in cases like
the case at bar, the Sixth Amendment right of an accused to compulsory
process gives way to the Fifth Amendment privilege of a potential witness
to be free of self-incrimination. United States v. Habhab, 132 F.3d 410,
416 (8th Cir. 1997). Thus, the district court did not err in refusing to
compel Juan Velasquez’ testimony.
We reverse a district court’s refusal to grant a continuance in a
criminal case only where the district court abused its discretion and the
movant was prejudiced thereby. United States v. Cotroneo, 89 F.3d 510, 514
(8th Cir.), cert. denied, 117 S.Ct. 533 (1996). Because Juan Velasquez’
testimony could have exposed him to additional criminal charges, the
district court could not have made Juan Velasquez’ testimony available
simply by continuing Fidel Velasquez’ trial beyond Juan Velasquez’
sentencing hearing. Thus, we cannot say that the district court abused its
considerable discretion by denying Fidel Velasquez’ request for a
continuance.
3
In addition to the danger of new charges, Juan Velasquez’ testimony could have
adversely affected his position at sentencing by reflecting upon his role in the offense and his
acceptance of responsibility. See Tr. Trans. at 7-8, 17. The other circuit courts of appeals are
split regarding whether such a defendant who has been convicted or who has pled guilty retains a
Fifth Amendment privilege against self-incrimination until he has been sentenced. Compare
United States v. Kuku, 129 F.3d 1435, 1438 (11th Cir. 1997), with United States v. Mitchell, 122
F.3d 185, 191 (3d Cir. 1997), pet. for cert. filed, No. 97-7541 (U.S. Jan. 13, 1998). We have not
passed on this issue. We believe that the conclusion that Juan Velasquez’ testimony could have
exposed him to additional criminal charges suffices to establish that he enjoyed a Fifth
Amendment privilege not to testify at Fidel Velasquez’ trial. Thus, we decline to address the
ramifications of the fact that Juan Velasquez’ testimony could have negatively affected him at
sentencing.
-3-
III.
Both appellants contend that the district court erred in concluding
that neither of them was a minor participant in the relevant offense and
refusing to give them credit as minor participants at sentencing. A minor
participant is one who is less culpable than most other participants but
whose role cannot be described as minimal. USSG § 3B1.2, comment. (n.3)
(West 1997). Whether a defendant was a minor participant in the offense
he committed is a factual question, and we review a district court’s
decision on the issue for clear error. United States v. Wells, 127 F.3d
739, 750 (8th Cir. 1997). The district court’s conclusion that neither
appellant was a minor participant in their offense conduct was not clearly
erroneous.
A defendant charged with a drug-related crime may not successfully
argue that his participation in the offense was minor in comparison to
others involved in drug activity well beyond the particular offense in
question. That is to say, for example, that a defendant convicted of
possession may not simply note that he is less culpable than the individual
who supplied the drugs and/or the individual who manufactured the drugs and
thereupon be designated a minor participant for sentencing purposes. See
United States v. Thompson, 60 F.3d 514, 517 (8th Cir. 1995). Indeed, the
relevant sentencing guideline itself directs the judge to decide whether
a defendant is a minor participant “[b]ased on the defendant’s role in the
offense.” USSG § 3B1.2 (emphasis added). The district court correctly
rejected Juan Velasquez’ § 3B1.2 argument on these precise grounds. See
J. Velasquez Sent. Trans. at 8.
Even when we compare each appellant’s participation with his
coappellant’s participation, we cannot conclude that the district court’s
finding was clearly erroneous. A review of Juan Velasquez’ sentencing
hearing suggests that, at best, Juan Velasquez was as culpable as Fidel
Velasquez in the charged offense. See id. at 7. The district court
expressly concluded at Fidel Velasquez’ sentencing hearing that the
evidence in the case “ably demonstrates that this crime was jointly
committed by both defendants.” F. Velasquez Sent. Trans. at 11. We have
reviewed the relevant facts and will not disturb the district court’s
legitimate conclusions here.
IV.
Finally, we review the district court’s conclusion that Juan Velasquez
was not entitled to benefit from the safety valve of USSG § 5C1.2. To
benefit, a defendant must show that he has truthfully provided to the
-4-
Government all information regarding the relevant crime before sentencing.
-5-
USSG 5C1.2 (West 1997). We review the district court’s conclusion that
Juan Velasquez did not discharge that burden for clear error. United
th
States v. Weekly, 118 F.3d 576, 581 (8 Cir.), modif’d on other grounds,
128 F.3d 1198 (8th Cir.), cert. denied sub nom. Romero v. United States, 118
S.Ct. 611 (1997).
Juan Velasquez relies upon the fact that, on the day of his
sentencing, he presented to the Government an affidavit purporting to set
forth his knowledge of the crime at issue. At sentencing, the Government
indicated to the district court that Juan Velasquez had not been
interviewed with respect to the information in his affidavit, and counsel
for the Government informed the district court that he was of the opinion
that the affidavit was not entirely truthful. Beyond that, the district
court itself noted that certain information in the affidavit was
inconsistent with the district court’s understanding of the facts of the
case based upon Fidel Velasquez’ trial. These are legitimate reasons upon
which the district court could base its refusal to apply the safety valve.
The judgment of the district court is affirmed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
-6-
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16-1366-cv
Estate of Jaquez v. City of N.Y.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a
summary order filed on or after January 1, 2007, is permitted and is
governed by Federal Rule of Appellate Procedure 32.1 and this Court’s
Local Rule 32.1.1. When citing a summary order in a document filed with
this Court, a party must cite either the Federal Appendix or an electronic
database (with the notation “Summary Order”). A party citing a summary
order must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 8th day of September, two thousand seventeen.
Present:
PETER W. HALL,
GERARD E. LYNCH,
CHRISTOPHER F. DRONEY,
Circuit Judges.
THE ESTATE OF MAURICIO JAQUEZ, by The Public
Administrator of Bronx County as administrator of
the Good, Chattels and Credit of the deceased
Mauricio Jaquez, ANA MARTINEZ,
Plaintiffs - Appellants, 16-1366-cv
v.
CITY OF NEW YORK, SERGEANT WILLIAM FLORES,
Shield No. 1023, Individually and in his official
capacity, DETECTIVE RAYMOND MORRISSEY, Shield
No. 744, Individually and in his official capacity,
DETECTIVE RAYMOND FLOOD, Shield No. 744,
Individually and in his official capacity, DETECTIVE
RICHARD HENDERSON, Shield No. 1033, Individually
and in his official capacity, DETECTIVE DAVID
MCNAMEE, Shield No. 7273, Individually and in his
official capacity,
1
16-1366-cv
Estate of Jaquez v. City of N.Y.
Defendants - Appellees,
NYC Police Officers JOHN DOES,
Defendants.
For Appellants: ZACHARY MARGULIS-OHNUMA, New York, NY
For Appellees: SUSAN PAULSON, Assistant Corporation Counsel (Deborah
A. Brenner, on the brief), for Zachary W. Carter,
Corporation Counsel of the City of New York, New York,
NY
Appeal from an Order dated June 9, 2014, an Order dated May 8, 2015, and
Judgment entered April 12, 2016 by the United States District Court for the
Southern District of New York (Forrest, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is
AFFIRMED.
Plaintiffs-Appellants the Estate of Mauricio Jaquez and Ana Martinez
(“Appellants”) appeal from the district court’s orders dismissing their claims against
the City of New York,1 and granting summary judgment in favor of Defendants-
Appellees New York City police officers Flores, Morrissey, Flood, Henderson, and
McNamee (“Appellees”) on the basis of qualified immunity for their use of non-
lethal force and initial use of lethal force. Appellants also appeal from the district
court’s order, issued following a jury trial, granting qualified immunity to
1Although Appellants’ notice of appeal indicates their intent to appeal the June 9, 2014 order
dismissing their claims against the City of New York, they have abandoned that claim by failing to
brief the issue.
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Estate of Jaquez v. City of N.Y.
Defendant-Appellee Officer Flores with respect to his use of lethal force in firing the
final shot, as well as a jury verdict in favor of Officer Flores determining that he
was not liable for firing the final shot.
I. BACKGROUND
A. The Arrest
The following facts are undisputed unless otherwise noted. This appeal
concerns a series of events that took place in a Bronx apartment on April 12, 2009.
Appellees arrived at the residence of Mauricio Jaquez (“Jaquez”) in response to a
911 call reporting that Jaquez and his wife were fighting and that Jaquez was
armed with a knife.
When the officers arrived, they entered the apartment and tried to persuade
Jaquez to surrender. At some point, Jaquez advanced down the hallway of the
apartment, and a struggle ensued as the officers attempted to arrest Jaquez.
During that struggle, after Officer Henderson had deployed his Taser, Jaquez
attacked Officer Flood with the knife, swinging the knife over Flood’s ballistic
shield, and making contact with Officer Flood in the shoulder and elbow. Officer
Flores and Officer Morrissey deployed their Tasers, but that did not stop Jaquez.
Because, according to the officers’ testimony, Jaquez remained armed and continued
to attack the officers, after yelling at Jaquez to drop the knife, Officer McNamee
shot Jaquez with three to four rubber bullets from a “Sage gun,” which also failed to
stop Jaquez. As the struggle continued, Jaquez attempted to stab Officer McNamee,
Officer Henderson again deployed his Taser, and Officers Morrissey and Flores fired
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Estate of Jaquez v. City of N.Y.
live ammunition. Jaquez was struck with four bullets, one of which, according to the
medical examiner, ultimately proved fatal, and he fell to the ground face-down
while still holding the knife. Officer Flores fired a final shot of live ammunition that
struck Jaquez in the head when Flores perceived Jaquez to be pushing himself off
the floor. Jaquez was placed in an ambulance and died on his way to the hospital.
B. Summary Judgment
Jaquez’s estate commenced this § 1983 action in the Southern District of New
York. The officers moved for summary judgment based on qualified immunity.
Appellants countered that proffered testimony of their proposed expert, Dr. Richard
Sullivan, created a factual dispute about the officers’ description of the shooting. Dr.
Sullivan opined that Jaquez was in a psychotic state and that when the officers
entered the apartment with weapons and body armor, this escalated Jaquez’s
reactions. Dr. Sullivan further opined that the trajectory of the bullets described by
Dr. Kristen Landi, the assistant medical examiner who completed the autopsy
report, contradicted the officers’ accounts of the events. That is, Dr. Sullivan also
opined that, because the autopsy report indicated that the bullets entered Jaquez’s
body from above, the bullets’ trajectory indicated that the officers were above
Jaquez when he was shot, which Appellants contend would contradict the officers’
claim that Jaquez was standing and attacking them at the time they deployed live
ammunition. Finally, Dr. Sullivan proposed to testify that it would have been
impossible, based on the injuries suffered, for Jaquez to push himself off the floor
and continue attacking the officers after the first gunshot wounds. This led Dr.
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Estate of Jaquez v. City of N.Y.
Sullivan to conclude that “Mr. Jaquez . . . was on the ground when four out of five of
the shots were fired and likely already on the ground or on the way when the
remaining shot . . . was fired,” and that he “posed no conceivable threat to anyone
after [the fatal wound] was inflicted.” Suppl. App. 920. Appellees moved to preclude
Dr. Sullivan’s testimony under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579
(1993).
Initially, the district court denied summary judgment, concluding that Dr.
Sullivan’s proffered expert testimony created a genuine issue of fact material to the
officers’ liability. On further consideration of the expert report, however, the district
court excluded Dr. Sullivan’s proposed testimony and granted the Appellees’ motion
for summary judgment except with respect to Officer Flores’s final shot. The district
court concluded that Dr. Sullivan’s testimony was unreliable because his expertise
was in emergency medicine, not in analyzing crime scenes, and his opinions were
not based on scientific evidence, experience, or research. The district court also
determined that Dr. Sullivan’s testimony usurped the jury’s role because he made
credibility determinations regarding whether the officers’ testimony was truthful.
The district court, however, denied summary judgment with respect to Officer
Flores’s final shot, concluding that there was a triable issue of fact as to whether a
reasonable officer could conclude that Jaquez posed a threat when Officer Flores
fired the final shot.
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Estate of Jaquez v. City of N.Y.
C. Trial
Before trial, Appellees moved to exclude certain evidence. The district court
concluded that Appellants’ motorized life-sized model of Jaquez would be unduly
prejudicial given other available evidence explaining the trajectory of the bullets.
The district court also excluded as unduly prejudicial two photographs from before
the events of April 12, 2009 that depicted Jaquez with his wife and child, and
Jaquez holding an infant. The district court next denied Appellees’ motion to
preclude the crime scene report and allowed the report subject to redactions. With
respect to the photographs attached to the crime scene report, the district court
allowed eight of ninety photos showing where the final shot occurred. The court
prevented Appellants from introducing into evidence some of the officers’ weapons,
tools, and ammunition, but did allow Appellants to introduce the Sage gun, which
fires rubber bullets, a ballistic vest, and a ballistic shield.
The only issue presented to the jury was whether Officer Flores used
excessive force when he fired the final shot after Jaquez was on the floor. The jury
returned two verdicts with respect to the final shot. In the first verdict, the jury
responded to two special interrogatories, finding that Jaquez was pushing himself
up from the floor and had a knife in his hand as Officer Flores fired the final shot.
In the second verdict, the jury found that Officer Flores did not use excessive force
against Jaquez. On the basis of the jury’s factual findings in response to the special
interrogatories, the district court granted Officer Flores’s motion for qualified
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Estate of Jaquez v. City of N.Y.
immunity. Following the trial, Appellants moved for judgment as a matter of law,
which the court denied.
II. STANDARDS OF REVIEW
We review de novo a district court’s grant of summary judgment, viewing the
facts in the light most favorable to the Appellants. Fed. R. Civ. P. 56(a); Saleem v.
Corp. Transp. Grp., Ltd., 854 F.3d 131, 138 (2d Cir. 2017). We review de novo a
district court’s denial of a judgment as a matter of law. Morse v. Fusto, 804 F.3d
538, 546 (2d Cir. 2015). We review the district court’s evidentiary rulings for abuse
of discretion. Boyce v. Soundview Tech. Grp., Inc., 464 F.3d 376, 385 (2d Cir. 2006).
Finally, “[a] jury instruction is erroneous if it misleads the jury as to the correct
legal standard or does not adequately inform the jury on the law.” Gordon v. N.Y.C.
Bd. of Educ., 232 F.3d 111, 116 (2d Cir. 2000). The formulation of special verdict
questions further “rests in the sound discretion of the trial judge, and will warrant
reversal only if the questions mislead or confuse the jury, or inaccurately frame the
issues to be resolved.” Cash v. Cty. of Erie, 654 F.3d 324, 340 (2d Cir. 2011) (citation
omitted).
III. DISCUSSION
A. Qualified Immunity
Qualified immunity serves as a defense when an officer’s conduct does not
violate clearly established law or it was objectively reasonable for the officer to
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Estate of Jaquez v. City of N.Y.
believe that his conduct did not violate such law. Salim v. Proulx, 93 F.3d 86, 89 (2d
Cir. 1996). “[W]hether an official protected by qualified immunity may be held
personally liable for an allegedly unlawful official action generally turns on the
objective legal reasonableness of the action, assessed in light of the legal rules that
were clearly established at the time it was taken.” Messerschmidt v. Millender, 565
U.S. 535, 546 (2012) (alteration in original) (internal quotation marks omitted).
“The objective reasonableness test is met—and the defendant is entitled to
immunity—if officers of reasonable competence could disagree on the legality of the
defendant’s actions.” Thomas v. Roach, 165 F.3d 137, 143 (2d Cir. 1999) (internal
quotation marks omitted). The determination of reasonableness must account for
“the fact that police officers are often forced to make split-second judgments in
circumstances that are tense, uncertain, and rapidly evolving—about the amount of
force that is necessary in a particular situation.” Graham v. Connor, 490 U.S. 386,
397 (1989). Because Jaquez cannot testify to contradict the officers’ testimony, “the
court must also consider circumstantial evidence that, if believed, would tend to
discredit the police officer’s story, and consider whether this evidence could convince
a rational factfinder that the officer acted unreasonably.” O’Bert ex rel. Estate of
O’Bert v. Vargo, 331 F.3d 29, 37 (2d Cir. 2003) (internal quotation marks omitted).
Taking the facts in the light most favorable to Appellants, there is no triable
issue of fact with respect to the objective reasonableness of the officers’ use of non-
lethal force. See Doninger v. Niehoff, 642 F.3d 334, 349 (2d Cir. 2011). Even
assuming Jaquez did not have the knife in his hand when he walked down the
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Estate of Jaquez v. City of N.Y.
hallway,2 the officers testified that they could not see Jaquez’s hand in that moment
and they could not determine that he was unarmed when they deployed the Taser.
Thus, in the moments that Jaquez was walking down the hallway “officers of
reasonable competence could disagree” as to whether Jaquez was a threat because
the officers knew Jaquez had easy access to a fillet knife, was acting erratically, and
was refusing to obey the officers’ commands. Thomas, 165 F.3d at 143; see Graham,
490 U.S. at 396–97.
After the first deployment of the Taser, Jaquez moved backwards around the
corner into the bathroom, out of the officers’ view. The officers proceeded down the
hallway towards the bathroom to arrest Jaquez. Appellants argue that there is a
genuine material dispute about whether Jaquez was attacking the officers when
they entered the bathroom and used non-lethal and lethal force. We disagree.
Appellants did not put forth sufficient competent evidence to create a genuine
dispute about whether Jaquez was attacking the officers with a knife in the
bathroom. Moreover, because of Jaquez’s refusal to follow commands, his close
proximity to a lethal weapon, and his behavior up to that point, the arresting
officers reasonably could have believed that Jaquez posed a threat. See Graham,
490 U.S. at 396–97. Officers of reasonable competence, therefore, could disagree
whether the officers’ later use of their Tasers and, after a physical altercation
between an officer and Jaquez, the officers’ use of the Sage Gun were reasonable.
2In support of this view, Appellants point to deposition testimony by Detective Cannizzaro, who was
operating a camera in Jaquez’s apartment and relaying what he observed to the other officers.
According to Cannizzaro, Jaquez appeared to have complied with the officers’ orders to put the knife
down before he moved down the hallway toward the officers.
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Estate of Jaquez v. City of N.Y.
Appellants also contend that the district court improperly granted summary
judgment on the officers’ initial use of lethal force. Appellants’ assertions that (1)
the downward trajectory of bullets demonstrated that Jaquez was lying on the
ground, (2) the trajectory of the bullets reflects that Jaquez’s right arm was pulled
back and not advancing at the officers, and (3) Jaquez was shorter than Officer
McNamee and could not have reached his neck with the knife, do not create
material disputes of fact as to whether the officers’ initial decision to use deadly
force was reasonable. In other words, the limited circumstantial evidence indicating
the possible positions of the officers and Jaquez at the time that they initially fired
live ammunition is insufficient to defeat summary judgment on qualified immunity.
There is no dispute that immediately prior to the officers’ use of lethal force Jaquez
threatened the officers with a knife—thus engaging in the use of lethal force
himself. Considering the facts and circumstances of this case “from the perspective
of a reasonable officer on the scene” and “allow[ing] for the fact that police officers
are often forced to make split-second judgments—in circumstances that are tense,
uncertain, and rapidly evolving—about the amount of force that is necessary in a
particular situation,” a reasonable officer could believe that Jaquez’s attack on
Officer McNamee reasonably posed a continued “threat to the safety of the officers.”
Graham, 490 U.S. at 396–97. At bottom, therefore, reasonable officers could
disagree as to whether lethal force was an appropriate response. See Thomas, 165
F.3d at 143. Absent any evidence contradicting the facts above, Appellees were
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Estate of Jaquez v. City of N.Y.
entitled to summary judgment on their qualified immunity defense for their use of
non-lethal and initial use of lethal force.
B. The District Court Did Not Err in Denying Appellants’
Request for a Directed Verdict
“[A] district court must deny a motion for judgment as a matter of law
unless, viewed in the light most favorable to the nonmoving party, the evidence is
such that, without weighing the credibility of the witnesses or otherwise considering
the weight of the evidence, there can be but one conclusion as to the verdict that
reasonable [persons] could have reached.” Cobb v. Pozzi, 363 F.3d 89, 101 (2d Cir.
2004) (second alteration in original) (internal quotation marks omitted). A movant’s
burden under Rule 50(b) to obtain post-verdict relief “is particularly heavy,” and
“the district court may set aside the verdict only where there is such a complete
absence of evidence supporting the verdict that the jury’s findings could only have
been the result of sheer surmise and conjecture, or . . . [there is] such an
overwhelming amount of evidence in favor of the movant that reasonable and fair
minded men could not arrive at a verdict against him.” Cross v. N.Y.C. Transit
Auth., 417 F.3d 241, 248 (2d Cir. 2005) (alteration in original) (internal quotation
marks omitted).
Viewing the record in the light most favorable to the Appellees, at the time
Officer Flores fired the final shot, the jury was able to conclude that Officer Flores
reasonably perceived Jaquez as a continued threat. Officers McNamee and
Morrissey testified that Jaquez was pushing himself up off the floor prior to the
moment Officer Flores fired the final shot. The jury’s finding was not the “result of
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Estate of Jaquez v. City of N.Y.
sheer surmise and conjecture,” but based on the officers’ testimony, the crime scene
report, and other evidence in the record that the jury determined to be credible.
Brady v. Wal-Mart Stores, Inc., 531 F.3d 127, 133 (2d Cir. 2008). The district court
therefore properly denied Appellants’ motions for a directed verdict.
C. The District Court Did Not Abuse Its Discretion in Its
Evidentiary Rulings
The district court did not exceed the bounds of its discretion by excluding Dr.
Sullivan’s expert testimony in which he would have opined on Jaquez’s
psychological state and police tactics when arresting an emotionally disturbed
person. Dr. Sullivan was not shown to have expertise in psychiatric diagnosis, or on
the standard police tactics in dealing with situations like that confronting the
officers on the day in question. Although Dr. Sullivan’s ability to opine on the
immediate effects of the gunshot wounds Jaquez had already suffered on his ability
to continue attacking the officers at the time of Flores’s final shot is a closer
question, we conclude that the district court’s exclusion of that testimony was also
within its discretion. Dr. Sullivan had only treated four or five gunshot wounds in
his career, and it was permissible for the district court to conclude that his opinion
on that subject was insufficiently reliable. (We note, moreover, that the district
court invited Appellants to submit a replacement expert report before the trial on
the final shot. Appellants declined to do so.).
With respect to Appellants’ challenges to the district court’s exclusion of a
life-sized model of Jaquez, portions of the crime scene report, two photographs of
Jaquez and his family, and the officers’ weapons not used to fire the final shot, we
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Estate of Jaquez v. City of N.Y.
conclude the district court acted within its discretion. The court weighed the
probative value of this evidence against the potential for it to confuse the jury and
prejudice the defense. Its conclusion that some of this evidence was cumulative of
other evidence already admitted in the record was reasonable. The district court did
not abuse its discretion in ruling as it did here.
Appellants also contend that the district court abused its discretion when it
allowed Dr. Landi, who authored the autopsy report on Jaquez, to testify on the
effect of the gunshot wounds. Specifically, Dr. Landi at several points testified that
the injuries resulting from the live ammunition would not have affected Jaquez’s
ability to push himself up off the floor. Appellants’ trial counsel did not object to
that line of questioning until later, when the district court overruled an objection to
a question concerning whether the injuries from the gunshot wounds would “have
any impact on Mr. Jaquez’s ability to hold a knife inside his hand and grasp it.”
Suppl. App. 1936–37. Appellants’ general objection to the question about Jaquez’s
ability to hold the knife was insufficient to preserve an objection to the earlier
questions concerning Jaquez’s ability to push himself up off the floor. Thus, we
review for plain error, which we have long held “should only be invoked with
extreme caution in the civil context.” Rasanen v. Doe, 723 F.3d 325, 333 (2d Cir.
2013). Although Dr. Landi’s testimony was arguably improper, it did not so clearly
“contravene an established rule of law” and “go to the very essence of the case” that
we can find its admission plainly erroneous. Id.
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Estate of Jaquez v. City of N.Y.
D. The District Court Did Not Commit Error By Instructing the
Jury That It Had Granted Qualified Immunity to the Other
Officers or Abuse Its Discretion By Providing the Jury with
Special Interrogatories
The district court’s jury instructions were not erroneous as they properly
informed the jury of the narrow issue before it—whether Flores’s firing of the final
shot was reasonable. See Graham, 490 U.S. at 396–97. The district court explained
at the beginning of trial that the only issue before the jury was the reasonableness
of Flores’s final shot. To limit the questions before the jury, and because there was
testimony introduced at trial as to these officers’ conduct and their use of force, the
district court instructed that it had already determined that the officers acted
reasonably in connection with the uses of force other than the final shot by Officer
Flores. The district court also instructed the jury that none of its rulings or actions
represented a determination concerning the credibility of witnesses or revealed its
opinion about the appropriate verdict in this case. Nothing about these instructions
could have misled the jury concerning the correct legal standard to be applied or
otherwise misinformed the jury on the law. See Gordon, 232 F.3d at 116.
The district court’s special interrogatories were not erroneous. See Cash, 654
F.3d at 340. Despite Appellants’ argument that they were “sandbagged,” Appellants’
Br. 59, the district court informed the parties of its intent to provide the jury with
special interrogatories at a pre-trial conference, and again on the first day of trial.
Much of the testimony at trial discussed the events leading up to the final shot. It
was reasonable for the district court to ask the jury specific factual questions the
answers to which would assist the district court in determining whether Flores was
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Estate of Jaquez v. City of N.Y.
entitled to qualified immunity with respect to the final shot. Whether Jaquez was
pushing himself off the floor and holding a knife at the time of the final shot were
plainly relevant to the question of whether Flores acted reasonably in shooting him
again. Submitting these interrogatories to the jury did not mislead the jury or
inadequately inform it of the law. The district court did not exceed the bounds of its
discretion in issuing these special interrogatories.
We have considered Appellants’ remaining arguments and conclude that they
are without merit. Accordingly, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
15
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Citation Nr: 1452663
Decision Date: 11/28/14 Archive Date: 12/02/14
DOCKET NO. 11-21 791 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania
THE ISSUES
1. Entitlement to service connection for a lung/respiratory disorder, to include pulmonary fibrosis (PF) and nonspecific interstitial pneumonia (IP).
2. Entitlement to a total disability evaluation based upon individual unemployability due to service-connected disabilities (TDIU).
REPRESENTATION
Appellant represented by: Veterans of Foreign Wars of the United States
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
T. S. Kelly, Counsel
INTRODUCTION
The Veteran, who is the appellant, had active service from September 1966 to October 1968.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from December 2009 and July 2013 rating determinations of the Department of Veterans Affairs (VA) Regional Office (RO) located in Philadelphia, Pennsylvania.
The Veteran, in September 2013, appeared at a videoconference hearing. A transcript of the hearing is of record.
In April 2014, the Board remanded this matter for further development.
The issue of entitlement to a TDIU is remanded to the RO via the Appeals Management Center (AMC) in Washington, DC. The Department of Veterans Affairs (VA) will notify the Veteran if further action is required on his part.
FINDING OF FACT
The most probative evidence of record shows that the Veteran's IP and PF are not related to service, including his claimed herbicide exposure,
CONCLUSION OF LAW
A lung disorder, to include IP and PF, was not incurred in or aggravated by active service nor may it be presumed to have been incurred therein. 38 U.S.C.A. §§ 1110, 1116 (West 2002 & Supp. 2013); 38 C.F.R. §§ 3.303, 3.307, 3.309 (2014).
REASONS AND BASES FOR FINDING AND CONCLUSION
Duties to Notify and Assist
The VCAA describes VA's duty to notify and assist claimants in substantiating a claim for VA benefits. See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2013); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2014).
Under 38 U.S.C.A. § 5102, VA first has a duty to provide an appropriate claim form, instructions for completing it, and notice of information necessary to complete the claim if it is incomplete. Second, under 38 U.S.C.A. § 5103(a), VA has a duty to notify the claimant of the information and evidence needed to substantiate and complete a claim, i.e., existence of a current disability, the degree of disability, and the effective date of any disability benefits. The Veteran must also be notified of what specific evidence he is to provide and what evidence VA will attempt to obtain. Third, VA has a duty to assist claimants in obtaining evidence needed to substantiate a claim. This includes obtaining all relevant evidence adequately identified in the record and, in some cases, affording VA examinations. 38 U.S.C.A. § 5103A.
In Dingess v. Nicholson, 19 Vet. App. 473, 490 (2006), the Court observed that a claim of entitlement to service connection consists of five elements, of which notice must be provided prior to the initial adjudication: (1) Veteran status; (2) existence of a disability; (3) a connection between the Veteran's service and the disability; (4) degree of disability; and (5) effective date. See 38 U.S.C. § 5103(a).
The Board finds that a December 2011 letter provided the Veteran with notice that fulfills the provisions of 38 U.S.C.A. § 5103(a) including notice of the laws and regulations governing disability ratings and effective dates as required by the Court in Dingess.
VA has also secured all available pertinent evidence and conducted all appropriate development. Specifically, the record shows that VA obtained and associated with the claims file all identified and available in-service and post-service records.
The RO also undertook all the requested development set forth in the April 2014 remand.
Given the above actions, the Board finds that VA undertook all needed development in this appeal. Therefore, the Board finds that VA has no further duty to develop this part of the Veteran's claim. See Gobber v. Derwinski, 2 Vet. App. 470, 472 (1992) (the "'duty to assist' is not a license for a 'fishing expedition' to determine if there might be some unspecified information which could possibly support a claim . . . [and] this duty is limited to specifically identified documents that by their description would be facially relevant and material to the claim").
The Veteran was afforded a VA examination in June 2014 as part of the development requested in the April 2014 Board remand. When VA undertakes to provide a VA examination or obtain a VA opinion, it must ensure that the examination or opinion is adequate. Barr v. Nicholson, 21 Vet. App. 303, 312 (2007). The Board finds that the VA examination of record is adequate for rating purposes, because it was performed by a medical professional, was based on a thorough examination of the Veteran, and reported findings pertinent to the rating criteria. Nieves-Rodriguez v. Peake, 22 Vet. App 295 (2008); see Barr v. Nicholson, 21 Vet. App. 303 (2007) (holding that VA must provide an examination that is adequate for rating purposes). Thus, the Board finds that a further examination is not necessary.
The Veteran has been afforded a meaningful opportunity to participate effectively in the processing of the claim, including by submission of statements and arguments presented by his representative, and through testimony at his September 2013 hearing. For these reasons, it is not prejudicial to the appellant for the Board to proceed to finally decide the appeal. Based upon the foregoing, the duties to notify and assist the Veteran have been met, and no further action is necessary to assist the Veteran in substantiating this claim.
Service Connection
Service connection may be granted for a disability resulting from disease or injury incurred in or aggravated by active military, naval, or air service. 38 U.S.C.A. § 1110; 38 C.F.R. § 3.303(a). Service connection may be granted for any disease diagnosed after discharge, when all the evidence, including that pertinent to service, establishes that the disease was incurred in service. 38 C.F.R. § 3.303(d). As a general matter, service connection for a disability requires evidence of: (1) the existence of a current disability; (2) the existence of the disease or injury in service, and; (3) a relationship or nexus between the current disability and any injury or disease during service. Shedden v. Principi, 381 F.3d 1163 (Fed. Cir. 2004); see also Hickson v. West, 12 Vet. App. 247, 253 (1999), citing Caluza v. Brown, 7 Vet. App. 498, 506 (1995), aff'd, 78 F.3d 604 (Fed. Cir. 1996).
Where the evidence shows a "chronic disease" in service or "continuity of symptoms" after service, the disease shall be presumed to have been incurred in service. For the showing of "chronic" disease in service, there is required a combination of manifestations sufficient to identify the disease entity, and sufficient observation to establish chronicity at the time. With chronic disease as such in service, subsequent manifestations of the same chronic disease at any later date, however remote, are service-connected, unless clearly attributable to intercurrent causes. If a condition noted during service is not shown to be chronic, then generally, a showing of "continuity of symptoms" after service is required for service connection. 38 C.F.R. § 3.303(b). The claimed lung disorders are not "chronic diseases" listed under 38 C.F.R. § 3.309(a); therefore, 38 C.F.R. § 3.303(b) does not apply. Walker v. Shinseki, 708 F.3d 1331 (Fed. Cir. 2013).
If a veteran was exposed to an herbicide agent during active military, naval, or air service, certain diseases shall be service-connected if the requirements of section 3.307(a)(6) are met even though there is no record of such disease during service, provided further that the rebuttable presumption provisions of section 3.307(d) are also satisfied. 38 C.F.R. § 3.309(e). Section 3.307(d)(6) provides that the term "herbicide agent" means a chemical in an herbicide used in support of the United States and allied military operations in the Republic of Vietnam during the period beginning on January 9, 1962, and ending on May 7, 1975. 38 C.F.R. § 3.307(d)(6)(i). Section 3.307(d)(6) also provides that a veteran who, during active military, naval, or air service, served in the Republic of Vietnam during the period beginning on January 9, 1962, and ending on May 7, 1975, shall be presumed to have been exposed during such service to an herbicide agent, unless there is affirmative evidence to establish that the veteran was not exposed to any such agent during that service. 38 C.F.R. § 3.307(d)(6)(iii). Service in the Republic of Vietnam includes service in the waters offshore and service in other locations if the conditions of service involved duty or visitation in the Republic of Vietnam. Id.
The diseases presumed to be associated with herbicide exposure include: chloracne or other acneform diseases consistent with chloracne, type 2 diabetes (also known as type II diabetes or adult-onset diabetes), Hodgkin's disease, ischemic heart disease (including, but not limited to, acute, subacute, and old myocardial infarction; atherosclerotic cardiovascular disease including coronary artery disease (including coronary spasm) and coronary bypass surgery; and stable, unstable and Prinzmetal's angina), all chronic B-cell leukemias (including, but not limited to, hairy-cell leukemia and chronic lymphocytic leukemia), multiple myeloma, non-Hodgkin's lymphoma, Parkinson's disease, early-onset peripheral neuropathy, porphyria cutanea tarda, prostate cancer, respiratory cancers (cancer of the lung, bronchus, larynx, or trachea), and soft-tissue sarcomas (other than osteosarcoma, chondrosarcoma, Kaposi's sarcoma, or mesothelioma). 38 C.F.R. § 3.309(e). For the purposes of § 3.307, the term herbicide agent means a chemical in an herbicide used in support of the United States and allied military operations in the Republic of Vietnam during the Vietnam era. 38 C.F.R. § 3.307(a)(6)(i). Agent Orange (AO) is generally considered an herbicide agent and will be so considered in this decision.
The diseases listed at 38 C.F.R. § 3.309(e) shall have become manifest to a degree of 10 percent or more any time after service, except that chloracne, porphyria cutanea tarda, and acute and subacute peripheral neuropathy shall have become manifest to a degree of 10 percent or more within a year after the last date on which the veteran was exposed to an herbicide agent during active military, naval, or air service. 38 C.F.R. § 3.307(a)(6)(ii).
The Secretary, under the authority of the Agent Orange Act of 1991 and based on the studies by the NAS, has determined that there is no positive association between exposure to herbicides and any condition for which the Secretary has not specifically determined that a presumption of service connection is warranted. See Notice, 59 Fed. Reg. 341-346 (1994); see also Notice, 61 Fed. Reg. 41,442-449, and 61 Fed. Reg. 57,586-589 (1996); Notice, 64 Fed. Reg. 59,232-243 (Nov. 2, 1999); Notice, 67 Fed. Reg. 42,600-08 (June 24, 2002); Notice, 72 Fed. Reg. 32,395-407 (June 12, 2007); Final Rule, 74 Fed. Reg. 21,258-260 (May 7, 2009); Final Rule, 75 Fed. Reg. 53,202-16 (Aug. 31, 2010).
Notwithstanding the foregoing, a veteran may still establish service connection with proof of actual direct causation. See Combee v. Brown, 34 F.3d 1039, 1043-44 (Fed. Cir. 1994); see also McCartt v. West, 12 Vet. App. 164, 167 (1999). "Of particular relevance to an analysis of medical evidence supporting such a nexus are factors such as whether a medical professional finds studies persuasive, whether there are other risk factors that might be the cause of the condition for which benefits are sought, and whether the condition has manifested itself in an unusual manner." Polovick v. Shinseki, 23 Vet. App. 48, 53 (2009). A statistical correlation between AO and a disease not on the presumptive list may not be the only basis for a positive nexus opinion, it may be part of the analysis, but the entirety of the analysis provided by the medical professional must be weighed and considered. Polovick, 23 Vet. App. at 53-54.
It is the defined and consistently applied policy of VA to administer the law under a broad interpretation, consistent, however, with the facts shown in every case. When, after careful consideration of all procurable and assembled data, a reasonable doubt arises regarding service origin, the degree of disability, or any other point, such doubt will be resolved in favor of the claimant. 38 C.F.R. § 3.102.
It is the Board's responsibility to evaluate the entire record on appeal. See 38 U.S.C.A. § 7104(a) (West 2002). In this case, the Board has thoroughly reviewed all the evidence in the Veteran's claims folder. Although the Board has an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, all of the evidence submitted by the Veteran or on his behalf. See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (the Board must review the entire record, but does not have to discuss each piece of evidence).
In evaluating the evidence in any given appeal, the Board has been charged with the duty to assess the credibility and weight given to evidence. Davidson v. Shinseki, 581 F. 3d 1313 (Fed. Cir. 2009); Jandreau v. Nicholson, 492 F. 3d 1372 (Fed. Cir. 2007); Buchanan v. Nicholson, 451 F. 3d 1331 (Fed. Cir. 2006); Klekar v. West, 12 Vet. App. 503, 507 (1999); Wood v. Derwinski, 1 Vet. App. 190, 193 (1991). Indeed, the Court has declared that in adjudicating a claim, the Board has the responsibility to do so. Bryan v. West, 13 Vet. App. 482, 488-89 (2000); Wilson v. Derwinski, 2 Vet. App. 614, 618 (1992).
The Veteran maintains that his lung disorders either had their onset in service or from his exposure to AO while in Vietnam.
To the extent that the Veteran is claiming that his current lung disorders arose out of exposure to herbicides, none of the current lung disorders are on the presumptive disease list. As noted above, the Secretary of Veterans Affairs has determined that there is no positive association between AO exposure and any condition for which the Secretary has not specifically determined that a presumption of service connection is warranted. Hence, presumptive service connection for any current lung disorder cannot be provided based upon the regulations governing presumptive exposure or on the basis of studies performed by the NAS on behalf of the Secretary with regard to AO exposure.
The claimant may support with affirmative medical opinion evidence his claim for service connection for a lung disorder as due to AO exposure. In this regard, the Veteran has not submitted any medical opinion demonstrating that any lung disorder arose out of exposure to AO. In the absence of any competent evidence relating any current lung disorder to the herbicide exposure in service, service connection would not be warranted on this basis.
A review of the Veteran's service treatment records reveals that he was hospitalized in July 1967 for flu syndrome. The Veteran was treated and released. In December 1967, the Veteran was diagnosed as having an upper respiratory infection. There were no further complaints or findings of lung/breathing problems in service. At the time of the Veteran's June 1968 service separation examination, normal findings were reported for the lungs and chest. On his June 1968 service separation report of medical history, the Veteran checked the "no" boxes when asked if he had or had ever had chronic or frequent colds or shortness of breath.
On his initial claim for compensation, received in October 1968, the Veteran did not report having lung or breathing problems. The Veteran did not request service connection for lung problems until May 2009. Treatment records associated with the claims folder reveal that the Veteran was seen in December 2008 for a cough productive of whitish sputum. A chest CT scan performed at that time revealed what was most likely IP/PF.
At his September 2013 videoconference hearing, the Veteran testified that he was initially diagnosed with pulmonary problems in 1983. The Veteran indicated that these records were not available for review. The Veteran stated that it was his belief that his pulmonary problems were related to his AO exposure. The representative also indicated that there was medical literature linking AO use and other propellants to cardiopulmonary findings, but he did not provide any such medical literature.
In conjunction with his claim, the Veteran was afforded a VA examination in June 2014. The examiner indicated that the Veteran's claims folder was available and had been reviewed as well as records in VBMS and CAPRI. The examiner diagnosed the Veteran as having non-specific interstitial pneumonia and pulmonary fibrosis. He indicated that the onset of these disorders was in 2008. The examiner noted that the Veteran had AO exposure and 35 pack-year cigarette use. Following examination, the examiner opined that the Veteran's lung conditions of nonspecific interstitial pneumonia and pulmonary fibrosis were less likely as not related to his period of military service, to include AO. He observed that there was no evidence based literature that he was aware of that stated that nonspecific interstitial pneumonia and pulmonary fibrosis were caused by or a result of exposure to AO.
The weight of the evidence demonstrates that the earliest post-service treatment lung disorders did not occur until years after service. VA treatment and examination records have diagnosed the Veteran as currently having lung problems. As such, current disabilities of the lungs are acknowledged by VA as having been established in the record by competent evidence.
The Veteran has himself asserted, within his written contentions, that he has experienced post-service lung problems since service. Such recent assertions, however, are inconsistent with, and outweighed by, other lay and medical evidence of record, including the June 1968 service separation examination report and service separation report of medical history, an absence of complaints, findings, or treatment for lung problems for many years after service, and the Veteran's own testimony that his pulmonary problems were initially diagnosed in 1983. Thus, to the extent that the Veteran is asserting that he had lung problems since service, the Board does not find the Veteran's more recent assertions of continuous lung problems since service to be credible.
As the Board does not find the Veteran's lay statements made within the record regarding lung symptoms since service to be credible, they are afforded no probative weight. These statements are vague in detail, and are inconsistent with more contemporaneous medical records and the Veteran's own, more contemporaneous histories, including histories made for treatment purposes. See Kahana v. Shinseki, 24 Vet. App. 428, 440 (2011) (Lance, J., concurring) (silence in a medical record can be weighed against lay testimony if the alleged injury, disease, or related symptoms would ordinarily have been recorded in the medical record being evaluated by the fact finder).
The Board next finds that the weight of the evidence demonstrates that the Veteran's current lung disorders are not related to active service. The Veteran was afforded a VA medical examination, which included an opinion as to etiology, in June 2014. The claims file was reviewed in conjunction with this examination. Such review included the service treatment records. Upon reviewing the claims file, the examiner indicated that it was less likely than not that the Veteran's current lung disorders had their onset in service. As this opinion was rendered by a competent medical expert after physical evaluation of the Veteran and review of his claims file, including his service treatment records, it is considered highly probative by the Board. The Board notes that the Veteran's representative, at the time of the September 2013 hearing, indicated that there was available research to support the opinion that AO caused cardiopulmonary problems. However, neither the Veteran nor his representative has submitted such evidence in support of the claim. Moreover, treatise evidence must discuss generic relationships with a degree of certainty such that under the facts of this particular case there is at least a plausible causality based on objective facts rather than on unsubstantiated lay opinion. See, e.g., Wallin v. West, 11 Vet. App. 509, 514 (1998); Timberlake v. Gober, 14 Vet. App. 122, 130 (2000) (citing Hensley v. West, 212 F.3d 1255, 1265 (Fed. Cir. 2000)). In addition to not submitting any articles, the representative's arguments talked in general about a relationship between cardiopulmonary problems and exposure to AO and other propellants. His argument is of little probative value.
The Board finds the Veteran is not competent to report regarding the etiological basis of his current lung disorders. Lay statements may be competent to support a claim for service connection by supporting the occurrence of lay-observable events or the presence of disability or symptoms of disability subject to lay observation. See Jandreau v. Nicholson, 492 F.3d 1372 (Fed. Cir. 2007); see also Buchanan v. Nicholson, 451 F.3d 1331 (Fed. Cir. 2006) (addressing lay evidence as potentially competent to support presence of disability even where not corroborated by contemporaneous medical evidence).
Some medical issues, however, require specialized training for a determination as to diagnosis and causation, and such issues are, therefore, not susceptible of lay opinions on etiology, and a veteran's statements therein cannot be accepted as competent medical evidence. See Clemons v. Shinseki, 23 Vet. App. 1, 6 (2009) ("It is generally the province of medical professionals to diagnose or label a mental condition, not the claimant"); Woehlaert v. Nicholson, 21 Vet. App. 456, 462 (2007) (unlike varicose veins or a dislocated shoulder, rheumatic fever is not a condition capable of lay diagnosis); Jandreau, 492 F.3d at 1377 , n. 4 ("sometimes the layperson will be competent to identify the condition where the condition is simple, for example a broken leg, and sometimes not, for example, a form of cancer"). Lay testimony is not competent in the present case, because the Veteran is not competent to state that any current lung disorders were incurred in service or are related to AO exposure. The diagnosis and etiology of the claimed lung disorders are complex medical questions and the Veteran is not shown to have the expertise to render such opinions in this case. See Davidson v. Shinseki, 581 F.3d 1313, 1316 (Fed. Cir. 2009); Kahana, 24 Vet. App. at 433 , n. 4 (lay witnesses are competent to opine as to some matters of diagnosis and etiology, and the Board must determine on a case by case basis whether a veteran's particular disability is the type of disability for which lay evidence is competent).
For the foregoing reasons, the preponderance of the evidence is against the claim for service connection for any current lung disorder, to include nonspecific interstitial pneumonia or pulmonary fibrosis. Because the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not for application. See 38 U.S.C.A. § 5107; 38 C.F.R. § 3.102.
ORDER
Service connection for a lung/respiratory disorder, to include PF and IP, is denied.
REMAND
As it relates to the claim of a TDIU, the Board notes that the RO denied the Veteran's claim for a TDIU in July 2013. The Veteran filed a notice of disagreement with this denial in September 2013 and statement of the case was issued in July 2014. Thereafter, the Veteran filed a substantive appeal in August 2014. On the VA Form 9, the Veteran checked the box indicating that he desired a Travel Board hearing at the RO.
To date, the Veteran has not been scheduled for the requested hearing.
Accordingly, the case is REMANDED for the following action:
Schedule the Veteran for a Travel Board hearing at the Philadelphia RO before a Veterans Law Judge. A copy of the notice sent to the Veteran with regard to the hearing should be placed in the claims file.
The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012).
______________________________________________
K. J. Alibrando
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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Opinion issued October 16, 2003
In The
Court of Appeals
For The
First District of Texas
NO. 01-03-00065-CR
SHEVON REED, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 253rd District Court
Chambers County, Texas
Trial Court Cause No. 12116
MEMORANDUM OPINION
This is an appeal from the denial of appellant’s pretrial writ of habeas corpus
relief based on double jeopardy. In her petition for habeas corpus relief, appellant
contended that the trial court should have quashed her indictment for possession of
marihuana on which no tax had been paid because she had already pleaded guilty to
possession of marihuana. We affirm.
BACKGROUND
Appellant was indicted for possession marihuana in an amount of more than
four ounces, but less than five pounds (“the possession case”). See Tex. Health &
Safety Code Ann. § 481.121 (Vernon 2003). Appellant was also indicted for
possessing a taxable substance, to-wit: 391 grams of marihuana, on which no tax had
been paid (“the tax case”). See Tex. Tax Code Ann. § 159.201 (Vernon 2002).
Appellant pleaded guilty in the possession case and then filed an application for writ
of habeas corpus, contending that the subsequent prosecution in the tax case violated
the constitutional protection afforded her by the Double Jeopardy Clause.
The trial
court denied habeas corpus relief and this appeal followed. In two related points of
error, appellant contends the trial court erred by denying her habeas corpus relief.
LAW AND ANALYSIS
The double jeopardy clause protects against multiple punishments for the same
offense as well as multiple prosecutions for the same offense after a conviction or an
acquittal. Brown v. Ohio, 432 U.S. 161, 97 S. Ct. 2221 (1977); State v. Perez, 947
S.W.2d 268, 270 (Tex. Crim. App. 1997). Because the case before us involves the
validity of the second prosecution, we are concerned with the double jeopardy
protection prohibition against multiple prosecutions.
See Perez, 947 S.W.2d 269.
The resolution of this case is governed by Perez, in which the defendant, like
the defendant in this case, pleaded guilty to possession of marihuana, then claimed
that the subsequent prosecution for failure to pay tax on the marihuana was barred by
double jeopardy. 947 S.W.2d at 269. The Court of Criminal Appeals began its
analysis by noting that the threshold question was whether the defendant was being
prosecuted for the “same offense” in the second prosecution, i.e., the prosecution of
the tax case. Id. To decide this issue, the court, citing Blockburger v. United States,
284 U.S. 299, 52 S. Ct. 180 (1932), compared the elements alleged in the initial
indictment with the elements alleged in the second indictment. Id. at 270-71. The
court noted that the possession case required proof of a usable amount of marihuana,
whereas the tax case required proof that the defendant purchased marihuana. Id. at
271-72. Because each indictment required proof of an element that the other did not,
the Perez court concluded that they were not the “same offense” for purposes of
double jeopardy. Id. at 272. Therefore, the court concluded that prosecution of the
tax case was not barred by the previous conviction in the possession case. Id. In this case, the indictment in the possession case provided that appellant
did then and there intentionally and knowingly possess a usable quantity
of marihuana in an amount of five pounds or less but more than four
ounces . . .
The indictment in the tax case provided that appellant
did intentionally and knowingly possess a taxable substance, to-wit: 391
grams of marihuana on which no marihuana tax has been paid to the
Texas Comptroller of Public Accounts.
After comparing the elements alleged in the two indictments, we conclude that
the possession case and the tax case do not charge the “same offense.” The
possession case requires proof of a usable quantity of marihuana, whereas the tax case
requires proof that no marihuana tax has been paid to the Texas Comptroller. The
Perez court acknowledged that such differences in the indictments mean that the
charged offenses are not the “same offense.” See 947 S.W.2d at 272 n.7.
CONCLUSION
Because the possession case and the tax case do not charge the “same offense,”
the trial court did not err by denying appellant habeas corpus relief. Accordingly, we
affirm the judgment of the trial court.
Sherry Radack
Chief Justice
Panel consists of Chief Justice Radack and Justices Keyes and Alcala.
Do not publish. Tex. R. App. P. 47.2(b).
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592 N.W.2d 847 (1999)
MINNESOTA TWINS PARTNERSHIP, petitioner, Appellant,
Milwaukee Brewers Baseball Club, Limited Partnership, et al., petitioners, Appellants,
v.
STATE of Minnesota, by Michael A. HATCH, its Attorney General, Respondent.
No. C9-98-890.
Supreme Court of Minnesota.
April 29, 1999.
*848 Roger J. Magnuson, Peter W. Carter, Dorsey & Whitney LLP, Minneapolis, Gregory P. Joseph, John Sullivan, Fried, Frank, Harris, Shriver & Jacobson, New York, NY, for appellants MN Twins Partnership.
Charles R. Shreffler, Shreffler Law Firm, Mendota Heights, Robert J. Kheel, Wilkie, Farr & Gallagher, New York, NY, for appellants Milwaukee Brewers Baseball Club, et al.
Mike Hatch, Minnesota Attorney General, Thomas F. Pursell, Senior Counsel, Peter B. Hofrenning, Ann Beimdiek Kinsella, Julie Y. *849 Ralston, Assistant Attorneys General, St. Paul, for respondent State of Minnesota.
Stephen F. Ross, University of Illinois College of Law, Champaign, Il, for amici curiae Consumer Federation of America and Fans Inc.
Heard, considered, and decided by the court en banc.
OPINION
PAUL H. ANDERSON, Justice.
We are asked to determine if appellants must comply with civil investigative demands issued by the Minnesota Attorney General's Office. The Attorney General is requesting information on the proposed sale and relocation of the Minnesota Twins baseball franchise to North Carolina and a potential boycott of Minnesota by Major League Baseball[1] in violation of state antitrust laws. The appellants allege that their conduct is exempt from Minnesota's antitrust laws because the United States Supreme Court has held that the business of professional baseball is exempt from compliance with federal antitrust laws. The district court rejected this argument and issued an order compelling compliance with the civil investigative demands. The Minnesota Court of Appeals denied review, holding that the issues presented were "premature." Appellants now ask us to reverse the court of appeals' denial of review and remand the matter to that court to consider the issues on the merits. We instead reverse the district court's order to compel compliance with the civil investigative demands and remand.
The facts are not in dispute. Early in October 1997, Carl R. Pohlad, on behalf of the Minnesota Twins Partnership, announced that he had signed a letter of intent to sell the Twins to North Carolina businessman Donald C. Beaver and the other investors of North Carolina Major League Baseball, L.L.C. (NCMLB). The sale was contingent on the Minnesota Legislature's refusal to authorize public funding for a new baseball stadium by November 30, 1997. Within days of the announcement of the proposed sale, a delegation from Minnesota, including then-Governor Arne H. Carlson and key legislators, traveled to Milwaukee to confer with then-Acting Commissioner of Major League Baseball Allan "Bud" Selig. Selig told the delegation that if a publicly-funded stadium was not authorized and built, the other Major League Baseball (MLB) team owners would approve the Twins' move from Minnesota. The Minnesota Legislature subsequently rejected all stadium bills introduced in the special legislative session called by Governor Carlson.
On December 17, 1997, the Attorney General served the Twins with civil investigative demands[2] (CIDs) as part of an investigation into possible violations of state antitrust laws. The other appellants, Milwaukee Brewers Baseball Club, L.P. (Brewers), the American League of Professional Baseball Clubs, Inc. (American League), the National League of Professional Baseball Clubs, Inc. (National League), the Office of the Commissioner of Major League Baseball, and NCMLB, were also served with the CIDs on that date.[3] The CIDs served on the Twins requested a broad array of documents concerning, among other things, the financial viability of the Hubert H. Humphrey Metrodome (the Twins' current stadium), the methods used by other professional baseball teams to obtain *850 new stadia, the potential purchase of the Twins by Beaver and his group of North Carolina investors, and the 1961 relocation of the Washington Senators to Minnesota. The CIDs also included numerous interrogatories seeking information on the Twins' efforts to procure a new stadium, as well as information on the structure, governance, and revenues of MLB.
The CIDs served on appellant NCMLB requested information on attempts to obtain a MLB expansion franchise or to purchase and relocate the Twins. The CIDs served on appellants Brewers, American League, National League, and the Office of the Commissioner requested, among other things, information on past MLB expansion, team relocation, and stadia financing, as well as information specific to the Twins' potential sale and relocation. Because all appellants have substantially the same interests before us, we will hereinafter refer to all appellant parties as the "Twins."
The Twins filed a motion for a protective order under Minn. R. Civ. P. 26.03 in Ramsey County District Court in January 1998. The Twins argued (a) that the Attorney General's investigation was precluded by professional baseball's exemption from antitrust laws; (b) that the investigation was precluded by the Commerce Clause of the United States Constitution; and (c) that the CIDs were overly broad and compliance was unduly burdensome. On February 9, 1998, the state filed a motion to compel compliance with the CIDs.
On April 20, 1998, the district court denied the Twins' motion for a protective order and granted the state's motion to compel compliance with the CIDs. The court determined that the issue of whether professional baseball was exempt from Minnesota's antitrust laws under either federal caselaw or the Commerce Clause was a threshold issue that must be considered before the CIDs could be enforced. After a thorough examination of the breadth of the antitrust exemption found in the United States Supreme Court's "baseball trilogy"[4] and the treatment by other courts of professional baseball's exemption, the district court was persuaded by the "painstaking analysis" found in Piazza v. Major League Baseball, 831 F.Supp. 420 (E.D.Pa.1993), and found baseball's exemption to be limited to the "narrow area of the reserve clause." The court also found the Twins' Commerce Clause argument unpersuasive, finding the issue impossible to resolve absent a factual record.
The Twins moved to certify the April 20 order directly to the court of appeals. On May 11, 1998, the district court issued an order denying this request. In the same order, the court also limited the documents necessary for compliance with the CIDs to those generated within the last six years that dealt with (1) revenue sharing within MLB; (2) relocation or sale of MLB teams; and (3) MLB communications regarding "construction of and methods for obtaining new stadia." The Twins petitioned the court of appeals for discretionary review of the April 20 order.
The court of appeals denied review in an order opinion, holding that the question of professional baseball's exemption from antitrust laws under either federal caselaw or the Commerce Clause was "premature." The court's order stated specifically that the Twins retained the right to raise the exemption as an affirmative defense should prosecution occur. The Twins appealed, arguing that the court of appeals erred in not reaching the merits of the argument that professional baseball's exemption from federal antitrust laws precluded prosecution under state antitrust laws.
I.
A district court has broad discretion "to issue discovery orders" and will be reversed on appeal only upon an abuse of such discretion. Shetka v. Kueppers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 921 (Minn.1990). In addressing a challenge to a civil investigative demand, a district court "is not required to weigh evidence and resolve factual disputes in the same manner *851 as at a trial." Kohn v. State by Humphrey, 336 N.W.2d 292, 296 (Minn.1983).
The Attorney General has the authority to investigate and prosecute "violations of the law of this state respecting unfair, discriminatory, and other unlawful practices in business, commerce, or trade." Minn.Stat. § 8.31, subd. 1 (1998). The Attorney General may use civil investigative demands to obtain discovery "from any person regarding any matter, fact or circumstance, not privileged, which is relevant" to the investigation. Minn. Stat. § 8.31, subd. 2. No civil action need be commenced before the issuance of civil investigative demands; all that is required is that the Attorney General have "reasonable grounds to believe that any person has violated, or is about to violate, any of the laws" over which the Attorney General has investigative authority. Id. The scope of the inquiry must be within the authority of the Attorney General, the information requested must be "reasonably relevant," and the demand for documents "not too indefinite." Kohn, 336 N.W.2d at 297 (quoting United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 94 L.Ed. 401 (1950)). A claim of exemption from antitrust laws defeats an otherwise validly issued civil investigative demand only when the activities being investigated are clearly covered by the exemption. See Associated Container Transp. (Australia) Ltd. v. United States, 705 F.2d 53, 59 (2d Cir. 1983).
The Attorney General issued the CIDs to the Twins pursuant to an investigation of potential violations of Minnesota laws prohibiting (a) any "contract, combination, or conspiracy between two or more persons in unreasonable restraint of trade or commerce;"[5] (b) the "establishment, maintenance, or use" of monopoly power;[6] and (c) price fixing, market allocation, and boycotts.[7] In briefs to the district court and this court, the state elaborated on its concern regarding a possible illegal boycott of Minnesota by the Twins, asserting that "it is reasonable to infer that the owners of MLB teams are acting in concert to effect an illegal boycott and/or a price fixing agreement. In addition, the evidence would also support an inference that [MLB] is unlawfully exercising joint monopoly power." For supporting evidence, the state points to numerous newspaper accounts and press releases containing allegations and inferences that the Twins, as well as the rest of MLB, would boycott Minnesota by prohibiting any major league baseball team from locating here in the future if a publicly-financed stadium was not built.
The state also cites several cases that limit the scope of professional baseball's exemption from antitrust laws. Arguing that there is no clear exemption for all antitrust claims brought against professional baseball, the state urges this court to allow the investigation to continue by affirming the court of appeals and the district court's order compelling compliance with the CIDs. The state argues that the extent of professional baseball's exemption and the effect of the Commerce Clause can be litigated properly only after the state makes specific charges and a factual record is developed.
The Twins' primary argument is not that the CIDs are outside the authority of the Attorney General under Minn.Stat. § 8.31, subd. 1, but that professional baseball is exempt from prosecution under antitrust laws both through a judicially created exemption and through the Commerce Clause. Thus, the threshold issue is the scope of professional baseball's exemption from Minnesota's antitrust laws, a legal issue we review de novo. See Jacka v. Coca-Cola Bottling Co., 580 N.W.2d 27, 32 (Minn.1998).
Minnesota's antitrust laws are generally interpreted consistently with federal courts' construction of federal antitrust laws. See State by Humphrey v. Alpine Air Products, Inc., 490 N.W.2d 888, 894 (Minn.App. 1992), aff'd, 500 N.W.2d 788 (Minn.1993); see also State v. Duluth Bd. of Trade, 107 Minn. 506, 517, 121 N.W. 395, 399 (1909). Both state and federal antitrust laws are to be broadly construed. Abbott Labs. v. Portland *852 Retail Druggists Ass'n, Inc., 425 U.S. 1, 11, 96 S.Ct. 1305, 47 L.Ed.2d 537 (1976); Minnesota-Iowa Television Co. v. Watonwan T.V. Improvement Ass'n, 294 N.W.2d 297, 305 (Minn.1980). This means that "exemptions from the antitrust laws must be construed narrowly." Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 126, 102 S.Ct. 3002, 73 L.Ed.2d 647 (1982). A party claiming exemption bears the burden of proving that its conduct is exempt from antitrust laws. Henderson Broad. Corp. v. Houston Sports Ass'n, Inc., 541 F.Supp. 263, 265 (S.D.Tex. 1982).
The United States Supreme Court first announced professional baseball's exemption from federal antitrust laws in Federal Baseball Club of Baltimore, Inc. v. National League of Prof'l Baseball Clubs, Inc., 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898 (1922). The plaintiff in Federal Baseball, a member of the Federal League, was a Baltimore baseball club that found itself without competitors following the National League's buy-out of the seven other Federal League teams. Id. at 207, 42 S.Ct. 465. The Baltimore club, as the sole remaining member of the Federal League, sued the National League under the Sherman Antitrust Act. Id. The Supreme Court, in an opinion written by Justice Oliver Wendell Holmes, held that the Sherman Antitrust Act did not apply to baseball because baseball did not involve interstate commerce. Justice Holmes wrote:
The business is giving exhibitions of base ball, which are purely state affairs. It is true that, in order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and States. But the fact that in order to give the exhibitions the Leagues must induce free persons to cross state lines and must arrange and pay for their doing so is not enough to change the character of the business. * * * [T]he transport is a mere incident, not the essential thing. That to which it is incident, the exhibition, although made for money would not be called trade or commerce in the commonly accepted use of those words.
Id. at 208-09, 42 S.Ct. 465.
Although the holding of Federal Baseball could logically be applied to any type of live performance or exhibition, the Supreme Court never extended it to any other business. The Court exhibited its unwillingness to extend the exemption from antitrust laws to other types of performances when it held the following year that the baseball exemption set forth in Federal Baseball did not necessarily apply to the business of vaudeville performances. See Hart v. B.F. Keith Vaudeville Exch., 262 U.S. 271, 273-74, 43 S.Ct. 540, 67 L.Ed. 977 (1923). Although vaudeville, like professional baseball, involved live performances made possible by transporting people and equipment across state lines, the Court reasoned that an antitrust suit against a vaudeville organization was not frivolous because "the apparatus sometimes is more important than the performers" and therefore commerce was potentially involved. Id. at 272-74, 43 S.Ct. 540.
The issue of baseball's exemption next came before the Supreme Court 30 years after Federal Baseball, during which time judicial understanding of what constituted "interstate commerce" had changed considerably. See, e.g., Wickard v. Filburn, 317 U.S. 111, 125, 128-29, 63 S.Ct. 82, 87 L.Ed. 122 (1942) (stating that the growing of wheat for intrastate consumption was governed by the Commerce Clause because Congress determined that the activity "exerts a substantial economic effect on interstate commerce"). In Toolson v. New York Yankees, Inc., 346 U.S. 356, 74 S.Ct. 78, 98 L.Ed. 64 (1953), the Court considered a ballplayer's claim that baseball's reserve system[8] violated federal *853 antitrust laws. See id. at 362, 74 S.Ct. 78. Pitcher George Toolson, who had signed a contract to play with the New York Yankees, refused to report from one farm club to another. Jeffrey S. Moorad, Major League Baseball's Labor Turmoil: The Failure of the Counter-revolution, 4 Vill. Sports & Ent. L.J. 53, 60 (1997). The Yankees then placed Toolson on the club's ineligible list, but because of the reserve system, no other team would sign him. See id. at 56, 60.
In a one-paragraph per curiam opinion, the Supreme Court noted that, after Federal Baseball, Congress had taken the Court's ruling "under consideration,"[9] but had declined to legislatively overrule professional baseball's exemption. Toolson, 346 U.S. at 357, 74 S.Ct. 78. Declining to overrule Federal Baseball, the Court left any change to Congress:
The business [of baseball] has thus been left for thirty years to develop, on the understanding that it was not subject to existing antitrust legislation. * * * We think that if there are evils in this field which now warrant application to it of the antitrust laws it should be by legislation. Without re-examination of the underlying issues, the judgments below are affirmed on the authority of [Federal Baseball], so far as that decision determines that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws.
Id. (emphasis added).
In several cases following Toolson, the Supreme Court made it clear that professional baseball's exemption rested on "a narrow application of the rule of stare decisis" applicable only to baseball. United States v. Shubert, 348 U.S. 222, 230, 75 S.Ct. 277, 99 L.Ed. 279 (1955); see also Radovich v. National Football League, 352 U.S. 445, 451-52, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957) (stating that the exemption was limited to "the business of baseball"). The Court declined to extend the exemption to theatre performances,[10] boxing,[11] football,[12] or basketball.[13] Were the exemption created by Federal Baseball not in existence, the Court stated it would treat baseball's reserve system the same as reserve systems of other professional sports. Haywood v. National Basketball Ass'n, 401 U.S. 1204, 1205, 91 S.Ct. 672, 28 L.Ed.2d 206 (1971).[14]
The Supreme Court's most recent and most thorough look at professional baseball's exemption came in Flood v. Kuhn, 407 U.S. 258, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972). Like Toolson, Flood involved a challenge to baseball's reserve system. Id. at 259, 92 S.Ct. 2099. St. Louis Cardinals centerfielder Curt Flood brought an antitrust suit against the Commissioner of Baseball after the Commissioner denied Flood's request to become a free agent rather than report to the Philadelphia Phillies after being unwillingly traded to that team by the Cardinals. Id. at 264-65, 92 S.Ct. 2099. Flood filed suit against the Commissioner, the presidents of the American and National Leagues, and the then-24 individual major league baseball clubs, charging, inter alia, violations of both federal and *854 state antitrust laws. Id. at 265-66, 92 S.Ct. 2099. Following a trial, the federal district court held that Federal Baseball and Toolson were dispositive of the antitrust claims and entered judgment for the defendants. Flood v. Kuhn, 309 F.Supp. 793 (S.D.N.Y.1970), aff'd, 443 F.2d 264 (2d Cir.1971), aff'd, 407 U.S. 258, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972). The Second Circuit Court of Appeals affirmed. Flood, 443 F.2d at 264.
The Supreme Court affirmed in an opinion written by Justice Harry A. Blackmun. Flood, 407 U.S. at 258, 92 S.Ct. 2099. In Flood, the Court delineated the circumstances surrounding Federal Baseball and outlined the application of Federal Baseball in subsequent cases. Id. at 269-80, 92 S.Ct. 2099. The pattern that emerges is clear: the exemption set forth in Federal Baseball is limited strictly to professional baseball, and despite frequent invitations to review the issue, Congress has allowed the anomalous exemption to remain. Id. at 281-82, 92 S.Ct. 2099. The Court acknowledged that the legal footings for the exemption were no longer valid, stating that "[p]rofessional baseball is a business and it is engaged in interstate commerce," but held that baseball remained exempt from federal antitrust law under the stare decisis of Federal Baseball and Toolson. Id. at 282, 92 S.Ct. 2099. The Court resolved any resulting inconsistency by embracing it:
Even though others might regard [the aberration of Federal Baseball and Toolson] as "unrealistic, inconsistent, or illogical," * * * the aberration is an established one and one that has been recognized * * * [by] a total of five[[15]] consecutive cases in this Court. It is an aberration that has been with us now for half a century, one heretofore deemed fully entitled to the benefit of stare decisis, and one that has survived the Court's expanding concept of interstate commerce. It rests on a recognition and an acceptance of baseball's unique characteristics and needs.
Id. (internal citation omitted). The majority opinion ends by reciting the holding of Toolson that "the business of baseball" is exempt from antitrust legislation based on stare decisis and congressional inaction. See id. at 285, 92 S.Ct. 2099.
Chief Justice Warren E. Burger concurred. Flood, 407 U.S. at 285, 92 S.Ct. 2099. Although having "grave reservations as to the correctness of Toolson," the Chief Justice stated that "[c]ourts are not the forum in which this tangled web ought to be unsnarled." Id. at 285-86, 92 S.Ct. 2099 (Burger, C.J., concurring). Justice William O. Douglas, joined by Justice William J. Brennan, dissented and disagreed with the Chief Justice's assessment of the proper forum for change, stating that "[Federal Baseball] is a derelict in the stream of law that we, its creator, should remove." Id. at 286, 92 S.Ct. 2099 (Douglas, J., dissenting).
While engagingly written, the Flood opinion is not clear about the extent of the conduct that is exempt from antitrust laws. The opinion begins by identifying the issue as whether "professional baseball's reserve system is within the reach of the federal antitrust laws." Flood, 407 U.S. at 259, 92 S.Ct. 2099 (emphasis added). The facts before the Supreme Court clearly implicated only the reserve clause. Id. at 264-66, 92 S.Ct. 2099. However, the holding is broader, stating that "we adhere once again to Federal Baseball and Toolson and to their application to professional baseball." Id. at 284, 92 S.Ct. 2099 (emphasis added). Thus, when interpreting the scope of Flood, we are seemingly offered the choice between either a narrow or a broad reading of professional baseball's antitrust exemption.
The "great weight of federal cases"[16] hold that Flood exempts the entire business of baseball from federal and state antitrust claims. See, e.g., Charles O. Finley & Co. v. Kuhn, 569 F.2d 527, 541 (7th Cir.1978) (holding that it is "clear" that the entire "business of baseball" is exempt from antitrust claims); *855 Portland Baseball Club, Inc. v. Kuhn, 491 F.2d 1101, 1103 (9th Cir.1974) (per curiam) (holding antitrust claim properly dismissed, citing Flood); McCoy v. Major League Baseball, 911 F.Supp. 454, 457 (W.D.Wash. 1995) (holding that Flood's reaffirmation of Toolson extended immunity to "the business of baseball").
A different interpretation of Flood can be found in Piazza v. Major League Baseball, 831 F.Supp. 420 (E.D.Pa.1993). Piazza was precipitated by a situation analogous to the one before this court the threatened move of the San Francisco Giants baseball club to Florida. Id. at 422-23. A partnership of investors, including plaintiff Vincent Piazza,[17] signed a letter of intent with Robert Lurie, the owner of the Giants, to purchase the team for $115 million. Id. at 422. The chair of MLB's Ownership Committee directed Lurie to negotiate with other potential purchasers in violation of the letter of intent and the Ownership Committee refused to grant the partnership the necessary permission to purchase and move the team. Id. at 422-23. The team was eventually sold to a group of San Francisco investors for $15 million less than Piazza's partnership had offered. John Gibeaut, Skybox Shakedown, A.B.A.J., June 1998, at 68, 71.
Piazza sued MLB on a number of grounds, including violations of the Sherman Antitrust Act. Piazza, 831 F.Supp. at 423-24. MLB moved to dismiss, arguing that "plaintiffs' federal claims fail to state a cause of action" and that the court lacked subject matter jurisdiction. Id. at 421. The Piazza court interpreted the Supreme Court's statement in Flood that baseball was a business engaged in interstate commerce as limiting the scope of the exemption to the reserve clause at issue in Flood and Toolson. Id. at 435-38. Hence, the Piazza court reasoned, the broad exemption articulated by other courts is an inappropriate application of stare decisis that erroneously expands professional baseball's exemption beyond the facts of Flood and Toolson. Id. at 437-48. Even applying a broad exemption, the court concluded that the ownership of baseball franchises had not been analyzed in light of Federal Baseball and therefore a factual record was necessary before a determination could be made.[18]Id. at 440-41.
In the present case, the Ramsey County District Court found Piazza to be more persuasive than other federal cases that outlined a broader exemption. The court concluded that "the ruling in Flood confines [baseball's] antitrust exemption to the narrow area of the reserve clause." Because the state's allegations "go far beyond the question of the reserve system," the court issued an order compelling compliance with the CIDs. Although the court of appeals did not address the merits of the district court's legal analysis, its holding that the issues were "premature" is consistent with the position that professional baseball's antitrust exemption exists only as an affirmative defense to specific charges and not as a blanket of immunity from any antitrust investigation.
The Piazza opinion is a skillful attempt to make sense of the Supreme Court's refusal to overrule Federal Baseball, an opinion generally regarded as "not one of Mr. Justice Holmes' happiest days." Salerno v. American League of Prof'l Baseball Clubs, 429 *856 F.2d 1003, 1005 (2d Cir.1970), cert. denied, 400 U.S. 1001, 91 S.Ct. 462, 27 L.Ed.2d 452 (1971). But Piazza ignores what is clear about Flood that the Supreme Court had no intention of overruling Federal Baseball or Toolson despite acknowledging that professional baseball involves interstate commerce. Although the facts of Flood deal only with baseball's reserve system, the Court's conclusion in Flood is unequivocal:
We repeat for this case what was said in Toolson:
"Without re-examination of the underlying issues, the (judgment) below (is) affirmed on the authority of [Federal Baseball] * * *, so far as that decision determines that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws." 346 U.S. at 357, 74 S.Ct. 78.
And what the Court said in Federal Baseball in 1922 and what it said in Toolson in 1953, we say again here in 1972: the remedy, if any is indicated, is for congressional, and not judicial, action.
Flood, 407 U.S. at 285, 92 S.Ct. 2099.
As intellectually attractive as the Piazza alternative is, we are compelled to accept the paradox the Supreme Court acknowledged in Flood when it declined to overrule Federal Baseball. To borrow a phrase from the concurrence in Flood, this court is "not the forum in which this tangled web ought to be unsnarled." Flood, 407 U.S. at 286, 92 S.Ct. 2099 (Burger, C.J., concurring). Professional baseball's exemption from antitrust laws may be an aberration, but we agree with those courts that believe "the Supreme Court should retain the exclusive privilege of overruling its own decisions." McCoy, 911 F.Supp. at 457 (quoting Salerno, 429 F.2d at 1005).
We choose to follow the lead of those courts that conclude the business of professional baseball is exempt from federal antitrust laws.[19] Further, we conclude that the sale and relocation of a baseball franchise, like the reserve clause discussed in Flood, is an integral part of the business of professional baseball and falls within the exemption.[20] In the past, we have deemed it proper to look to decisions made under corollary federal statutes "of a similar character for the principle by which to construe our own statute." Duluth Bd. of Trade, 107 Minn. at 517, 121 N.W. at 399. Accordingly, we hold that the conduct of the Twins being investigated by the Attorney General is exempt from Minnesota, as well as federal, antitrust laws. Enforcement of the CIDs against the Twins is therefore outside the scope of the Attorney General's authority because no enforcement action could follow. See Phoenix Bd. of Realtors, Inc. v. United States Dept. of Justice, 521 F.Supp. 828, 830 (D.Ariz.1981) (holding that "[a]n activity which is exempt from the antitrust laws, cannot form the basis of an antitrust investigation") (citation omitted). Because as a matter of law the Attorney General is precluded from prosecuting the Twins on these antitrust allegations, the district court erred when it issued an order compelling compliance with the CIDs. The Twins are entitled to a protective order under Minn. R. Civ. P. 26.03.
We reverse the court of appeals and remand this matter to the district court for proceedings consistent with this opinion.
LANCASTER, J., took no part in the consideration or decision of this matter.
NOTES
[1] Although there is no legal entity known as Major League Baseball, this term is commonly used to refer to the joint operations of the American League of Professional Baseballs Clubs, Inc. and National League of Professional Baseball Clubs, Inc. See Joseph J. McMahon, Jr. and John P. Rossi, History and Analysis of Baseball's Antitrust Exemption, 2 Vill. Sports & Ent. L.F. 213, 230-31 (1996) (discussing 1903 agreement between American and National Leagues).
[2] The Attorney General's Office has the authority to demand discovery from persons suspected of violating state laws governing trade and commerce. Minn.Stat. § 8.31, subd. 2 (1998). This discovery is demanded through documents called civil investigative demands which issue directly from the Attorney General's Office. See Kohn v. State by Humphrey, 336 N.W.2d 292, 295 (Minn. 1983).
[3] On March 11, 1998, appellants Brewers, American League, National League, Office of the Commissioner of Baseball, and NCMLB intervened; the intervenors were joined as appellants on appeal.
[4] Flood v. Kuhn, 407 U.S. 258, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972); Toolson v. New York Yankees, Inc., 346 U.S. 356, 74 S.Ct. 78, 98 L.Ed. 64 (1953); Federal Baseball Club of Baltimore, Inc. v. National League of Prof'l Baseball Clubs, Inc., 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898 (1922).
[5] Minn.Stat. § 325D.51 (1998).
[6] Minn.Stat. § 325D.52 (1998).
[7] Minn.Stat. § 325D.53, subd. 1 (1998).
[8] The reserve system, as applied through a reserve clause contained in every ballplayer's contract, meant that the initial team with which a ballplayer signed a contract had "a continuing and exclusive right to his services." Toolson, 346 U.S. at 362 n. 10, 74 S.Ct. 78 (Burton, J., dissenting). The club could unilaterally renew the player's contract when it expired, or release the player, or assign the player's contract to any other team, which would then have the same rights to the player's services. See id. at 362-63, n. 10, 74 S.Ct. 78. All Major League Baseball clubs agreed to abide by this system, meaning that a player who wished to break out of the reserve system and negotiate for himself would be declared ineligible and no other team would sign him. Id.
[9] In Toolson, the dissent noted that in 1952 the Subcommittee on the Study of Monopoly Power issued to the House of Representatives Committee on the Judiciary a report that found the business of baseball to be interstate in nature. Toolson, 346 U.S. at 358-59, 74 S.Ct. 78 (Burton, J., dissenting) (citing H.R.Rep. No. 82-2002, at 4, 5 (1952)). The 1952 report concluded that the reserve system was so vital to the stability of baseball that legislation condemning the reserve clause was not justified. See Flood v. Kuhn, 407 U.S. 258, 272-73, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972) (citing the 1952 study as evidence of Congressional approval of baseball's antitrust exemption).
[10] Shubert, 348 U.S. at 230., 75 S.Ct. 277
[11] United States v. International Boxing Club of New York, 348 U.S. 236, 242, 75 S.Ct. 259, 99 L.Ed. 290 (1955).
[12] Radovich, 352 U.S. at 451-52, 77 S.Ct. 390.
[13] Haywood v. National Basketball Association, 401 U.S. 1204, 1205, 91 S.Ct. 672, 28 L.Ed.2d 206(1971).
[14] "Basketball * * * does not enjoy exemption from the antitrust laws. Thus the decision in this suit would be similar to the one on baseball's reserve clause which our decisions exempting baseball from the antitrust laws have foreclosed." Haywood, 401 U.S. at 1205, 91 S.Ct. 672.
[15] The five cases are Federal Baseball, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898; Toolson; 346 U.S. 356, 74 S.Ct. 78, 98 L.Ed. 64; International Boxing, 348 U.S. 236, 75 S.Ct. 259, 99 L.Ed. 290; Shubert, 348 U.S. 222, 75 S.Ct. 277, 99 L.Ed. 279; and Radovich, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456.
[16] See Butterworth v. National League of Prof'l Baseball Clubs, 644 So.2d 1021, 1025 (Fla.1994).
[17] Vincent Piazza was a childhood friend of former Los Angeles Dodgers manager Tommy Lasorda, who, as a favor, drafted Piazza's son Mike as the 1389th selection in the 1988 amateur draft. John W. Guarisco, "Buy Me Some Peanuts and Cracker Jack," But You Can't Buy The Team: The Scope and Future of Baseball's Antitrust Exemption, 1994 U. Ill. L.Rev. 651, 659 n. 91 (citing Mel Antonen, Piazza Works Hard on Fundamentals, USA Today, Oct. 28, 1993, at 3C). Mike Piazza played catcher for the Dodgers well enough to be named the 1993 National League Rookie of the Year. Mark T. Gould, Baseball's Antitrust Exemption: The Pitch Gets Closer and Closer, 5 Seton Hall J. Sport L. 273, 283 n. 38 (1995). Traded to the Florida Marlins on May 15, 1998, and then to the New York Mets on May 22, 1998, Mike Piazza has been named to the National League All-Star Team for six consecutive seasons, thus making Lasorda's favor to a childhood friend a phenomenally wise decision. The Sporting News, "Player Profiles Mike Piazza" (visited Apr. 23, 1999) .
[18] One day after a congressional committee voted to strip professional baseball of its antitrust exemption, the remanded claim was settled, precluding development of a factual record. Gibeaut, A.B.A.J., June 1998 at 71. The exemption has never been eliminated by Congress.
[19] Because our holding is dispositive of this action, we need not address the argument that the Commerce Clause prohibits the enforcement of state antitrust laws against appellants.
[20] See State v. Milwaukee Braves, Inc., 31 Wis.2d 699, 144 N.W.2d 1, 15 (1966) ("The type of decision involved in this case, in essence, whether to admit a new member [of the league] in order to replace an existing member which desired to move to a new area, appears to be so much an incident of league operation as to fall within the exemption.").
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48 F.3d 1238NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.
James D. BARRETT, Petitioner,v.MERIT SYSTEMS PROTECTION BOARD, Respondent.
No. 94-3653.
United States Court of Appeals, Federal Circuit.
Feb. 22, 1995.
Before NIES, CLEVENGER, and RADER, Circuit Judges.
JUDGMENT
PER CURIAM.
1
AFFIRMED. See Fed.Cir.R. 36.
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972 So.2d 1162 (2008)
STATE of Louisiana
v.
George HUGHES.
No. 2007-K-1490.
Supreme Court of Louisiana.
January 11, 2008.
Denied.
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Order filed, November 5, 2012.
In The
Fourteenth Court of Appeals
____________
NO. 14-12-00806-CR
____________
ADIT YADIR UMANZOR-VILLALOBOS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 176th District Court
Harris County, Texas
Trial Court Cause No. 1318988
ORDER
The reporter’s record in this case was due October 29, 2012. See Tex. R. App. P.
35.1. The court has not received a request to extend time for filing the record. The
record has not been filed with the court. Because the reporter’s record has not been filed
timely, we issue the following order.
We order Judy Ann Fox, the official court reporter, to file the record in this appeal
within 30 days of the date of this order.
PER CURIAM
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People v Willingham (2020 NY Slip Op 02295)
People v Willingham
2020 NY Slip Op 02295
Decided on April 16, 2020
Appellate Division, Third Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided and Entered: April 16, 2020
110280
[*1]The People of the State of New York, Respondent,
vJoseph Willingham, Appellant.
Calendar Date: February 11, 2020
Before: Egan Jr., J.P., Clark, Aarons, Pritzker and Reynolds Fitzgerald, JJ.
Kathy Manley, Selkirk, for appellant.
P. David Soares, District Attorney, Albany (Emily Schultz of counsel), for respondent.
Pritzker, J.
Appeal from a judgment of the County Court of Albany County (Carter, J.), rendered February 8, 2018, convicting defendant upon his plea of guilty of the crime of attempted criminal possession of a weapon in the second degree.
As part of a global disposition of two indictments and another pending charge, defendant pleaded guilty to attempted criminal possession of a weapon in the second degree. In accordance with the terms of the plea agreement, defendant was sentenced, as a second felony offender, to a prison term of three years followed by five years of postrelease supervision. He appeals.
Initially, defendant's challenge to the validity of his plea is not preserved for our review absent evidence of an appropriate postallocution motion (see People v Strack, 177 AD3d 1036, 1037 [2019]; People v Warren, 176 AD3d 1504, 1505 [2019]). Contrary to his assertion, he did not make any statements during the plea colloquy that negated an element of the charged crime (see Penal Law §§ 110.00, 265.03 [3]). Although it is true that, at the time of the plea, defendant stated that he was unaware that the subject weapon was located in the glove compartment of the vehicle in which he was a passenger, he went on to acknowledge that he was a passenger in that vehicle and to expressly admit guilt under a theory of constructive possession (see Penal Law § 10.00 [8]; People v Thomas, 165 AD3d 1636, 1636 [2018], lvs denied 32 NY3d 1129 [2018], cert denied ___ US ___, 140 S Ct 257 [2019]; People v Boyd, 153 AD3d 1608, 1608 [2017], lv denied 30 NY3d 1103 [2018]; People v Worthington, 150 AD3d 1399, 1400-1401 [2017], lv denied 29 NY3d 1095 [2017]). Notably, defendant's guilty plea required neither a recitation of every element of the crime nor a factual explanation for each element (see People v Seeber, 4 NY3d 780, 781 [2005]; People v Hollenbeck, 152 AD3d 974, 975 [2017], lv denied 30 NY3d 1061 [2017]). Moreover, given the applicability of the presumption found in Penal Law § 265.15 (3), the allocution cannot be said to cast significant doubt upon defendant's guilt (see People v Saunders, 2 AD3d 905, 905 [2003], lv denied 1 NY3d 634 [2004]; cf. People v Medina-Feliz, 151 AD3d 603, 603 [2017]; People v Clavie, 28 AD3d 872, 873 [2006]). Thus, the narrow exception to the preservation requirement was not triggered and no further inquiry by County Court was required, as defendant suggests (see People v Lopez, 71 NY2d 662, 666 [1988]).
Egan Jr., J.P., Clark, Aarons and Reynolds Fitzgerald, JJ., concur.
ORDERED that the judgment is affirmed.
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Cite as 2014 Ark. 204
SUPREME COURT OF ARKANSAS
No. CV-13-1115
Opinion Delivered May 8, 2014
MELVIN SMITH APPEAL FROM THE LINCOLN
APPELLANT COUNTY CIRCUIT COURT
[NO. LCV-2013-82-5]
V. HONORABLE JODI RAINES
DENNIS, JUDGE
STATE OF ARKANSAS
APPELLEE AFFIRMED.
JOSEPHINE LINKER HART, Associate Justice
A Pulaski County judgment dated November 30, 1977, states that a jury “returned a
verdict of Guilty of Murder I and Burglary” against appellant Melvin Smith “with punishment
fixed at life imprisonment in the State Penitentiary on Murder I and six years’ imprisonment
in the State Penitentiary on Burglary.” The judgment further provided that the “Court doth
this date sentence and commit defendant to life imprisonment and six years,” with the “six
years to commence at the expiration of the life sentence.” In 2013, Smith petitioned the
Lincoln County Circuit Court for writ of habeas corpus, which the court denied. Smith
appeals, asserting that, in accordance with Miller v. Alabama, ___ U.S. ___, 132 S. Ct. 2455
(2012) and Jackson v. Norris, 2013 Ark. 175, ___ S.W.3d ___, his sentence to life
imprisonment was invalid on its face because the sentencer did not hold a hearing to consider
mitigating factors relating to Smith’s youth before imposing the maximum sentence of life
imprisonment. We affirm.
Cite as 2014 Ark. 204
In his petition, Smith asserted that he was serving a sentence of life imprisonment after
he was convicted of first-degree murder. He alleged that he was charged with capital murder
on June 21, 1977, convicted of first-degree murder on November 30, 1977, and that at the
time of the offense, he was sixteen years old, with his date of birth being August 4, 1960.
Smith argued that the imposition of life imprisonment upon a juvenile offender was contrary
to Miller and Jackson. The circuit court dismissed the petition, concluding that because Smith’s
life sentence was not mandatory, Miller was inapplicable.1 Smith appeals.
A writ of habeas corpus is proper when a judgment of conviction is invalid on its face
or when a circuit court lacked jurisdiction over the cause. Murry v. Hobbs, 2013 Ark. 64, at
2. (per curiam). In 1977, first-degree murder was a class A felony. Ark. Stat. Ann. § 41-
1502(3) (Repl. 1977). The term of imprisonment for a class A felony was not less than five
years nor more than fifty years, or life. Ark. Stat. Ann. § 41-901(a) (Repl. 1977); see Ark. Stat.
Ann. § 41-803(3) (Repl. 1977). Capital murder was punishable by death or life imprisonment
without parole. Ark. Stat. Ann. § 41-803(2); Ark. Stat. Ann. § 41-1351 (Repl. 1977); Ark.
Stat. Ann. § 41-1501(3) (Repl. 1977).
1
In his original petition, Smith asserted that he had pleaded guilty to first-degree
murder but stated in his amended petition that he was convicted of the crime. In its order
denying the petition, the circuit court apparently relied on the allegations contained in the
original petition, stating that Smith had asserted in his petition that he had entered a
negotiated guilty plea to first-degree murder and was sentenced to life imprisonment. The
circuit court observed that Smith accepted life imprisonment from the sentencing range for
first-degree murder. Smith argues on appeal that because the circuit court misstated the
facts in its order, its ruling should be reversed. We may, however, affirm the circuit court
if it reached the right decision albeit for the wrong reason. See, e.g., Jones v. State, 347 Ark.
409, 422, 64 S.W.3d 728, 737 (2002).
2
Cite as 2014 Ark. 204
The United States Supreme Court held that Arkansas’s “mandatory life without parole
for those under the age of 18 at the time of their crimes violates the Eighth Amendment’s
prohibition on ‘cruel and unusual punishments.’” Miller, at ___, 132 S. Ct. at 2460. The
Court stated that the “Eighth Amendment forbids a sentencing scheme that mandates life in
prison without possibility of parole for juvenile offenders.” Id. at ___, 132 S. Ct. at 2469. The
Court also stated, “Although we do not foreclose a sentencer’s ability to make that judgment
in homicide cases, we require it to take into account how children are different, and how
those differences counsel against irrevocably sentencing them to a lifetime in prison.” Id. at
___, 132 S. Ct. at 2469. The Court further stated, “Our decision . . . . mandates only that a
sentencer follow a certain process—considering an offender’s youth and attendant
characteristics—before imposing a particular penalty.” Id. at ___, 132 S. Ct. at 2471. The
Court also stated that “[b]y requiring that all children convicted of homicide receive lifetime
incarceration without possibility of parole, regardless of their age and age-related
characteristics and the nature of their crimes, the mandatory sentencing schemes before us
violate this principle of proportionality, and so the Eighth Amendment’s ban on cruel and
unusual punishment.” Id. at ___, 132 S. Ct. at 2475. On remand, this court reversed the
denial of Jackson’s petition for writ of habeas corpus, issued the writ, and remanded Jackson’s
case to the circuit court with the instruction that a sentencing hearing be held “where Jackson
may present for consideration evidence that would include that of his ‘age, age-related
characteristics, and the nature of’ his crime.” Jackson, 2013 Ark. 175, at 2, ___ S.W.3d at ___.
(citing Miller, ___ U.S. at ___, 132 S. Ct. at 2475).
3
Cite as 2014 Ark. 204
On appeal, Smith argues that Miller and Jackson do not hold only that a mandatory life
sentence for a juvenile violates the Eighth Amendment. Rather, Smith asserts that those cases
further hold that the sentencer must have a hearing to consider the mitigating circumstances
related to youth before it may impose a sentence of life imprisonment without parole. In
support of his argument, Smith notes that in Jackson, this court ordered the circuit court to
hold a sentencing hearing where Jackson could present such mitigating evidence.
After Miller, but prior to Jackson, this court considered the applicability of Miller to an
instance where the petitioner, who was seventeen years old at the time of the crime, was
convicted of first-degree murder under the 1977 statute and sentenced to life imprisonment
without parole. This court held that “Miller is only applicable in Arkansas when a mandatory
life sentence is imposed without the sentencer’s being able to ‘take into account how children
are different, and how those differences counsel against irrevocably sentencing them to a
lifetime in prison.’” Murry, 2013 Ark. 64, at 3 (citing Miller, ___ U.S. at ___, 132 S. Ct. at
2469). This court concluded that because Murry’s life sentence for first-degree murder was
not mandatory, Miller was “simply inapposite.” Id. at 4. After Jackson was decided, we
observed in Hobbs v. Turner, 2014 Ark. 19, at 11, ___ S.W.3d ___, ___, (citing Murry, 2013
Ark. 64), that “Miller prohibits a sentencing scheme that mandates life in prison without the
possibility of parole for juvenile homicide offenders,” and because “Turner was not subjected
as a juvenile homicide offender to a mandatory life-without-parole sentence. . . . Miller is
inapplicable.” In Britt v. State, 2014 Ark. 134 (per curiam), Britt, who alleged that he was a
juvenile when he committed the crime, was found guilty of first-degree murder and sentenced
4
Cite as 2014 Ark. 204
to life imprisonment. This court reaffirmed its holding in Murry, concluding that because
Britt’s life sentence for first-degree murder was not mandatory, his sentence was not illegal
under Miller. Britt, 2014 Ark. 134, at 4.
Given our holdings in Murry, Turner, and Britt, we again hold that Miller is inapplicable,
as Smith’s 1977 sentence to life imprisonment for first-degree murder was not mandatory.
Moreover, Jackson does not require that we remand this case for a sentencing hearing. Jackson
was initially sentenced to a mandatory life sentence. On remand, we afforded Jackson an
opportunity to present mitigating evidence, because Jackson’s initial sentence did not allow
for consideration of mitigating evidence. Here, Smith did not face a mandatory sentence;
rather, he was subject to a discretionary sentencing range, and the sentencer was permitted
to consider sentencing-related mitigating evidence.
Affirmed.
Marion A. Humphrey, for appellant.
Dustin McDaniel, Att’y Gen., by: Christian Harris, Ass’t Att’y Gen., for appellee.
5
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882 F.Supp. 137 (1995)
Thomas E. LENGYEL, Plaintiff,
v.
SHEBOYGAN COUNTY, Ann M. Wondergem, and Gary Johnson, Defendants.
Civ. A. No. 94-C-1074.
United States District Court, E.D. Wisconsin.
March 31, 1995.
Thomas Nelson, Shneidman, Myers, Dowling & Blumenfield, Milwaukee, WI, for plaintiff.
Lisa M. Leemon, Lindner & Marsach, Milwaukee, WI, for defendants.
ORDER TO REMAND
REYNOLDS, District Judge.
Plaintiff Thomas E. Lengyel ("Lengyel") claims he was unlawfully terminated from his position as a social work supervisor for Sheboygan County, Wisconsin. On September 9, 1994, he commenced a suit in the Circuit Court for Sheboygan County. On September 26, 1994, defendants removed the case to federal court, asserting that plaintiff's state court suit contained causes of action based on the First, Fifth, and Fourteenth Amendments of the Constitution. Plaintiff's state court complaint, however, did not refer to these constitutional provisions.
On December 8, 1994, this court ordered that the parties brief the question of whether plaintiff's state court complaint, which omitted any reference to the Constitution, laws, or treaties of the United States, and which was brought to enforce state laws, was properly removed to federal court pursuant to 28 U.S.C. §§ 1441 et seq. The court ordered that parties submit simultaneous briefs and reply briefs on this question, but parties failed to do so. Rather, plaintiff submitted an amended complaint on December 29, 1994, which contained two references to 42 U.S.C. § 1983. Defendants submitted an answer to the amended complaint on January 23, 1995.
Federal district courts are courts of limited jurisdiction and have an affirmative duty to ensure that they have jurisdiction to hear the case or controversy before them. National W. Life Ins. v. Fischer, 722 F.Supp. 554 (E.D.Wis.1989). The Seventh Circuit has stated: "[T]he federal courts are obliged to *138 police the constitutional and statutory limitations on their jurisdiction. That is why, even at the appellate level, the court must satisfy itself that there is federal jurisdiction over the case." Kanzelberger v. Kanzelberger, 782 F.2d 774, 777 (7th Cir.1986).
When a district court determines there is a lack of subject matter jurisdiction, the case shall be remanded, even if the parties prefer to remain in federal court. As the Seventh Circuit has observed: "Having found himself in federal court after removal, the plaintiff may want to stay there. A remand on the court's own motion may deprive both sides of their preferred forum." In re Continental Cas. Co., 29 F.3d 292, 294 (7th Cir.1994).
The court has concluded that removal of this case to federal court was improper. Defendants premised their removal on grounds of original jurisdiction, pursuant to 28 U.S.C. 1441(b), which provides:
Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
In his state court complaint, however, plaintiff makes no reference to the Constitution, treaties, or laws of the United States. He states causes of action for due process, defamation, and negligence, based primarily on defendants' alleged violation of Wis.Stat. § 19.85(1), ensuring the right of terminated public employees to receive evidentiary hearings in open session. But plaintiff does not make any reference to 42 U.S.C. § 1983, the Constitution, nor to any federal constitutional violation.
Because this case was improperly removed to federal court in the first instance, plaintiff may not keep it in this improper forum by amending his complaint. Federal subject matter jurisdiction must be determined at the time of removal; "a party may not manipulate jurisdiction by amending the complaint." Land and Lakes Co. v. Henderson, No. 94-C-1815, 1994 WL 124876, at *2 (N.D.Ill. Apr. 11, 1994). Similarly, the U.S. Supreme Court and Seventh Circuit have held that federal jurisdiction cannot be conferred by consent of the parties. Gainesville v. Brown-Crummer Invest. Co., 277 U.S. 54, 59, 48 S.Ct. 454, 455-56, 72 L.Ed. 781 (1928); Kanzelberger, 782 F.2d at 777. Rather, this court remains bound by the edict of 28 U.S.C. § 1447(c), which states: "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."
IT IS THEREFORE ORDERED that this action is remanded to the Circuit Court of Sheboygan County, Wisconsin.
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673 So.2d 521 (1996)
Gustavo PRIETO, Petitioner,
v.
UNION AMERICAN INSURANCE CO., et al., Respondents.
No. 95-2941.
District Court of Appeal of Florida, Third District.
April 24, 1996.
Rehearing Denied June 5, 1996.
*522 Jose de la O; Arnold R. Ginsberg and Todd R. Schwartz, Miami, for petitioner.
Ratiner & Glinn; Hightower and Rudd and Frances Fernandez Guasch, Miami, for respondents.
Before NESBITT, LEVY and GERSTEN, JJ.
NESBITT, Judge.
By petition for writ of certiorari, Gustavo Prieto seeks review of a discovery order. We grant the petition and quash the order under review.
Monica Sanchez sued Gustavo Prieto for motor vehicle negligence. Prieto was liability insured with Union American Insurance Company (Union), however, his coverage was limited to $10,000. Union appointed counsel for Prieto and defended the underlying suit through verdict and judgment in Sanchez's favor. Post-excess judgment, Sanchez brought this action against Union for bad faith. At issue is her allegation that Union failed to act with due regard for Prieto's interests in defending the suit rather than attempting in good faith to settle. Union denies that settlement was possible.
During the course of Union's deposition of Prieto, Union attempted to discover the substance of his communications with appointed counsel in the underlying suit. Prieto's counsel raised attorney-client privilege wherein the following exchange occurred.
Union's Counsel: Do you refuse to allow him to answer any questions about the conversation with his lawyer?
Petitioner's Personal Counsel: Yes, sir.
Union Counsel: We'll certify that. And you would continue to object to any questions I had along that line?
Petitioner's Personal Counsel: It's a continuing objection.
Union, however, proceeded to question Prieto about his conversations with his lawyers. Prieto's counsel persistently objected. As the questioning continued, it turned to communications and correspondence sent by Union, in response to which Prieto stated, "[I]t was my choice whether I retained an attorney. That's the reason why I called [attorney] Gil." Prieto also testified that he took letters sent by Union to Gil's office and signed them there, and that Gil "probably" explained the documents to him. Prieto's counsel then objected and again instructed his client not to answer any questions regarding conversations with his attorneys.
Following the deposition, Union filed a motion to require response to questions. At a hearing which followed, Union's counsel for the first time argued that Prieto had made voluntary disclosures during his deposition which waived the attorney-client privilege. The trial court subsequently rendered an *523 order finding Prieto had waived the attorney-client privilege, and ordering that Union be allowed to depose Prieto's attorneys "and inquire as to their conversations with Mr. Prieto." The instant petition followed.
Waiver imports the intentional relinquishment of a known right. See Smith v. Armour Pharmaceutical Co., 838 F.Supp. 1573 (S.D.Fla.1993) (waiver of attorney-client privilege must be intentional); see also Brookings v. State, 495 So.2d 135, 139 (Fla. 1986) ("mere fact that a witness-client testifies to facts which were the subject of consultation with counsel is no waiver of the privilege."). The transcript shows an unequivocal assertion of privilege with a confused Prieto, at times, blurting out a few statements, before the interpreter on hand could even finish translating the objections of Prieto's counsel or his instruction to Prieto not to respond. Thus we conclude that in the instant case, Prieto did not waive the attorney-client privilege by the limited statements he made.
Accordingly, the petition for certiorari is granted, the order under review is quashed, and the cause is remanded.
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594 F.Supp.2d 945 (2009)
OMNICARE, INC., Plaintiff,
v.
UNITEDHEALTH GROUP, INC., Pacificare Health Systems, Inc., and RxSolutions, Inc. d/b/a Prescription Solutions, Defendants.
No. 06 C 6235.
United States District Court, N.D. Illinois, Eastern Division.
January 16, 2009.
*947 Aldo A. Badini, Brian S. McGrath, Eamon O'Kelly, George E. Mastoris, Harvey Kurzweil, Henry Joseph Ricardo, Lisa M. Card, Michael C. Thelen, Susannah P. Torpey, Dewey & Leboeuff, LLP, New York, NY, Andrew Jonathon Schaeffer, Carrie A. Shufflebarger, William T. Robinson, III, Greenebaum, Doll & McDonald, Covington, KY, James T. Malysiak, Lee A. Freeman, *948 Jr., Richard P. Campbell, Jenner & Block, LLP, Chicago, IL, John D. Harkrider, Axinn, Veltrop & Harkrider, LLP, New York, NY, for Plaintiff.
Athanasios Papadopoulos, James King Gardner, Neal, Gerber & Eisenberg, Chicago, IL, Byron Todd Jones, Christopher W. Madel, Erik Casey Beckett, Jennifer G. Daugherty, Jennifer M. Robbins, Loren L. Hansen, Margaret M. Lockner, Martin R. Lueck, Michael V. Ciresi, Randolph C. Winton, Sara A. Poulos, Stephen P. Safranski, Thomas J. Undlin, Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, Corey W. Roush, Robert Frederick Leibenluft, Hogan & Hartson, Washington, DC, Frederick M. Erny, Dinsmore & Shohl, LLP, Cincinnati, OH, Loretta E. Lynch, Steven M. Edwards, Hogan & Hartson, LLP, New York, NY, for Defendants.
MEMORANDUM OPINION AND ORDER
REBECCA R. PALLMEYER, District Judge.
Plaintiff Omnicare, Inc., is the nation's largest institutional pharmacythat is, a provider of pharmacy services to persons in health care institutions. UnitedHealth Group ("UnitedHealth") and PacifiCare Health Systems, Inc. ("PacifiCare") are health insurers who provide prescription drug coverage to senior citizens under the Medicare "Part D" program. To qualify under that program, a health insurer must demonstrate to federal regulators that it can provide pharmacy services to individuals in long-term care facilities; a contract with an institutional pharmacy such as Omnicare is one way of doing so. Both UnitedHealth and PacifiCare entered into negotiations with Omnicare, and UnitedHealth signed an agreement with Omnicare before UnitedHealth was certified under the Medicare Part D program. During the same time period, UnitedHealth and PacifiCare were engaged in merger talks that culminated in a Merger Agreement between the two parties. PacifiCare broke off its negotiations with Omnicare a week after signing the Merger Agreement and then proceeded to obtain federal certification without Omnicare in its contract "network." PacifiCare later resumed contract talks with Omnicare, ultimately striking a deal far more favorable to it than the one UnitedHealth had achieved. Then, once the UnitedHealth-PacifiCare merger was complete, UnitedHealth abandoned its own deal with Omnicare and took advantage of the more favorable terms in PacifiCare's contract with Omnicare.
In this lawsuit, Omnicare contends that the merger violated antitrust laws and that Defendants are liable for fraud. The court denied Defendants' motion to dismiss, see Omnicare, Inc. v. UnitedHealth Group, Inc., 524 F.Supp.2d 1031 (N.D.Ill.2007), and the parties proceeded with discovery. Defendants now move for summary judgment on these claims and, for the reasons that follow, the motion is granted.
FACTUAL BACKGROUND
I. Medicare Part D
Medicare is a health insurance program administered by the federal government in order to provide coverage to elderly and disabled Americans. See 42 U.S.C. § 1395 et seq. In 2003, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which created a voluntary prescription drug benefit for seniors called Medicare Part D. Pub. L. No. 108-173, 117 Stat. 2066 (2003). Under Part D, the Centers for Medicare & Medicaid Services ("CMS") make payments to Prescription Drug Plan ("PDP") sponsorstypically insurance providers. PDPs, in turn, pay prescription drug providersretail and institutional *949 pharmaciesfor providing pharmacy services to the individuals enrolled in the PDP. See 42 U.S.C. § 1395w-115. The PDP sponsors are compensated in two ways: through payments from CMS and through premiums paid by enrollees. Id. The prescription drug providers receive their payments pursuant to contracts with the PDP sponsors.
To participate in Part D, which went into effect on January 1, 2006, PDP sponsors were required to be approved by, and enter into a contract with, CMS. (Bagley Report ¶ 17, App. 155 to Mem. in Supp.) CMS divided the United States into thirty-four "PDP regions," and a PDP sponsor had to be approved for each region in which it wished to operate. As part of its bid for CMS approval, a Part D sponsor needed to demonstrate that it had sufficient pharmacy providers in its network in the PDP region to service both retail customers and patients in long-term care facilities ("LTCs"). (3/16/05 Long-Term Care Guidance, App. 57 to Mem. in Supp.) PDPs were required to provide a list of contracts with pharmacies that serve LTCs in order to "ensure that all of [the sponsor's] future Part D enrollees who are institutionalized can routinely receive their Part D benefits through the plans' network of pharmacies" rather than through "out of network" pharmacies. (Id. at 4.) CMS referred to this requirement of nearby, in-network pharmacies providing services to LTC enrollees as the "convenient access" standard. (Id.) In addition, CMS required PDP sponsors to offer a contract to any pharmacy willing and able to participate in the sponsor's LTC network.[1] (Id.)
In 2006, 23 million out of 42 million eligible seniors participated in Medicare Part D. (Ex. A to Rubinfeld Decl. ¶ 31, Attach. to Mem. in Opp'n.) Seniors can become enrolled in a PDP in one of two ways. First, seniors eligible for Medicare can simply choose to participate in Part D. Second, individuals who also qualify for Medicaidanother federal insurance program, one designed to provide coverage for individuals and families with low incomesare automatically enrolled by the government. These low-income seniors, called "dual eligibles" because they are eligible for both Medicare and Medicaid, are enrolled in PDPs whose premiums are lower than an established cap set by CMS. (Id. ¶ 34.) These enrollees are technically free to switch to any other plan that falls below the cost threshold established by CMS, but a number of factorssuch as the physical impairment of these enrollees and bureaucratic obstaclesmake this a rarely-used option. (Rubinfeld Decl. ¶ 6(c), Attach. to Mem. in Opp'n.) Dual eligibles are fully subsidized by the federal government, which pays for both premiums and co-payments for the drugs, and constitute up to 65% of LTC residents. (Ex. A to id. ¶¶ 34-35.) Overall, though, Omnicare concedes that all individuals living in LTCs, including both dual-eligibles and voluntary enrollees, comprise only about 3-5% of total PDP enrollees. (Mem. in Opp'n at 6 n. 7.) Defendants' negotiations and resulting contracts with Omnicare, the largest LTC pharmacy in the nation, covered only LTC patients. (Omnicare's Supplemental Statement of Undisputed Material Facts ¶¶ 23, 31.)
II. Merger
UnitedHealth and PacifiCare, insurance providers who sought CMS certification as *950 PDP sponsors in 2005, initiated merger discussions in January 2005. (Defs.' 56.1 ¶ 16.) As talks between the two entities intensified in the weeks leading up to signing the Merger Agreement on July 6, they entered into two separate confidentiality agreements dictating how information deemed "confidential" or "highly confidential" was to be exchanged during the "due diligence" period.[2] (Defs.' 56.1 ¶ 17.) Although there were some failures to comply with terms of the confidentiality agreements (Omnicare's Resp. to Defs.' 56.1 ¶¶ 17-19), the purpose for the agreements was apparent. The first confidentiality agreement, designed to protect confidential information, made that information available only to members of UnitedHealth's due diligence team and prevented them from sharing it with others outside that team. (Defs.' 56.1 ¶ 17.) The second confidentiality agreement created a "clean room" for highly confidential material and permitted only members of UnitedHealth's "clean team," a subgroup of the due diligence team, to have access to the materials. (Id. ¶ 18.) In addition, prior to the sharing of any information between the two parties, PacifiCare's outside antitrust counsel, Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden"), developed a "data room" where Skadden attorneys reviewed all PacifiCare's documents to determine the propriety of sharing them with UnitedHealth. (Id. ¶ 19.)
Although much of the due diligence process had no relationship to the companies' plans for Part D, several meetings and other exchanges of information concerning Part D did take place. On June 9, 2005, UnitedHealth and PacifiCare met specifically to discuss PacifiCare's Part D program.[3] (Id. ¶ 22.) At the meeting, Jacqueline Kosecoff, an Executive Vice President at PacifiCare, made a presentation entitled "Part D Prescription Drug Program," which included general information regarding administrative expense estimates and information about RxSolutions, a wholly-owned subsidiary of PacifiCare responsible for negotiating contracts with pharmacies on PacifiCare's behalf. (Part D Prescription Drug Program, App. 31 to Mem. in Supp.) From Kosecoff's presentation itself and notes prepared after the meeting, it appears that no pricing information was provided in the presentation outside of an assertion that PacifiCare would follow "an aggressive pricing strategy." (Id.; 6/17/05 Memo, App. 26 to Mem. in Supp.) Tom Paul, a UnitedHealth official, noted in a summary prepared after the meeting that PacifiCare provided only "little information" that was "very general," and stated that, based on the meeting, "[t]here is insufficient information to draw any due diligence conclusions about this important program." (Id.) To that end, UnitedHealth sent PacifiCare a list of questions concerning Part D on June 22. (Defs.' 56.1 ¶ 24.) In PacifiCare's response to the document, PacifiCare disclosed its "expected average *951 brand discount off of AWP,"[4] which was in fact the same rate that Omnicare ultimately agreed to in its contract with PacifiCare's agent, RxSolutions, in December 2005. (Part D Questions, Ex. 50 to Mem. in Opp'n, at UN008817.)
At a meeting between the parties on June 28, 2005,[5] approximately one week prior to the signing of the Merger Agreement, PacifiCare provided UnitedHealth with Part D information regarding "(1) product and distribution strategies, (2) benefit plan designs, and (3) financial assumptions," including PacifiCare's average low and average high plan pricing information from a sampling of regions. (Defs.' 56.1 ¶ 23.) On July 2, Peter Frank, an outside actuary retained by UnitedHealth who does not appear to have formally been a member of UnitedHealth's due diligence team, met with PacifiCare officials to exchange information about the Part D program. (Id. ¶ 25.) At this meeting, PacifiCare disclosed national average bid information for its Part D plans, and Frank provided corresponding information concerning UnitedHealth's Part D business. (Id.) The following day, Frank prepared a written summary of the meeting for UnitedHealth officials, in which he disclosed the profit margin PacifiCare expected in its Part D bids. (7/5/05 e-mail from Frank to Jelinek, App. 41 to Defs.' 56.1.) Frank also emphasized that his report was lacking in many specifics, including the names of the PacifiCare officials with whom Frank met "in case [the UnitedHealth officials receiving the report] may know any of them." (Id.) Frank further emphasized that "no information on regional bids or on distribution of expected enrollment by region is available. What you see [in the report] is most of what we have." (Id.) Frank also noted that he "prepared the report quickly under some time pressure to get a copy to the lawyers so that any potential competitively sensitive info could be removed from the report."[6] (Id.) Edward Lagerstrom, the head of UnitedHealth's Corporate Development at the time of the merger, agreed that UnitedHealth received limited information, stating in his deposition that UnitedHealth "wanted to be absolutely clear that [PacifiCare's PDP was not] going to lose a lot of money, but I did not need to see the long-term care contracts, particularly given that our antitrust attorney said that we could not see them. So we did not see them." (Lagerstrom Dep. at 218:8-14, App. 22 to Mem. in Supp.)
On July 6, 2005, the two parties signed the Agreement and Plan of Merger ("Merger Agreement"), which announced UnitedHealth's planned purchase of PacifiCare for approximately $8.8 billion. (Defs.' 56.1 ¶ 6.) Section 5.01 of the Merger Agreement prohibits PacifiCare from entering into any contracts before the consummation of the merger, other than those entered into in the ordinary course of business, "without [UnitedHealth's] prior written consent ... that involves [PacifiCare] *952 or any of its Subsidiaries incurring a liability in excess of three million dollars." (Merger Agreement § 5.01(a)(x), Ex. 72 to Mem. in Opp'n.) The December 2005 contract between RxSolutions and Omnicare generated about $130 million in revenue for Omnicare, which would appear to trigger the requirement of the Merger Agreement that PacifiCare secure UnitedHealth's approval for the Omnicare contract. (Capell Decl. ¶ 6, Attach. to Mem. in Opp'n.) However, Defendants have also provided a Company Disclosure Letter ("Letter"), referred to in § 5.01 of the Merger Agreement,[7] which appears by its terms to carve out an exception to the approval requirement. Specifically, the Letter provides that PacifiCare "and its Subsidiaries may enter into or amend any Contracts relating to their Part D standalone business" without seeking approval from UnitedHealth. (Company Disclosure Letter § 5.01(a)(1), Attach. to Phanstiel Decl., App. 47 to Mem. in Supp.)
The United States Department of Justice ("DOJ") reviewed the terms of the Merger Agreement to determine its potential effects on competition. (Defs.' 56.1 ¶¶ 7-8.) Subject to certain divestitures, none of which directly concerned Part D, DOJ approved the merger, and the transaction closed on December 20, 2005. (Id.)
III. PDP Approval & Negotiations with Omnicare
In addition to working on the merger, both UnitedHealth and PacifiCare spent much of the 2005 calendar year developing their PDPs to obtain approval from CMS for 2006. As explained above, a critical component to achieving CMS approval was entering into contracts with prescription drug providers, both for retail and LTC customers. To assist in the negotiations with these pharmacies, potential PDP sponsors contracted with pharmacy benefit managers ("PBMs"), who would act as brokers, negotiating contracts with institutional pharmacies on behalf of potential PDPs. Walgreens Health Initiatives, Inc. ("WHI") served as the PBM for UnitedHealth (and other PDP sponsors) in negotiating contracts with certain pharmacies on behalf of UnitedHealth. (Defs.' 56.1 ¶ 10.) PacifiCare utilized RxSolutions, an internal PBM that is a wholly-owned subsidiary of PacifiCare, to conduct its negotiations. (Id. ¶ 3.)
Omnicare is the largest pharmacy servicing LTC facilities in the country. (Ex. A to Rubinfeld Decl. ¶ 21, Attach. to Mem. in Opp'n.) In June 2005, Omnicare distributed its template pharmacy-network contract, which included a section called the "18 Patient Protections" (the "Patient Protections" or "Protections"). (Defs.' 56.1 ¶ 37.) According to Omnicare, the provisions grew out of an awareness of Omnicare's importance in the LTC marketplace and were designed primarily "to address the specific health and safety needs of nursing home residents, who require a higher standard of care." (Mem. in Opp'n at 8.) The Protections did provide certain benefits to plan enrollees; for example, one provision provision granted residents up to 180 days to transition from drugs not included in the plan to drugs that are, and another provision required the PDP sponsor to waive certain requirements that could delay the provision of drugs to LTC residents. (Mem. in Opp'n at 8.) Omnicare further contends that the Patient Protections *953 represent best clinical practices. Indeed, some potential defense witnesses acknowledged this in their depositions. (Bagley Dep. 260:1-13, Ex. 96 to Mem. in Opp'n; Infante Dep. 158:17-19, Ex. 164 to Mem. in Opp'n.)
The parties differ greatly in their characterizations of the Patient Protections, however. Defendants argue that many of the Patient Protections in fact violate Medicare regulations and would render a PDP ineligible to receive reimbursement from CMS. (Infante Memo at 1, App. 133 to Mem. in Supp.) In the opinion of outside counsel Marie Infante, who was retained by UnitedHealth, the violations would render UnitedHealth ineligible to receive reimbursement from CMS under Part D for its provision of drugs to LTC patients.[8] (Id.) Among other objections concerning the scope of the coverage afforded by the Patient Protections, Infante wrote that the Protections also impermissibly shifted the obligation of the PDP to respond to inquiries from enrollees to Omnicare. (Id. at 1-3.) Defendants also argue that PDP sponsors "had a rational economic incentive" not to agree to the Patient Protection provisions because those provisions would increase the costs of providing prescription drugs to the LTC patients. (Defs.' 56.1 ¶ 41.) Omnicare argues that the Protections were in fact in the economic interest of the sponsors because the sponsors had an interest in contracting with Omnicare (based on its large size). (Omnicare's Resp. to Defs.' 56.1 ¶ 41.) Further, Omnicare contends, because the Protections were favorable to potential enrollees, their adoption would enhance the PDPs' efforts to market themselves to potential enrollees. (Id.)
A. WHI-Omnicare Agreement
On July 29, 2005, after two months of negotiations, WHI, acting as the PBM for UnitedHealth as well as four smaller PDPs, entered into a pharmacy-network agreement with Omnicare (the "WHI-Omnicare Agreement"). (Defs.' 56.1 ¶¶ 11, 49.) In these pharmacy network contracts, the pharmacy is reimbursed for prescription drugs at a rate calculated as a percentage discount from the average wholesale price ("AWP"), plus a dispensing fee. (Id. ¶ 39.) The PDP's economic interest is to obtain a large discount from AWP, and a small dispensing fee. (Id. ¶ 40.) The Agreement also contained Omnicare's 18 Patient Protections, as did all the pharmacy-network agreements that Omnicare entered into prior to the August 1, 2005 deadline for PDPs to submit their LTC networks to CMS. (Id. ¶ 42.) In addition, the WHI-Omnicare Agreement provided that it would apply to any pharmacy acquired by Omnicare, but did not contain a parallel provision extending its reach to any PDP acquired by United-Health. (Id. ¶ 52.) Omnicare contends *954 that as a matter of interpretation, a PDP acquired by UnitedHealth would "automatically [be] covered under the WHI Agreement," but the Agreement contains no explicit provision providing for such a contingency. (Omnicare's Resp. to Defs.' 56.1 ¶ 52.) Finally, Omnicare acknowledges that the Agreement did not contain any provision "that would have prevented [UnitedHealth] from withdrawing the [UnitedHealth] Part D plans from the WHI-Omnicare Agreement and switching them to another Part D pharmacy network." (Id.; Omnicare's Resp. to Request to Admit No. 21, App. 56 to Mem. in Supp.)
B. RxSolutions-Omnicare Agreement
The negotiations between Omnicare and RxSolutions, PacifiCare's internal PBM, were considerably more complicated and drawn out. According to Defendants, PacifiCare's strategy was to set up its pharmacy networks using the RxSolutions template contractcalled an "Any Willing Provider" contractrather than using contracts prepared by pharmacies. Consistent with that strategy, in 2005, RxSolutions did not sign any contract that was prepared by a retail or LTC pharmacy. (Defs.' 56.1 ¶ 56, 59.) The standard reimbursement rate provided in the RxSolutions "Any Willing Provider" contract was substantially more favorable for the PDP than the one established by the WHI-Omnicare Agreement, providing both a lower dispensing fee and a greater discount from AWP. (Id. ¶ 57.)
On June 6, 2005, in the course of its negotiations on behalf of PacifiCare, RxSolutions sent a copy of its "Any Willing Provider" contract to Omnicare. (Id. ¶ 59.) Later that day, Tim Bien, Omnicare's Senior Vice-President of Professional Services who was responsible for negotiating pharmacy-network contracts with PBMs, participated in a conference call with RxSolutions and PacifiCare in which Bien stated that he would send a copy of Omnicare's form contract to RxSolutions. (Id. ¶¶ 36, 60.) Bien did so on June 21. (Id. ¶ 61; 6/21/05 e-mail from Smith to Anchondo, App. 73 to Mem. in Supp.) Both Omnicare and RxSolutions pushed for use of its own form contract as the basis for further negotiations; Robert Hill at Omnicare suggested that RxSolutions make revisions to Omnicare's form contract, but expressed a willingness for some flexibility by noting that the mark-up "will not commit Prescription Solutions to necessarily using Omnicare's form of agreement." (Defs.' 56.1 ¶ 63; 6/24/05 e-mail from Hill to Cortes, Ex. 91 to Mem. in Opp'n.) By the time of their next conference call on July 6, Bien noted that the parties were still "way off on price," but PacifiCare agreed to suggest changes to the Omnicare form contract rather than continue to insist upon its own. (Defs.' 56.1 ¶ 65; Bien Dep. 204:6-205:7, App. 18 to Mem. in Supp.) Rochele Cortes, a Pharmacy Contracting Manager at RxSolutions, did mark up the Omnicare form contract, noting in several places RxSolutions's position that various provisions, especially the Patient Protections, were either untenable from a business standpoint or violated CMS regulations; as of July 2005, Omnicare refused to agree to a contract that did not contain the Patient Protections. (Defs.' 56.1 ¶¶ 66-67; App. 75 to Mem. in Supp.)
According to Defendants, this impasse caused PacifiCare to conclude it would be unable to reach an agreement with Omnicare prior to the August 1 deadline and therefore broke off the negotiations. (Defs.' 56.1 ¶ 68.) Omnicare contends in this lawsuit that PacifiCare's termination of negotiations was actually the result of a conspiracy with UnitedHealth, designed to obtain more favorable rates from Omnicare for both PacifiCare and United-Health. *955 (Omnicare's Resp. to Defs.' 56.1 ¶ 68.) On July 14, about one week after PacifiCare and UnitedHealth signed the Merger Agreement, the negotiations between PacifiCare and Omnicare broke down. Rochele Cortes at RxSolutions sent Bien an e-mail stating, "We regret to inform you that based on the Omnicare agreement and the counteroffer rate ... we will not be engaging in a contract at this time with your company for Medicare Part D. Please feel free to contact me with any comments or questions." (7/14/05 e-mail from Cortes to Bien, App. 78 to Mem. in Supp.) Bien responded by saying, "Thanks for letting me know. We stand ready to negotiate should you decide to do so." (7/15/05 e-mail from Bien to Cortes, App. 78 to Mem. in Supp.) The next day, RxSolutions Director of Network Relations David Chaney e-mailed Cortes, "This time next year, after we merge with United, they [i.e. Omnicare] will be begging to come in." (7/15/05 e-mail from Chaney to Cortes, App. 80 to Mem. in Supp.) Cortes responded, "Let them beg!" (7/15/05 e-mail from Cortes to Chaney, App. 80 to Mem. in Supp.)
After breaking off negotiations with Omnicare, PacifiCare determined that its LTC network was 80-90% complete (i.e. PacifiCare had contracted with pharmacies within 75 miles of 80-90% of the LTC facilities where it had enrollees). (Defs.' 56.1 ¶ 72.) Defendants claim that PacifiCare intended to fill in the remaining gaps in its network with smaller, independent pharmacies; according to Omnicare, given how small these independent pharmacies were, that was not a realistic goal. (Omnicare's Resp. to Defs.' 56.1 ¶ 72.) In August 2005, CMS declared that PacifiCare's existing LTC network was deficient and informed PacifiCare that it needed to contract with additional pharmacies. (Defs.' 56.1 ¶ 77.) According to Cortes, PacifiCare considered approaching Omnicare to make up the gaps in its network; Omnicare disputes this, noting that after negotiations broke down in July, PacifiCare officials commented that Omnicare "shouldn't hold [its] breath" in waiting to hear back from PacifiCare. (Omnicare's Resp. to Defs.' 56.1 ¶ 78; 7/15/05 e-mail from Chaney to Cortes, Ex. 100 to Mem. in Opp'n.) In any event, PacifiCare decided that, given the short time frame (three days) that CMS provided to PacifiCare to cure the gaps, PacifiCare could satisfactorily plug the gaps by contracting with Managed Health Care Associates, Inc. ("MHA"), an organization that represented a number of smaller LTC pharmacies and with whom PacifiCare had fewer outstanding disagreements than it had with Omnicare. (Defs.' 56.1 ¶ 78.) Even with MHA in its network, CMS initially concluded that PacifiCare's LTC network was still deficient in one region, but after learning that PacifiCare in fact had seven LTC pharmacies in the region at issue (the District of Columbia), CMS approved PacifiCare as a national PDP on September 30, 2005. (Id. ¶¶ 80-81.) CMS also certified at least one other national PDP, Humana, without Omnicare in its network. (Id.)
Omnicare changed its strategy in late 2005 and early 2006 to accept contracts with PDPs that did not contain the Patient Protections. (Omnicare's Resp. to Defs.' 56.1 ¶ 107.) The reasons for the change, according to Omnicare, were to enable Omnicare to provide coverage for as many of its LTC patients as possible, and to respond to increasing pressure from CMS to do so. (Bien Dep. 127:12-128:4, Ex. 79 to Mem. in Opp'n.) PacifiCare, on the other hand, argues the change in strategy was caused by a weaker negotiating position and a concern that Omnicare might lose clients if it did not contract with more PDPs. Defendants point to an e-mail Bien received from other Omnicare officials that *956 stated, "Two [LTC] facility Executive Directors indicated it would be easier to change pharmacies than to change that many patients ... [which] underlines the need that exists ... to have a contract with [PacifiCare]." (11/30/05 e-mail from Evans to Bien, App. 104 to Mem. in Supp.) Omnicare denies that any threatened loss of business was significant and insists that no such concern had any bearing on its strategy shift in late 2005. (Omnicare's Resp. to Defs.' 56.1 ¶ 99.) In any event, it is undisputed that the majority (fifteen out of twenty-one) of the contracts that Omnicare entered into between August 1, 2005 and April 1, 2006 were PDP-written contracts that did not contain the Patient Protections. (Id. ¶ 43.) As of February 2006, the PDP-written contracts without the Protections governed over one-third of Omnicare's Part D business (including the RxSolutions contract, described below). (Id. ¶ 83.)
Presumably in order to determine whether Omnicare should resume its efforts to contract with PacifiCare, on October 17, 2005, Bien at Omnicare e-mailed Craig Stephens, the Vice President in charge of UnitedHealth's Part D contracting, asking, "Is there a sense of when United will close the acquisition of PacifiCare? When the deal closes, will PacifiCare be contracted with Omnicare as a result of the acquisition? Thanks for your help on this."[9] (Defs.' 56.1 ¶¶ 48, 84.) Stephens did not reply to this e-mail before conferring with other UnitedHealth officials, including Ann Tobin, counsel at UnitedHealth. Forwarding Bien's e-mail, Stephens wrote to Tobin, "Interestingshould we assume PacifiCare has not agreed with Omnicare?" (Id. ¶ 85.) After another e-mail from Bien pressed him for a reply, Stephens finally wrote back on October 31, explaining that "PacifiCare's Part D offering for 2006 is a unique contract with CMS. If and when the deal closes, PacifiCare will follow their own Part D product strategy throughout the 2006 calendar year." (Id. ¶ 87.) The next day, Bien forwarded this response to Omnicare CEO Joel Gemunder, noting his conclusion that "PacifiCare will not be included with the United Part D offering." (Id. ¶ 93.)
Shortly thereafter, Omnicare did contact PacifiCare to resume negotiations. (Id. ¶ 95.) PacifiCare asserts that, even though CMS had approved its LTC pharmacy-network without Omnicare, PacifiCare remained interested in negotiating with Omnicare in order to expand its network. (Id. ¶ 96.) Omnicare argues that PacifiCare actually still needed Omnicare, because it was concerned that CMS might heighten the "convenient access" standard by requiring that a PDP's LTC enrollees reside even closer to the pharmacies that provided their drugs. (Omnicare's Resp. to Defs.' 56.1 ¶ 96.) Specifically, Omnicare points to testimony from Angelo Giambrone, the RxSolutions Vice President of Industry and Network Relations, suggesting PacifiCare was concerned that CMS might be "raising the bar" regarding convenient access standards. (Giambrone Dep. 183:12-19, Ex. 86 to Mem. in Opp'n.) At Bien's request, in mid-November, Cortes again sent him the RxSolutions form contract, which PacifiCare claims it *957 still wanted to use as the starting point for any negotiations. (Defs.' 56.1 ¶¶ 95, 97.) Together with the RxSolutions "Any Willing Provider" contract, Cortes sent an-email saying, "We will need to work with this document in order to proceed." (11/18/05 e-mail from Cortes to Bien, App. 102 to Mem. in Supp.) Omnicare claims that it understood that the form contract proposal was a "take it or leave it" proposition and not an invitation to commence negotiations; in particular, Bien testified that because of time restrictionsOmnicare wanted to finalize its Part D network before January 1, 2006he asked PacifiCare and RxSolutions "for their best contract that they would give us, and I believe [the "Any Willing Provider" contract] was purported to be that." (Omnicare's Resp. to Defs.' 56.1 ¶¶ 97-98; Bien Dep. 434:13-435:7, App. 18 to Mem. in Supp.)
In any event, after receiving the RxSolutions form contract, Omnicare made no attempt to negotiate any of its termsnot even the reimbursement rateand simply signed the contract on December 6, 2005. (Defs.' 56.1 ¶¶ 100-101.) Chaney at RxSolutions testified that he was surprised that Omnicare made no attempt to negotiate any terms. (Chaney Dep. 124:18-22, App. 67 to Mem. in Supp.) The reimbursement rate in the RxSolutions contract was substantially lower than the rates Omnicare negotiated with other national PDPs, including UnitedHealthin fact, UnitedHealth's discount off of AWP in the WHI contract was only 75% of the discount provided in the RxSolutions contract, and UnitedHealth also paid a larger dispensing fee. (Rubinfeld Decl. ¶¶ 11-12, Attach. to Mem. in Opp'n.) Still, at least three small local PDPs, representing less than 1 % of Omnicare's January 2006 revenues, did negotiate lower rates than the RxSolutions contract contained. (Id.) As described above, Bien had directly asked Stephens whether PacifiCare would become a party to UnitedHealth's contract as a result of the merger. Yet Omnicare negotiators apparently did not consider the flip side of that question, and the contract contained no provision that precluded UnitedHealth from participating, after the merger, in the agreement that RxSolutions negotiated on behalf of PacifiCare.
C. UnitedHealth Joins RxSolutions-Omnicare Agreement
Omnicare contends in this lawsuit that UnitedHealth's decision in February 2006 to withdraw from the WHI-Omnicare Agreement and join the RxSolutions contract had been planned by UnitedHealth and PacifiCare for a long period of time before the merger was finalized. Omnicare claims that UnitedHealth's basic strategy is summed up in a document referred to as the "stalking horse memorandum," first circulated between UnitedHealth and PacifiCare officials on September 6, 2005.[10]*958 The two-page memo is titled "UnitedHealth Group's Pharmacy Management Options." (Ex. 215 to Mem. in Opp'n, at UN034675.) Page 1 discusses UnitedHealth's past experiences with PBMs and presents some basic information about RxSolutions, including the fact that it operates solely as an "in-house" PBM for PacifiCare and a description of the services RxSolutions provides. (Id.) The top of page 2 reads, in bold, "Several strategic options need to be considered to capitalize on the value proposition Prescription Solutions can bring to United." (Id. at UN034676.) The memo then lists three strategic options: "1. Continue to outsource all of United's PBM services .... 2. Adopt a mixed strategy of outsourcing selected PBM services/functions to external vendors and in source [sic] selected services/functions to Prescription Solutions.... 3. Eventually consolidate all PBM services internally under Prescription Solutions." (Id.) Under the second option, the memorandum asked, "Is there a role for a central group to manage all PBM services for United whether they are in-sourced or out-sourced to obtain the best financial terms, contracts and service?", and suggested as a solution, "Use Prescription Solutions as a stalking horse to obtain the best service and contracts." (Id.) Omnicare contends that this reference to using RxSolutions as a stalking horse demonstrates UnitedHealth's intention to "surreptitiously obtain more favorable contracts for [UnitedHealth] from vendors such as Omnicare." (Mem. in Opp'n at 21.)
UnitedHealth has a different explanation for its eventual withdrawal from the WHI-Omnicare Agreement. According to Defendants, UnitedHealth began harboring legal concerns about the WHI-Omnicare Agreement in general, and the 18 Patient Protections in particular, as early as August 2005. (Defs.' 56.1 ¶¶ 117-18.) Indeed, on September 12, two months before negotiations between Omnicare and PacifiCare resumed, Tobin sent Stephens an e-mail saying that UnitedHealth "may be requiring WHI to renegotiate our Omnicare agreement." (Id. ¶ 119). On November 9, Attorney Infante warned that there were legal problems with the WHI Agreement (as noted, Omnicare questions whether this decision was reached independently). (Id. ¶ 121.) Around this same time, WHI's own senior attorney, Kelly Simenson, also concluded that the WHI-Omnicare Agreement, at least as it concerns UnitedHealth, conflicted with Medicare Part D regulations.[11] (Id. ¶ 124.) On December 8, two days after Omnicare signed the RxSolutions contract, UnitedHealth expressed its concerns about the WHI Agreement to Omnicare, apparently for the first time. (Id. ¶ 125.) Later that month, WHI forwarded a copy *959 of the WHI-Omnicare Agreement to Omnicare, with proposed changes that WHI contended were necessary to bring the agreement into compliance with federal law and regulations. (Id. ¶ 126.) Omnicare concedes that "one or two" other unnamed PDPs raised legal concerns about the Patient Protections, and that several PDPsincluding MedImpact, Caremark, RxAmerica, Coventry, FirstHealth, and Independent Healthsigned contracts with Omnicare that did not contain the Protections. (Omnicare's Resp. to Defs.' 56.1 ¶ 131.) Bien believed that these objections regarding the Protections, including the claim that the Protections violated CMS regulations, were simply a negotiating tactic. (Id.) In early January 2006, UnitedHealth's outside counsel proposed an agreement, without many of the Protections, to replace the agreement negotiated on UnitedHealth's behalf by WHI. (Defs.' 56.1 ¶ 130.)
Defendants claim that UnitedHealth learned of the RxSolutions-Omnicare Agreement in January 2006. (Id. ¶ 132.) Omnicare contends that the evidence recited aboveespecially the stalking horse memorandumdemonstrates that UnitedHealth both knew of and devised strategy around the RxSolutions contract months before this time. (Omnicare's Resp. to Defs.' 56.1 ¶ 132.) Yet on January 11, 2006, Stephens at UnitedHealth e-mailed Giambrone, his counterpart at RxSolutions, asking, "Quick questiondo you have a Part D network agreement with Omnicare for LTC pharmacy?" (Defs.' 56.1 ¶ 132.) Later that day, Giambrone affirmed that RxSolutions/PacifiCare did have such an agreement: "YesDo you?" (Id.) Stephens responded twenty minutes later, "Yeswe do through WHI. Let's discuss on Friday." (Id.) According to Defendants, this correspondence marked the first time that UnitedHealth became aware of the RxSolutions contract with Omnicare. (Id.)
Following a meeting between Giambrone and Stephens on January 20, Stephens wrote an e-mail to Tobin exploring the possibility that UnitedHealth might benefit from PacifiCare's advantageous deal with Omnicare:
I learned from Angelo [Giambrone of RxSolutions] yesterday that PHS has a favorable agreement in place with Omnicare. We need to understand if we can utilize the [RxSolutions] agreement for our businessthis may offer a different approach we can take with Omnicare. Will you discuss/get copy from [PacifiCare's in-house counsel]?
(Id. ¶¶ 133-34.) In response, Tobin e-mailed PacifiCare's in-house counsel a couple of days later, requesting a copy of the RxSolutions-Omnicare Agreement. "Angelo suggested to Craig that it could be useful to us in finalizing our agreement with Omnicare or that we might even be able to use it," she wrote. (Id. ¶ 135.) On February 22, 2006, Stephens verbally informed Bien that UnitedHealth would be utilizing the RxSolutions contract, effective April 1, 2006; he confirmed this in writing on February 28. (Id. ¶ 137.)
IV. Omnicare files suit
Omnicare filed this action against Defendants on May 18, 2006 in the U.S. District Court for the Eastern District of Kentucky, the site of Omnicare's corporate headquarters and many potential witnesses. (Mem. Op. and Order [45] at 6.) The Kentucky district court transferred the matter to this court, relying on a forum selection provision of the WHI-Omnicare Agreement that provided for Illinois courts to have exclusive jurisdiction over disputes "arising under or in connection with" the Agreement. (Id. at 3.) Omnicare claims that, prior to the merger, UnitedHealth *960 and PacifiCare conspired to have PacifiCare obtain the lowest possible price from Omnicare and then switch UnitedHealth's plan over to the more favorable PacifiCare-Omnicare contract. In its First Supplemental and Amended Complaint ("Complaint"), Omnicare alleges that Defendants violated the Sherman Act, as well as a parallel Kentucky antitrust statute, by "conspir[ing] to coordinate their negotiations with Omnicare in order to ... fix and depress the prices paid by defendants to Omnicare for providing those services." (Am. Compl. ¶ 6.) Omnicare further alleges that Defendants conspired to defraud Omnicare, fraudulently misrepresented their intentions to Omnicare, and were unjustly enriched by their fraud.
Defendants moved to dismiss the antitrust claims in the Complaint for failure to state a claim on which relief can be granted. This court denied the motion on September 28, 2007, holding that Omnicare had "pleaded facts which plausibly suggest that the merger agreement constituted a contract, combination, or conspiracy between UnitedHealth and PacifiCare under section 1 of the Sherman Act." Omnicare, Inc. v. UnitedHealth Group, Inc., 524 F.Supp.2d 1031, 1039 (N.D.Ill.2007). The court further held that Omnicare had pleaded sufficient facts to satisfy the other elements of the antitrust claims, namely, that Defendants' conduct resulted in an unreasonable restraint of trade, that Omnicare was a proper plaintiff to bring the suit, and that Omnicare had suffered an injury recognized by antitrust laws. Id. at 1039-44.
On June 20, 2008, Defendants moved for summary judgment on all claims. On the same date, Omnicare filed a Motion for Partial Summary Judgment Pursuant to Rule 56 Or in the Alternative Motion to Strike, arguing that five affirmative defenses advanced by Defendants fail as a matter of law. The court addresses both summary judgment motions in this opinion.
DISCUSSION
Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). Unlike a motion to dismiss, a motion for summary judgment requires the opposing party to present evidence "showing a genuine issue for trial." FED. R. CIV. P. 56(e). A genuine issue of material fact exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court will draw all reasonable inferences from the evidence in favor of the nonmoving party, id. at 255, 106 S.Ct. 2505, but the nonmoving party still bears the burden of establishing the existence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
I. Federal Antitrust Claim
Section 1 of the Sherman Act is designed to prevent business entities from entering into collusive agreements. By its terms, section 1 prohibits "[e]very contract, combination ..., or conspiracy, in restraint of trade." 15 U.S.C. § 1. In the usual case, a price-fixing conspiracy exists between sellers who agree to artificially set their prices above or below market prices. See Int'l Outsourcing Servs., LLC v. Blistex, Inc., 420 F.Supp.2d 860, 864 (N.D.Ill.2006) (citing Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 348, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982)). Illegal *961 agreements may also be made between buyers who conspire to establish a price below market levels, a situation often referred to as a "buyers' cartel." Int'l Outsourcing Servs., 420 F.Supp.2d at 864. To establish a successful section 1 claim against a buyers' cartel, a plaintiff must prove: (1) the existence of a contract, combination, or conspiracy between buyers; (2) an unreasonable restraint of trade in the relevant market; and (3) an injury caused by the cartel. See Denny's Marina v. Renfro Prods., 8 F.3d 1217, 1220 (7th Cir.1993).
Defendants argue that Omnicare cannot establish the existence of a genuine issue of material fact supporting its claim that Defendants violated section 1 of the Sherman Act. See 15 U.S.C. § 1. Specifically, Defendants argue that Omnicare has not presented sufficient evidence to avoid summary judgment on each of the three elements of the claim outlined above. The court agrees with Defendants that Omnicare has not established a genuine issue of material fact that the Defendants engaged in a contract, combination, or conspiracy in restraint of trade. Although the parties also devoted substantial briefing to the other two elements, the failure to establish a genuine issue on the first element is dispositive of the entire claim, and the court therefore does not consider whether a genuine issue of material fact exists concerning an unreasonable restraint of trade or whether Omnicare was injured as a result of anticompetitive behavior.
Omnicare can prove the existence of an agreement through direct or circumstantial evidence. Miles Distribs., Inc. v. Specialty Constr. Brands, Inc., 476 F.3d 442, 449 (7th Cir.2007). Direct evidence is "evidence tantamount to an acknowledgment of guilt," while circumstantial evidence is "everything else including ambiguous statements." In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 662 (7th Cir.2002). When relying on circumstantial evidence to establish the existence of a conspiracy, at least some of the evidence "must tend to exclude the possibility that the alleged conspirators acted independently rather than in concert." Miles Distribs., 476 F.3d at 449 (citing Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984)). This standard does not, however, require the plaintiff to exclude any possibility that the defendants acted independently. See In re Brand Name Prescription Drugs Antitrust Litig., 186 F.3d 781, 787 (7th Cir.1999). Rather, the standard merely establishes that "conduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy." Matsushita, 475 U.S. at 588, 106 S.Ct. 1348 (citing Monsanto, 465 U.S. at 764, 104 S.Ct. 1464). Therefore, while the plaintiff in an antitrust case faces no higher burden to defeat summary judgment than a plaintiff in another case, Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 468, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992), antitrust law does "limit[ ] the range of permissible inferences from ambiguous evidence in a [section] 1 case." Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 660 (7th Cir.1987) (quoting Matsushita, 475 U.S. at 588, 106 S.Ct. 1348).
Omnicare argues that the voluminous evidence presented with this motion creates a genuine issue of material fact as to the existence of an illegal agreement between UnitedHealth and PacifiCare. First, Omnicare argues that the Merger Agreement between UnitedHealth and PacifiCare by its own terms establishes the existence of a conspiracy in restraint of trade. Second, Omnicare claims that PacifiCare's actions in its contract negotiations *962 with Omnicare were economically irrational unless understood as the product of concerted action with UnitedHealth. Omnicare's final argument is that the information exchanged by the merging entities in the period leading up to the merger was competitively sensitive and creates substantial evidence from which a jury could find the existence of a conspiracy.
For the reasons explained here, the court concludes that the evidence on which Omnicare relies is at least as consistent with independent action by the Defendants as it is with an unlawful agreement. Accordingly, Defendants are entitled to summary judgment on Count I.
A. Merger Agreement
The main pillar of Omnicare's proof of a contract, combination, or conspiracy is the Merger Agreement signed by PacifiCare and UnitedHealth. In denying Defendants' motion to dismiss, this court held that "Omnicare has pleaded facts which plausibly suggest that the merger agreement constituted a contract, combination, or conspiracy between UnitedHealth and PacifiCare under section 1 of the Sherman Act." Omnicare, Inc., 524 F.Supp.2d at 1039. At the summary judgment stage, however, merely pleading sufficient facts will not suffice to withstand a motion for summary judgment; rather, the plaintiff must make an affirmative showing of proof that a genuine issue of material fact exists that requires a trial. See Ruffin-Thompkins v. Experian Info. Solutions, Inc., 422 F.3d 603, 607 (7th Cir.2005) (citing Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir.1988)). An examination of the Merger Agreement itselfincluding the materials incorporated by reference into the agreementshows that Omnicare has not made such a showing here.
Omnicare emphasizes a provision of the Merger Agreement (the "approval provision") that requires PacifiCare to obtain UnitedHealth's approval for any transaction, other than those entered into in the ordinary course of business, in excess of $3 million. Specifically, section 5.01 of the Merger Agreement prohibits PacifiCare from "enter[ing] into ... any Contract ... that involves [PacifiCare] or any of its Subsidiaries incurring a liability in excess of three million dollars." (Merger Agreement § 5.01(a)(x), Ex. 72 to Mem. in Opp'n.) In Omnicare's view, the approval provision sets such a low threshold that it essentially grants UnitedHealth control over all of PacifiCare's Part D contracts. In response, Defendants point to exceptions in the Merger Agreement that carve out the Part D contract entered into by RxSolutions from the approval requirement. Most notably, Defendants point to the Company Disclosure Letter ("Letter") referred to in section 5.01 of the Merger Agreement. Section 5.01 establishes the $3 million ceiling for PacifiCare transactions that do not require UnitedHealth approval, except as "provided in Section 5.01(a) of the Company Disclosure Letter." (Id.) That Letter specifically authorizes PacifiCare "and its Subsidiaries [to] enter into or amend any Contracts relating to their Part D standalone business ...." (Company Disclosure Letter § 5.01(a) (1), Ex. 73 to Mem. in Opp'n.) Omnicare has not challenged Defendants' interpretation of the provision: that it exempts PacifiCare from securing UnitedHealth's approval before entering into a Part D contract. Instead, Omnicare casts doubt on the Letter's authenticity, arguing that it is only a draft, and characterizes Defendants' tardy disclosure of the Letter as an "affront to this court." (Mem. in Opp'n at 37.) None of these reasons provide a basis on which the court is free disregard the letter.
*963 Authentication of a document can be made by a "witness with knowledge" who testifies "that a matter is what it is claimed to be." FED.R.EVID. 901(b)(1). PacifiCare's Chief Executive Officer and President at the time of the merger, Howard Phanstiel, confirmed the parties' interpretation of the Letter, testifying that he "understood that Part D contracts with providers, like institutional pharmacy provider Omnicare, Inc., were exempted" from the approval provision by the Company Disclosure Letter. (Phanstiel Decl. ¶¶ 4-5, App. 47 to Mem. in Supp.) Phanstiel further asserted that the Letter attached to his Declaration was a "true and correct copy" of the Letter, which sufficiently authenticates the Letter under Rule 901(b)(1). (Id. ¶ 5.) Contrary to Omnicare's suggestion, the copy of the Letter attached to Phanstiel's Declaration is not labeled as a "draft," and Omnicare has presented no other basis for the conclusion that it was not a binding part of the PacifiCare/UnitedHealth Merger Agreement. Omnicare's suggestion that the court should disregard the Letter because it is unexecuted is insufficient in this regard: the Letter is not a separate agreement that required separate execution by the parties, but rather is incorporated by reference into the Merger Agreement based on the explicit reference in § 5.01 of the Agreement. Finally, Omnicare argues that the Defendants' production of the Letter at this late stage in the proceedings, two years after the action was initially filed, is an "affront to the court." (Mem. in Opp'n at 37.) The court is also puzzled by Defendants' regrettable decision to withhold materially beneficial evidence until the summary judgment stage. Nonetheless, nothing in the record casts serious doubt upon the authenticity of the Letter, and the court will not exclude relevant evidence solely on the basis of effrontery.
Finding no basis on which to exclude the Company Disclosure Letter, the court must consider it in determining whether a genuine issue exists as to the existence of a conspiracy based on the Merger Agreement. In ruling on the motion to dismiss, the court concluded that the allegation that Defendants "coordinated their decisions regarding PacifiCare's entry into new agreements" was sufficient to state a claim. Omnicare, 524 F.Supp.2d at 1037. Now at the summary judgment stage, Omnicare bears the burden of showing that a genuine issue exists as to whether such coordination actually took place. The Company Disclosure Letter explicitly excludes PacifiCare's Part D negotiations from requiring UnitedHealth's approval, and Phanstiel stated that, to the best of his knowledge, "PacifiCare did not ask for United's prior consent to enter into any pharmacy-network contract with Omnicare or any other pharmacy provider." (Phanstiel Decl. ¶ 7, App. 47 to Mem. in Supp.) All that Omnicare offers in rebuttal is the text of § 5.01 of the Merger Agreement, but as noted above, the relevance of that text is undermined by the Company Disclosure Letter.
Omnicare also relies on two consent decrees that the United States entered into with companies accused of violating the Sherman Act to argue that the UnitedHealth-PacifiCare Merger Agreement is anticompetitive. According to Omnicare, the merger agreements in both cases contain similarly restrictive provisions, which DOJ relied upon in determining the existence of a conspiracy in restraint of trade. As an initial matter, the court notes that these decrees have no precedential value. More importantly, the provisions of the merger agreements involved in those other cases are clearly distinct from the approval provision of the UnitedHealth/PacifiCare agreement. The provision in the Merger Agreement between UnitedHealth and PacifiCare *964 is a relatively common feature in merger agreements intended to insure that the acquired company (PacifiCare) does not assume any major liabilities for which the acquiring company (UnitedHealth) would be responsible after the merger. See ANTITRUST ADVISER, supra § 3:74, at 3-270. By contrast, the merger agreement in United States v. Computer Assocs. Int'l, Inc., No. 01-02062, 2002 WL 31961456 (D.D.C. Nov. 20, 2002), contained a provision preventing the acquired company from setting prices below a certain level. Id. at *9. This provision could not be explained in terms of its possible effect on the proposed merger and appeared to be motivated almost entirely by anticompetitive interests. Id. (provision is "extraordinary and not reasonably ancillary to any legitimate goal of the transaction").
Nor does United States v. Gemstar-TV Guide Int'l, Inc., No. 03-0198, 2003 WL 21799949 (D.D.C. July 11, 2003) establish that the UnitedHealth/PacifiCare agreement violates the Sherman Act. In fact, in the Gemstar case, DOJ explicitly sanctioned the use of terms that limit the acquirer's liability. Id. at *3 (permitting merging parties to agree to "forego conduct that would cause a material adverse change in the value of to-be-acquired assets during the Pre-consummation Period"). As numerous commentators, including Omnicare's expert and the general counsel of the Federal Trade Commission, have noted, these approval provisions are common practice in mergers, and the presence of one here does not constitute evidence of conspiracy. (Coates Report ¶ 68, Attach. to Mem. in Opp'n; William Blumenthal, The Scope of Permissible Coordination Between Merging Entities Prior to Consummation, 63 Antitrust L.J. 1, 55-56 (Fall 1994).) In the absence of other evidence of a conspiracy, the threshold value of $3 million is not so low as to give rise to an inference of conspiracy.
In sum, the Merger Agreement by its own terms did not require UnitedHealth to approve PacifiCare's Part D contracts.[12] The commonly-adopted provision requiring the acquirer's approval of certain transactions therefore cannot provide the basis to conclude that a conspiracy in restraint of trade existed.
B. Economic Evidence
Omnicare next contends that economic evidence demonstrates that Defendants must have entered into an illegal agreement in restraint of trade. Generally, courts will not second-guess business judgments made by a private actor. See Lamb's Patio Theatre, Inc. v. Universal Film Exchanges, Inc., 582 F.2d 1068, 1070 (7th Cir.1978). Some courts have, however, recognized that evidence that a defendant's action, if taken independently, would be contrary to its economic self-interest "tend[s] to exclude the likelihood of independent conduct" and may therefore constitute circumstantial evidence in support of a Sherman Act claim sufficient to survive summary judgment. Re/Max Int'l, Inc. v. Realty One, Inc., 173 F.3d 995, 1009 (6th Cir.1999). Omnicare argues that PacifiCare's bargaining strategy makes no sense in the absence of a conspiracy because a contract with Omnicare was the only practical way for PacifiCare to provide drugs to many of its enrollees in LTC facilities serviced by Omnicare. If PacifiCare had not reached a secret agreement with UnitedHealth, Omnicare concludes, *965 its bargaining behavior was so reckless that it endangered PacifiCare's reputation, its Part D certification by CMS, and even the merger itself. Omnicare also claims that the reimbursement rate it received in the PacifiCare contract is itself evidence of a conspiracy because it was significantly lower than prevailing market rates and could only have been extracted from Omnicare by anticompetitive behavior. The court addresses these arguments in turn.
1. PacifiCare's Bargaining Strategy
In mid-July 2005, PacifiCare had not yet been approved by CMS as a national PDP. Given Omnicare's widely-felt presence in the market, Omnicare argues that PacifiCare's decision to break off negotiations at that point in the CMS-approval process was reckless and made no economic sense. First, Omnicare argues that the decision risked PacifiCare's ability to get drugs to its enrollees living in nursing homes serviced by Omnicare, which would seriously harm PacifiCare's brand name with senior citizens. Second, the decision to break off negotiations also put PacifiCare's certification with CMS at risk. On March 16, 2005, CMS had explicitly told PacifiCare, "We would expect that the plan would seek to enter into a network contract with a pharmacy serving the LTC facility as soon as practicable." (3/16/05 Long-Term Care Guidance, Ex. 20 to Mem. in Opp'n at 4.) According to Omnicare, by breaking off negotiations with the institutional pharmacy that was likely to service many of PacifiCare's dual eligibles and that possessed exclusive contracts with many of the LTC facilities, PacifiCare jeopardized its CMS certification and risked the loss of $64 million in Part D profits PacifiCare was expecting in 2006. Finally, Omnicare suggests that PacifiCare's economically-irrational decision to break off negotiations with Omnicare may even have put PacifiCare's planned merger with UnitedHealth at risk, if UnitedHealth thought the loss of the expected PDP profits made the merger no longer desirable.[13] Based on information available in PacifiCare's public financial statements, Omnicare argues that PacifiCare's strategy put at risk $64 million in Part D profits, a gain in its market capitalization of $1.2 billion, $243 million in merger-related costs that PacifiCare would have to realize as losses (for tax purposes) had the merger failed, and $60 million in executive bonuses to be paid upon completion of the merger; in exchange, PacifiCare stood to gain only $11 million based on better reimbursement rates in the Omnicare contract over three years. (Coates Decl. ¶ 5, Rubinfeld Decl. ¶ 9, Attachs. to Mem. in Opp'n.) And, if UnitedHealth were to become a party to the RxSolutions contract, the newly-merged entity stood to gain somewhere between $130 and $300 million. These circumstances, according to Omnicare, create a genuine issue of material fact as the economic reasonableness of PacifiCare's decisions.
In defense of its business judgment, PacifiCare relies principally on the fact that its strategy succeededPacifiCare's PDP was certified by CMS without Omnicare and it eventually received a lower rate in its contract with Omnicare. This fact by itself, according to PacifiCare, undermines any challenge to its decision and defeats the contention that PacifiCare's decision to call Omnicare's bluff is inconsistent with independent action on the part of PacifiCare. The court agrees that the success of PacifiCare's strategy entitles it to very strong judicial deference, for if business judgments generally deserve deference, *966 see Brach v. Amoco Oil Co., 677 F.2d 1213, 1223 (7th Cir.1982), then successful business judgments deserve even greater deference.
In fact, the record shows that PacifiCare's business strategy made sense even without the benefit of hindsight. At the time PacifiCare refused to sign the Omnicare contract and insisted on working from the RxSolutions standard contract, there were several other PDPsincluding at least one other national PDPthat also refused to sign Omnicare's contract before the CMS bid deadline of August 1. In August 2005, CMS informed PacifiCare that its LTC pharmacy network was deficient and that PacifiCare needed to expand its network by contracting with additional pharmacies. Rather than returning to Omnicare, with whom PacifiCare believed there were a number of outstanding issues, PacifiCare thought it could sufficiently patch its pharmacy network by contracting with MHA. CMS ultimately approved PacifiCare's PDP with MHA, and not Omnicare, in its network. Similarly, Humana, another national PDP, contracted with enough other pharmacies to meet the CMS requirements without Omnicare in its network.
Omnicare believes its own centrality to a national PDP's LTC strategy make PacifiCare's insistence upon using its own form contract, initially at the expense of any agreement with Omnicare, irrational and thereby creates a genuine issue of material fact concerning the reasonableness of the strategy. The record undermines this assertion, as well. Omnicare's bargaining power with other PDPs in addition to PacifiCare was apparently greatly reduced as 2005 wore on; the reasonableness of PacifiCare's decision to use the RxSolutions contract is demonstrated by the fact that so many other PDPs insisted upon their own contracts that Tim Bien of Omnicare conceded that it "was the standard practice for PBMs" to insist on the PBM's own form contract. Fully 15 out of Omnicare's 21 contracts entered into between August 1, 2005 and April 1, 2006 used the PDP's form contracts, rather than the version proposed by Omnicare.[14] (Defs.' 56.1 ¶¶ 43, 45.) The record indicates that Omnicare simply was not as essential to CMS approval as it argues it should have been.
It appears from the record that CMS's approval of PacifiCare's PDP without Omnicare so strengthened PacifiCare's bargaining position that it was justified in again demanding that Omnicare sign PacifiCare's own "Any Willing Provider" contract. In early November, CMS distributed a document intended for PDPs that had already been certified, cautioning that "in order to facilitate plan compliance with the LTC convenient access standard, we strongly encourage plans to contract with LTC pharmacies serving all the LTC facilities in which their enrollees might reside as soon as practicable." (LTC Convenient Access Standard Statement at 1, Ex. 89 to Mem. in Opp'n.) One would expect this directive to entice PacifiCare to resume negotiations with Omnicare, but to suggest, as Omnicare does, that it substantially increased Omnicare's bargaining position is unjustifiedif it had, one would expect that PacifiCare would have been eager to sign Omnicare's form contract rather than the other way around. Within one month of the CMS directive, PacifiCare did enter into a contract with Omnicare, *967 and it did so from a superior bargaining position as a large CMS-certified PDP. Perhaps as a result, the reimbursement rates in that contract were substantially more favorable to PacifiCare than the rates PacifiCare and Omnicare had discussed earlier. In short, the contract that Omnicare signedwithout making a counterofferwas undisputedly favorable to PacifiCare and undermines Omnicare's assertion that Omnicare was in the stronger bargaining position.
At its core, Omnicare's theory would require the court to hold that a bargaining strategy that was ultimately successful and saved PacifiCare money was nevertheless illogical and contrary to its economic interest. It may not be impossible for a plaintiff to argue that a successful business strategy was economically irrational, but such an argument requires, at a minimum, a stronger showing than was made here, where PacifiCare demonstrated a rational basis for its actions and showed that other PDPs acted similarly. Granting due deference to the business decisions of PacifiCare, the court cannot conclude that its successful bargaining strategy was so irrational that it was inconsistent with independent action.
2. Reimbursement Rate
Omnicare next contends that the reimbursement rate provided in the Omnicare-RxSolutions contract was so low as to be proof of a conspiracy. Information about uncompetitive prices may be probative evidence suggesting the existence of a conspiracy. See JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F.3d 775, 778-79 (7th Cir.1999). Omnicare has provided an expert's report concluding that the reimbursement rate paid by PacifiCare under the RxSolutions contract was significantly lower than other national PDP's rates paid to Omnicare. According to Omnicare, PacifiCare's ability "to extract a lower reimbursement rate from Omnicare than other PDPs that were more than five times [PacifiCare's] size simply makes no economic sense." (Mem. in Opp'n at 56-57.)
If PacifiCare was indeed successful in negotiating an unusually favorable rate, Omnicare has failed to produce any evidence that suggests this was a result of anything other than unsuccessful bargaining on Omnicare's part. When negotiations between PacifiCare and Omnicare resumed in November 2005, PacifiCare demanded that further negotiations take place on the basis of the RxSolutions contract, and sent Omnicare a copy. Rather than suggest any changes to the contract or the reimbursement rate, Omnicare signed the copy without negotiation. If PacifiCare's proposed lower rate had been problematic or unconscionable, one would expect Omnicare to protest or at least make a counterproposal. The record contains no indication that the rate was non-negotiable or that Omnicare otherwise felt some economic coercion to enter into the contract. Omnicare's characterization of the lower reimbursement rate as being "extracted" from Omnicare is inconsistent with evidence that the contract was willingly entered into by two sophisticated parties. Moreover, the rate at issue, while lower than the rates offered by other national PDPs, was higher than the rates Omnicare had agreed to with three local PDPs. These local PDPs admittedly made up a small portion of Omnicare's business, but the existence of these contractsas well as Omnicare's silence regarding the ratedefeats the inference that PacifiCare's rate was so low as to be suspect on its face. If the contract really made no economic sense, as Omnicare now contends, one would not have expected Omnicare to enter into that contract so readily; even given Bien's stated concern that he *968 was worried about Omnicare's ability to provide coverage to PacifiCare enrollees, some bargaining on price and other terms would still be expected. Far from being inconsistent with independent action, this evidence is entirely consistent with one company's finding itself in a superior bargaining position vis a vis a supplier and offering a contract to the supplier on terms favorable to itself. Therefore, nothing in the reimbursement rate paid by PacifiCare constitutes evidence of a conspiracy.
C. Premerger Communications and Information Exchange
Finally, Omnicare argues that communications that took place between UnitedHealth and PacifiCare prior to the completion of the merger on December 20, 2005 create a genuine issue as to the existence of a conspiracy. Omnicare asserts that this evidence is all direct evidence; in fact, the court sees none of it as "tantamount to an acknowledgment of guilt." Because the evidence requires the drawing of inferences to find the existence of a conspiracy, that evidence is actually circumstantial and must be considered under the Monsanto/Matsushita framework. High Fructose Corn Syrup, 295 F.3d at 662. Accordingly, Omnicare must again offer at least some evidence that "tends to exclude the possibility of independent action." Monsanto, 465 U.S. at 768, 104 S.Ct. 1464.
At the outset, the court notes that virtually no case law establishes standards for determining when premerger discussions are anticompetitive. Some federal agencies have, however, expressed concern about the potential anticompetitive effects of premerger communications and coordination. Accord ANTITRUST ADVISER, supra § 3:74, at 3-271. DOJ and the Federal Trade Commission ("FTC") have entered into a handful of consent decrees with companies who illegally coordinated premerger activities; but these cases are not very instructive because they did not all concern alleged Sherman Act violations, and furthermore, were all "easy cases that involved egregious conduct." William Blumenthal, General Counsel, FTC, The Rhetoric of Gun-Jumping, Remarks Before the Association of Corporate Counsel, Annual Antitrust Seminar of the Greater New York Chapter (Nov. 10, 2005), at 2-3, available at http://www.ftc.gov/speeches/05 speech.shtm. The balance the court seeks to strike here is a sensitive one. On the one hand, courts should not allow plaintiffs to pursue Sherman Act claims merely because conversations concerning business took place between competitors during merger talks; such a standard could chill business activity by companies that would merge but for a concern over potential litigation. On the other hand, the mere possibility of a merger cannot permit business rivals to freely exchange competitively sensitive information. This standard could lead to "sham" merger negotiations, or at least allow for periods of cartel behavior when, as here, there is a substantial period of time between the signing of the merger agreement and the closing of the deal. With this delicate balance, as well as the Monsanto/Matsushita framework, in mind, the court considers the evidence offered by Omnicare of premerger information exchange.
1. Late June/Early July 2005
As detailed above, UnitedHealth and PacifiCare first began discussions of a possible merger in January 2005, but talks between the two entities intensified in the weeks leading up to the signing of the Merger Agreement on July 6. In a series of meetings in June and July, the two parties exchanged strategic information, including Part D average pricing. Defendants emphasize that the information exchange *969 took place between senior members of the merging entities, referred only to averages and ranges, did not mention the prices offered to Omnicare, and virtually never discussed long-term care networks or the contract terms offered to LTC pharmacies.
Omnicare disputes these characterizations of the talks. First, Omnicare disputes that these talks were exclusively among high-level officials of PacifiCare and UnitedHealth. This factor is relevant because high-level executives are less likely to be directly involved in developing the Part D proposals and less directly able to use any of the competitively sensitive information, to the extent such information was disclosed. Omnicare claims that "business operations employees" were involved in the June due diligence meetings. (Omnicare's Resp. to Defs.' 56.1 ¶ 23.) Omnicare fails to define what exactly it means by "business operations employees," however, and a review of the attendees at the June due diligence meetings, listed above in the Statement of Facts, shows that it was attended primarily by CEOs, CFOs, and other senior executives of various UnitedHealth and PacifiCare business segments. (Due Diligence SummaryPoint Part D, Ex. 38 to Mem. in Opp'n.) That these officials may have overseen aspects of Part D can hardly be surprising; indeed, it would be stranger if the executives at the Part D due diligence meetings had little or no connection to the Part D business. In addition, the UnitedHealth, PacifiCare, and RxSolutions officials who appeared to have the most direct contact with Omnicaresuch as Rochele Cortes at RxSolutions or Craig Stephens at UnitedHealthdo not appear to have been present at these meetings. The blanket usage of the term "business operations employees" therefore has no bearing on whether UnitedHealth and PacifiCare officials improperly exchanged information during due diligence.
Even if those directly involved with negotiations with Omnicare and other pharmacies were not those directly involved in the due diligence meetings, Omnicare has demonstrated the existence of a genuine issue of material fact as to whether such personnel were provided with information in excess of what was permitted by the confidentiality agreements. A UnitedHealth official on the due diligence team, Jerry Knutson, testified that other UnitedHealth personnel not on the team were consulted about matters learned in due diligence. (Knutson Dep. 85:21-86:11, Ex. 32 to Mem. in Opp'n.) Knutson explained that these consultations were essential for the due diligence team to assess the relevance of the information the team was receiving. (Id. at 86:15-22.) The consultations nevertheless do create concerns that competitively sensitive information was leaked outside of the parameters set by the confidentiality agreement covering such information. Defendants deny having employed the information for any improper purposes, but, though Knutson's reasons for sharing the information may be benign, the risk remains that these officials could have used the information they obtained in anticompetitive ways to benefit their own businesses. Omnicare has thus established a genuine issue of material fact as to whether Plan D decision makers were involved in these discussions. Coupled with other evidence of improprieties during merger negotiations, this evidence might well be inconsistent with independent action. By itself, however, this issue does not support an inference of conspiracy because it is not inconsistent with the belief that the two entities were still acting independently.
Omnicare's other suggestions of impropriety are less convincing. Omnicare *970 observes that during the course of due diligence, UnitedHealth was shown a PacifiCare document entitled "Form of Prescription Drug Services Agreement," which was also the title of the "Any Willing Provider" contract that RxSolutions ultimately signed with Omnicare. This contract template is not specific to Part D contracts, however, and, by itself, does not create a binding contract to provide LTC care under Part D. (Lagerstrom Decl. ¶ 3, App. 206 to Defs.' Reply.) Nor does the PacifiCare form contain any Part D pricing information or make any reference to Omnicare or any other specific institutional pharmacy. (Id.) The fact that it is substantially the same form as the contract that Omnicare later signed is thus of little significance, because nothing in this document communicates anything about prices that PacifiCare was offering to LTC providers or other pharmacies under Part D. All that it shows is that RxSolutions possessed in June, and in fact used in December, a generic template to enter into an agreement with an institutional pharmacy. This fact is simply immaterial to this summary judgment motion.
Omnicare also points to the price information that was exchanged during the due diligence process as further evidence of anticompetitive behavior. Specifically, the Part D questionnaire that UnitedHealth sent PacifiCare asked for PacifiCare's expected average brand discount off of AWP. PacifiCare replied that the rate was AWP[x]% for its Preferred Network, which was in fact the same rate that PacifiCare ultimately paid in the Omnicare contract. Omnicare does not argue that this price information was irrelevant to UnitedHealth's determination of an appropriate offer price for the merger, and the court agrees that the information had some importance to consummating the Merger Agreement. UnitedHealth's method of obtaining the admittedly relevant information appears to the court to be appropriately circumspectrather than requesting all information about all relevant markets, UnitedHealth asked only for averages and ranges. Nor can Omnicare properly dispute the assertion of Ken Lagerstrom, head of UnitedHealth's Corporate Development, that "no Part D information that was available to us ... relate[d] to specific contracts." (Lagerstrom Dep. 393:24-394:2, App. 22 to Mem. in Supp.) Omnicare claims that UnitedHealth's access to PacifiCare's "Any Willing Provider" contract undercuts this claim, but as noted above, that form is a contract template that does not provide specifics and Omnicare has not established any genuine issue as to the materiality of that form.
The natural question arising from this information exchange is, was this information exchange necessary for the due diligence process? See Michael C. Naughton, Gun-Jumping and Premerger Information Exchange: Counseling the Harder Questions, 20-SUM ANTITRUST 66, 68 (Summer 2006). Certainly, one could not expect that the two merging entities would not discuss Part D plans at all, so the exchange of some information relating to Part D does not automatically create a genuine issue as to the existence of a conspiracy. And, as discussed above, the pricing information that was exchangedarguably the most competitively sensitive of any of the exchanged informationwas provided late in the process (less than one month before the signing of the Merger Agreement) and was conveyed in the form of averages and ranges rather than specific bargained-for rates. In early June 2005, UnitedHealth officials were even complaining about the difficulty of assessing PacifiCare's "level of readiness to implement the Part D business and the level of business *971 risk they are assuming." (Paul Memo at 2, App. 29 to Mem. in Supp.) Omnicare has failed to establish that the price and strategy information that was subsequently exchanged creates a genuine issue as to the existence of a conspiracy. Rather, the evidence suggests that the information exchange was as general as possible to enable UnitedHealth to evaluate PacifiCare's Part D readiness and its level of business risk. Even though it appears that UnitedHealth did not scrupulously enforce the segregation of its due diligence team from other members, that fact alone cannot alter the generally benign nature of the information exchanged. From the record, it appears that this exchange of information was necessary to due diligence and was performed in a reasonably sensitive manner.
Three additional pieces of evidence warrant further discussion. First, UnitedHealth's sharing of its own average price information with PacifiCare could be seen as unnecessary and circumstantial evidence of a conspiracy. Some commentators argue that the inference of a conspiracy is significantly weakened where it is the target (here, PacifiCare) who is providing information to the acquirer. See Blumenthal, The Scope of Permissible Coordination Between Merging Entities Prior to Consummation, supra at 5 (quoting a past general counsel of the FTC). Although the vast majority of the UnitedHealth-PacifiCare information exchange falls into this category, UnitedHealth did provide PacifiCare with UnitedHealth's own average bid information on July 2. (Defs.' 56.1 ¶ 25.) The rationale for the acquiring corporation's providing price informationeven average price informationto the acquired firm is weaker than for providing the target's information to the acquirer, but there is still a rational basis for it: just as the acquirer wants to know that it is not making a dangerous investment in acquiring the target, the target wants to have some assurance that the entity that is acquiring it is well-run and has a strong strategic vision for the future. See generally ANTITRUST ADVISER, supra 3:74, at 3-270. The other circumstances surrounding this information exchange also demonstrate its harmless nature. Peter Frank, an independent actuary hired by UnitedHealth, delivered the information to PacifiCare in a sealed envelope because the PacifiCare personnel with whom he was meeting had not disqualified themselves from PacifiCare's negotiations with CMS. As a precautionary measure, Frank had disqualified himself from participating in UnitedHealth's negotiations with CMS due to his receipt of PacifiCare's average bid information.[15] (Frank Dep. 127:3-9, App. 21 to Mem. in Supp.) Frank's intent was that the sealed envelope be passed along to individuals who had disqualified themselves from CMS negotiations but could analyze UnitedHealth's Part D data in a manner that would aid them in their decisions concerning the merger. For unexplained reasons, the record does not disclose who at PacifiCare did view this information, but under Matsushita, this is not evidence inconsistent with competitive behavior and thus cannot be the basis for finding a genuine issue of material fact as to the existence of a conspiracy.
Significantly, in all this evidence of meetings concerning Part D plans, the record contains only one reference to any discussion specifically concerning Omnicare: PacifiCare's CEO testified to having *972 a conversation with Jacqueline Kosecoff, Executive Vice President of PacifiCare's Specialty Companies, about PacifiCare's difficulty in negotiating a contract with Omnicare, and Kosecoff mentioned that UnitedHealth was also having difficulties. (Phanstiel Dep. 93:18-94:2, Ex. 29 to Mem. in Opp'n.) Even assuming Kosecoff learned this information from a conversation with a UnitedHealth official, her statement does not support an inference that UnitedHealth and PacifiCare were engaged in a price-fixing conspiracy. Nothing in the statement suggests that pricing or strategy regarding negotiations with Omnicare were discussed between PacifiCare and UnitedHealth. For this reason, Omnicare's reliance on Heartland Surgical Specialty Hosp., LLC v. Midwest Div., Inc., 527 F.Supp.2d 1257 (D.Kan.2007) is misplaced. Summary judgment was denied in that case because the defendants "communicated to each other (i.e., to their competitors) about their strategies." Id. at 1304. Neither Kosecoff's statement about UnitedHealth nor any of the preceding evidence about conversations between UnitedHealth and PacifiCare suggests that any such strategic discussions took place in the pre-Merger Agreement discussions.
Finally, Omnicare argues that the Company Disclosure Letter actually supports the conclusion that section 5.01 of the Merger Agreement constitutes evidence of a conspiracy. According to Omnicare, UnitedHealth would only have agreed to this exception to the approval provision if PacifiCare had already disclosed its Part D contracting strategy to UnitedHealth. In support, Omnicare points to a statement made by Lagerstrom that UnitedHealth "got a confidence level that [PacifiCare] would not lose money in their Part D program" based on "pricing information" PacifiCare delivered to UnitedHealth during due diligence in the weeks leading up to the signing of the Merger Agreement. (Lagerstrom Dep. 442:22-443:13, Ex. 34 to Mem. in Opp'n.) For the reasons given above, however, the pricing information PacifiCare disclosed was not so competitively sensitive that it was inappropriate to disclose during the days leading up to the signing of the Merger Agreement. The exception for Part D plans written into the letter simply cannot be understood as consistent only with a finding of a conspiracy between UnitedHealth and PacifiCare.
2. Communications Subsequent to Execution of Merger Agreement
Following the signing of the Merger Agreement, the record contains virtually no reference to communications between UnitedHealth and PacifiCare relating to Part D pricing or strategy in general, or LTC contracts and Omnicare in particular. This silence is consistent with Defendants' denials of any concerted activity, particularly since both parties' contracts with Omnicare were entered into after the signing of the Merger Agreement. See Blumenthal, The Scope of Permissible Coordination Between Merging Entities Prior to Consummation, supra at 5 ("Once price is agreed upon ... and an agreement to merge is reached, further information exchanges are more difficult to justify.") Omnicare makes much of the memorandum shared between high-level PacifiCare and UnitedHealth officials, suggesting that the combined postmerger entity use RxSolutions "as a stalking horse to obtain the best service and contracts." (UnitedHealth Group's Pharmacy Management Options, Ex. 215 to Mem. in Opp'n, at UN034676.) According to Omnicare, the "`stalking horse' memorandum" is an important exception to this lack of post-Merger Agreement communications and *973 provides direct evidence of a conspiracy.[16]
Again, the stalking horse language is not an admission of guilt and is therefore not direct evidence of a conspiracy. The court must instead determine what value it has as circumstantial evidence of a conspiracy. The entire document is clearly written prospectively, with an eye towards integration of services after the merger is completed. The top of page 2, for instance, says that "several strategic options need to be considered," not that one strategic option is currently being pursued. In fact, three separate strategic possibilities are listed: outsource all PBM services, outsource some PBM services, and outsource no PBM services. Only one of those options contains any reference to the stalking horse (and that reference is in a sub-sub-point), so it is difficult to conclude that one phrase in the middle of the document constitutes evidence of a conspiracy.
Omnicare notes with suspicion the underhanded tone implicit in the phrase "stalking horse," suggesting the phrase has a somewhat conspiratorial connotation. At his deposition, Phanstiel of PacifiCare was asked to provide a definition of the term, and responded as follows: "A stalking horse is a shield to conceal the hunter from the prey. Sometimes the phrase is used in the context of [a] decoy; sometimes the phrase is used in the context of creating confusion between the parties." (Phanstiel Dep. 65:19-23, Ex. 29 to Mem. in Opp'n.) Omnicare argues that UnitedHealth used RxSolutions as a stalking horse by figuratively hiding behind it, allowing RxSolutions to obtain a better rate and then taking advantage of that rate obtained by RxSolutions. According to Omnicare, this document makes no sense as a post-merger document because RxSolutions could not be used deceptively to benefit UnitedHealth once it was known that PacifiCare and RxSolutions were subsidiaries of UnitedHealth. But this is true only if Omnicare is correct about how a stalking horse strategy would operate: that is, using deceptive practices to enable the larger company to benefit from the more favorable terms offered to the smaller company. Given the context of the memo, however, particularly its focus on long-term strategic planning, this reading is not the most natural. Lois Quam, a UnitedHealth official involved in the discussions concerning the stalking horse memo, offered a less strained reading of the memorandum. Quam suggested that the stalking horse reference meant that UnitedHealth would keep RxSolutions as a subsidiary but not use it as its own PBM; rather, RxSolutions could be used to develop innovations "that could set a standard" that would make bargaining easier for UnitedHealth. (Quam Dep. 163:2-13, App. 207 to Reply Mem.) Omnicare's reading of the memorandum, while not completely implausible, is more difficult to square with the actual text that makes the document read as though it is a post-merger planning document. Indeed, the stalking *974 horse memorandum was attached to an e-mail discussing PBM strategy that was sent out in January 2006, after the merger had been completed. (1/20/06 e-mail, App. 168 to Mem. in Supp.) This fact is inconsistent with Omnicare's theory that the merging parties planned for RxSolutions to function as a stalking horse only before the two companies merged.
The court is sensitive to the concern that it should not take the place of the jury in weighing evidence at the summary judgment stage. See High Fructose Corn Syrup, 295 F.3d at 655. Nonetheless, guided by the standards established in Monsanto and Matsushita, the court concludes that Omnicare has failed to produce evidence of action by UnitedHealth and PacifiCare that is inconsistent with lawful conduct on the part of two competing entities engaged in legitimate merger discussions and planning. Notably, Omnicare was mindful of the UnitedHealth/PacifiCare merger plans at the time it entered into its agreement with RxSolutions, yet Omnicare apparently made no effort to include in that agreement a term that would have prohibited UnitedHealth from taking advantage of the lower rates for which RxSolutions had bargained. Not only is there no evidence that Omnicare attempted to negotiate such a provision, there is also nothing in the record that indicates that PacifiCare would have refused to accept it.
The court grants summary judgment in favor of Defendants on Count I of the Complaint.
II. State Law Claims
Omnicare's remaining claims against Defendants all arise under state law. The court has no independent jurisdiction for deciding these claims; diversity jurisdiction is lacking because Omnicare and PacifiCare are both incorporated in Delaware. (Defs.' 56.1 ¶ 4; 28 U.S.C. § 1332(a), (c)). Omnicare asserts that the state claims are within the court's supplemental jurisdiction. (Am. Compl. ¶ 18; 28 U.S.C. § 1367(a).) This court has discretion, however, to determine whether to exercise its supplemental jurisdiction when, as in this case, the original basis for federal jurisdiction has been dismissed. 28 U.S.C. § 1367(c)(3). The court's decision should be guided by "the values of judicial economy, convenience, fairness, and comity." Groce v. Eli Lilly & Co., 193 F.3d 496, 501 (7th Cir.1999) (quoting City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 173, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997)).
Three of these four factors favor the court's retention of jurisdiction. First, the interest in judicial economy overwhelmingly favors this court deciding the state law issues. The parties have filed tens of thousands of pages in exhibits and numerous briefsincluding substantial briefing on the state law claimsand this court has devoted a considerable amount of resources to understanding the factual and legal arguments presented by the parties. Having a state court review many of the same documents to achieve an understanding of the factual and legal issues would be grossly inefficient. Second, it would be more convenient to the parties to have this court, which already has all the relevant discovery materials and legal briefs before it, to issue an opinion on this matter rather than to await a refiling in state court, particularly given the amount of time it would take a new court to become acquainted with the facts. Third, this resolution would also be more fair to the parties, who have devoted over three and one-half years to this matter; tellingly, neither party has argued that this court should surrender jurisdiction on the state claims if it granted summary judgment on the federal anti-trust claim.
*975 The remaining interest identified by the Seventh Circuit, and the only one that favors dismissal of the state causes of action, is that of comity. This interest is reflected in the presumption recognized by the Seventh Circuit that district courts should usually relinquish jurisdiction over state claims when the federal claims are dismissed before trial. Groce, 193 F.3d at 501 ("[I]t is the well-established law of this circuit that the usual practice is to dismiss without prejudice state supplemental claims whenever all federal claims have been dismissed prior to trial."). This presumption, however, does not determine every case. See, e.g., CropLife America, Inc. v. City of Madison, 432 F.3d 732, 734 (7th Cir.2005) ("relinquishment [of the state claims] is not mandatory ... [and] both sides want us to decide the state-law claim rather than protract the litigation"); Timm v. Mead Corp., 32 F.3d 273, 277 (7th Cir.1994) ("especially when difficult and unsettled state law issues are not implicated by the pendent claims, it is entirely acceptable ... for a federal court to decide those claims"); Brazinski v. Amoco Petroleum Additives Co., 6 F.3d 1176, 1182 (7th Cir.1993). The presumption should not apply in this case. For one thing, the state law claims are not "novel or complex," 28 U.S.C. § 1367(c)(1); indeed, federal courts in this district routinely hear cases applying these state causes of action. E.g., Gas Tech. Inst. v. Rehmat, 524 F.Supp.2d 1058, 1070, 1073-74 (N.D.Ill. 2007) (fraud and conspiracy to commit fraud); Munch v. Sears, Roebuck & Co., 2008 WL 4450307, at *6 (N.D.Ill. Sept. 30, 2008) (unjust enrichment). While Omnicare's state law claims are rather complex, their complexity derives more from factual nuance than from legal nuance, and this court is in a superior position to apply the complex facts to settled Illinois law. See Brazinski, 6 F.3d at 1182 (presumption applies most strongly when the state law is "unsettled").
The Seventh Circuit has identified two common scenarios where this presumption in favor of dismissal may be refuted: first, "where substantial federal judicial resources have already been expended on the resolution of the supplemental claims," and second, "where it is obvious how the claims should be decided." Williams Electronics Games, Inc. v. Garrity, 479 F.3d 904, 907 (7th Cir.2007). The court first notes that Omnicare essentially concedes that its claim under the Kentucky antitrust law does not survive summary judgment if its federal antitrust claim fails, and the court concludes that the state claim should be construed the same as the federal antitrust claim. See Fieldturf, Inc. v. Sw. Recreational Indus., Inc., 235 F.Supp.2d 708, 721 n. 10 (E.D.Ky.2002), vacated in part on other grounds, 357 F.3d 1266 (Fed. Cir.2004) (granting summary judgment on federal and state antitrust claims because "the antitrust law of the Commonwealth is so similar to its federal counterpart, the Sherman Antitrust Act, and may be interpreted where appropriate with regard to federal law, the Court shall dispatch [sic] with the claim under KY.REV.STAT. 367.175 upon its analysis of the federal antitrust claim"). The court therefore grants summary judgment on Count II of the Complaint, as resolution of the state antitrust claim is "obvious" given the court's disposition of the federal antitrust claim. As for the other state law claimsfor fraud, conspiracy to commit fraud, and unjust enrichmentthe court has clearly, as discussed above, expanded substantial judicial resources on their resolution.
In sum, the interests of judicial economy, convenience, and fairness all favor having this court determine the state law issues. The sole countervailing factor, comity, is not substantially implicated here *976 because the state law claims are not novel, but are rather claims that courts in this district regularly encounter. The court therefore proceeds to consider these remaining counts.
A. Fraud
Omnicare alleges that UnitedHealth fraudulently misrepresented the post-merger intentions of UnitedHealth and PacifiCare. On October 17, 2005, Tim Bien of Omnicare sent UnitedHealth representative Craig Stephens an e-mail concerning the merger, inquiring, "When the deal closes, will PacifiCare be contracted with Omnicare as a result of the acquisition?" (10/17/05 e-mail from Bien to Stephens, Ex. 83 to Mem. in Opp'n.) Two weeks later, on October 31, Stephens replied in a two-sentence e-mail: "PacifiCare's Part D offering for 2006 is a unique contract with CMS. If and when the deal closes, PacifiCare will follow their own Part D product strategy throughout the 2006 calendar year." (10/31/05 e-mail from Stephens to Bien, Ex. 83 to Mem. in Opp'n.) Omnicare contends that this e-mail was materially false or misleading and that Omnicare relied upon the e-mail to its detriment by entering into negotiations with PacifiCare and ultimately agreeing to the "Any Willing Provider" contract that UnitedHealth later joined. Defendants move for summary judgment, arguing that no genuine issue of material fact exists that would allow Omnicare to establish the elements of the claim.
1. Choice of Law
Before analyzing the fraud claim itself, the court must determine whether Kentucky or Illinois law applies. Generally, when a court obtains jurisdiction over an action as the result of a transfer of venue, the choice-of-law rules of the transferring court apply. See Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). Applying the rule to the present case, this court would apply Kentucky choice-of-law rules in determining which state's tort law should govern the fraud claim because the action was transferred to this court from a Kentucky district court. However, the Van Dusen rule is intended to prevent defendants from seeking a transfer merely to obtain more favorable choice-of-law rules. See id. In this case, where a forum selection clause in the WHI-Omnicare agreement states that Illinois courts "shall have exclusive jurisdiction over the parties," applying the Van Dusen rule would more likely allow the plaintiff to manipulate the choice-of-law rules to be applied by filing the action in a different court. See Freedman v. Am. Online, Inc., 325 F.Supp.2d 638, 652 (E.D.Va.2004) ("[A]pplying the usual Van Dusen rule in the face of a forum selection clause encourages forum shopping by a party seeking to avoid the application of the contractually-chosen forum.") Thus, because this case was transferred to this court by means of a forum selection clause, the choice-of-law rules of Illinois should govern rather than those of Kentucky.
The court accordingly applies Illinois law to determine whether the WHI-Omnicare Agreement's choice-of-law clause, which would apply the common law of Illinois to the fraud claims, governs this claim. In addition to its forum selection clause, the Agreement also states that the contract "will be construed and governed according to the laws of the State of Illinois." (WHI-Omnicare Agreement at 20, App. 58 to Mem. in Supp.) By its terms, this clause does not directly apply to Omnicare's fraud claim because the claim does not require the court to construe the Agreement. Even when a choice-of-law clause lacks the breadth to encompass a related tort claim, however, "tort claims *977 that are dependent upon the contract are subject to a contract's choice-of-law clause." Medline Indus. Inc. v. Maersk Med. Ltd., 230 F.Supp.2d 857, 862 (N.D.Ill. 2002). One important factor in determining whether the tort claim "depends upon" the contract is whether the claim could exist without the contract. M. Block & Sons, Inc. v. IBM Corp., No. 04 C 340, 2004 WL 1557631, at *4 (N.D.Ill. July 8, 2004); Birnberg v. Milk St. Res. Assocs. Ltd. P'ship, No. 02 C 978, 2003 WL 151929, at *14 (N.D.Ill. Jan. 21, 2003). Here, the entire purpose behind Bien's initial e-mailand presumably Stephens's response to itwas to determine whether PacifiCare would be swept into the WHI-Omnicare Agreement. The claim for fraud could not have existed without the Agreement, then, and so the claim is dependent upon the contract. Therefore, Illinois fraud law applies.
The elements of a fraud claim in Illinois are: (1) that the defendant made a false statement of material fact, (2) the defendant knew or believed it was false, (3) the defendant intended to induce plaintiff to act, (4) the plaintiff justifiably relied on the statement, and (5) the plaintiff was injured as a result. Assoc. Benefit Servs., Inc. v. Caremark RX, Inc., 493 F.3d 841, 852 (7th Cir.2007) (quoting Williams v. Chi. Osteopathic Health Sys., 274 Ill. App.3d 1039, 1048, 211 Ill.Dec. 151, 654 N.E.2d 613, 619 (1st Dist.1995)). As explained below, Omnicare's claim falters on the first element: Omnicare cannot show that a genuine issue of material fact exists that UnitedHealth made a false statement of material fact.
2. False Statement of Material Fact
Defendants contend that summary judgment should be granted because nothing in Stephens's e-mail was false.[17] Omnicare does not seriously contest the literal truth of the statements in the e-mail, but nevertheless argues that the representations made by Stephens are actionable because they were materially misleading. "A representation is fraudulent when, to the knowledge or belief of its utterer, it is false in the sense in which it is intended to be understood by the recipient." Miller v. Lockport Realty Group, Inc., 377 Ill. App.3d 369, 377, 315 Ill.Dec. 945, 878 N.E.2d 171, 179 (1st Dist.2007) (quoting Soderlund Bros., Inc. v. Carrier Corp., 278 Ill.App.3d 606, 619, 215 Ill.Dec. 251, 663 N.E.2d 1, 10 (1st Dist.1995)). Essentially, Omnicare asserts that UnitedHealth attempted to convey to Omnicare that UnitedHealth and PacifiCare were pursuing their Part D strategies separately, when in fact they were coordinating them. Omnicare's interpretation of the statement is more sinister than the court's, in two ways. First, the e-mail does not say that UnitedHealth and PacifiCare would remain entirely independent throughout 2006 in their Part D approaches, only that PacifiCare "will follow [its] own Part D product strategy." Stephens was responding to the question of whether PacifiCare would be a party to the WHI-Omnicare Agreement and stated that PacifiCare would follow its own strategy. As a reply to Bien's question, this statement is truthful, as PacifiCare eventually did reach its own agreement with Omnicare. Omnicare did not ask whether UnitedHealth would try to join a contract into which Omnicare and PacifiCare might enter; so Omnicare's suggestion that UnitedHealth meant to convey a message that UnitedHealth would not try to join a contract made between Omnicare and PacifiCare (who were not even negotiating with one another at this time) is unlikely and unsupported *978 by the record. Stephens's reply clearly indicated that PacifiCare would not be a party to the WHI Agreement, and was therefore true both literally and in its intended message.
Second, Omnicare has not established the existence of a genuine issue of material fact that the merging parties were in fact coordinating their Part D strategies at this point in time. Omnicare's best evidence consists of general statements made by high-level officials of UnitedHealth and PacifiCare stressing their interest in combining networks and contracts to achieve economies of scale. (Erlandson Dep. 66:11-19, Ex. 63 to Mem. in Opp'n ("if contractually [UnitedHealth is] able to get access to PacifiCare networks, to the extent that they have better contracts ... that would create value"). For the reasons already explained in Part I, there is nothing invidious about this, as presumably the entities decided to merge for the purpose of becoming more efficient. These statements are also so general that they do not directly implicate Part D coordination generally or Omnicare specifically. The closest Omnicare comes is pointing to an e-mail from UnitedHealth's Pfotenhauer on December 3, 2005. Discussing the upcoming merger, Pfotenhauer wrote,
For Part D[,] I see one of our major foci next year to further examine the end to end
production process and re-calibrate whether we still need as many outsourced vendors. Someone looking beyond Part D might see some additional synergies that would not be immediately discerned in Part D.
(12/3/05 e-mail from Pfotenhauer to Jelinek, Ex. 177 to Mem. in Opp'n.) Again, all this shows is that the merging entities hoped to increase efficiency after the merger, even with respect to Part D. This e-mail does not support a finding that the companies had already engaged in a coordinated plan vis a vis Omnicare. Indeed, it actually suggests the opposite, as all the references are to what people in the next year could accomplish, not what has already been done. If Omnicare cannot show that Defendants were coordinating their Part D strategies, then the e-mail quite simply cannot be fraudulent.
Omnicare also attempts to create a genuine issue of material fact concerning whether the merging entities had developed a coordinated Part D plan through circumstantial evidence of communications Stephens had with other UnitedHealth officials prior to replying to Bien's e-mail. Although Stephens generally replied promptly to Bien's e-mails, he did not quickly respond to this one, prompting Bien to send a second e-mail one week later, asking, "Craig, Can you give me anything on this? Tim." (10/25/05 e-mail from Bien to Stephens, Ex. 217 to Mem. in Opp'n.) Stephens still did not reply until October 31. In the interim, Stephens conferred with other UnitedHealth officials concerning the appropriate response to provide to Bien. According to Stephens, he delayed responding to Bien "because what he was asking for ... would have required me to, you know, go down a path that I could not go down." (Stephens Dep. 291:14-18, Ex. 108 to Mem. in Opp'n.) Omnicare deems this vague statement conspiratorial and argues that it suggests that a secret agreement existed between UnitedHealth and PacifiCare that Stephens was afraid of exposing. Stephens clarified what he meant, however, stating that he did not want to give Bien "guidance as to what's going to happen post-acquisition with contracts when I have had no interaction with PacifiCare. And on top of that, I've been instructed to have no interaction with PacifiCare." (Id. at 291:20-25.) Furthermore, Stephens stated that no one he *979 contacted suggested possible ways for him to respond to the e-mail. Nor did any of the other individuals to whom he spoke have any memory of giving substantive input to the response.[18] (Id. at 292:7-13; Pfotenhauer Dep. 117:19-118:24, Ex. 115 to Mem. in Opp'n.) Once pieced together, this evidence is insufficient to support a finding that UnitedHealth and PacifiCare had developed a coordinated strategy that Stephens was very carefully trying to avoid divulging.
Fundamentally, the fraud count is based upon UnitedHealth's failure to answer a question that Omnicare did not ask. In Bien's e-mail, Omnicare asked whether PacifiCare would become contracted with Omnicare as a result of the merger. If Omnicare wanted to know the degree to which the merged entities might coordinate their Part D planning and sharing of contracts, it could have asked a broader question concerning general post-merger plans for the combined entity.[19] Omnicare asked only whether PacifiCare would enter into the WHI Agreement (not whether UnitedHealth might enter into any agreement Omnicare might reach with PacifiCare); Stephens replied that PacifiCare was following its own Part D strategya truthful statement, as PacifiCare ultimately entered its own contract with Omnicare and never used the WHI Agreement. Contrary to Omnicare's contention in the Complaint, the Stephens e-mail does not give "the impression that UHG would not attempt to transfer its Part D plans to PHS after the merger" because Bien's e-mail to Stephens clearly asked about the opposite situation: whether PacifiCare would enter into UnitedHealth's existing contract. (Am. Compl. ¶ 11.) In fact, after receiving the Stephens e-mail, Bien forwarded the e-mail to Joel Gemunder, President and CEO of Omnicare, and wrote, "PacifiCare will not be included with the United Part D offering." (11/1/05 e-mail from Bien to Gemunder, Ex. 308 to Mem. in Opp'n.) Bien's understanding of the message was therefore in accord with what actually happened, namely, that PacifiCare and Omnicare would need to reach their own LTC agreement if they were to be contracted with one another. Nor was the intended meaning misleading. The clear import of the Stephens e-mail was that Omnicare would not automatically be contracted with PacifiCare as a result of the merger; if Omnicare and PacifiCare did not reach their own contract, then they would not do business together. Omnicare has made no showing to suggest that this was not true. Thus, even if Omnicare is unhappy with the results of its contracting with PacifiCare, it cannot protest the contract on the grounds of fraud. Neither the literal terms of the e-mail nor its intended meaning were false.
B. Conspiracy to Commit Fraud
Omnicare also contends that UnitedHealth and PacifiCare conspired to defraud Omnicare. To sustain a claim for conspiracy to defraud in Illinois, a plaintiff must show: "(1) a conspiracy; (2) an overt act of fraud in furtherance of the conspiracy; and (3) damages to the plaintiff as a result of the fraud." Bosak v. McDonough, *980 192 Ill.App.3d 799, 803, 139 Ill.Dec. 917, 549 N.E.2d 643, 646 (1st Dist.1989). None of these elements are met. As stated above, Omnicare has failed to establish the existence of a genuine issue as to an agreement between UnitedHealth and PacifiCare regarding either Omnicare or LTC strategies generally. Furthermore, the second element of conspiracy requires an act of fraud which, as noted above in granting summary judgment on the fraud claim, Omnicare has also failed to establish. See Damato v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 878 F.Supp. 1156, 1162 (N.D.Ill.1995) ("[T]o state a valid conspiracy to defraud claim[,] plaintiffs must allege facts establishing the elements of fraud under Illinois law."). And in the absence of fraud, Omnicare can show no injury caused by the fraud. The court thus grants summary judgment in favor of defendants on Omnicare's conspiracy claim.
C. Unjust Enrichment
In a separate count, Omnicare claims that it is entitled to recovery because Defendants were unjustly enriched by "the improper utilization by UHG and PHS of the noncompetitive reimbursement rate schedule contained within the PHS Any Willing Provider Contract." (Compl. ¶ 96.) A cause of action for unjust enrichment requires a showing that "the defendant has unjustly retained a benefit to the plaintiff's detriment, and the defendant's retention of that benefit violates" basic principles of justice. HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145, 160, 137 Ill.Dec. 19, 545 N.E.2d 672, 679 (1989). The Illinois Supreme Court has identified three situations where the defendant's retention of a benefit will be considered unjust:
(1) the benefit should have been given to the plaintiff, but [a] third party mistakenly gave it to the defendant instead..., (2) the defendant procured the benefit from [a] third party through some type of wrongful conduct ..., or (3) the plaintiff for some other reason had a better claim to the benefit than the defendant....
Id. at 161-62, 137 Ill.Dec. 19, 545 N.E.2d at 679 (internal citations omitted); see also Assoc. Ben. Servs., 493 F.3d at 854 (citing HPI). Illinois courts do not appear to have uniformly followed this guidance, however; some courts have required a more specific showing than suggested by the court in HPI. See, e.g., McKay v. Kusper, 252 Ill.App.3d 450, 463, 191 Ill. Dec. 762, 624 N.E.2d 1140, 1150 (1st Dist. 1993) (requiring "unlawful or improper conduct as defined by law" for unjust enrichment claim to succeed); Lewis v. Lead Indus. Ass'n, Inc., 342 Ill.App.3d 95, 105, 276 Ill.Dec. 110, 793 N.E.2d 869, 877 (1st Dist.2003) ("In order for a cause of action for unjust enrichment to exist, there must be some independent basis which establishes a duty on the part of the defendant to act and the defendant must have failed to abide by that duty").
In short, the "law of unjust enrichment in Illinois is unclear." Cohabaco Cigar Co. v. U.S. Tobacco Co., No. 98 C 1580, 1999 WL 988805, at *15 (N.D.Ill. Oct. 22, 1999); see also C.B. Mills v. Hawranik, No. 91 C 5797, 1994 WL 113088, at *15 (N.D.Ill. Mar. 30, 1994). A lack of clarity in the state law would normally suggest that the court should decline to resolve the issue, see 28 U.S.C. § 1367(c)(1), but in this case the lack of clarity is immaterial for two reasons. First, the courts have clearly held that "where there is a specific contract that governs the relationship of the parties," a plaintiff cannot assert a claim for unjust enrichment. Stathis v. Geldermann, Inc., 295 Ill.App.3d 844, 864, 229 Ill.Dec. 809, 692 N.E.2d 798, 812 (1st Dist. 1998) (citing People ex rel. Hartigan *981 v. E & E Hauling, Inc., 153 Ill.2d 473, 497, 180 Ill.Dec. 271, 607 N.E.2d 165, 177 (1992)). Omnicare had contracts with all of the defendants in this case and therefore cannot proceed under an unjust enrichment theory.
Second, and more fundamentally, there are simply no grounds to support recovery regardless of what standard of conduct applies. Omnicare claims that Defendants were unjustly enriched "[a]s a result of the illegal conspiracy between UHG and PHS, including, in particular, UHG's fraudulent misrepresentation in its October 31st e-mail, and the scheme to devise a fraudulent strategy for PHS to refuse to negotiate with Omnicare." (Am. Compl. ¶ 96.) For the reasons already discussed in this opinion, however, none of these alleged misdeeds took placethere was no illegal conspiracy between UnitedHealth and PacifiCare; UnitedHealth made no fraudulent misrepresentation in the October 31st e-mail; and there was no fraudulent scheme that resulted in PacifiCare refusing to negotiate with Omnicare. Omnicare has failed to demonstrate the existence of a genuine issue of material fact regarding any of the factual predicates which would allow recovery under a theory of unjust enrichment. Cf. Ass'n Ben. Servs., 493 F.3d at 855 ("[W]hen the plaintiff's particular theory of unjust enrichment is based on alleged fraudulent dealings and we reject the plaintiff's claims that those dealings, indeed, were fraudulent, the theory of unjust enrichment that the plaintiff has pursued is no longer viable."). Therefore, under any theory of unjust enrichment, Defendants are entitled to summary judgment.
CONCLUSION
For the reasons stated above, Defendants' motion for summary judgment on all claims in Omnicare's First Supplemental and Amended Complaint [556] is granted. Plaintiff's Motion for Partial Summary Judgment Pursuant to Rule 56 Or in the Alternative Motion to Strike [571] is denied. Defendants' Motion to Strike Certain of Omnicare's Responses [641] is stricken as moot.
NOTES
[1] In addition to being certified as a PDP, insurers could also obtain certification as a Medicare Advantage Prescription Drug Plan ("MAPD"), which functions as an HMO in addition to providing prescription drugs. For 2006, 72% of Part D enrollees were enrolled in standalone PDPs, while 28% were enrolled in MAPDs. (Ex. A to Rubinfeld Decl. ¶ 33, Attach. to Mem. in Opp'n.) Among LTC enrollees, MAPDs were even less common. (Id.)
[2] Companies considering a merger frequently share "significant quantities of competitively sensitive information regarding their respective businesses in the course of investigatory `due diligence'" in order for each party to determine whether the business deal makes sense. See ANTITRUST ADVISER § 3:74, at 3-270 (Irving Scher ed., 4th ed. 2007).
[3] The June 9 meeting included, from PacifiCare, Jacqueline Kosecoff (Executive Vice President), Greg Scott (CFO), and Chris Karkenny (official in Corporate Development); from UnitedHealth, officials included Ed Lagerstrom (head of Corporate Development), Jerry Knutson (CFO of Ovations, UnitedHealth's senior business component), Rick Jelinek (President of Ovations' Senior and Retiree Services), and Tom Paul (CEO of a UnitedHealth subsidiary). (Due Diligence Summary-Point Part D, Ex. 38 to Mem. in Opp'n; Omnicare's Resp. to Defs.' 56.1 ¶ 23.)
[4] In the parties' submissions, the acronym "AWP" is alternatively used to refer to both an "Any Willing Provider" contract and a recognized industry rate known as "Average Wholesale Price." To avoid confusion, the court uses "AWP" only to refer to "Average Wholesale Price," and will write out the phrase "Any Willing Provider."
[5] The June 28 meeting consisted mostly of the same personnel involved in the June 9 meeting. A few additional individuals participated on June 28, however, including Lois Quam (CEO of Ovations), Peter Frank (outside counsel for UnitedHealth), and Howard Phanstiel (CEO of PacifiCare). (Due Diligence SummaryPoint Part D, Ex. 38 to Mem. in Opp'n; Omnicare's Resp. to Defs.' 56.1 ¶ 23.)
[6] The record does not reflect whether UnitedHealth's attorneys did in fact see the report or whether the attorneys made any changes to it.
[7] Specifically, the Merger Agreement states that PacifiCare may not enter into contracts (other than those required in the ordinary course of business) in excess of $3 million prior to the completion of the merger, "except as required by applicable Law ... or provided in Section 5.01(a) of the Company Disclosure Letter and except as expressly contemplated by this Agreement." (Merger Agreement § 5.01(a), Ex. 72 to Mem. in Opp'n.)
[8] Omnicare suggests that Ms. Infante's conclusions were actually written as an advocacy piece prepared in response to UnitedHealth's request for the "strongest legal arguments" in favor of a finding that the Protections are unlawful. (Omnicare's Resp. to Defs.' 56.1 ¶ 41; Ex. 163 to Mem. in Opp'n.) An e-mail from Infante to Tobin does state that Infante "decided to use the statutory framework because it provided the simplest way to outline your strongest legal arguments." (Ex. 163 to Mem. in Opp'n (emphasis added).) The memorandum itself nowhere suggests that it was written with a predetermined result, however ("As requested, I have reviewed the Pharmacy Network Agreement ... and conclude, for the reasons outlined below, that the prescription drugs provided under this agreement would not qualify for reimbursement under Medicare Part D." [Infante Memo at 1, App. 133 to Mem. in Supp.]), and both Infante and Tobin maintain that Infante's conclusions were not dictated by UnitedHealth. (Tobin Dep. 333:14-17, Ex. 159 to Mem. in Opp'n; Infante Dep. 96:2-17, Ex. 164 to Mem. in Opp'n.)
[9] The record does not reflect when or how Bien and Omnicare learned of the merger. Even if neither of the merging parties informed Omnicare of the merger prior to the signing of the Merger Agreement, Omnicare surely learned of the merger shortly thereafter, as news of the merger was widely reported, including on the front page of the Wall Street Journal. Vanessa Fuhrmans et al., Two Health Plans Agree on a Deal for $8.1 BillionUnitedHealth Adds Heft in California and Medicare with Move on PacifiCare, WALL ST. J., July 7, 2005, at A1.
[10] Several separate e-mails attached to Omnicare's brief contain copies of this memorandum. (E.g. Ex. 25; Ex. 44; Ex. 45; Ex. 211; Ex. 215; Ex. 216.) The basic document is the same in each exhibit, although some differences, including the precise placement of the "stalking horse" language, do appear. However, neither party appears to consider those differences material, and the court agrees that no substantive changes altered the meaning of this memorandum in any of the exhibits provided by Omnicare. (See Quam Dep. 207:16-21, Ex. 8 to Mem. in Opp'n (witness had same understanding of "stalking horse" language when it was repositioned in the memorandum).)
None of these copies clearly state who originally authored the memorandum, but it circulated among several officials responsible for pharmacy network management at the two entities, including Lois Quam and Peggy Olson at UnitedHealth; Howard Phanstiel, CEO of PacifiCare; and Jacqueline Kosecoff, an Executive Vice President at PacifiCare. (Exs. 44, 45 to Mem. in Opp'n.)
[11] It is not altogether clear whether other PDP sponsors covered by the terms of the WHI-Omnicare Agreement also had concerns that the Agreement was inconsistent with federal regulations. At her deposition, Simenson expressed no opinion as to whether the WHI-Omnicare Agreement was noncompliant with Medicare regulations as to other PDP sponsors covered by the Agreement, but stated that part of the problem as it specifically related to UnitedHealth was that the Agreement allowed for more expansive benefit design than UnitedHealth's own policies did. (Simenson Dep. 44:3-16, App.135 to Mem. in Supp.) Even after UnitedHealth was dropped from the WHI-Omnicare Agreement, WHI continued to seek to make changes to that Agreement (presumably on behalf of other PDPs), although these changes appear to have been motivated by business reasons rather than concerns about illegality. (Defs.' 56.1 ¶ 141.) The WHI-Omnicare Agreement continued in effect with respect to the other PDPs covered by it until December 31, 2008, the end of the initial term originally contemplated in the Agreement. (Ex. 19 to Mem. in Opp'n; Omnicare's Supplemental Statement of Undisputed Material Facts ¶ 39.)
[12] The clear and unequivocal language of the Company Disclosure Letter makes it unnecessary to consider Defendants' arguments that two other provisions of the Merger Agreement demonstrate that the approval provision does not apply to PacifiCare's Part D contract with Omnicare.
[13] Omnicare has not provided any evidence that UnitedHealth in fact would have backed out of the merger if CMS did not certify PacifiCare's PDP.
[14] According to Bien, Omnicare's "shift in thinking" in agreeing to PDP form contracts after August 1 was caused by Omnicare's desire to protect its patients' interests by ensuring they would be covered under Part D, and not the result of a reduction in Omnicare's bargaining power. (Omnicare's Resp. to Defs.' 56.1 ¶ 82; Bien Dep. 127:12-128:4, Ex. 79 to Mem. in Opp'n.)
[15] At his deposition, Frank said that disqualification would have been unnecessary if he knew what PacifiCare was going to tell him. (Frank Dep. 127:15-23, App. 21 to Mem. in Supp.)
[16] Omnicare also suggests that this strategy to impermissibly use RxSolutions was discussed at the June 28, 2005 due diligence meeting between UnitedHealth and PacifiCare. A memorandum prepared after the meeting shows that the parties discussed ways to combine resources, and UnitedHealth concluded that "[t]he combined entities would be advantaged through the ... [c]onsolidation and leverage of resources in regard to Pharmacy benefit administration (PBMs) [and] Pharmacy Network contracting ...." (Due Diligence SummaryPoint Part D, Ex. 38 to Mem. in Opp'n, at UN282570.) The court sees no impropriety in this comment. UnitedHealth was considering ways to achieve better economies of scale after the merger and suggested that the PBM area was one area where this was possible. Omnicare's argument that this memorandum provides direct or indirect evidence of a conspiracy is unpersuasive.
[17] Defendants do not appear to dispute the materiality of the e-mail.
[18] In the case of Ann Tobin, UnitedHealth claimed attorney-client privilege to prevent her from answering. (Tobin Dep. 220:11-15, Ex. 109 to Mem. in Opp'n.) Omnicare does not appear to have challenged the assertion that communications with Tobin were privileged.
[19] Of course, UnitedHealth may have declined to answer such a detailed question, to the extent that it had an answer at this point prior to the closing of the deal. Whether UnitedHealth would or could have answered such a question is, of course, a question the record does not answer.
| {
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238 S.W.2d 649 (1951)
SMITH
v.
STATE.
No. 4654.
Supreme Court of Arkansas.
April 9, 1951.
Rehearing Denied May 7, 1951.
*650 John C. Sheffield, Helena, for appellant.
Ike Murry, Atty. Gen, Jeff Duty, Asst. Atty. Gen, for appellee.
MILL WEE, Justice.
Appellant, Aubrey Smith, was convicted of murder in the first degree in the killing of Ray Campbell and his punishment fixed by the jury at death.
The appellant, Aubrey Smith, and Peter Dorsey are Negro residents of St. Francis County, Arkansas. On the night of August 2, 1950 they stole a cow and calf from Dorsey's neighbor, Tom Norsworthy, and brought the animals to North Little Rock,
Arkansas, in the trailer of appellant's automobile. In attempting to sell the stolen cattle the next morning at the North Little Rock Stock Yards, one of the men gave a fictitious name and their actions aroused the suspicions of the manager of the stockyards who called the Pulaski Sheriff's Department. Following an investigation by Pulaski County officers, appellant and Dorsey were taken into custody and officers in St. Francis County were notified.
In response to a call from the Pulaski County Sheriff, Otis Tatum and Ray Campbell, deputy sheriffs of St. Francis County, drove to Little Rock arriving about 6 p. m, August 3rd. Appellant and Dorsey were turned over to the St. Francis County officers. On the return trip to Forrest City the officers stopped about twenty minutes at a roadside cafe on the outskirts of North Little Rock where they ate sandwiches while appellant and Dorsey remained in the back seat of the car. At that time appellant and Dorsey had some discussion about escaping from the officers. On resuming the journey to Forrest City the two officers were riding in the front seat of the twodoor sedan driven by Tatum and each carried a pistol in a short strapless holster on his right side. Appellant was riding on the left side of the back seat with Dorsey to his right and appellant's right hand was handcuffed to Dorsey's left hand.
The evidence on behalf of the state is that the group had reached a point on Highway 70 about seventeen miles from Forrest City when appellant, with his left hand, and Dorsey, with his right hand, simultaneously reached for and took the two officers' guns. Appellant procured Tatum's gun and shot the latter in the left shoulder as he brought the speeding car to a stop. In the ensuing melee officer Campbell was shot in the head and right chest and died almost instantly. Tatum was shot twice, one of the bullets being later removed by a physician and the other bullet was still lodged in his back at the time of the trial.
A bullet found on the floor between the car seats after the shooting with human tissue and blood on it was identified by a ballistics expert as having been fired from *651 Tatum's gun. The bullet that entered Campbell's chest came out about the collar bone. Campbell's dead body was lying across Tatum who was slumped in the driver's seat when he regained consciousness. Tatum succeeded in opening the left door of the car and fell out on the concrete highway. When passing motorists failed to stop, he "threw himself in front of the cars" and a motorist stopped and an ambulance was summoned.
After the shooting appellant and Dorsey fled with the officers' guns and succeeded in removing the handcuffs. The next day they stopped at a house to get a man to take them to Marianna. Dorsey was there apprehended but appellant again fled. When appellant was about to be captured on the morning of August 5, he shot himself twice, the first shot grazing and the second shot entering his chest. He was taken to University Hospital in Little Rock for treatment. While in the hospital on August 7, appellant gave and signed a written statement to officers describing the shooting and subsequent events. The statement was introduced at the trial without objection.
At the trial appellant gave testimony relative to the shooting not materially different from that related in the written statement. However, he testified at the trial that, while being held in the Pulaski County jail on August 3rd, the Pulaski County officers and Tatum subjected him to severe beating with their fists and a boat paddle, "stomped" on his legs and burned his hair with matches; that he related the burning and beating to the officers who took his statement at the hospital but the latter refused to incorporate this in the written statement. This was denied by Tatum and the officers who took the statement from appellant. A physician who examined appellant shortly after his capture found no evidence of beatings or burns. Appellant also testified that on the return trip to Forrest City, Campbell threatened to beat appellant and Dorsey but this was also denied by Tatum.
Appellant was charged with murder in the first degree by information filed in the St. Francis Circuit Court. On September
22, 1950 he applied for a change of venue from St. Francis County on the ground that the inhabitants of the county were so prejudiced against him that he could not obtain a fair and impartial trial therein. This application was granted and the cause ordered removed to the circuit court of Phillips County, Arkansas, where the case proceeded to trial on November 20, 1950.
Appellant first contends that error was committed in the trial court's refusal to quash the information. Under the procedure authorized by Amendment 21 to our State Constitution appellant was tried upon an information filed by the prosecuting attorney instead of an indictment by a grand jury. It is argued that this procedure is violative of appellant's rights under the 5th and 14th Amendments to the Constitution of the United States. We have rejected this contention in several cases. Penton v. State, 194 Ark. 503, 109 S.W.2d 131; Smith et al. v. State, 194 Ark. 1041, 110 S.W.2d 24; Higdon v. State, 213 Ark. 881, 213 S.W.2d 621; Brown v. State, 213 Ark. 989, 214 S.W.2d 240. The same result was reached in the recent case of Washington v. State, 213 Ark. 218, 210 S. W.2d 307, 308, which was appealed to the United States Supreme Court and certiorari denied in Washington v. State of Arkansas, 335 U.S. 884, 69 S.Ct. 232, 93 L.Ed. 423. In that case we said: "The United States Supreme Court has repeatedly held that a State canif it so desiresprovide for a prosecution by information instead of by indictment. Some of these cases are : Hurtado v. [People of State of] California, 110 U.S. 516, 4 S.Ct. Ill [292], 28 L.Ed. 232; Bolln v. [State of] Nebraska, 176 U. S. 83, 20 S.Ct. 287, 44 L.Ed. 382; and Gaines v. [State of] Washington, 277 U.S. 81, 48 S.Ct. 468, 72 L.Ed. 793." It follows that the trial court did not err in overruling the motion to quash the information.
Appellant next filed a motion to quash the regular panel of petit jurors and to summon a special venire. The motion alleged that appellant, being charged with murdering a white deputy sheriff, was entitled to have his case heard by an impartial jury; that the regular panel of the jurors selected for the November 1950 term of *652 court was composed of 22 white jurors and 2 Negro jurors. The motion further alleged: "The defendant further states that the jury commissioners, following a practice of many years standing in Phillips County, Arkansas, have pursued a policy of selecting jurors discriminating against the selection of negroes, because of race. That during the past several years, it has been the practice of the jury commission to select not more than three negroes, and such selection was done deliberately for the purpose of undertaking to meet the charge of discrimination, and that such action has not been done in good faith, but was mere subterfuge."
Before this motion was ruled on and after final selection of the jury to try the case, appellant filed a motion to quash and set aside the jury as finally selected. This motion alleged that the regular panel was exhausted before completion of the jury; that the court instructed the sheriff to summon a special jury list without regard to race, color or creed and that of the special list summoned and used there were 12 white and 2 Negro jurors. It was further alleged: "That the defendant exhausted all twelve of his peremptory challenges and still there were left on the jury as finally made up 2 negro jurors and 10 white jurors and that this jury is not an impartial jury within the meaning and spirit of the Constitution of the State of Arkansas and the United States, and under the facts and circumstances as set out in the original motion and brought forward into this motion; that under the facts and circumstances as set out herein, this defendant cannot have a fair and impartial trial by a fair and impartial jury as guaranteed to him as above stated."
The two motions were heard together upon the testimony of one of the jury commissioners and the following stipulations :
"The Court: It is agreed by and between counsel for the State of Arkansas and counsel for the defendant, Aubrey Smith, that the records in the Circuit Clerk's office of Phillips County, Arkansas do disclose that there have been negroes upon the regular panels or jury lists for the regular terms of the Circuit Court of Phillips County, Arkansas for the past ten years; that at several terms there was only one negro on the list; that at several terms there were two negroes on the list, or panels, and that at least one term three negroes were on the panels, the regular panels; and the that at the present term there are two negroes on the regular list of petit jurors.
"It is agreed by and between counsel for the State of Arkansas and counsel for the defendant Aubrey Smith, that the present panels of petit jurors were selected from the lists of electors which paid their poll taxes before October 1, 1949, and that the regular term of court met and said jurors were empaneled after October 1, 1950, and that each member of the petit jury was examined under oath and asked if he possessed the new, or current, poll tax receipt before he was sworn in as a regular juror.
"Mr. Sheffield: It is agreed that after the regular panel was selected and during the current term of the Circuit Court a number of the regular panel have been excused, at their request, and that vacancies have been filled by the Court from the list of voters for 1950, that is, those who have paid their poll taxes between October 1, 1949 and October 1, 1950, and that the poll tax list of voters for 1950 shows that there were 5144 white voters and 2616 negro voters; Whereas, the tax books for the period immediately preceding that showed 1477 negro voters and 3200 white voters."
C. E. Mayer, one of the three jury commissioners who' selected the jury panels for the November 1950 term of court, testified that the commissioners made their selections from the current list of qualified electors containing the names of 3200 white electors and 1477 Negro electors; that 22 white electors and 2 Negro electors were placed on the regular panel of petit jurors and 12 white electors on the list of alternates; that the selections were made in accordance with the court's instructions to select fair-minded, intelligent people qualified to weigh problems arising in law suits; that the selections were made without regard to race, creed or color; that the commissioners considered *653 at least three other Negroes who were deemed qualified but who were not selected because one was an undertaker, another a ginner and farmer who was busy in the cotton ginning season, and the commissioners failed to find the address of the third elector; that there was no discussion among the commissioners to the effect that the number of Negro jurors should be limited; that the court instructed them to include Negroes in their selections without indicating any certain number; that most of the Negro electors qualified for jury service were of the professional type and their number comparatively small; and that the 1940 population of Phillips County was about 63 percent Negro and 37 percent white. There was no evidence of the percentage of white and colored population for 1950, probably because such census figures were not available at the time of trial.
It was alleged in the motions to quash and is earnestly argued that the trial court's action in overruling the motions to quash the regular jury panel, and the jury as finally selected is violative of appellant's right to an impartial jury under Amendments 5, 6 and 14 of the Constitution of the United States and §§ 3 and 10 of Article II oif the Constitution of Arkansas.
[24] It is observed from the stipulation that there has been a systematic inclusion rather than exclusion of Negroes by the commissioners in selecting the jury panels in Phillips County for the past ten years. The facts in this case in reference to the ratio of white electors to Negro electors are similar to those in Washington v. State of Arkansas, supra. In that case no Negroes had been selected as members of the petit jury panels in Jefferson County for thirty years until an adjourned term of court held shortly before the regular term at which the defendant was tried. Three Negroes were placed on the regular panel as alternates for the term at which Washington was tried. In answer to the same argument urged by appellant in the case at bar, we quoted the following language from the opinion in Akins v. State of Texas, 325 U.S. 398, 65 S.Ct. 1276, 1279, 89 L.Ed. 1692: "Petitioner's sole objection to the grand jury is that the `commissioners deliberately, intentionally and purposely limited the number of the Negro race that should be selected on said grand jury panel to one member.' Fairness in selection has never been held to require proportional representation of races upon a jury. [State of] Virginia v. Rives, 100 U.S. 313, 322, 323, 25 L.Ed. 667; Thomas v. State of Texas, 212 U.S. 278, 282, 29 S.Ct. 393, 394, 53 L.Ed. 512. Purposeful discrimination is not sustained by a showing that on a single grand jury the number of members of one race is less than that race's proportion of the eligible individuals. The number of our races and nationalities stands in the way of evolution of such a conception of due process or equal protection. Defendants under our criminal statutes are not entitled to demand representatives of their racial inheritance upon juries before whom they are tried. But such defendants are entitled to require that those who are trusted with jury selection shall not pursue a course of conduct which results in discrimination `in the selection of jurors on racial grounds.' Hill v. [State of] Texas, supra, 316 U.S. [400] 404, 62 S.Ct. [1159] 1161, 86 L.Ed. 1559 [1562]. Our directions that indictments be quashed when Negroes although numerous in the community, were excluded from grand jury lists have been based on the theory that their continual exclusion indicated discrimination and not on the theory that racial groups must be recognized. Norris v. [State of] Alabama [294 U.S. 587, 55 S. Ct. 579, 79 L.Ed. 1074] ; Hill v. [State of] Texas [316 U.S. 400, 62 S.Ct. 1159, 86 L. Ed. 1559]; and Smith v. [State of] Texas [311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84, 61 S.Ct. 164], supra. The mere fact of inequality in the number selected does not in itself show discrimination."
The facts in the instant case are clearly distinguishable from those in the case of Patton v. State of Mississippi, 332 U.S. 463, 68 S.Ct. 184, 92 L.Ed. 76, where systematic exclusion had been practiced for thirty years and there were no Negroes on the venires for the term at which the *654 defendant was tried. In Sec. 11 of an annotation to the Patton case found in 1 A. L.R.2d 1291, numerous cases, federal and state, are digested which follow the holding in Akins v. State of Texas, supra. Many of these cases involve factual matters similar to those in the case at bar and uniformly hold that the fact that there was not an exact mathematical ratio or balance between qualified members of different races or classes in the selection of a jury list is not proof, in itself, of discrimination.
The petit juror occupies a high office in our system of jurisprudence. The quality of his decisions in matters involving rights of property, liberty and life itself is of gravest concern to his fellow men and the well-being of society in general. The mere fact that a person is a qualified elector does not ipso facto render him eligible for jury service in Arkansas. In making up the jury lists our statutes require the commissioners to select "persons of good character, of approved integrity, sound judgment and reasonable information". Ark.Stats. §§ 39-206, 39-208. The commissioners are under oath to refrain from selecting any person as a juryman whom they believe unfit and not qualified. Ark.Stats. § 39-201. Although they may be eligible, all persons over 65 years of age and many others who are members of certain occupations and professions, including undertakers, are exempt from jury service. Ark.Stats. §§ 39-104 to 39-114.
We cannot agree with counsel's contention that the testimony of Commissioner Mayer discloses that discrimination was actually practiced in violation of the rights of appellant. The witness gave frank and unevasive answers to all questions. Viewed as a whole, his testimony reflects an honest and sincere effort on the part of the jury commissioners to select qualified jurors without any showing of bad faith or design to limit the selection of, or discriminate against, persons of appellant's race. In our opinion his testimony tends to support his denial that racial discrimination was practiced in making the selections. On the basis of this testimony and the stipulations entered into at the hearing, we conclude that no error was committed in overruling appellant's separate motions to quash the jury panels.
Appellant next contends that error was committed by the trial court in modifying his requested instruction No. 1. The instruction as requested reads: "In this case, the accused says that when he made the statement which has been introduced in this case as his signed confession, that he made other statements as a part of the confession which the officers taking the statement would not incorporate into the written statement. You are instructed that the law is that if a defendant makes a confession, that the statements made by him in explanation of the crime, or other statements made by him at the time appearing favorable to him, and intended by him to be a part of the confession, must all be included in the confession introduced as evidence. In other words, the confession in its entirety must be offered, if it is to be considered by you as a confession, and if only that portion of the statement given by the accused which is adverse to him is incorporated, leaving out that which might appear favorable to him, then it is your duty to disregard the entire confession offered by the State in evidence." The court gave the instruction as modified by substituting the following in lieu of the last sentence of the requested instruction: "So if you find that the defendant made certain statements at the time which were not included in the written confession, you shall consider them as a part of the confession offered in evidence, even though such statements appear favorable to the defendant."
As previously indicated, appellant made no objection to the introduction of the confession. At the time of its introduction there was no suggestion that it was not freely and voluntarily made, or that it did not contain the entire statement of appellant, and it was unnecessary that the court hear preliminary testimony in chambers prior to admission. Burton v. State, 204 Ark. 548, 163 S.W.2d 160. The instruction as requested was misleading in that the jury could have readily concluded. *655 from the language used that they were hound to accept as true the statement of appellant that he made certain statements which were not incorporated in the written confession. This was a highly disputed question of fact for the jury's determination, which was made crystal clear by the court's modification. The jury were told in the second sentence of the instruction that the entire statements must have been included in the confession in accordance with the decision in Williams v. State, 69 Ark. 599, 65 S.W. 103, relied on by appellant. All of the matters which appellant claimed were omitted from his written statement are contained in his testimony. It was within the province of the jury to determine the truth or falsity of all or any part of the evidence, including the confession. Smith v. State, 216 Ark. 1, 223 S.W. 2d 1011. We find no error in the modification of the requested instruction.
Although not brought forward in the motion for new trial, appellant also objected to the court's instruction on "flight" for the reason "that said instruction is abstract and because the declaration of law, as given, has no application to the facts developed in this case". The instruction told the jury that if they found that defendant fled from the scene of the shooting for the purpose of avoiding arrest and trial, they could consider such fact along with all the other facts and circumstances in determining guilt or innocence. We have held that flight of the accused is admissible as a circumstance in corroboration of evidence tending to establish guilt. Stevens v. State, 143 Ark. 618, 221 S.W. 186. There was ample evidence of flight in the case at bar and the instruction is not open to the objection urged against it.
The final insistence for reversal is covered by the first three and the eighth assignments in the motion for new trial which challenge the sufficiency of the evidence to support the verdict. It is argued that there is no substantial evidence to establish appellant's guilt of any degree of homicide higher than manslaughter and that the testimony on behalf of the state is so inconsistent with certain physical facts as to be unworthy of belief. In this connection great stress is laid on testimony relating to a shirt discarded by appellant shortly after leaving the scene of the shooting. This shirt was found by officers the next day but was not offered in evidence by the state. Appellant introduced the shirt in evidence and testified that the blood thereon came from his mouth as the result of beatings administered by officers at the Pulaski County Jail. He further testified that his companion tore the shirt from his body shortly after they left the scene of the shooting because the white color of the shirt might more readily lead to their detection. But the jury could have reasonably concluded that the shirt was discarded because it was stained with the blood of the slain officer or his companion. The distinction between principals and accessories before the fact in felony cases has been abolished in this state and all accessories before the fact are deemed principals and punished as such. Ark. Stats. § 41-118. In testing the sufficiency of the evidence, we consider it in the light most favorable to the state. When so considered, the jury was warranted in concluding that appellant wilfully shot and killed the deceased, Ray Campbell, after deliberation and premeditation and with malice aforethought, or, that if he did not actually fire the fatal shot, he was present aiding and abetting his companion in the commission of such felonious act.
We find no prejudicial error in the record and the judgment is affirmed.
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729 F.2d 1447
Appeal of Harte Biltmore Limited
NO. 83-1263
United States Court of Appeals,third Circuit.
FEB 03, 1984
Appeal From: E.D.Pa.,
Van Artsdalen, J.
1
AFFIRMED.
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981 So.2d 1184 (2006)
DAVID OLOWOKERE ET AL.
v.
MAGIC CITY HOMEBUYERS, LLC.
No. 2050219.
Supreme Court of Alabama.
February 24, 2006.
Decision of the Alabama Court of Civil Appeal without Opinion. Dismissed for failure to file brief complying with Rule 28, Ala. R.App.P.
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FILED
NOT FOR PUBLICATION
JUN 28 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SOUTHERN CALIFORNIA No. 14-56169
COUNSELING CENTER,
D.C. No. 2:13-cv-05468-ABC
Plaintiff - Appellant, (AGR)
v.
MEMORANDUM*
GREAT AMERICAN INSURANCE
COMPANY,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, District Judge, Presiding
Argued and Submitted June 9, 2016
Pasadena, California
Before: REINHARDT and WARDLAW, Circuit Judges and KORMAN,** Senior
District Judge.
Southern California Counseling Center (“SCCC”) appeals the grant of Great
American Insurance Company’s (“GAIC”) motion for summary judgment and the
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
denial of its own motion for partial summary judgment in a case arising out of the
rejection of SCCC’s reimbursement claim under a GAIC-issued insurance policy’s
coverage for losses due to computer fraud. The district court found that the policy’s
exclusion for losses caused by “authorized representatives” – here, SCCC’s payroll-
services agent, Ben Franklin Payroll Service, and/or its principal, Richard Zakarian
– applied. We affirm.
Section D.1.c of the policy excludes from coverage losses caused by the
dishonest acts of “authorized representatives.” Black’s Law Dictionary defines “to
authorize” as “[t]o give legal authority; to empower,” and “representative” as
“[s]omeone who stands for or acts on behalf of another.” Black’s Law Dictionary
(10th ed. 2014). Webster’s Dictionary presents substantially similar definitions.
Webster’s Third New International Dictionary (Unabridged) 146!47, 1926!27
(1981). As a result, authorized representatives are “in essence, those whom the
insured empowers to act on its behalf.” Stanford Univ. Hosp. v. Fed. Ins. Co., 174
F.3d 1077, 1085 (9th Cir. 1999). Just as we found in Stanford with regard to a similar
provision in an insurance policy, “the plain meaning of the ‘authorized representative’
language [here] . . . is not ambiguous and covers those who by authorization of the
insured are given access to and permitted to handle the insured’s funds.” Id.
This understanding comports with the function of the provision within the
-2-
policy: to place the onus of vetting the individuals and entities whom the insured
engages to stand in its shoes – and thus the risk of loss stemming from their conduct
– squarely on the insured. In other words, the term “authorized representative” is “a
straightforward effort to embrace all statuses that are ‘authorized,’ and thus are the
insured’s responsibility to supervise.” Id. (quoting Stop & Shop Cos. v. Fed. Ins. Co.,
136 F.3d 71, 76 (1st Cir. 1998)).
SCCC executed multiple agreements with Ben Franklin Payroll Service and/or
its principal, Richard Zakarian, to allow the latter party or parties to provide payroll
services. In doing so, SCCC gave them direct access to its bank account and
permission to file tax documents on its behalf. These agreements used the word
“authorize” numerous times; indeed, it is difficult to imagine contracts that could more
explicitly “authorize” a “representative” to act on one’s behalf. Under these
circumstances, the district court did not err in concluding that the only reasonable
construction of the term “authorized representative” encompasses Ben Franklin
Payroll Service and/or Zakarian, and, as a result, the exclusion unambiguously applies.
That Ben Franklin Payroll Service was not an incorporated or registered business is
of no significance because it is clear that an entity or individual doing business under
the name Ben Franklin Payroll Service entered into the agreements with SCCC and
even partially performed for a period of time. See Pinkerton’s Inc. v. Superior Court,
-3-
57 Cal. Rptr. 2d 356, 360 (Ct. App. 1996).
AFFIRMED.
-4-
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
August 3, 2006
No. 06-10111 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-00234-CR-T-17EAJ
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
BUENERGI ESTUPINAN PAREDES,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(August 3, 2006)
Before BARKETT, MARCUS and WILSON, Circuit Judges.
PER CURIAM:
Buenergi Estupinan Paredes appeals the 135-month sentence imposed
following his conviction for possession with intent to distribute cocaine while on
board a vessel subject to United States jurisdiction, 46 App. U.S.C. §§ 1903(a), (g),
21 U.S.C. § 960(b)(1)(B)(ii), and conspiracy to possess with intent to distribute
cocaine while on board a vessel subject to United States jurisdiction, 46 App.
U.S.C. §§ 1903(a), (g), (j), 21 U.S.C. § 960(b)(1)(B)(ii).
Paredes first argues that he the district court erred in denying him a minor
role reduction under U.S.S.G. § 3B1.2(b). Paredes asserts that his role as a low-
level member of the crew on a go-fast boat was minor when compared to the
entire drug trafficking network and when compared to that of the captain of the go-
fast boat.
We review for clear error a district court’s factual determination of a
defendant’s role in the offense. United States v. De Varon, 175 F.3d 930, 937
(11th Cir. 1999) (en banc). A defendant “who is less culpable than most other
participants, but whose role could not be described as minimal” is entitled to a
two-level reduction for his minor role. U.S.S.G. § 3B1.2(b), comment. (n.5). The
defendant bears the burden of proving a minor role in the offense by a
preponderance of the evidence. De Varon, 175 F.3d at 939.
The record supports the district court's findings that the conduct attributed to
Paredes was identical to his actual conduct and that he was not substantially less
2
culpable than the other crew members on the go-fast boat. Paredes was only held
accountable for the quantity of cocaine found on his boat. Further, while Paredes
asserts that his role was less than that of the captain of the go-fast boat, this does
not preclude the district court from finding that Paredes’s role was not minor. The
district court did not clearly err in denying Paredes a minor role reduction.
Paredes further argues that his sentence was unreasonable. Paredes asserts
that he had never previously been involved in criminal activity, and that he
engaged in this conspiracy only in order to obtain money for a medical operation.
He further contends that a significantly lesser sentence would have better served
the purposes of punishment, as listed in 18 U.S.C. § 3553(a)(2).
“After the district court has accurately calculated the Guideline range,” we
review the final sentence for reasonableness. United States v. Winingear, 422 F.3d
1241, 1244 (11th Cir. 2005) (internal quotes omitted). The factors that act as a
guide in determining whether a sentence was reasonable are found in 18 U.S.C.
§ 3553(a). Id. at 1246. “These factors include the available sentences, the
applicable Guideline range, the nature and circumstances of the offense, and the
need for the sentence to reflect the seriousness of the offense, promote respect for
the law, provide just punishment for the offense, and provide the defendant with
needed medical care.” Id. Another factor is “the need to avoid unwarranted
3
sentence disparities among defendants with similar records who have been found
guilty of similar conduct.” 18 U.S.C. § 3553(a)(6).
The record reflects that the district court considered the § 3553(a) factors as
well as the guidelines, and found that a sentence at the low end of the guideline
range was appropriate. The district court was informed of and considered
Paredes’s poverty, his cooperation with agents after his arrest, the purposes of the
level of punishment for drug traffickers, the sentence ranges available, Paredes’s
need for medical treatment, the nature of his offense, and his lack prior criminal
history. The district court determined that the low end of the guideline range was
sufficient, but not greater than necessary, to comply with the statutory purposes of
sentencing. The sentence of 135 months was also much less than the statutory
maximum of life imprisonment. Paredes’s sentence was reasonable.
Upon consideration of the briefs of the parties, and thorough review of the
record, we find no reversible error.
AFFIRMED.
4
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343 F.3d 1000
GLEN HOLLY ENTERTAINMENT INC., a California Corporation dba Digital Images, Plaintiff-Appellant,v.TEKTRONIX INC., an Oregon Corporation; Avid Technology, Inc, a Delaware Corporation, Defendants-Appellees.
No. 01-56447.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted October 9, 2002 — Pasadena, California.
Filed September 9, 2003.
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Jeffrey T. Makoff, Makoffs LLP, San Francisco, California, for the Plaintiff-Appellant.
Stanley M. Gorinson, Kilpatrick Stockton LLP, Washington, DC, for the Defendants-Appellees.
James C. Burling, Hale & Dorr, LLP, Boston, Massachusetts, for the Defendants-Appellees.
Appeal from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding. D.C. No. CV-99-02476-SVW.
Before: Stephen Reinhardt, Stephen S. Trott and Barry G. Silverman, Circuit Judges.
OPINION
TROTT, Circuit Judge.
1
Glen Holly Entertainment Inc. ("Digital Images") brought this private antitrust action, with supplemental state law claims, against Tektronix Inc. ("Tektronix") and Avid Technology, Inc. ("Avid"), collectively ("defendants"). Pursuant to defendants' Rule 12(b)(6) motion, the district court dismissed Digital Images' antitrust and promissory estoppel claims, as well as some of its fraud and negligent misrepresentation claims. The court concluded that Digital Images lacked "anti-trust standing" in that the injury alleged did not qualify as "anti-trust injury." The district court subsequently granted summary judgment in favor of the defendants on Digital Images' remaining fraud and negligent misrepresentation claims. We have jurisdiction under 28 U.S.C. § 1291. We affirm in part, and reverse and remand in part.
STANDARD OF REVIEW
2
We review de novo the district court's dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Zimmerman v. City of Oakland, 255 F.3d 734, 737 (9th Cir.2001). All allegations of material fact in the complaint are regarded as true and construed in the light most favorable to Digital Images. Big Bear Lodging Ass'n v. Snow Summit, Inc., 182 F.3d 1096, 1101 (9th Cir.1999) (citations omitted). Digital Images' second amended complaint was not subject to dismissal unless it appeared beyond doubt that Digital Images could prove no set of facts in support of its claims that would entitle it to relief. Morley v. Walker, 175 F.3d 756, 759 (9th Cir.1999) (citations omitted).
3
We review de novo the district court's grant of summary judgment. Balint v. Carson City, Nev., 180 F.3d 1047, 1050 (9th Cir.1999) (en banc). We view the evidence in the light most favorable to Digital Images, the nonmoving party, and determine whether any genuine issues of material facts exist and whether the district court correctly applied the relevant substantive law. Id. "Antitrust standing is a question of law reviewed de novo." American Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1054 (9th Cir.1999).
BACKGROUND
4
Digital Images alleges that most filmed entertainment product in the United States was edited during the 1990's on "non-linear editing systems," a digital technology based method of efficiently accessing and rearranging film images and audio tracks. Until September 1998, two competing manufacturers of non-linear editing systems existed in the United States' film market, Tektronix and Avid, the defendants in this case. According to plaintiff Digital Images' complaint, Tektronix and Avid were "powerful rivals" who engaged in "fierce" economic and innovative competition from which Digital Images and other consumer-purchaser end users of their respective products materially benefitted across the board. Tektronix called its system "Lightworks." Avid referred to its competing product by the company name, "Avid."
5
Digital Images was in the business of (1) leasing to film companies for their own use non-linear editing equipment which it purchased from the manufacturer, and (2) using these systems to perform professional editing services for customers in the film industry. Digital Images purchased its entire stock of non-linear editing equipment, i.e., Lightworks, from Tektronix and relied on the manufacturer for service, features, upgrades, and support. In antitrust terms, Digital Images was in the "purchase market" a customer-consumer who obtained goods and related services in the relevant market from the defendants. As counsel argued to the court, Digital Images was, among other things, a "buyer for [its] own use." [ER 0263.] Digital Images alleges also that it competed with the manufacturers Avid and Tektronix in the rental market as a rental equipment and service provider ("RESP"). The point of competition alleged was the decision by limited-purpose film production companies either to buy a machine from the manufacturer, or rent one from a RESP. It is in these capacities that we examine its standing to bring this action.
6
At a series of meetings between April and October 1996, Tektronix representatives met with Lightworks' customers, including Digital Images. During these meetings, Tektronix representatives asserted that Tektronix would continue to improve and aggressively to market Lightworks. Between 1996 and August 1998, the representatives discussed Tektronix's forward-looking business plans during one-on-one meetings with Digital Images, and at industry conventions and trade shows. Based on Tektronix's presentations, Digital Images alleges it chose to remain with Lightworks instead of switching to Tektronix's competitor, Avid.
7
By September 1998, Avid had succeeded in controlling 85% of the non-linear film editing machine market. On September 3, 1998, abruptly, without warning, and contrary to previous representations, Avid and Tektronix entered into an "alliance" whereby Tektronix agreed to cease manufacturing and selling its Lightworks system, and to become a distributor for its previous competitor Avid's non-linear film editing products. To quote Digital Images' second amended complaint,
8
(b) Avid and Tektronix agreed "jointly" to market Avid's current and future non-linear editing products to the broadcast market, and Tektronix was prohibited from selling the Avid non-linear editing product to film market RESPS [i.e., rental equipment and service providers,] (such as Digital Images). When the parties agreed to end competition, which they recognized would be viewed as anti competitive conduct, they colluded to conceal the true facts from the public. This was done through a variety of maneuvers, including false S.E.C. filings concerning Lightworks, false statements at press conferences, and an incentive system under which Tektronix would effectively be precluded from competing with Avid — even though the "joint venture" agreements did not contain an express non-compete clause; and (c) Avid and Tektronix agreed to stop competing in markets for the sale of editing equipment to the broadcast industry, and instead to combine their products into a single product that would eliminate the non-linear news editing equipment markets — which set the stage for Avid and Tektronix to split the profits that would be realized from the elimination of competition in these markets. Further to that scheme, Avid and Tektronix formed a jointly-owned corporation called "Avstar Systems LLC." The agreement between Tektronix and Avid was an egregious act of unlawful market division....
9
[ER 0188-0189.] (Emphasis added.)
10
Digital Images alleges that this joint venture was purposefully anti-competitive and caused its film producer customers to refuse to have their films edited with Lightworks technology after they discovered that the system had been discontinued. Unable to switch products because of costs and allegedly insurmountable change-over complications, this competition-ending agreement between Avid and Tektronix effectively ruined Digital Images' Lightworks reliant business, and forced Digital Images out of business. As the district court noted, as a result of this joint venture "plaintiff's business was abruptly destroyed."
11
Notwithstanding a string of prior consistent representations to the industry to the contrary, on October 9, 1998, Tektronix claimed to the Security and Exchange Commission ("S.E.C.") in justification of its decision to collaborate with Avid that it had entered into the alliance because Lightworks was near the end of its product life cycle. Whatever the reason, the alliance allegedly had the effect of eliminating all competition in the relevant market wherein Digital Images was both a customer-purchaser-owner-end-user and a purchaser-owner-lessor. Digital Images asserts that the agreement gave Avid a monopoly in the relevant market. Interbrand competition was dead.
12
Digital Images filed this private antitrust lawsuit on March 10, 1999, alleging that the Avid/Tektronix agreement violated antitrust laws-the Sherman Act (15 U.S.C. §§ 1-2), the Clayton Act (15 U.S.C. § 18), and the Cartwright Act (Cal. Bus. & Prof.Code § 16726). Digital Images alleged also state law claims against Tektronix for fraud, negligent misrepresentation, and promissory estoppel, and a claim against Avid for interference with prospective business advantage.
13
Digital Images alleged in its complaint that Tektronix's representations regarding its intentions were both material and false, and that Digital Images relied on these statements in two principal ways: (1) Digital Images repeated Tektronix's misrepresentations to its customers which caused it to lose business and credibility when the representations turned out to be false; and (2) Digital Images remained an exclusive Lightworks vendor (which included substantial capital investments in Lightworks equipment), which caused Digital Images to suffer unrecoverable losses when Tektronix failed to deliver on its representations and then suddenly, collusively, and unlawfully exited the non-linear editor business in September 1998.
14
On September 15, 1999, the district court dismissed Digital Images' first amended complaint with leave to amend. Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1073, 1085-86 (C.D.Cal. 1999); Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1101-02 (C.D.Cal.1999). Digital Images filed its second amended complaint on November 3, 1999, alleging the same claims as its first amended complaint and attempting to cure deficiencies identified by the district court. The district court dismissed the second amended complaint's claims of federal and state antitrust law violations against Avid and Tektronix after it concluded that Digital Images had failed to allege the necessary "anti-trust injury."1
15
The district court dismissed also, in part, Digital Images' fraud and negligent misrepresentation claims, and dismissed its promissory estoppel claim in its entirety. The court reasoned that most of the alleged misrepresentations were not actionable as fraud or negligent misrepresentation because they constituted mere puffery or were too vague. The court dismissed Digital Images' promissory estoppel claim because the alleged promises were too vague or indefinite, and because no allegations supported the conclusion that injustice could only be avoided by enforcing them. The district court concluded, however, that five alleged misrepresentations were facially actionable as fraud and negligent misrepresentation and not subject to 12(b)(6) dismissal.
16
On July 11, 2001, however, the district court granted summary judgment in favor of Tektronix on the basis of Digital Images' five remaining claims for fraud and negligent misrepresentation because Digital Images had "failed to present a disputed issue as to whether it justifiably relied on the alleged misstatements." The district court entered final judgment on August 10, 2001, and Digital Images timely appealed.
DISCUSSION
A.
Standing
17
Section 4 of the Clayton Act provides that "any person ... injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore...." 15 U.S.C. § 15(a). This law effectively allows private persons to sue for antitrust violations previously restricted by statute to government enforcement. Digital Images claims that the Avid/Tektronix agreement violated federal antitrust law, principally sections 1 and 2 of the Sherman Antitrust Act, by creating a monopoly, destroying competition in the relevant market, and restraining trade, all to the detriment of Digital Images' "business" and its "property." To quote its brief, "Digital Images was injured by ... the collusive restructuring of markets to the benefit of the colluders and to the detriment of other market participants including those who buy products ..."
18
Only those who meet the requirements for "antitrust standing" may pursue a claim under the Clayton Act; and to acquire "antitrust standing," a plaintiff must adequately allege and eventually prove "antitrust injury." American Ad, 190 F.3d at 1054-55 (citing Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 530-35, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (emphases added)).
19
Antitrust injury is defined not merely as injury caused by an antitrust violation, but more restrictively as "injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). In Brunswick, for example, the Supreme Court held, as we explained in Pool Water Prods. v. Olin Corp., 258 F.3d 1024 (9th Cir.2001), that "a plaintiff must prove that his loss flows from an anticompetitive aspect of the defendant's behavior.... If the injury flows from aspects of the defendant's conduct that are beneficial or neutral to competition, there is no antitrust injury, even if the defendant's conduct is illegal per se." Pool Water, 258 F.3d at 1034 (citation and internal quotation marks omitted). Applying this test the Supreme Court concluded in Brunswick that antitrust damages are not available "where the sole injury alleged is that [failing] competitors were continued in business [by the defendant's acquisition of them,] thereby denying [plaintiffs] an anticipated increase in market shares." 429 U.S. at 484, 97 S.Ct. 690. Similarly, the Court concluded in Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986) that loss or damage to a competitor due merely to increased competition, such as a possible diminution of profits due to price competition following a merger by other competitors is not antitrust injury. The Court pointed out that the antitrust laws "were enacted for `the protection of competition, not competitors.'" Id. at 115, 107 S.Ct. 484 (quoting Brunswick, 429 U.S. at 488, 97 S.Ct. 690; quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)).
20
Antitrust injury is made up of four elements: "(1) unlawful conduct, (2) causing an injury to the plaintiff, (3) that flows from that which makes the conduct unlawful, and (4) that is of the type the antitrust laws were intended to prevent." American Ad, 190 F.3d at 1055.
21
In addition, we impose a fifth requirement, that "the `injured party be a participant in the same market as the alleged malefactors.'" Id. at 1057 (quoting Bhan v. NME Hospitals, Inc., 772 F.2d 1467, 1470 (9th Cir.1985)). "In other words, the party alleging the injury must be either a consumer of the alleged violator's goods or services or a competitor of the alleged violator in the restrained market." Eagle v. Star-Kist Foods, Inc., 812 F.2d 538 (9th Cir.1987). In fact, and as the district court recognized, "Consumers in the market where trade is allegedly restrained are presumptively the proper plaintiffs to allege antitrust injury." See SAS v. Puerto Rico Tel. Co., 48 F.3d 39, 44-45 (1st Cir.1995) ("[t]he presumptively proper plaintiff is a customer who obtains services in the threatened market"); See Associated Gen. Contractors v. Carpenters, 459 U.S. at 538, 103 S.Ct. 897 ("As the legislative history shows, the Sherman Act was enacted to assure customers the benefits of price competition, and ... [to] protect[] the economic freedom of participants in the relevant market.").
B.
The District Court's Analysis
22
The district court examined Digital Images' first amended complaint and determined in connection with defendants' Rule 12(b)(6) motion (1) that the defendants' conduct as alleged was "wrongful... under the antitrust laws," (2) that Digital Images' damage resulted from the defendants' conduct, (3) that the injury suffered by Digital Images flowed from that which made the defendants' conduct unlawful, and (4) that the discontinuation of the Lightworks product line had "a negative effect on competition." 100 F.Supp.2d 1073. The court said, "There is no question that plaintiff has alleged conduct that would violate the antitrust laws." Id. at 1080. The court correctly noted also that the antitrust laws
23
do not preclude any manufacturer from independently discontinuing a product line any more than they preclude a manufacturer from independently raising prices.... However, when a manufacturer discontinues a product in return for a benefit from a competitor, this conduct may violate the antitrust laws.
24
Id. at 1081. With respect to the second amended complaint, however, the district court concluded that Digital Images, which it regarded primarily as a "displaced distributor," had failed to allege an "injury of the type the antitrust laws were intended to prevent...."2 [ER 291.] Brunswick 429 U.S. at 488. The district court said,
25
Granting relief to Plaintiff for a reduction in the value of its inventory as a result of a merger would, therefore, have the perverse effect of punishing mergers that lead to the production of better products in proportion to the superiority of the merged entity's products.
26
[ER 287.]
27
The court was influenced by Digital Images' failure to allege that it "intends to make or has made purchases in the newly-modeled market" as well as its failure to claim predatory pricing on the part of the allied defendants. The court concluded also that Digital Images' allegation that its inventory had become obsolete was "not an injury suffered in the new purchase market." Finally, the court opined that mergers that result in better products are procompetitive and should not be rendered actionable under our antitrust laws.
28
Defendants argue not that their alliance was lawful, but that antitrust injury is not present here because the same harm would have resulted if Tektronix had merely gone out of business. They rely on cases recognizing that "loss incurred because of an unlawful acquisition that would also have been incurred had the acquisition been lawful is not antitrust injury." Lucas Auto. Eng'g v. Bridgestone/Firestone, Inc., 140 F.3d 1228, 1233 (9th Cir.1998) (citing Brunswick, 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701); Alberta Gas Chems. Ltd. v. E.I. Du Pont De Nemours and Co., 826 F.2d 1235 (3rd Cir.1987). Defendants argue also that "[i]f the injury flows from aspects of the defendant's conduct that are beneficial or neutral to competition, there is no antitrust injury, even if the defendant's conduct is illegal per se." Pool Water, 258 F.3d at 1034 (quoting Rebel Oil Co. v. ARCO, 51 F.3d 1421, 1433 (9th Cir. 1995)).
C.
Type of Injury
29
The main argument on appeal involves American Ad's fourth requirement: whether Digital Images' injury is "of the type the antitrust laws were intended to prevent." 190 F.3d at 1055. In this respect, the intentions of the antitrust laws are well synthesized in Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940):
30
The end sought [by the Sherman Act's prohibition against unreasonable restraints of trade] was the prevention of restraints to free competition in business and commercial transactions which tended to restrict production, raise prices or otherwise control the market to the detriment of purchasers or consumers of goods and services, all of which had come to be regarded as a special form of public injury.
31
Id. at 493, 60 S.Ct. 982 (emphasis added). "[T]he central purpose of the antitrust laws, state and federal, is to preserve competition. It is competition ... that these statutes recognize as vital to the public interest." Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 988 (9th Cir. 2000). "Every precedent in the field makes clear that the interaction of competitive forces ... is what will benefit consumers." Id.
32
The district court's first error was to characterize Digital Images role in the market as a "distributor," a role which Digital Images protests it did not play. Typically, a distributor is a wholesaler who sells products chiefly to retailers and commercial users, usually as part of a contractual relationship with the primary manufacturer of the product, or with a franchisor. Digital Images' complaint establishes no such relationship with either defendant. We agree with Digital Images that this focus was a mistake and that "terminated distributor" cases, such as John Lenore & Co. v. Olympia Brewing Co., 550 F.2d 495 (9th Cir.1977), are unhelpful. Thus, the district court's conclusion that Digital Images had suffered no antitrust injury as a distributor was simply irrelevant.
33
Unfortunately, the district court's mistaken view that Digital Images was a distributor of Tektronix's products carried over into its analysis of Digital Images' allegation that it competed as a RESP in the rental market with the defendant manufacturers. The court dismissed this assertion on the ground that the rule that "canceled distributors do not have antitrust standing does not have an exception merely because the manufacturer is also a seller of the products to end-users that is also sold to end-users by the distributor." "Plaintiff's role in the market is really undistinguishable for [sic] its role as a `distributor'."
34
As indicated, the court's decision fatally to pigeon hole Digital Images as a distributor is simply wrong. Digital Images disclaims any such relationship with Tektronix, and there is nothing sufficient in the pleadings to impeach this assertion. Thus, for standing purposes, Digital Images alleged enough to establish factually that it is both a customer and a competitor in a slightly different market.
35
The court's third error was to limit a purchaser/consumer's actionable antitrust injury to situations where the purchaser/consumer has made or intends to make purchases in the relevant market which, as the result of antitrust activity, now suffers from (1) artificially increased prices, or (2) artificially less innovative products. Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1073, 1080 (C.D.Cal. 1999). With all respect, this understanding of antitrust injury is too restrictive.3
36
The Avid/Tektronix agreement detrimentally changed the market makeup up and limited consumers' choice to one source of output. One form of antitrust injury is "[c]oercive activity that prevents its victims from making free choices between market alternatives." Amarel v. Connell, 102 F.3d 1494, 1509 (9th Cir.1996) (internal quotation marks and citation omitted). The injury alleged flowed from the discontinuation of the only competing product on the market by agreement between the only two competitors in the market. Digital Images and its customers no longer had a viable choice between market alternatives.
37
Defendants' reliance on cases where courts found no antitrust injury because the "harm" resulted from lower prices, continued competition, or increased competition simply do not apply to the instant case. See Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 336, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990); Brunswick, 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701; Cargill, 479 U.S. 104, 107 S.Ct. 484, 93 L.Ed.2d 427. Nothing in the record indicates that the Avid/Tektronix agreement lowered prices or enhanced competition. Additionally, none of the cases relied on by the defendants involved the elimination of all competition similar to that alleged by Digital Images. Nothing in the record indicates that a finding of antitrust injury under the circumstances of this case would punish behavior that the anti-trust laws are designed to promote.
38
Blue Shield of Virginia v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982) provides us with assistance in deciding the dispositive issue in this case. Virginia McCready was a Blue Shield subscriber who sought the professional services of a psychologist for a mental and nervous disorder. Blue Shield refused to cover these services on the ground that the services had been provided not by a psychiatrist, but by a non-physician psychologist. McCready then sued Blue Shield and the NeuroPsychiatric Society of Virginia, claiming an unlawful conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 "to exclude and boycott clinical psychologists from receiving compensation under the Blue Shield plans." Id. at 470, 102 S.Ct. 2540. The district court dismissed her lawsuit on the ground that she had no antitrust standing. A divided panel of the Fourth Circuit reversed. 649 F.2d 228 (1981). The dissenting judge saw McCready's injury not "as a design or good of any antitrust violation," but "rather as a consequence thereof."
39
The Supreme Court affirmed the Fourth Circuit, holding that McCready as a customer had standing to sue:
40
"As a consumer of psychotherapy services entitled to benefits under the Blue Shield Plan, we think it's clear that McCready was within that area of the economy ... endangered by [that] breakdown of competitive conditions."
41
457 U.S. at 480, 102 S.Ct. 2540 (internal quotation marks and citation omitted).
42
The Supreme Court dismissed as irrelevant the defendant's arguments, which are similar to the defendants' Brunswick-based arguments made here, (1) that McCready did not visit a psychiatrist whose fees were artificially inflated as a result of the competitive advantage he gained by the alleged conspiracy, (2) that McCready suffered no out-of-pocket additional expenses because of the conspiracy, and (3) that her psychologist's bills were no higher because of the conspiracy. The court said,
43
Brunswick is not so limiting. Indeed, as we made clear in a footnote to the relied-upon passage, a § 4 plaintiff need not "prove an actual lessening of competition in order to recover. [C]ompetitors may be able to prove antitrust injury before they actually are driven from the market and competition is thereby lessened." Id., at 489, n. 14, 97 S.Ct. at 698 n. 14. Thus while an increase in price resulting from a dampening of competitive market forces is assuredly one type of injury for which § 4 potentially offers redress, see Reiter v. Sonotone Corp., 442 U.S. 330, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979), that is not the only form of injury remediable under § 4. We think it plain that McCready's injury was of a type that Congress sought to redress in providing a private remedy for violations of the antitrust laws.
44
McCready charges Blue Shield with a purposefully anti-competitive scheme. She seeks to recover as damages the sums lost to her as the consequence of Blue Shield's attempt to pursue that scheme. She alleges that Blue Shield sought to induce its subscribers into selecting psychiatrists over psychologists for the psychotherapeutic services they required, and that the heart of its scheme was the offer of a Hobson's choice to its subscribers. Those subscribers were compelled to choose between visiting a psychologist and forfeiting reimbursement, or receiving reimbursement by forgoing treatment by the practitioner of their choice. In the latter case, the antitrust injury would have been borne in the first instance by the competitors of the conspirators, and inevitably — though indirectly — by the customers of the competitors in the form of suppressed competition in the psychotherapy market; in the former case, as it happened, the injury was borne directly by the customers of the competitors. McCready did not yield to Blue Shield's coercive pressure, and bore Blue Shield's sanction in the form of an increase in the net cost of her psychologist's services. Although McCready was not a competitor of the conspirators, the injury she suffered was inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market. In light of the conspiracy here alleged we think that McCready's injury "flows from that which makes defendants' acts unlawful" within the meaning of Brunswick, and falls squarely within the area of congressional concern.
45
457 U.S. at 482-484, 102 S.Ct. 2540 (emphasis added) (internal footnotes omitted).
46
The parallels here to McCready are apparent. In each case, a customer was directly damaged by an act alleged to be in violation of the antitrust laws. The customer was not required to show that the reduced competition increased the basic market cost of the service involved, only that she was directly and economically hurt by the alleged violation.
47
FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986) supports our conclusions. In that case, dentists conspired to refuse to submit x-rays to insurers for use in evaluating claims for benefits. In sustaining the FTC's conclusion that this practice unreasonably and conspiratorially restrained trade in violation of § 1 of the Sherman Act, the Court said,
48
The Federation's policy takes the form of a horizontal agreement among the participating dentists to withhold from their customers a particular service that they desire — the forwarding of xrays to insurance companies along with claims forms. `While this is not price fixing as such, no elaborate industry analysis is required to demonstrate the anticompetitive character of such an agreement.' A refusal to compete with respect to the package of services offered to customers, no less than a refusal to compete with respect to the price term of an agreement, impairs the ability of the market to advance social welfare by ensuring the provision of desired goods and services to consumers at a price approximating the marginal cost of providing them.
49
Id. at 459, 106 S.Ct. 2009.
50
Granted that this discussion was directed at whether the restraint in question was "unreasonable," but we note that the reason it was regarded as unreasonable is that it restricted customers' choices by purposefully eliminating something from the market without any redeeming pro-competitive effect. As the Court said, "The Federation is not entitled to preempt the working of the market by deciding for itself that its customers do not need that which they demand." Id. at 462, 106 S.Ct. 2009. See also NCAA v. Board of Regents of Univ. of Okla., 468 U.S. 85, 110, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984) ("Thus [the NCAA's plan to restrict television broadcasts of football games] is inconsistent with the Sherman Act's command that price and supply be responsive to consumer preference."); Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 357b. (2d ed. 2000) ("Antitrust law addresses distribution restraints in order to protect consumers from the higher prices or diminished choices that can sometimes result from limiting intrabrand competition."); Pa. Dental Ass'n v. Med. Serv. Ass'n of Pa., 815 F.2d 270, 275 (3d Cir.1987) (citation omitted) ("[A]n agreement limiting consumer choice by impeding the `ordinary give and take of the marketplace'... cannot be sustained under the Rule of Reason.")
51
The defendants rely in large measure on cases that are sufficiently distinguishable to be inapposite and unhelpful. This case at this stage is not Brunswick, it is not Cargill, it is not Pool Water, and it is not Lucas Automotive.4 In the Brunswick line of cases, the alleged "injury" was simply a loss of greater profits caused by increased competition stemming from the alleged wrongful acts. Here, as the record now stands, there is no pro competitive aspect of the defendant's strategic alliance, none. Conduct, such as an agreement to restrain trade, "is inherently destructive of competitive conditions and may be condemned even without proof of its actual market effect." Amarel, 102 F.3d at 1509, (quoting Associated Gen. Contractors v. Carpenters, 459 U.S. at 528, 103 S.Ct. 897). Moreover, whatever might have happened to Digital Images, had some other event occurred resulting in the demise of Lightworks, is irrelevant in this context. The strategic alliance set out to exterminate Lightworks and allegedly succeeded, leaving only one product, no choices, and no competition in its wake. Furthermore, this case is not strictly a merger case, or a case involving the simple discontinuation of a product line, or one involving the termination of a distributor. To repeat, it is a case where the plaintiff has alleged an unlawful agreement, dressed up as a competitor collaboration, to kill off a product in order to end competition, and a case where the plaintiffs' business which used that product was directly and intentionally strangled in the consummation of that agreement. Digital Images suggests that the agreement prohibited Tektronix from selling the only remaining product to it as a RESP. In this connection, and to borrow from McCready, the injury and the damage suffered by Digital Images to its property and business was "inextricably intertwined" with an agreement by two separate manufacturers which the district court recognized as clearly in violation of the Sherman Act.
52
Digital Images' allegation of "loss stems from a competition-reducing aspect or effect of [defendants'] behavior," Atlantic Richfield, 495 U.S. at 344, 110 S.Ct. 1884. Given that customers are the intended beneficiaries of competition, and that customers are presumptively those injured by its unlawful elimination, for pleading purposes we conclude that Digital Images has satisfied the requirement that it adequately allege antitrust injury to its business.5 In its pleadings, Digital Images presents an allegation of "injury-in-fact that was reasonably proximate to the violation without undue duplication, complex apportionment, or alternative plaintiffs more directly affected by the violation." Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 335d. (2d ed.2000).
53
If the antitrust laws are designed to protect customers from the harm of unlawfully elevated prices, and from "agreements between competitors at the same level of the market structure to allocate territories in order to minimize competition," United States v. Topco Assocs., 405 U.S. 596, 610, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972), it is no stretch to conclude that these same laws protect customers from harm directly related to the unlawful removal of a competitive product from the market. If as McCready (quoting Brunswick) suggests, "competitors may be able to prove antitrust injury before they actually are driven from the market and competition is thereby lessened," McCready, 457 U.S. at 482-484, 102 S.Ct. 2540, one would think that a customer in business directly driven from the market by an agreement in restraint of trade would be able to do the same. It is one thing for a business to have cast its fate with a product that disappears because of the normal forces of the market; it is another to have the rug pulled out from under a business by a conspiratorial agreement to eliminate a competing product from the process upon which our economic model depends in order to promote social welfare. As the Supreme Court has said,
54
Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise systems as the Bill of Rights is to the protection of our fundamental personal freedoms.
55
Topco Associates, 405 U.S. at 608, 92 S.Ct. 1126.
D.
56
Fraud and Negligent Misrepresentation Claims
57
Under California law, both fraud and negligent misrepresentation as causes of action require Digital Images to demonstrate it justifiably relied on Tektronix's misrepresentations. Anderson v. Deloitte & Touche, LLP, 56 Cal.App.4th 1468, 66 Cal.Rptr.2d 512, 515 (1997) (fraud); Fox v. Pollack, 181 Cal.App.3d 954, 226 Cal.Rptr. 532, 537 (1986) (negligent misrepresentation). Digital Images bases its fraud and negligent misrepresentation claims on eight statements:
58
(1) In early 1996, Tektronix personnel advised Digital Images and others that "Version 6.0" software was "in the late stages of beta testing" and would be released within a few months;
59
(2) In early 1996, Tektronix personnel declared that "Version 6.0 is being treated as a high priority at Lightworks and we have more than enough engineers and programmers to meet our goals";
60
(3) In early 1996, Tektronix offered assurances that it placed a "high priority" on system upgrades, and that it intended to allocate all necessary resources to ensure improvement of the Lightworks system;
61
(4) In early 1996, Tektronix executives told Digital Images that a "24-frame development is being done on a priority basis and involves only a simple modification of the 30-frame system — which is almost complete";
62
(5) In early 1996, Tektronix advised that it had "people actively developing a real-time effects system, and will unveil it next year";
63
(6) In early 1996, Tektronix assured Digital Images and others that it was going to develop a more aggressive marketing campaign to advertise the Lightworks film editing system;
64
(7) In March 1998, Tektronix advised Digital Images that 24-frame software for the V.I.P. editing system would be delivered no later than September 1, 1998, but rescinded that assurance approximately one month later, and instead advised Digital Images that it would not be developing such software; and
65
(8) In March 1998, Tektronix issued a press release that particularly described Version 6.0 features. The press release stated: "Tektronix is committed to the Lightworks editing line, illustrated by new software releases. The upcoming release of Version 6.0 software brings dramatic new features to Lightworks Turbo and Heavyworks systems, including 5 min/GB picture resolution for the Heavy-works product...."
66
The district court dismissed the second, third, and sixth statements under Federal Rule of Civil Procedure 12(b)(6). We agree with the district court that these statements — generally describing the "high priority" Tektronix placed on product development and alluding to marketing efforts — do not state an actionable fraud or negligent misrepresentation claim. The statements were generalized, vague and unspecific assertions, constituting mere "puffery" upon which a reasonable consumer could not rely. See Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246 (9th Cir.1990); In re All Terrain Vehicle Litig., 771 F.Supp. 1057, 1060-61 (C.D.Cal.1991), modified on other grounds, 978 F.2d 1265 and 979 F.2d 755 (9th Cir.1992). Thus, the district court appropriately dismissed these claims.
67
The district court disposed of the remaining fraud and negligent misrepresentation claims by granting Tektronix summary judgment. The district court found no evidence in the record supporting Digital Images' claim of justifiable reliance. We conclude that the district court appropriately granted summary judgment dismissing Digital Images' fraud and negligent misrepresentation claims based on the fourth, seventh, and eighth statements. Digital Images did not demonstrate justifiable reliance on these statements. The fourth statement concerning development of a 24-frame system in 1996 could not support justifiable reliance because Digital Images expressed no serious interest in purchasing this system until April of 1998. By then, Digital Images had already decided to stay with Lightworks. The seventh and eighth statements, made in 1998, could not support justifiable reliance because Digital Images had already decided by the Summer of 1997 to stay with Tektronix.
68
The district court erred, however, when it concluded that no genuine issues of material fact existed with regard to the first statement describing development of the Version 6.0 software. During 1996, Digital Images was weighing business options and deciding whether to switch to Avid or remain with Tektronix's Lightworks. Cary Shott, president of Digital Images, stated she relied on the information provided by Tektronix "while forming Digital Images' business plan." Shott asserted that "Tektronix'[s] promises and assurances... are what convinced [her] that [she] had a viable future as a Lightworks vendor." Shott also attested that, had Digital Images switched to Avid's editing system before mid-1997, its future profits would have been comparable to those it enjoyed using Lightworks and it "would have been able to fully amortize the cost of four new systems during the projects and would have been able to be more price competitive as the market continued to consolidate throughout 1997."
69
The district court concluded that Tektronix's statement affirming issuance of Version 6.0 was not actionable because it was true — a Version 6.0 was ultimately issued. However, this did not occur until 1998, and there is some question whether the system worked as promised. Nevertheless, the relevant time frame affecting Shott's decision to stay with Lightworks or transition to Avid was 1996. The fact that Version 6.0 was ultimately issued in 1998 does not address the impact Tektronix's representation had on Shott in 1996 when Tektronix promised delivery in a "couple of months."
70
As an alternate basis for dismissal, the district court concluded that "there is simply no support in the record for Digital Images' assertion that it only stayed with Lightworks because of the promised release of Version 6.0 software." The district court observed that Shott had offered other reasons for her decision to remain with Lightworks in 1997. Those other reasons, however, only explained her decision to stay with Lightworks in 1997 and not her decision to stay with Lightworks in 1996. In addition, Shott's other reasons for remaining with Lightworks would not defeat her claim as a matter of law. "[A]lleged fraud need not be the sole cause of a party's reliance. Instead, reliance may be established on the basis of circumstantial evidence showing the alleged fraudulent misrepresentation ... substantially influenced the party's choice, even though other influences may have operated as well." Sangster v. Paetkau, 68 Cal.App.4th 151, 80 Cal.Rptr.2d 66, 78 (1998) (emphasis in original) (citations omitted).
71
Construing all facts and inferences in Digital Images' favor, a genuine issue of material fact exists concerning whether Tektronix's representation that Version 6.0 would be released in a "couple of months" substantially influenced Digital Images' decision to remain with Lightworks in 1996 instead of switching to Avid's product. Accordingly, summary judgment should not have been granted on this issue and we remand.6
E.
Digital Images' Promissory Estoppel Claim
72
Digital Images argues that the eight statements underlying its fraud and negligent misrepresentation claims also support a promissory estoppel claim. Under California law, "`[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.'" Kajima/Ray Wilson v. Los Angeles County Metro. Transp. Auth., 23 Cal.4th 305, 96 Cal.Rptr.2d 747, 1 P.3d 63, 66 (2000) (quoting Restatement (Second) of Contracts § 90).
73
The district court dismissed Digital Images' promissory estoppel claim under Federal Rule of Civil Procedure 12(b)(6), concluding that the alleged representations did not constitute actionable promises because they were too vague or indefinite. "[A] promise that is `vague, general or of indeterminate application' is not enforceable." Aguilar v. Int'l Longshoremen's Union Local # 10, 966 F.2d 443, 446 (9th Cir.1992) (quoting Hass v. Darigold Dairy Prods. Co., 751 F.2d 1096, 1100 (9th Cir.1985)). Additionally, "a promise must be definite enough that a court can determine the scope of the duty and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages." Ladas v. Cal. State Auto. Ass'n, 19 Cal.App.4th 761, 23 Cal.Rptr.2d 810, 814-15 (1993) (citations omitted).
74
We agree with the district court that Tektronix's representations were not definite enough to be enforceable and that "Digital Images has not sufficiently alleged facts that would support the conclusion that injustice can only be avoided by enforcing the promise allegedly made by Tektronix." Digital Images has adequate remedies through its viable fraud and negligent misrepresentation claims; therefore, a promissory estoppel claim is not necessary to avoid injustice. See Gibson v. Resolution Trust Corp., 51 F.3d 1016, 1026 (11th Cir.1995) (precluding promissory estoppel claim where alternate state law indemnification remedies offered adequate relief). The district court appropriately dismissed Digital Images' promissory estoppel claim, and we affirm.
Request for Reassignment
75
Digital Images argues also that we should reassign this case to another district judge on remand. Absent personal bias, "reassignment is appropriate only in `unusual circumstances.'" American Ad, 190 F.3d at 1061 (citations omitted). Such unusual circumstances rarely exist and do not exist in this case. See California v. Montrose Chem. Corp., 104 F.3d 1507, 1521-22 (9th Cir.1997). Relevant considerations include "(1) whether [the district judge would] have substantial difficulty in putting out of his or her mind previously-expressed views ..., (2) whether reassignment is advisable to preserve the appearance of justice, and (3) whether reassignment would entail waste and duplication out of proportion to any gain in preserving the appearance of fairness." Id. at 1521.
76
Here, Digital Images contends reassignment is necessary because the district judge called Cary Shott to the witness stand during the summary judgment proceeding and allegedly treated her rudely. The record, however, reflects that the district judge merely focused Shott's attention on the particular question he wanted her to answer. When Shott's brief testimony concluded, the judge thanked her. This short exchange does not create unusual circumstances warranting reassignment.
77
In addition, Digital Images argues that the district judge's off-the-cuff suggestion that he would not hire any other law clerks from Yale disparaged the law clerk's work in this case. For whatever purpose the district court intended this remark, it does not demonstrate the judge is biased against a party or otherwise unfit to preside over proceedings on remand. Additionally, the district court's alleged mismanagement of the docket does not rise to the level of an unusual circumstance.
78
Digital Images made no effort to tie its arguments to relevant precedent or explain how anything the district judge did or failed to do establishes bias or satisfies the Montrose factors. The existing record reveals no basis for reassigning the case to another district court judge on remand. Accordingly, Digital Images' request is denied.
CONCLUSION
79
The district court's dismissal of Digital Images' state and federal antitrust claims alleged in the second amended complaint is reversed and we remand with instructions to reinstate those claims. The district court's dismissal of Digital Images' allegations of promissory estoppel, fraud and negligent misrepresentation in the second amended complaint is affirmed. The district court's order granting Tektronix summary judgment is reversed with regard to the fraud and negligent misrepresentation claims based on Tektronix's "Version 6.0" statement, but is affirmed in all other respects.
80
AFFIRMED in part, REVERSED in part, and REMANDED. The parties shall bear their own costs of this appeal.
Notes:
1
After this dismissal, the parties entered into a stipulation to dismiss with prejudice the intentional interference claim against Avid, without prejudice to Digital Images' right to appeal and reinstatement in the event of reversal. The intentional interference claim is not an issue in this appeal
2
The first and second amended complaint make consistent allegations regarding the antitrust injury suffered. The district court viewed Digital Images' allegations more favorably in its decision dismissing the first amended complaint
3
The district court believed also that Digital Images' injury was "exacerbated by the very thing the antitrust laws are designed to promote" because its "current inventory of editing products is harmed the more innovative and productive the joint-venture between Avid and Tektronix." The district court went on to conclude that "[g]ranting relief to [Digital Images] for a reduction in the value of its inventory as a result of a merger would ... have the perverse effect of punishing mergers that lead to the production of better products in proportion to the superiority of the merged entity's products." [ER 287.] This analysis is sheer speculation. Nothing in the record supports the proposition that the joint venture produced better products, innovation, or productivity. In fact, the complaint alleges that the effect of the agreement was to diminish innovation and quality of the product
4
Nor is it (1)Hairston v. Pacific 10 Conference, 101 F.3d 1315 (9th Cir.1996) (where I would have denied antitrust standing to basketball players unhappy with NCAA sanctions against their school); (2) R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139 (9th Cir.1989) (en banc) where there was no agreement to restrict the output of the product involved; or (3) ARCO v. U.S.A. Petroleum, 495 U.S. 328, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990) (one competitor held not to have demonstrated antitrust injury from rival's vertical, maximum price fixing agreement).
5
Defendants argue that "by 1998 the demand for Lightworks' products had declined drastically." This decline in demand may make it more difficult for Digital Images to prove damages in a certain amount or to demonstrate the "direct" or causation element for antitrust standing, but it does not impact our finding of antitrust injury. Moreover, the defendants muddy the Rule 12(b)(6) waters by injecting assertions of factual disputes into their argument, such as (1) Lightworks was not discontinued but "sold to a third party and is in business," and that Digital Images knew it, and (2) "Ms. Shott [the owner of Digital Images], shutdown her own company and went off to write a novel." Whether this is true or not, and whether it is relevant is to be decided at a stage later through a motion to dismiss for lack of standing pursuant to Rule (12)(b)(6). It is true of course, that an antitrust cause of action is susceptible of dismissal at any stage once it does appear factually that the injury complained of was not antitrust in nature. As illustrated inBrunswick, "judgment must be given to the defendant whenever it appears that any essential element of the plaintiff's claim is missing...." Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 335e2. (2d ed.2000); R.C. Dick Geothermal, 890 F.2d at 145 (standing is properly raised at any stage of the litigation). Finally, we do not address the validity of defenses such as "failing business," "exiting assets," and "failing division." See Antitrust Law Developments (Fifth), Appendix C § 5.
6
The district court identified the fifth statement (Tektronix's representation that it had "people actively developing a real-time effects system, and will unveil it next year [1997]"), as actionable and not subject to dismissal under Fed.R.Civ.P. 12(b)(6), but did not address the statement during subsequent summary judgment proceedings. It should do so on remand
| {
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[Cite as State v. Grissom, 2016-Ohio-961.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
STATE OF OHIO :
:
Plaintiff-Appellee : C.A. CASE NO. 26626
:
v. : T.C. NO. 12CR2996
:
KHRYSTOPHER GRISSOM : (Criminal Appeal from
: Common Pleas Court)
Defendant-Appellant :
:
...........
OPINION
Rendered on the ___11th___ day of ____March____, 2016.
...........
MICHELE D. PHIPPS, Atty. Reg. No. 0069829, Assistant Prosecuting Attorney, 301 W.
Third Street, 5th Floor, Dayton, Ohio 45422
Attorney for Plaintiff-Appellee
KHRYSTOPHER GRISSOM, #685-116, London Correctional Institute, P. O. Box 69,
London, Ohio 43140
Defendant-Appellant
.............
FROELICH, J.
{¶ 1} Khrystopher Grissom, pro se, appeals from a judgment of the Montgomery
County Court of Common Pleas, which denied his motion for leave to file a motion for a
new trial, pursuant to Crim.R. 33. In a supplemental brief, Grissom also asserts as error
-2-
the trial court’s denial of his motion to correct the record, pursuant to App.R. 9(E). For
the following reasons, the trial court’s judgment will be affirmed.
I. Factual and Procedural History
{¶ 2} In October 2012, Grissom was indicted for felonious assault (deadly weapon)
with a five-year firearm specification (Count One), discharge of a firearm on or near a
prohibited premises (serious physical harm) with a three-year firearm specification (Count
Two), and having weapons while under disability (Count Three). In a previous opinion,
we described the underlying facts, as adduced at trial, as follows:
On September 29, 2012, at approximately 11:30 p.m., Daniel
Sammons was walking out of a Speedway gas station store on North Dixie
Drive in Harrison Township, Ohio, when the door he used to exit the store
grazed Grissom’s arm. Grissom, who had been standing outside and
leaning his shoulder against the door, became angry after the door grazed
him, and he began cussing at Sammons. In response, Sammons looked
at Grissom and walked away. The confrontation between Sammons and
Grissom at Speedway is not in dispute.
Sammons, however, testified that as he walked away, Grissom came
toward him and said: “I’m a shoot you up.” Additionally, Chris Watkins, a
passenger sitting in Sammons’s Jeep Liberty parked nearby, testified that
he heard Grissom say “shoot you up” to Sammons in an escalated voice.
Thereafter, both Watkins and Sammons saw Grissom run and jump inside
a maroon Ford Expedition parked nearby. It is undisputed that Grissom
was in the driver’s seat of the Expedition and that Grissom followed
-3-
Sammons’s Jeep out of Speedway and onto North Dixie Drive.
Sammons and Watkins testified that Grissom sped up very close to
the rear of Sammons’s Jeep and changed lanes so that the Expedition was
on the Jeep’s driver’s side. Both men then heard a gunshot fire into the
Jeep as they were driving. Neither Sammons nor Watkins saw a gun, but
Watkins testified that he saw a flash and could tell that the gunshot came
from the front-seat area of the Expedition. It is undisputed that there was
a gunshot fired at the Jeep and that it came from somewhere inside the
Expedition.
The gunshot shattered the rear window of Sammons’s Jeep and hit
the left side of the driver’s seat. In response to the gunshot, Sammons
testified that he slammed on the brakes and called 9-1-1. Additionally, both
Sammons and Watkins testified that they followed the Expedition, which
continued to drive away from them after the shot was fired. Sammons and
Watkins also testified that they pulled over after spotting a State Trooper on
the side of the road, and that they told the officer what had happened.
Londell Johnson, a passenger in the Expedition driven by Grissom,
testified that the Expedition belonged to his sister, who is Grissom’s
girlfriend. Johnson testified that on the night of the shooting, his brother,
Lewis, and Grissom’s friend, Jaye, were also riding as passengers in the
Expedition. According to Johnson, Jaye was seated in the front-passenger
seat and he and Lewis were in the back.
Johnson also testified that when they went to Speedway, he,
-4-
Grissom, and Lewis got out of the Expedition, and that Grissom was the last
person to return to the vehicle. While Johnson did not see Grissom’s
confrontation with Sammons, he testified that Grissom returned to the
Expedition and said: “Dude just bumped me.” When Johnson inquired who
bumped him, Grissom pointed to Sammons’s Jeep. Johnson testified that
Grissom was the only person in the vehicle that got angry about the
confrontation and that he and Lewis were trying to calm him down.
In addition, Johnson testified that he heard a gunshot while they were
riding beside the Jeep and that he heard someone say: “Watch out, little
bro.” He further testified that the gunshot came from inside their vehicle,
but that he did not see who fired the gun. After the gunshot, Johnson
testified that Grissom drove away. At trial, Johnson’s testimony regarding
who fired the gun was impeached using a written statement that Johnson
gave to police two days after the shooting. Johnson acknowledged that he
wrote as part of his statement that, “Jimmy [a.k.a. Grissom] shot the gun.”
Johnson further acknowledged that he had indicated in his statement that
Grissom told him to say that Jaye had fired the gun. Furthermore, Johnson
testified that he and the other passengers had no reason to shoot
Sammons.
(Citations omitted.) State v. Grissom, 2d Dist. Montgomery No. 25750, 2014-Ohio-857, ¶
3-9.
{¶ 3} Grissom was convicted, after a jury trial, of all charges. The trial court
merged Counts One and Two and the firearm specifications for those counts. The court
-5-
sentenced Grissom to six years in prison for felonious assault (Count One) and 12 months
for having weapons while under disability (Count Three), to be served consecutively.
The court also imposed five years of incarceration for the firearm specification, to be
served consecutively to and prior to the sentences for Counts One and Three. Grissom’s
aggregate sentence was 12 years in prison.
{¶ 4} Grissom appealed from his convictions. On March 7, 2014, we affirmed.
Grissom, 2d Dist. Montgomery No. 25750, 2014-Ohio-857. Grissom filed a notice of
appeal in the Ohio Supreme Court, but the Court declined to accept jurisdiction of
Grissom’s appeal. 06/11/2014 Case Announcements, 2014-Ohio-2487.
{¶ 5} On September 8, 2014, Grissom moved for a new trial, pursuant to Crim.R.
33, based on newly discovered evidence, prosecutorial misconduct, and misconduct by
Johnson. Specifically, Grissom asserted that Johnson had lied at trial when he testified
that (1) he had not been promised anything by the State in exchange for his testimony
and (2) Grissom was the shooter. Grissom claimed that the prosecutor committed
misconduct by failing to correct that testimony. Grissom’s motion quoted portions of
Johnson’s direct examination and cross-examination, which allegedly demonstrated that
false testimony and misconduct.
{¶ 6} In his motion, Grissom contended that the State threatened to prosecute
Johnson and to have Johnson’s sister’s children sent to Children Services unless
Johnson wrote in a pretrial statement and testified at trial that Grissom was the shooter.
Grissom claimed that he was unavoidably prevented from discovering evidence of the
false testimony within the time period set forth in Crim.R. 33.
{¶ 7} Grissom supported his motion with an affidavit from Johnson and his own
-6-
affidavit. Johnson’s affidavit stated that he (Johnson) had been coerced by the State to
provide a false written statement and testimony, and it indicated that Grissom’s friend,
Jaye, was actually the shooter. Grissom’s affidavit stated that he learned after August
15, 2014, that Johnson had presented false testimony at trial and that he (Grissom)
learned of the facts in Johnson’s affidavit when he received the affidavit. Grissom stated
in his affidavit that he did not know of these facts prior to trial, at trial, or within 120 days
(the time limitation for a motion for a new trial based on newly discovered evidence).
{¶ 8} The State opposed Grissom’s motion and attached affidavits of the lead
detective and the primary prosecutor at trial, denying Johnson’s allegations. The State
argued that (1) Grissom had not demonstrated that he was unavoidably delayed from
learning the new evidence upon which he relied, (2) the evidence was not new because
Grissom had sufficient opportunity to discover this information before or during trial, and
(3) Grissom cannot demonstrate that the alleged new evidence would have affected the
outcome of the trial, because there was evidence that Grissom aided and abetted the
shooting, even if he was not the actual shooter.
{¶ 9} Grissom filed a reply memorandum, in which he repeated his prior arguments
and claimed that the State was taking advantage of an error that it had invited.
{¶ 10} On February 27, 2015, the trial court overruled Grissom’s motion for leave
to file a motion for a new trial. The court found that the excerpts of the trial transcript, as
quoted by Grissom, showed that Johnson’s allegations of coercion were not newly
discovered but, instead, were raised during Grissom’s trial. The court emphasized that
the alleged newly discovered evidence was elicited on cross-examination by defense
counsel, and “[i]t is clear from the [trial transcript] that Johnson never ‘lied,’ as Defendant
-7-
alleges by failing to admit this information to the jury. Indeed, Johnson and Defense
counsel’s exchange on cross-examination clearly demonstrates that the jury was made
aware of all of Johnson’s allegations.”
{¶ 11} Grissom appealed from the trial court’s ruling.
{¶ 12} While this appeal was pending, Grissom filed an affidavit and statement of
the evidence, citing App.R. 26(C), seeking to reconstruct the record to show that Johnson
answered “No” when asked on direct examination, (1) “You didn’t have a choice coming
here to testify?” and (2) “You’re not getting breaks? No deals? No one promised you
anything?” The transcript showed Johnson’s answers to be “no audible response.”
{¶ 13} On June 10, 2015, we construed Grissom’s affidavit as a motion to correct
the record, pursuant to App.R. 9(E), and we remanded the matter to the trial court for the
limited purpose of considering the record issues raised by Grissom. We instructed
Grissom to file a motion to correct the record in the trial court. Grissom did so on June
30, 2015. The trial court denied the motion on August 11, 2015, finding that “the trial
transcript is substantially consistent with testimony received by the Court.”
{¶ 14} In his appellate brief, filed prior to our June 10 remand to the trial court,
Grissom raised one assignment of error, claiming that the trial court abused its discretion
when it determined that Johnson’s testimony was not newly discovered and denied his
(Grissom’s) motion for leave to file a motion for a new trial, pursuant to Crim.R. 33.
{¶ 15} On December 14, 2015, with leave of this court, Grissom filed a
supplemental brief, raising an additional assignment of error that the trial court’s denial of
his motion to correct the record “violate[d] his right to due process and his right to a new
trial.” We will address Grissom’s assignments of error together.
-8-
II. Denial of Motions to Correct the Record
and for Leave to File a Motion for a New Trial
{¶ 16} Crim.R. 33(A)(2) permits a defendant to file a motion for a new trial based
on misconduct of the jury, the prosecuting attorney, or witnesses for the state. Crim.R.
33(A)(6) allows the trial court to grant a new trial “[w]hen new evidence material to the
defense is discovered which the defendant could not with reasonable diligence have
discovered and produced at trial.” A motion for new trial based on Crim.R. 33(A)(2)
generally must be made within fourteen days after the verdict was rendered; a motion for
a new trial based on newly discovered evidence generally must be brought within 120
days. Crim.R. 33(B).
{¶ 17} A defendant who seeks a new trial after the required time period must first
obtain leave from the trial court, demonstrating “by clear and convincing proof that the
defendant was unavoidably prevented” from filing his motion for a new trial or discovering
the evidence upon which he relies. Crim.R. 33(B). “[A] party is unavoidably prevented
from filing a motion for a new trial if the party had no knowledge of the existence of the
ground supporting the motion for new trial and could not have learned of the existence of
that ground within the time prescribed for filing the motion for new trial in the exercise of
reasonable diligence.” State v. Walden, 19 Ohio App.3d 141, 146, 483 N.E.2d 859 (10th
Dist.1984); State v. Wilson, 2d Dist. Montgomery No. 23247, 2009-Ohio-7035, ¶ 8.
{¶ 18} A defendant is entitled to a hearing on his motion for leave if he submits
“documents that on their face support his claim that he was unavoidably prevented from
timely discovering the evidence” at issue. State v. York, 2d Dist. Greene No. 99-CA-54,
-9-
2000 WL 192433 (Feb. 18, 2000); State v. McConnell, 170 Ohio App.3d 800, 2007-Ohio-
1181, 869 N.E.2d 77, ¶ 19 (2d Dist.).
{¶ 19} Although a defendant may file his motion for a new trial along with his
request for leave to file such motion, the trial court may not consider the merits of the
motion for a new trial until it makes a finding of unavoidable delay. State v. Stevens, 2d
Dist. Montgomery Nos. 23236, 23315, 2010-Ohio-556, ¶ 11; York, supra.
{¶ 20} A trial court’s decision on a Crim.R. 33 motion for a new trial will not be
reversed absent an abuse of discretion. State v. Metcalf, 2d Dist. Montgomery No. 26101,
2015-Ohio-3507, ¶ 4. An abuse of discretion implies that the trial court’s attitude was
unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217,
219, 450 N.E.2d 1140 (1983).
{¶ 21} We also review the trial court’s denial of Grissom’s motion to correct the
record for an abuse of discretion. State v. Morgan, 8th Dist. Cuyahoga No. 78142, 2001
WL 470170, *2 (May 3, 2001).
{¶ 22} Johnson was the first witness on the second day of trial. (On the State’s
motion, and with agreement of defense counsel, Johnson was called as a court’s witness,
not as a State’s witness. Tr. 123.) Johnson testified that he knew Grissom as “Jimmy,”
that Grissom was the boyfriend of one of Johnson’s sisters, and that his sister was, at
that time, pregnant with Grissom’s child. Johnson testified that it was not his choice to
testify at Grissom’s trial, and that he was only testifying because he got a subpoena. (Tr.
235.)
{¶ 23} Johnson then testified about the events of September 29, 2012. With
respect to the shooting, Johnson stated that he and his (Johnson’s) brother were in the
-10-
back seat of his sister’s Expedition; Grissom was driving, and Grissom’s friend, Jaye, was
in the front passenger seat (Tr. 238-39). Johnson testified, “The only thing I heard, you
feeling me, was a gunshot. * * * I can’t say who shot it. * * * I heard, ‘Watch out.’ ” (Tr.
246.) Johnson agreed that the shot came from the car in which he was a passenger.
Id.
{¶ 24} The prosecutor asked Johnson about a statement he wrote for the police
two days after the shooting. Johnson acknowledged that he had told the police and had
written that Grissom “went right behind him and that’s when he told me to ‘Move, little
bro.’” (Tr. 248.) Johnson agreed that he had also said and had written that “Jimmy shot
the gun.” Id. Johnson testified that the only person that had a reason to shoot at the
Jeep was Grissom (Tr. 252), but he also stated, “At the same time, how can you shoot at
the same time? You got to keep your eyes on the road. Point blank period. The dude,
Jaye, is the closest one to the window. You hear me?” (Tr. 252.) However, Johnson
further testified that Grissom later apologized for the incident (Tr. 253). Johnson testified
at trial that his brother told him not to say anything about the shooting (Tr. 254.), but
Johnson acknowledged that his written statement indicated that Grissom had told him not
to say anything. (Tr. 255.) The State continued its questioning regarding the written
statement, as follows:
Q: That’s what you wrote in your written statement, right?
A: You said it.
Q: No one forced you to write this statement?
A: At the same time, he told me, my man’s took the blame. You feeling
me?
-11-
Q: I’m asking you. No one forced you what to say in your written
statement. And when you wrote this statement, didn’t this man tell you,
write honestly what happened? Tell us honestly what happened on
September 29th?
A: Uh-huh.
Q: Didn’t he tell you to say honestly what happened? Did he tell you to
lie in your statement?
A: No. Why would he tell me to lie on my statement? You feeling me?
Q: He didn’t tell you to lie on your statement. This is something you wrote
on your own free will, right?
A: Right.
Q: No one told you exactly what to say here?
A: That’s what I said.
Q: So on your statement, he said, oh, tell them Jaye did it, right? That’s
what you wrote, right? Khrys told you, tell them Jaye did it, right?
A: And that’s what I wrote. You feeling me? N**ger didn’t tell me to do
it. That’s what I wrote. You feeling me?
Q: He didn’t tell you and no one told you, other than this detective here,
tell us honestly what happened.
A: Right.
(Tr. 255-56.)
{¶ 25} The State asked Johnson again about his willingness to provide testimony
at trial:
-12-
Q: You didn’t have a choice coming here to testify today, right?
A: (No audible response.)
Q: That’s a no, right?
A: Right.
Q: Okay. Are you getting anything for testifying today?
A: Yes, ma’am.
Q: You’re not getting any breaks? No deals? No one promised you
anything?
A: (No audible response.)
Tr. at 258.
{¶ 26} Afterward, the State again questioned Johnson again about the contents of
his written statement.
{¶ 27} On cross-examination, Johnson stated that Detective Daugherty had met
him at school, and that he (Johnson) was worried that the police would think that he was
the shooter. (Tr. 265-66.) Defense counsel then questioned Johnson about his
statement, asking:
Q: Okay. And were you told at any point in making that statement, if you
didn’t write that statement down, you might go down as the shooter?
A: It’s a conspiracy. * * * At the same time when I first came there, you
feeling me, they talking about taking my nephews and my sister, and all
that. You feeling me? Pick – keep my nephew and my sister kids in
children’s services, if she don’t write no statement, and she talking if we
don’t get Jimmy up here. You feeling me? Making threats and all that.
-13-
You feeling me?
Q: So the detective said if you didn’t make that statement, he was going
to take your sister’s kids?
A: Right. That’s what he was saying to my sister when I was in the room.
You feeling me?
Q: Okay.
A: They was arguing. You feeling me? And I was arguing with them at
the time. You feeling me? Then he came in here and said, Jimmy took
the blame. All’s I need you to do is write that down. You feeling me?
That’s what I did and he let me go.
Q: Okay. And you weren’t charged with anything as a result of this; is that
correct?
A: No. You feeling me?
Q: All right. Now, you said that – I guess when you wrote this statement,
you said – when you said Jimmy shot – that was because you assumed he
had?
A: Yeah.
Q: All right. You never actually saw a gun?
A: No, I ain’t seen no gun. I just heard, “Watch out, little bro.” You
feeling me?
(Tr. 266-67.)
{¶ 28} Johnson further testified on cross-examination that he did not see anyone
with a gun, and he did not know who told him to “watch out.” (Tr. 269-70.) Johnson
-14-
denied that anyone had told him to lie at trial, and he asserted that he was telling the truth.
(Tr. 273.)
{¶ 29} On redirect examination, the prosecutor asked Johnson about the top
portion of his written statement, which states, “It’s understood that the statements [are]
made of my own free will” and Johnson had “not been placed under duress or made any
promises in exchange for this.” (Tr. 274.) Johnson responded that these disclaimers
had not been read to him prior to his writing his statement.
{¶ 30} On recross examination, Johnson reiterated that no one read him the
disclaimer at the top of the paper with his written statement, and Johnson said that he did
not read it before writing his statement. (Tr. 278-79.) When asked if he felt pressured
to write his statement, Johnson responded, “I just heard a lot of people getting into it with
my sister. * * * Threatening my sister.” (Tr. 279.) Johnson stated that he wanted to
protect his sister.
{¶ 31} In his motion to correct the record, Grissom sought to have the transcript
modified to reflect that Johnson had answered “No” to the two direct examination
questions with no audible responses. With respect to the first question, the prosecutor
made clear with a follow-up question that Johnson had intended “No” to the question
about whether he had a choice to testify; this was consistent with Johnson’s answer to
the same question at the beginning of his direct examination. We find no abuse of
discretion in the trial court’s denial of Grissom’s motion to correct the record as to the first
question.
{¶ 32} The trial court found that the transcript was “substantially consistent” with
Johnson’s testimony, suggesting that the transcript accurately reflected that Johnson did
-15-
not audibly respond to the second question about “any breaks” he may have received.
Even if the trial court had erred in reaching this conclusion and that Johnson’s response
was “No,” we find the error was harmless, in light of Johnson’s testimony on cross-
examination.
{¶ 33} Grissom argues that the correction of the record is necessary, because it
would establish that Johnson had lied when he said that he had received no benefit.
However, Johnson informed the jury during his cross-examination that he was afraid that
he would be accused of the shooting and that he heard police officers threatening his
sister that her children (Johnson’s nephews) would be taken by Children Services if she
and Johnson did not write a statement. Johnson stated that he and his sister were
arguing with the officers and that he was told that all he needed to do was write a
statement saying that Grissom had committed the shooting. Johnson testified, “That’s
what I did and he let me go.” Johnson’s inaudible response has no bearing on whether
Grissom is entitled to leave to file a motion for new trial.
{¶ 34} Upon review of Johnson’s testimony, it is apparent that Grissom cannot
establish that he was unavoidably prevented from discovering the alleged new evidence
and bringing a timely motion for a new trial. Johnson’s affidavit states that Detective
Daugherty threatened to have Johnson’s sister’s children taken into the State’s custody,
and that Daughterty threatened to charge Johnson with the shooting if he did not
cooperate. Johnson’s written statement indicated that the detective instructed him
(Johnson) to implicate Grissom in the shooting. The allegations against the detective in
Johnson’s affidavit, which Grissom claims are newly discovered, were brought out in
defense counsel’s cross-examination of Johnson at trial.
-16-
{¶ 35} Grissom was also not unavoidably prevented from discovering evidence
that Johnson had “lied” when he identified Grissom as the shooter. Johnson testified at
trial that he did not see who shot out of the vehicle; he did not expressly identify Grissom
as the shooter. He confirmed that Grissom was the only person in the vehicle who had
a gripe against Sammons, but Johnson further testified that Jaye was the individual
closest to the window and that Grissom would have had a difficult time shooting and
driving at the same time. Johnson also testified on cross-examination that he had
identified Grissom as the shooter in his written statement, because he had assumed that
Grissom was the shooter. Johnson’s affidavit in support of Grissom’s motion for a new
trial identifies Jaye as the shooter, but defense counsel had an opportunity to explore
Johnson’s identification and any pressure he felt to identify Grissom at trial. Finally, we
note that Grissom was in the vehicle when the shot was fired. Grissom did not need
information from Johnson to know whether Johnson had incorrectly identified him as the
shooter and for his attorney to cross-examine Johnson, as he did.
{¶ 36} Accordingly, Grissom did not establish that he had no knowledge of the
existence of the ground supporting his motion for new trial (the information in Johnson’s
affidavit) and that he could not have learned of the existence of that ground within the
time prescribed for filing the motion for new trial in the exercise of reasonable diligence.
The trial court did not err in denying Grissom’s motion for leave to file a motion for a new
trial.
III. Conclusion
{¶ 37} The trial court’s judgment will be affirmed.
-17-
.............
DONOVAN, P.J. and HALL, J., concur.
Copies mailed to:
Michele D. Phipps
Khrystopher Grissom
Hon. Barbara P. Gorman
| {
"pile_set_name": "FreeLaw"
} |
J-S47011-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
DAVID DIPRIMIO
Appellant No. 945 EDA 2013
Appeal from the PCRA Order February 8, 2013
In the Court of Common Pleas of Philadelphia County
Criminal Division at No(s): CP-51-CR-0005763-2008
CP-51-CR-0005764-2008
CP-51-CR-0005765-2008
CP-51-CR-0005766-2008
CP-51-CR-0005767-2008
BEFORE: MUNDY, J., OLSON, J., and WECHT, J.
MEMORANDUM BY MUNDY, J.: FILED SEPTEMBER 26, 2014
Appellant, David DiPrimio, appeals from the February 8, 2013 order
dismissing his petition filed pursuant to the Post Conviction Relief Act
(PCRA), 42 Pa.C.S.A. §§ 9541-9546, without a hearing. In addition,
together with a Turner/Finley no-merit letter, averring the appeal is
without merit.1
and affirm the PCRA
____________________________________________
1
See Commonwealth v. Turner, 544 A.2d 927 (Pa. 1988);
Commonwealth v. Finley, 550 A.2d 213 (Pa. Super 1988) (en banc).
J-S47011-14
The PCRA court summarized the relevant factual and procedural
history of this case as follows.
On April 27, 2008, [Appellant] got into a fight
with patrons at Mick Daniels Bar in South
Philadelphia. After closing, while the crowd was
leaving the bar, [Appellant] opened fire from across
the street, shooting six times and hitting three
victims. One of the victims was a man he argued
with inside the bar, the second victim was a man he
argued with outside of the bar, and the third victim
was a man who had been talking to the second
victim at the time of the shooting. When the crowd
chased [Appellant], he shot a fourth victim. Another
man who heard the shots and saw [Appellant]
running eventually subdued [Appellant] and gained
control over the firearm. However, [Appellant]
flagged down a police officer and blamed the
shooting on the man who had subdued him. An off-
duty police officer who had witnessed the shooting
then arrived on scene and explained that [Appellant]
was really the shooter[].
On March 25, 2009, [Appellant] was found
guilty after a waiver trial before the Honorable John
count of attempted murder, simple assault, and
possessing an instrument of crime.[2] On May 29,
2009, he was sentenced to an aggregate term of 15
[3]
[Appellant] appealed
his sentence; the judgment of sentence was affirmed
on June 17, 2010. Commonwealth v. David
DiPrimio, [4 A.3d 691 (Pa. Super. 2010)
(unpublished memorandum), appeal denied, 14 A.3d
____________________________________________
2
18 Pa.C.S.A. §§ 2702, 901(a) (to commit 18 Pa.C.S.A. § 2502(a)), 2701,
and 907, respectively.
3
Appellant was represented by Brian J. McMonagle, Esquire during trial and
sentencing, and was represented by Mitchell Strutin, Esquire during his
direct appeal.
-2-
J-S47011-14
of appeal to the Pennsylvania Supreme Court was
denied on December 28, 2010.
On March 26, 2012, Appellant, represented by
[private counsel,] Kenneth A. Young, Esquire, filed a
Petition pursuant to the [PCRA]. [On July 12, 2012,
the Commonwealth filed a motion to dismiss
On December 6, 2012, and January 7, 2013,
[the PCRA] court sent [Appellant] notice pursuant to
dismiss his PCRA Petition, explaining that the issues
raised in his PCRA were without merit. [No response
February 8, 2013, [the PCRA] court formally
2013, [Appellant] filed this Notice of Appeal.
On April 11, 2013, [the PCRA] court ordered a
1925(b) Statement from [Appellant]. Postmarked
April 26, 2013, [Appellant] sent this court his
1925(b) Statement, raising numerous claims on
appeal.
PCRA Court Opinion, 5/21/13, at 1-3.
Young filed a petition to withdraw before the PCRA court, averring he had
not been retained to represent Appellant on appeal and that Appellant could
not afford counsel. On August 14, 2013, Appellant petitioned this Court for
appointment of new counsel. On August 27, 2013, we remanded the matter
to the trial court for resolution. On September 10, 2013, the PCRA court
ordered that new counsel be appointed to represent Appellant in the instant
-3-
J-S47011-14
appeal. On October 4, 2013, John Belli, Esquire (Attorney Belli) filed his
Attorney Belli, subsequently filed a petition to withdraw as counsel,
together with a Turner/Finley letter on October 29, 2013. On May 5, 2014,
Appellant filed a pro se
no-merit letter.
In his Turner/Finley letter, Attorney Belli identifies the following
1925(b) statement.
1. The PCRA Court erred by holding that
ineffective for failing to investigate, develop,
and present evidence that [A]ppellant was
suffering from severe cognitive deficits at the
time of the incident did not entitle him to
relief;
2. The PCRA Court erred by holding that
ineffective for failing to argue that he was
incompetent to stand trial lacked merit;
3. The PCRA Court erred by holding that
ineffective for failing to investigate and
subpoena witnesses for the defense entitled
him to no relief;
4. The PCRA Court erred by not granting relief on
a claim alleging that trial counsel was
ineffective for failing to obtain and present
of establishing that he lacked the mental
capacity to form specific intent to kill;
-4-
J-S47011-14
5. The PCRA Court erred by holding that
was ineffective for not reviewing the crime
scene photos, which established that the
entitled him to no relief;
6. The PCRA Court erred by dismissing
appellate counsel were ineffective for failing to
raise the preceding claims in a post[-]sentence
motion and on direct appeal respectively; and
7. The PCRA court erred by failing to provide
[A]ppellant with a [Rule] 907 notice that
specifically identified the reasons why the court
dismissed his PCRA petition without a hearing.
Had [A]ppellant been aware of the reasons for
denying him PCRA relief he would have alleged
that PCRA counsel was ineffective because he:
a. failed to seek a retrospective
competency evaluation;
b.
investigation to an alternative to
justification;
c. failed to certify the PCRA record with
mental health records; and
d. fail[ed] to submit affidavits of witnesses.
Turner/Finley Letter, at 8-9.
In his pro se
Turner/Finley letter, Appellant raises the following additional issues.
-5-
J-S47011-14
[1.] [W
is not in compliance with the procedures for
filing an [sic] Brief[?]4
[2.] [Whether] trial counsel was ineffective for
failure to object to the inadequate jury waiver
colloquy denying [] Appellant [h]is Sixth
Amendment right to effective counsel and
[whether] PCRA counsel was ineffective for
behalf[?]
Pro Se Response at 1, 2.
We reiterate the following principles guiding our consideration of an
appeal from the denial of PCRA relief.
standard and scope of review is limited to
support
Commonwealth v. Edmiston, 65 A.3d 339, 345
(Pa. 2013) (citation omitted) [, cert. denied,
Edminston v. Pennsylvania, 1345 S. Ct. 639
findings of the PCRA court and the evidence of
record, viewed in the light most favorable to the
Commonwealth v. Koehler, 614 Pa. 159, 36 A.3d
by
Commonwealth v. Spotz, 610 Pa. 17, 18 A.3d
Court applies a de novo standard of review to the
Id.
Commonwealth v. Medina, 92 A.3d 1210, 1214-1215 (Pa. Super. 2014)
(en banc). Further, in order to be eligible for PCRA relief, a petitioner must
____________________________________________
4
Anders v. California, 386 U.S. 738 (1967).
-6-
J-S47011-14
plead and prove by a preponderance of the evidence that his conviction or
sentence arose from one or more of the errors listed at 42 Pa.C.S.A.
§ 9543(a)(2). These issues must be neither previously litigated nor waived.
Id. § 9543(a)(3).
without conducting a hearing.
[T]he right to an evidentiary hearing on a post-
conviction petition is not absolute. It is within the
support either in the record or other evidence. It is
the responsibility of the reviewing court on appeal to
examine each issue raised in the PCRA petition in
light of the record certified before it in order to
determine if the PCRA court erred in its
determination that there were no genuine issues of
material fact in controversy and in denying relief
without conducting an evidentiary hearing.
Commonwealth v. Wah, 42 A.3d 335, 338 (Pa. Super. 2012), quoting
Commonwealth v. Turetsky, 925 A.2d 876, 882 (Pa. Super. 2007)
(internal citations omitted), appeal denied, 940 A.2d 365 (Pa. 2007); see
also Pennsylvania Rule of Criminal Procedure 907. We stress that an
evidentiary hearing is not meant to function as a fishing expedition for any
possible evidence that may support some speculative claim of
Commonwealth v. Roney, 79 A.3d 595, 604-605 (Pa.
2013) (internal quotation marks and citation omitted). We review a PCRA
Id. at
604.
-7-
J-S47011-14
aw from representation. As described by our
Supreme Court, the requirements PCRA counsel must adhere to when
requesting to withdraw include the following.
-
detailing the nature and extent of his review;
-
listing each issue the petitioner wished to have
reviewed;
-
were meritless[.]
Commonwealth v. Pitts, 981 A.2d 875, 876 (Pa. 2009), quoting Finley,
supra Counsel must also send to the petitioner: (1) a copy of the
-
a statement advising petitioner of the right to proceed pro se or by new
counsel. Commonwealth v. Wrecks, 931 A.2d 717, 721 (Pa. Super.
2007).
[W]here counsel submits a petition and no-
merit letter that do satisfy the technical demands of
Turner/Finley, the court - trial court or this Court -
must then conduct its own review of the merits of
the case. If the court agrees with counsel that the
claims are without merit, the court will permit
counsel to withdraw and deny relief. By contrast, if
the claims appear to have merit, the court will deny
at least instruct
Id. (citation omitted).
-8-
J-S47011-14
As referenced above, Appellant challenges the sufficiency of Attorney
Turner/Finley no-merit letter. Pro Se Response at 1.
However, he does so by arguing that the standards governing withdrawal of
counsel from a direct appeal as required by Anders, supra, and
Commonwealth v. Santiago, 978 A.2d 349 (Pa. 2009), apply. Id.
first error is that [Attorney Belli] filed a no-merit letter to this Court instead
5
of an Id.
confusion stems from his interpretation of Santiago as applying to all
appeals as opposed to only direct appeals. As the instant appeal is from a
final order in a collateral challenge to his judgment of sentence through the
PCRA, the afore-described Turner/Finley standards apply. See Pitts,
supra.
Instantly, we conclude that Attorney Belli has complied with the
requirements of Turner/Finley. Specifically, Attorney Belli Turner/Finley
letter details the nature and extent of his review, addresses the claims
Appellant raised in his amended PCRA petition and Rule 1925(b) Statement,
and determines that the issues lack merit. Attorney Belli provides a
____________________________________________
5
One distinction between an Anders brief and a Turner/Finley no merit
letter is that on direct appeal counsel must discuss all issues arguably
supporting an appeal, while in collateral proceedings counsel must discuss all
issues a petitioner wishes to raise. Wrecks, supra, 720-721. Hence,
applying Anders criteria, Appellant avers Attorney Belli was ineffective for
not spotting an issue, i.e.
Appellant now claims has arguable merit even though it was not included in
his Rule 1925(b) statement as an issue he wished to raise. As such, this
issue is waived for our consideration on appeal.
-9-
J-S47011-14
Additionally, Attorney Belli served Appellant with a copy of the petition to
withdraw and Turner/Finley brief, advising Appellant that, if Attorney Belli
was permitted to withdraw, Appellant had the right to proceed pro se or with
privately retained counsel. We proceed, therefore, to conduct an
.
pro se response
alleg
When reviewing a claim of ineffective assistance of counsel, we apply the
following test, first articulated by our Supreme Court in Commonwealth v.
Pierce, 527 A.2d 973 (Pa. 1987).
When considering such a claim, courts
presume that counsel was effective, and place upon
the appellant the burden of proving otherwise.
Counsel cannot be found ineffective for failure to
assert a baseless claim.
To succeed on a claim that counsel was
ineffective, Appellant must demonstrate that: (1) the
claim is of arguable merit; (2) counsel had no
reasonable strategic basis for his or her action or
him.
[T]o demonstrate prejudice, appellant must
show there is a reasonable probability that, but for
have been different.
- 10 -
J-S47011-14
Commonwealth v. Michaud, 70 A.3d 862, 867 (Pa. Super. 2013) (internal
quotation marks and citations omitted). tablish any prong of
Commonwealth v.
Birdsong, 24 A.3d 319, 330 (Pa. 2011).
the Turner/Finley letter, which pertain to his allegations of trial counsel
ineffectiveness for failing to investigate, raise or develop certain issues
6
Appellant
known to the
was ineffective assistance of trial counsel not to raise the issue. PCRA
Petition, 3/26/12, at 10, ¶ 30.
statutory:
[W]henever a person who has been
charged with a crime is found to be
substantially unable to understand the nature
or object of the proceedings against him or to
participate and assist in his defense, he shall
be deemed incompetent to be tried, convicted
or sentenced so long as such incapacity
continues.
50 P.S. § 7402(a). In order to establish
incompetence, an appellant has the burden of
____________________________________________
6
second and fourth questions. We therefore address them coordinately.
ineffectiveness into an allegation of ineffectiveness of direct appeal counsel.
- 11 -
J-S47011-14
proving that he was either unable to understand the
nature of the proceedings against him or to
participate in his own defense.
In re R.D., 44 A.3d 657, 665 (Pa. Super. 2012) (citation omitted), appeal
denied, 56 A.3d 398 (Pa. 2012).
Instantly, Appellant, in his PCRA petition made no averments that he
was incompetent, that he was unable to understand the proceedings, or that
he could not assist in his defense. He merely alleges that circumstances at
trial suggested there was a question of his competency, but those
circumstances are not identified.7 Appellant also, did not identify any
experts prepared to testify on the issue. Further the PCRA court noted that
the record, including colloquies with Appellant belied his incompetency claim.
Trial Court Opinion, 5/21/13, at 6. Accordingly, we conclude the PCRA court
did not err in determining there were no material issues of fact relative to
the effective assistance of trial and appellate counsel concerning their failure
proffered no basis to conclude a material issue of fact exists, relative to the
merits of the underlying issue. See Wah, supra.8
____________________________________________
7
PCRA Petition, 3/26/12, at 10, ¶ 30.
8
To the extent Appellant alleges trial court error in failing to act sua sponte
in holding a competency hearing as a basis for PCRA relief, the claim fails as
waived for failure to raise the issue on direct appeal. See Commonwealth
(Footnote Continued Next Page)
- 12 -
J-S47011-14
In his first and fourth issues on appeal, Appellant makes a similar
claim of ineffectiveness of trial counsel for failing to investigate, develop, or
possible
diminished capacity defense. Turner/Finley Letter at 13, 20. In this
at 5, ¶ 16. Appellant f
medication, testimony from various friends and family, jail records will
Id. obtained the
background data, he would have been able to present testimony that
Id.
would have provided diminished capacity and unreasonable belief at the
Id. at 8, ¶ 26.9
_______________________
(Footnote Continued)
v. Smith, 17 A.3d 873, 903 (Pa. 2011), cert. denied, Smith v.
Pennsylvania, 133 S. Ct. 240 (2012).
9
The PCRA court determined that this issue lacked merit because diminished
capacity defense is only available to defend a charge of first-degree murder.
available only as a defense to first-degree murder []. Likewise, it is not
-
Commonwealth v. Russell, 938 A.2d 1082, 1092 (Pa. Super. 2007)
(citations omitted). However, we have explained that the specific intent
element for attempted murder is identical to first-degree murder.
Commonwealth. v. Spells, 612 A.2d 458, 461 n.5 (Pa. Super. 1992); In
(Footnote Continued Next Page)
- 13 -
J-S47011-14
preceding issue.
Diminished capacity is an extremely limited defense,
which requires extensive psychiatric testimony
establishing a defendant suffered from one or more
mental disorders which prevented him from
formulating the specific intent to kill. Only where a
defendant admits liability and contests the degree of
guilt is a diminished capacity defense available.
Commonwealth v. Cuevas, 832 A.2d 388, 393 (Pa. 2003) (citations
actions or acted impulsively is irrelevant to specific intent to kill, and thus is
not admissible to Commonwealth
v. Sepulveda, 55 A.3d 1108, 1122
PCRA petition did not identify with any specificity a mental illness or disorder
that affected his ability to form the specific intent to kill. His generic
material issue of fact in the absence of any proffer of expert psychiatric
testimony on the subject. See id.
_______________________
(Footnote Continued)
re R.D., supra at 678. Thus, diminished capacity is a defense available to a
charge of attempted murder. See Commonwealth v. Rovinski, 704 A.2d
1068, 1071-1072 (Pa. Super. 1997) (involving an appeal after this Court
defense claim to a charge of attempted murder), appeal denied, 723 A.2d
1024 (Pa. 19
Commonwealth v. Rykard, 55
A.3d 1177, 1183 (Pa. Super. 2012), appeal denied, 64 A.3d 631 (Pa. 2013).
- 14 -
J-S47011-14
Appellant has included in the certified record various medical records
pertaining to his traumatic head injury and recovery from 2005. These
abil
condition at the time he shot the four victims three years later. 10 In light of
assistance of counsel relative to developing a defense of diminished
capacity, we conclude the PCRA court did not err or abuse its discretion in
See Commonwealth v.
McLaurin, 45 A.3d 1131, 1137 (Pa. Super. 2012), appeal denied, 65 A.3d
413 (Pa. 2013).
assistance of trial counsel for failing to investigate and present witnesses for
his defense. Turner/Finley Letter at 18. We have described a PCRA
in presenting this type of claim as follows.
to testify does not constitute ineffectiveness per se.
Commonwealth v. Cox, 603 Pa. 223, 267, 983
A.2d
establishing whether defense counsel was ineffective
for failing to call witnesses, a defendant must prove
the witnesses existed, the witnesses were ready and
____________________________________________
10
nd accounts of its effect on
father. N.T., 3/24/09, at 19-20.
- 15 -
J-S47011-14
testimony prejudiced petitioner and denied him a fair
Id. at 268, 983 A.2d at 693.
Commonwealth v. Johnson, 27 A.3d 244, 247 (Pa. Super. 2011).
Further, a petitioner must provide proof of the availability of the witness, his
or her willingness to testify and the substance of the proposed testimony by
including an appropriate affidavit or other proof with the PCRA petition.
McLaurin, supra.
Commonwealth v.
Dennis, 950 A.2d 945, 960 (Pa. 2008). Nevertheless, a similar threshold
testimony[,] Appellant cannot demonstrate prejudice sufficient to establish
ineffectiveness of tr Id. at 965.
witness to the assault of the Complainants against [Appellant] who was not
the []
PCRA petition, 3/26/12, at 12,
¶¶
availability or willingness to tes
supposed testimony is averred or supported in an affidavit. Absent these
- 16 -
J-S47011-14
pleading requirements, we discern no error or abuse of discretion in the
dismissal of this claim without a hearing.11
In his fifth issue, Appellant alleges trial counsel was ineffective for not
reviewing crime scene photos that Appellant contends could have
contradicted trial testimony of Commonwealth witnesses. Turner/Finley
Letter at 20. Appellant did not include this issue in his PCRA petition,
raising it for the first time in his Rule 1925(b) statement. -settled
Commonwealth v. Ousley, 21 A.3d 1238, 1242 (Pa. Super. 2011)
(internal quotation marks and citation omitted), appeal denied, 30 A.3d 487
(Pa. 2011). Accordingly, we conclude Appellant has waived this issue, and is
due no relief.
In his seventh issue,
that his issues lacked merit. Turner/Finley Letter at 22. Appellant argues,
s basis, he could have
timely alleged ineffectiveness of PCRA counsel in failing to rectify the afore-
e.g., failing to provide
____________________________________________
11
Appellant only identified potential witnesses, albeit without any supporting
material, for the first time in his Rule 1925(b) statement.
- 17 -
J-S47011-14
mental health records and failing to submit affidavits of witnesses. 12 Id.
Additionally, in his response to
ineffectiveness for, in turn, failing to raise an issue contesting the
Pro Se
Response to Turner/Finley Letter at 2-4. None of these issues were raised
before the PCRA court in the first instance.
In Commonwealth v. Henkel, 90 A.2d 16 (Pa. Super. 2014) (en
banc), this Court conducted an exhaustive review of Pennsylvania law
regarding review of PCRA counsel ineffectiveness claims for the first time on
appeal. The Henkel Court concluded that issues of PCRA counsel
notice or in a serial PCRA petition. Id. at 29. We recognize that Appellant
was still represented by PCRA counsel at the time the Rule 907 notice was
issued and that the PCRA time bar may be an obstacle to future PCRA
petitions. However, these factors do not alter the aforesaid requirement.
for the first time on appeal renders any effective enforcement of the rule-
Id.
____________________________________________
12
At the time the PCRA court sent its two Rule 907 notices of its intent to
dismiss, Appellant was represented by counsel. Additionally, the
Commonwealth had filed a motion to dismiss reciting the above discussed
deficiencies in Ap
- 18 -
J-S47011-14
counsel ineffectiveness are reviewable in this appeal.
without merit, waived, or premature. Additionally, finding Attorney Belli
compliant with the Turner/Finley requirements, we grant his motion to
withdraw as counsel. Finally, discerning no error or abuse of discretion by
PCRA petition without a hearing.
Order affirmed. Motion to withdraw granted.
Judge Olson joins the majority.
Judge Wecht concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/26/2014
- 19 -
| {
"pile_set_name": "FreeLaw"
} |
702 F.Supp. 415 (1988)
GRANITE COMPUTER LEASING CORP., Plaintiff,
v.
The TRAVELERS INDEMNITY COMPANY, Defendant.
No. 81 Civ. 7705 (CBM).
United States District Court, S.D. New York.
November 28, 1988.
*416 Shea & Gould, Lauren J. Wachtler, Barbara Slott, New York City, for plaintiff.
Max E. Greenberg, Cantor, Trager & Toplitz, James H. Reidy, New York City, for defendant.
OPINION
MOTLEY, District Judge.
I. BACKGROUND
The dispute concerns a contract involving Community Science Technology, Inc. (CST), National Modular Systems Corp. (NMS), and NMS' surety, The Travelers Indemnity Company (Travelers). The facts concerning this action are more fully set forth in this court's prior Amended Opinion of March 23, 1987, and will only be summarized here.
In March of 1973, CST was awarded a general contract by the United States Government for the manufacture and installation of prefabricated modular housing units at several Air Force bases. In April of 1973, CST entered into a subcontract with NMS in which NMS was to manufacture and deliver the necessary modular units for bases on the East Coast. As required by the terms of the subcontract, NMS obtained a performance bond with Travelers wherein NMS was named as principal, CST as obligee, and Travelers as surety.
In the spring of 1974, NMS encountered substantial financial difficulties. On April 5, 1974, NMS demanded a substantial increase in the contract price from CST. On April 26, 1974, NMS submitted to the Government a request for Extraordinary Relief in the amount of $750,000. On June 21, 1974, NMS closed its plant. Travelers was requested to intervene to provide financial assistance to its principal. Because of Travelers' refusal to extend the requested aid, CST, facing a possible termination by the Government, decided to advance the funds necessary for NMS to resume its plant operations. On July 8, 1974, CST and NMS entered into a financing agreement, with the consent of Travelers, and provided that no provision of the financing agreement was to operate as a waiver or relinquishment of any of the parties' rights or remedies.
In 1976, after the military housing project was completed, CST instituted suit against Travelers to recoup funds it had provided NMS to enable NMS to reopen its plant. This lawsuit was stayed pending administrative claims which CST had previously instituted against the Government on behalf of itself and its subcontractors. The claims against the Government settled in 1980. The Government agreed to increase the contract prices by approximately *417 $2,800,000. The settlement proceeds were allocated to the subcontractors, including NMS. CST also applied a portion of the settlement proceeds to the amount it expended, pursuant to the financing agreement, that was still outstanding and owed by NMS. This allocation did not cover in full the funds CST previously provided.
Granite Computer Leasing Corp., a successor in interest to CST, now seeks to recover from Travelers the amount still remaining to CST that was not covered by the allocation from the Government's award. According to Granite, NMS' plant closure in June 1974 constituted a breach of its contract with CST, thereby triggering Travelers' suretyship obligations to provide financing for its principal, NMS, or to ensure its principal's performance. Travelers, on the other hand, claims that the plant closing by NMS was not a breach by NMS under the NMS/CST subcontract, and that even if it was a breach, it was justified due to prior breaches caused by either CST or the Government.
After hearing the trial testimony, examining the parties' exhibits, and studying all the evidence, the court now grants plaintiff Granite's motion for a directed verdict.
II. DISCUSSION
In its prior Amended Opinion of March 23, 1987, the court ruled that 1) "the bond between NMS and Travelers required the latter to ensure actual performance of the subcontract should NMS default, and in no way required a failure of indemnification on NMS's part for the ripening of the obligation; 2) that the `disputes resolution' clause of the main contract was applicable to NMS at the time of its plant closing in June 1974." (Amended Opinion at 5).
A. Traveler's Obligation
It is settled law, as Travelers maintains, that a surety's "obligations are no more than co-extensive with that of its principal." (Defendant's Memoranda in Opposition to Plaintiff's Motions for Multiple Relief, 8/15/88, Memorandum In Opposition to Motion # 1, at 3). Accordingly, "`there can be no obligation on the part of the surety unless there has been a default by the contractor on his contract.'" Pacific Employers Ins. Co. v. City of Berkeley, 158 Cal.App.3d 145, 204 Cal.Rptr. 387, 390 (1st Dist.1984) (quoting 13 Couch on Insurance § 47:20, at 240-242 (2d ed. 1982)). See also 74 Am Jur 2d, Suretyship, § 25 (1974) ("Since the obligation of a surety is accessory to that of a principal debtor, it follows that the liability of the surety is ordinarily measured by the liability of the principal, and cannot exceed it.").
Travelers is therefore not liable on its bond unless its principal NMS is liable for breach of contract with CST. Travelers contends that its principal NMS "was never in default of or in breach of the Supply Contract," (Pre-trial Order, 10/14/87, at 14), that CST was the one in default because of late payments, failures to pay, delays, changes in design, "failures to obtain timely approval of prototypes," id., failure to pay "NMS' proportionate share of progress payments received by CST from the Government for the `design' portion of the project," id. at 18, etc. The alleged prior breaches by CST gave NMS the right to rescind its contract, in spite of the "proceed diligently" clause,[1] and according to Travelers, since its principal was not in default, its suretyship obligations were not triggered.
B. Travelers' Claim of Late Payments or Non-Payments
a. Design Payments
Travelers asserts, among other things, nonpayment and/or late payments as a defense *418 for NMS' plant closing. Specifically, Travelers claims that "CST was tardy in its payment of contract monies (progress payments) to NMS." (Defendant's Pre-Trial Memorandum at 11). "That failure to pay, by itself, excused further performance by NMS." Id. at 18.
Granite contends, however, that even if NMS was entitled to payment for design work, it did not comply with the payment provisions of the contract requiring requisition before payment (Memorandum Relating to Granite's Position on `Non-Payment' of the $100,000 to NMS by CST for Design Work, at 2-6).
This court has previously ruled that Travelers is precluded from offering evidence of nonpayment of design work as justification for NMS' plant closure on June 21, 1974, because NMS failed to requisition for payments in contravention of terms provided in the contract. For reasons more fully stated below, the court adheres to its prior determination that NMS was contractually bound to requisition for payment, including design payment, before CST was obligated to make such payments to NMS.
Article II of the subcontract between CST and NMS provides for a total, fixed contract price of $3,347,180, to be paid to NMS for "all services and materials to be rendered and furnished by NMS." Travelers stated in its November 7, 1988 letter to the court, that it concedes that design payments were included in the inclusive contract price, but argues that the issue of contention is the "timing of payment of the contract price to NMS by CST...." (emphasis in original). In other words, Travelers argues that the Government's payment to CST for the design portion of the project should have been immediately paid to NMS within ten days of receipt, and should not have been "`paid out' over the term of the contract as part of the progress payments made for delivery of each module." (Travelers' November 7, 1988 Letter to the Court).
This court does not agree that design payments were somehow immune from contractual requirements for requisition prior to payment. Article II, subsections 1(a) and 1(b) of the subcontract referring to payment for materials so provide. (requiring invoices to be furnished with payment request). General Provision 7 and Special Provision 9 of the Prime Contract also require similar documentation. General Provision 7(b) requires the Government to make progress payments on "estimates approved by the Contracting Officer" and "[i]f requested by the Contracting Officer, the Contractor shall furnish a breakdown of the total contract price showing the amount included therein for each principal category of work, in such detail as requested, to provide a basis for determining progress payments." Special Provision 9(a) similarly requires invoices to be furnished "with any such payment request."
Thus, according to General Provision 7 and Special Provision 9 of the Prime Contract, upon request of the government, CST would have to provide some sort of documentation, such as invoices, for work CST and its subcontractors did. In order to provide "a breakdown of the total contract price," CST in turn would necessarily need some sort of documentation from its subcontractor NMS. If NMS was entitled to design payments, it did not requisition for design work in violation of payment provisions in the contract and the subcontract. Travelers cannot now complain that design work which its principal may have performed was only paid out as "part of the progress payments" (Travelers' Letter, supra) rather than automatically doled out to NMS within ten days upon receipt of payment by CST.
In spite of abundant contractual provisions requiring invoices and requisitions for payment, Travelers nonetheless argues that those provisions delineating requisitioning procedures apply only to progress payments for materials. (Travelers' Brief on `Non-Payment' Defense, at 2). According to Travelers, other progress payments, presumably for design work, were exempt from requisition requirements and became automatically due once CST received payment from the government. Travelers *419 cites as support for this proposition subparagraph (g) of Article II of the subcontract:
Other progress payments will be made in accordance with Provision 7 of the General Provisions of the Contractor and within ten (10) days subsequent to the receipt of payment by the Contractor.
General Provision 7, as discussed above, requires the contractor to furnish a breakdown of the contract price, if requested by the Government. This provision surely can be of no help to Travelers. Travelers, instead, points to a scant one-sentence amendment to Provision 7, which merely states that "[s]tatutory limitation precludes design costs from exceeding six (6) percent of the construction cost." Because this amendment 7(f) makes no mention of backup requirement, Travelers assumes that therefore no backup requirement exists for design work, in spite of the fact that multiple provisions exist in both the prime contract and subcontract requiring precisely such backup. Without an explicit provision unequivocally exempting documentation for design work, this court refuses to assume that in the midst of all the above-mentioned contractual provisions requiring requisitioning and backups, amendment 7(f)'s one-sentence description that design costs are not to exceed six percent of construction cost somehow eliminates all the other backup requirements.
As part of the same argument, Travelers points further to the portion in subparagraph (g) of Article II of the subcontract, stating, as quoted above, that "[o]ther progress payments will be made ... within ten (10) days subsequent to the receipt of payment by the Contractor." In several pre-trial conferences, counsel for Travelers argues that "[b]y the contract term which I have just read, that payment was due, the proportional part of that payment was due to National within 10 days after the contractor's receipt.... No requirement of a requisition is required by the provision which I just read.... That payment was automatically due." (10/27/88 Transcript, at 16). This court remains unpersuaded. The issue here remains the requisite procedure prior to payment, backup requests before payment can be made, not what should happen subsequent to CST' receipt of government money.
The court thus holds that regardless of whether or not NMS was contractually entitled to design payments from CST, its failure to requisition for payments in essence nullified any alleged right it may have had to be paid for design work. Travelers is therefore not entitled to claim what its principal is not entitled to claim non-payment of design work as justification for NMS' plant closing on June 21, 1974.
b. Late Progress Payments
Travelers repeatedly claims that NMS' plant closure resulted from prior breaches caused by CST, "principally delays and failures to pay." (Defendant's Pre-Trial Memorandum, at 9; see also id. at 10 (Travelers claiming CST's "failure to timely pay sums due to NMS."); Defendant's Contentions, 5/19/87, at 5-6). Yet evidence presented at trial reveals that CST made all payments requisitioned from NMS. From plaintiff's exhibit number 4, a chart compiling information gathered from books and records of CST and NMS, Mr. Bernstein testified about the requisitions received by CST, the dates of receipt, the requisitions CST passed on to the government, the payments received from the government, the dates of such receipt from the government, the payments CST made to NMS, and the dates of such payments to NMS. (11/15/88 Trial Transcript, at 89-94). According to Mr. Bernstein, the total amount of NMS' requisitions as of the plant's closing was $1,397,136. CST had paid at that time $1,396,369, an amount roughly 42% of the total contract price of $3,347,180. Id. at 103. The testimony reveals that nothing which was requisitioned or invoiced by NMS was unpaid by CST. Id. Nothing during the cross-examination of Mr. Bernstein disturbs this testimony (11/16/88 Trial Transcript, at 153-232).
C. Delays
Travelers claims that delays of the Government in approving certain plans, change orders by the Government (Defendant's *420 Contentions, 5/19/87, at 3-4), and CST's "failures to obtain timely approval of design drawings," (Pre-Trial Order, 10/14/87, at 14) caused NMS substantial hardship and justified NMS' plant closing. The evidence shows that there indeed were major delays caused by late government approvals of plans. CST itself "sustained delays and damages as a result of the government's delays in approving the design of CST, National and IMH." (11/16/88 Trial Transcript, at 157).
However, the evidence also shows that NMS itself contributed to some of the delays by the fact that "it did not meet the acoustical requirements as set out in the RFTP." (11/17/88 Trial Transcript, at 432). NMS "never really got into a swing of production because of the ... effects of the delay," id. at 446, such as "[l]aying off the labor force, having to retrain." Id. Mr. Solomon, Travelers' own witness, testified that those delays caused NMS "to layoff because we didn't have approval. We reduced the labor force after the acoustics test." Id. at 446. Thus, NMS' own failure to meet the Government's acoustical requirements, requirements which the Government later had to reduce, id. at 434, contributed to the costs and delays Travelers now claims justified NMS' plant closing.
Moreover, the evidence shows that NMS went ahead with construction any way when it failed to obtain government approval of its design. Id. at 447-48. Mr. Solomon testified that "as far as I know I had never seen a set of plans that said approved." Id. at 448. Instead, NMS proceeded to build "the prototype based on plans submitted to the Corps of Engineers" id. that had never been approved, even though the "[p]rototype was not supposed to be used for approval." Id. at 447. NMS, in effect, in failing to meet government requirement and obtaining government approval, was nonetheless building at its own risk. So while there were delays in government approval of design, and even nonapproval of design, NMS itself did not sustain the sort of delay that prevented it from performing what it was contracted to perform.
In sum, according to different trial testimony from different witnesses, it is fair to conclude that there were substantial delays caused by various parties, including NMS, for one reason or another. Contrary to Travelers' assertions, however, such delays do not give NMS the right to rescind its contract. For the reasons stated below, NMS was bound by the "proceed diligently" clause in the contract to continue performance.
D. The Disputes Clause Requirement to Proceed Diligently
In Recon/Optical, Inc. v. Government of Israel, 816 F.2d 854 (2d Cir.1987), the Court of Appeals for the Second Circuit was faced with a similar situation as the situation at hand. There, a dispute arose concerning a contract between the contractor and the government of Israel for the production of certain air reconnaissance system. The contractor could not meet certain contract specifications and claimed in its defense that such specifications were "unrealistic and unreasonable." Id. at 855. (It should be noted that a similar claim is asserted here, that "[t]he acoustical experts we [NMS] hired to test advised us that based on window space specified by RFTP, the opening required by the heat, ventilation, air conditioning unit and other requirements that the RFTP out [sic], it was impossible to meet the acoustical requirements." (11/17/88 Trial Transcript, at 432)). The contractor proposed various modifications which, though orally approved by the Israeli Air Force, were apparently not approved by the government of Israel. Israel thus refused payment. The contractor submitted its claims to arbitration, pursuant to a provision requiring the contractor to "proceed diligently with the performance of this Contract" "pending the final disposition of any dispute hereunder." Id. at 856.
The contractor subsequently terminated the contract, pursuant to a provision in the contract allowing an aggrieved party to terminate in the event of a material breach. Thereafter, Israel terminated the contractor *421 following the contractor's work stoppage.
As Travelers is now claiming, the contractor Recon also claimed that in spite of the disputes clause, the contract did not require it to continue performance because of Israel's failure to make certain payments. Id. at 857 & n. 3. Recon instead argued that requiring it to continue work pending arbitration would serve to read another contractual provision allowing either party to terminate because of the other party's material breach out of the contract. Id. The Second Circuit disagreed.
The Court stated that the contract "explicitly requires continuation of work `pending the final disposition of any dispute.' A provision applicable only to non-material breaches would be superfluous, because [the contractor's] obligation to continue performance would not be legally diminished by such a breach even absent the clause." Id., citing J. Calamari and J. Perillo, Contracts §§ 11-22(a) (2d ed. 1977) and Corbin, Corbin on Contracts § 946 (1951 & Supp.1971). Thus, the contractor "is ... required to continue work pending the arbitration that it has initiated. Should the arbitrators find a material breach by [the government], [the contractor] may then terminate under [the applicable provision authorizing termination because of the other party's material breach]." Id.[2]
The Second Circuit thus found that the contractor had to proceed diligently, as required under the contract, even though another provision in the same contract there specifically provided for termination by one party in the event of the other party's material breach. In this case, by contrast, there is no such provision allowing for termination due to material breach. There were delays, to be sure, but NMS itself contributed to some of the delay. Counsel for Travelers specifically admitted that "I think that contract is silent on walking off under any circumstances, as most are...." (11/16/88 Trial Transcript, at 196). Non-payment being the only contractual ground which would allow NMS to walk off the job, and nonpayment not having been made out by Travelers, the court holds that NMS was obligated to proceed diligently pending its claim with the Corps of Engineers.
Aside from the various nonpayment defenses, Travelers also relies on delays as justification for NMS' plant closing in June 1974. Delays in this case were primarily caused by the Government, as Mr. Bernstein testified. (11/16/88 Trial Transcript, at 157, 158, 161). Because of the delays, work was performed over a substantially longer period of time than originally contemplated by either CST or NMS, causing both parties substantial financial burdens. On April 5, 1974, NMS then submitted a claim of $1.5 million for an increase in the contract price. (Defendant's Memoranda In Opposition to Plaintiff's Motions for Multiple Relief, 8/15/55, Defendant's Memorandum in Opposition to Motion # 1, at 13; 11/16/33 Trial Transcript, at 186, 224). CST at that time passed the claim on to the Government. Id. at 195. This claim was pending when NMS announced the permanent closing of its plant in June of 1974.
Travelers contends that the claim was made directly against CST (Id. at 224; Defendant's Memoranda In Opposition to Plaintiff's Motions for Multiple Relief, supra, at 13). According to Travelers, delays, even though caused by the Government through no fault of CST, would "not *422 affect CST's contractual liabilities to NMS." (Defendant's Pre-Trial Memorandum, at 15). However, "[p]otential damage from delay is inherent in any construction contract.... When the party causing the delay is the United States Government, and the contract is the standard government contract, it is impossible ... to find an equitable reason why a prime contractor, without fault and without option and without right of reimbursement from the Government, should have to compensate his subcontractor for damages resulting from delayed performance." McDaniel v. Ashton-Mardian Co., 357 F.2d 511, 517 (9th Cir.1966).[3] The evidence shows that CST had passed NMS' claim on to the government, and that CST was awaiting the government's response to the claim. Mr. Bernstein testified that "if the government increased it, I [CST] would pass on the increase to them [NMS]." (11/16/88 Trial Transcript, at 224).[4]
The primary case relied upon by Travelers, United States v. Lennox Metal Mfg. Co., 225 F.2d 302 (2d Cir.1955), is inapposite to the case at hand. The facts of that case are wholly distinguishable from the facts of the present case. There, the court found that the government's termination of the contractor was arbitrary and wrong, because 1) the contractor had incurred large costs in its efforts to comply with numerous change orders issued by the government; 2) the government was bound by the partial payments provisions to make what the Court deemed to be mandatory and not discretionary payments, id. at 308- *423 09, 315; 3) when the contractor presented invoiced requests for such partial payments, the government advised the contractor that the payments would be made, id. at 305; 4) the contractor continued requests for partial payments and warned the government that it would be unable to continue production until a payment was made, id. (note: this warning was made following a certain change order issued by the government which "required retooling of from 60 to 90 daysduring which there could be no productionand expenses of approximately $120,000." id. (emphasis added)); 5) the government continued talks and negotiations with the contractor and sent an investigative production team to study the situation and to work out a partial-payment schedule, id; 6) the team concluded that a partial payment would allow the contractor to perform, id; 7) and yet despite such promises, the government terminated its contract with the contractor.
The facts in Lennox reveal that the contractor was not the one that permanently stopped performance. It did not comply with the delivery schedule, but it was still in the process of talking with the government. Thus, the standard disputes clause of the contract was never triggered and was never the issue in the case. Because the government was the one that terminated the contract after promises of partial payments and while negotiations were still continuing, the partial payments clause was the clause occupying center stage in that case. The court found that the government failed to make the mandatory partial payments, id. at 306-07, and that it was "solely because of that default that defendant could not thereafter have performed." Id. at 307 (emphasis added).
The facts adduced from trial in this case, as discussed above, fail to present such a picture. NMS failed to requisition for design payments as required by the contracts and therefore cannot use that defense for justification. Payments requisitioned by NMS were made out by CST. Delays were caused primarily by the government. NMS itself contributed to the delays. NMS proceeded with its work in spite of delays in approval of plans by the government plans which were never in fact approved thereby casting doubt on Travelers' claim that the government so substantially delayed and impeded NMS' work that such delays should rise to the level of justification for NMS' June 1974 plant closure.[5]
III. CONCLUSION
The facts as set forth and described by the court in the case, together with the requirement that the contractor abide by the "proceed diligently" clause, see Recon/Optical, supra, 816 F.2d at 856-57, lead the court to rule that 1) NMS was required to proceed diligently and that the plant closure in June 1974 was a breach of its contract with CST; 2) NMS' failure to proceed diligently constitutes unjustifiable default. Because a surety's obligations arise upon default of its principal, see e.g., Balboa Ins. Co. v. United States,[6] 775 F.2d 1158, 1161 (Fed.Cir.1985), Travelers' bond obligations were triggered upon its principal's unjustifiable default in June 1974.
NOTES
[1] Paragraph 6 of the "Disputes" clause of the contract between CST and the Government provides, in pertinent part, that "any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer...." "Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision."
As stated, the court, for reasons delineated in the prior Amended Opinion, has previously ruled that the "proceed diligently" mandate of the prime contract between CST and the Government was applicable to NMS at the time of NMS' plant closing in June 1974.
[2] The Court also disposed of the contractor's argument that it was not obligated to continued performance because of the doctrine of impossibility of performance. The Court refused to disturb the district court's finding that the contractor terminated the contract "not because of impossibility of performance or any other reason listed in its termination letter, but because of its arbitrable dispute with Israel concerning payment for modifications." Recon/Optical, supra, 816 F.2d at 858.
Travelers here claims nonpayment by CST, a claim refuted by Granite's showing that all claims requisitioned by NMS were ultimately paid. But even if nonpayment were a viable defense supported by evidence at trial, it would not make out a defense of impossibility or impracticability, Recon/Optical, id., as claimed by Travelers (Pre-Trial Order, 10/14/87, at 26). Travelers would have a claim only under the contract, however, if it had been successful in showing that CST failed to make requisite payments to NMS. See Article III of the CST/NMS subcontract.
[3] The Court also stated that there is no authority to support the "proposition that, absent express or implied contract provision therefor, the subcontractor can recover from the prime contractor for delays which are not caused by the fault of the latter." McDaniel, supra, 357 F.2d at 514 n. 2. Cf. Quaker-Empire Constr. Co. v. D.A. Collins Constr. Co., 88 A.D.2d 1043, 452 N.Y.S.2d 692 (3rd Dep't 1982). In this case, relied on by Travelers, the court found sufficient evidence to support the finding that the prime contractor's "delay and faulty performance prevented timely and economical completion of plaintiff's work under its subcontract." Id. 452 N.Y.S.2d at 693-94.
The prime contractor there was found to have furnished to the subcontractor "erroneous field measurements," to have delayed the "completion of final grading of the road shoulders," apparently a precondition to much of the subcontractor's own performance, to have neglected to "properly position gaps in the concrete bridge", etc. id. at 694. On those facts, the New York state court found it irrelevant to the prime contractor's liability whether the state or other third parties may have contributed to some of the delay, clearly because the prime contractor itself was guilty of most of the delays. No such case has been made out against CST here.
W.F. Magann Corp. v. Diamond Mfg. Co., 580 F.Supp. 1299 (D.C.S.C.1984), aff'd in part, rev'd in part, 775 F.2d 1202 (4th Cir.1985), a case involving a proceed diligently clause where the court found that the prime contractor's prior breaches justified the subcontractor's rescission, can also be distinguished from the present case. The facts there clearly show that the subcontractor's work of dredging for the construction of a navigable channel system was made impossible by misclassification of sand material by the government in its Design Memorandum. Id. at 1306. The requirement of a certain side slope was therefore difficult to meet. Numerous problems arose from the dredging work. Id. at 1310. The general contractor and the government had in their possession all along the Design Memorandum demonstrating that the sideslope specifications as well as the soil classification were defective, while the subcontractor was never provided with such information. Id. at 1311, 1312. On those facts, the court found that whether or not the breach, resulting from defective specifications, was caused by the general contractor or the government, the subcontractor had the right of rescission. Id. at 1315.
The facts in our case simply do not show CST to be guilty of the sort of reprehensible acts and omissions which were made out against the prime contractor in the Magann case.
[4] See Vermont Marble Co. v. Baltimore Contractors, Inc., 520 F.Supp. 922 (D.D.C.1981). The court found that the clause "time is of the essence" in the subcontract did not give the subcontractor the right to rescind on the basis of delay, id. at 928, but that the subcontractor, instead, was bound by a similar disputes provision as the one present here. The court also found that the subcontractor did not make a claim for additional compensation that was unmet by the general contractor. It noted however, that even if a particular letter, demanding "`payment in full of all excess costs incurred to date for the delays thus far suffered,'" id. at 928-29 n. 8, and threatening "`not to proceed unless and until a proper and equitable adjustment in price had been achieved and agreed upon,'" did in fact amount to such a claim, "it is clear that [the general contractor] did not refuse the claim; rather [the general contractor] made an effort to incorporate [the subcontractor's] loss in the claim it [the general contractor] had pending before the [government]." Id. That is precisely what CST has done in this case.
[5] See, e.g. Sancolmar Industries, Inc., 74-1 BCA (CCH) ¶ 10,391, Board of Contract Appeals Decision, ASBCA Nos. 16478 and 16479, Nov. 19, 1973 (Contractor claimed its default was justified because of the government's suspension of progress payments and because of defective contract drawings, id. at 49,057-49,058. The Board found that the contractor had "not shown excusable delay for its default" and that under the disputes provision of the contract, the contractor was bound to proceed diligently pending final decision of its disputes. Id.); First Line Mfg. Inc., 83-1 BCA (CCH) ¶ 16,394, Board of Contract Appeals Decision, ASBCA Nos. 24443 and 24444, March 16, 1983 (Where the contractor had announced that it was ceasing work and closing operations, the government could terminate the contract prior to the due date. The government there had made substantial progress payments and the court was unpersuaded that "undercapitalization" or "insolvency" excused the contractor's failure to perform. Id. at 81,501).
[6] "When a contractor defaults under the contract, the obligation of the surety then arises under its performance and payment bond." Balboa Ins., supra.
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17 N.J. 194 (1955)
110 A.2d 545
CHARLES C. COLOZZI, PLAINTIFF,
v.
BEVKO, INC., A CORPORATION OF THE STATE OF NEW JERSEY, CHARLES MAXWELL ALRICH, EDWARD O'HARA AND CLIFFORD C. CORSON, DEFENDANTS.
The Supreme Court of New Jersey.
Argued December 6, 1954.
Decided January 10, 1955.
*197 Mr. Madison S. DuBois argued the cause for the appellant James Hunter, III, receiver.
Mr. Sidney P. McCord, Jr., argued the cause for the respondent Theodore Blumberg.
*198 The opinion of the court was delivered by BURLING, J.
This appeal stems from proceedings in aid of execution on a judgment entered in a civil action in the Superior Court, Law Division. The appeal was taken from a final order entered by the Superior Court, Law Division, filed June 10, 1954, which vacated restraints upon the sale by the respondent, Theodore Blumberg, a resident of Pennsylvania who was not a party to the original action, of certain promissory notes made by Bevko, Inc., a New Jersey corporation, to, respectively, the defendants Charles Maxwell Alrich, Edward O'Hara and Clifford Corson. Blumberg's claim that he held the notes as collateral security for indebtedness of Alrich, O'Hara and Corson, was sustained by the order. James Hunter, III, a receiver appointed in aid of the execution in the principal action, appealed to the Superior Court, Appellate Division. Prior to hearing there the appeal was certified on our own motion.
Charles C. Colozzi, the plaintiff in the principal action, recovered a judgment for $30,000 against the defendants Alrich, O'Hara and Corson. Defendant Bevko, Inc. had secured a judgment of dismissal. The present appeal does not involve the validity of these judgments.
On March 18, 1954 the Sheriff of Camden County, pursuant to a writ of execution issued under Colozzi's judgment, levied upon the right, title and interest of Alrich, O'Hara and Corson in and to certain stock certificates and notes in the possession of Blumberg's attorneys, Starr, Summerill & Davis, in Camden, New Jersey. Blumberg, through his attorneys, on March 31, 1954 delivered a notice in writing to the Sheriff of Camden County, under the provisions of N.J.S. 2A:17-29, making claim to the stock certificates and notes. The property in question (i.e., levied upon by the sheriff and subsequently claimed by Blumberg) was as follows: Certificate No. 1 issued by Bevko, Inc. to Alrich, representing 25 shares of capital stock of Bevko, Inc.; Certificate No. 2 issued by Bevko, Inc. to Corson, representing 25 shares of capital stock of Bevko, Inc.; Certificate No. 3 issued by Bevko, Inc. to O'Hara, representing 25 shares of *199 capital stock of Bevko, Inc.; note made by Bevko, Inc., payable to Alrich, in the amount of $20,000; note made by Bevko, Inc., payable to Corson, in the amount of $20,000; and note made by Bevko, Inc. to O'Hara, in amount of $20,000.
On April 28, 1954 the Superior Court, Law Division, pursuant to N.J.S. 2A:17-65 and 66, on motion of the plaintiff Colozzi, ordered Blumberg and the defendants Alrich, O'Hara and Corson, and each of them, restrained until further order of the court, from assigning, negotiating or otherwise transferring the above-mentioned stock certificates issued by Bevko, Inc. This order, which was filed April 29, 1954, appointed James Hunter, III (herein referred to as the receiver) as receiver of any right, title and interest of Alrich, O'Hara and Corson in the three promissory notes of Bevko, Inc., hereinbefore referred to, subject to any interest of Blumberg therein.
The receiver, by a subsequent motion, sought an order directing the delivery to him of the notes of Bevko, Inc., hereinbefore referred to, and adjudicating and determining Blumberg's rights therein. Blumberg made an opposing motion, seeking an order allowing Blumberg to sell his interest in the three notes of Bevko, Inc., hereinbefore referred to. These motions appear to have been addressed to the Superior Court, Law Division, under and by virtue of R.R. 4:75-2. Cf. R.R. 4:76; N.J.S. 2A:17-67.
At a hearing on May 13, 1954 on these two motions neither Blumberg nor the receiver addressed any objection to the other's motion adjectively. Blumberg's attorney agreed that the proceedings called for "a determination of who has the right to possession of these notes" and that Blumberg had appeared to the extent necessary "to protect what rights he has in the matter."
The facts disclosed during reception of evidence on these motions were that Alrich, O'Hara and Corson were principal stockholders of Bevko, Inc., a New Jersey corporation. Bevko, Inc. required financing for a project undertaken by it, and Alrich, O'Hara and Corson obtained the necessary *200 funds from Blumberg. Blumberg, called as a witness by the receiver, testified that on February 25, 1953, at his office in Philadelphia, Pennsylvania, he met with Alrich, O'Hara and Corson, Sidney Bookbinder, their attorney, and William Schwab, Blumberg's attorney. He testified that the three Bevko, Inc. notes ($20,000 each) were prepared and signed at that meeting, were delivered to him (Blumberg) then and were held by him thereafter. He testified that at the same meeting a written financing contract was entered into between him (Blumberg), Alrich, O'Hara and Corson. The financing contract was identified and placed in evidence. The gist of the financing contract was that Blumberg agreed to loan $25,000 each to Alrich, O'Hara and Corson; each of the latter was immediately to invest $5,000 in Bevko, Inc. and loan $20,000 to Bevko, Inc., and receive a corporate note therefor. Each was to "give to Blumberg an individual note to be secured by their issued shares (i.e., 25% each), of the said corporation." Paragraph 11 of the agreement provided that in the event of liquidation of Bevko, Inc. prior to its fulfillment of contracts (attached to the agreement), the assets should be distributed according to their investment, the investment of each of Alrich, O'Hara and Corson being identified as $5,000. Blumberg testified that Alrich, O'Hara and Corson delivered their individual notes to him on the same day. Mr. Bookbinder, called as a witness by the receiver, testified that the Bevko, Inc. notes were pledged to Blumberg as collateral for the three $25,000 loans. The Bevko, Inc. notes were not endorsed by Alrich, O'Hara and Corson. Mr. Bookbinder testified the individual notes (as distinguished from the Bevko, Inc. notes) were made by Alrich, O'Hara and Corson on February 26, 1953. He predicated the statement upon the date written on the individuals' notes and did not expressly deny the making thereof on February 25, 1953. Each of the individuals' respective $25,000 notes referred to the delivery of Bevko, Inc. stock to Blumberg as collateral security, and these individuals' notes also provided "THE ABOVE COLLATERAL SECURITY and any heretofore or which may hereafter" be deposited with Blumberg *201 "and any other property of maker in (Blumberg's) possession, * * * shall stand as one general continuing collateral security * * *" for the individuals' obligations to Blumberg. The receiver asserted that "This being executed in Pennsylvania, Pennsylvania law will control." The receiver introduced evidence of pertinent Pennsylvania law. Blumberg did not object to the introduction of Pennsylvania law into the case, and on this appeal concedes generally its applicability.
The Superior Court, Law Division, determined on the evidence that the Bevko, Inc. notes in question had been validly pledged to Blumberg as collateral security. The court entered an order embodying this determination, releasing these notes from restraint and authorizing Blumberg to sell these notes. This is the order subjected to the receiver's present appeal.
The questions involved in this appeal include whether (1) the Superior Court, Law Division, had jurisdiction to determine Blumberg's rights in the Bevko, Inc. notes; (2) Pennsylvania or New Jersey law applies to determine the validity of the pledge; (3) judicial notice of Pennsylvania law may be taken in this case; (4) the evidence should be permitted to support a pledge in the light of the parol evidence rule, i.e., whether there was a variation of the terms of the written agreement and collateral notes of the individuals, Alrich, O'Hara and Corson; (5) the absence of endorsement by the payees of Bevko, Inc. notes defeated the pledge.
I. JURISDICTION
Blumberg contended on this appeal that the Superior Court, Law Division, lacked jurisdiction to enter a determination deciding his rights in and to the Bevko, Inc. notes in question. We find no merit in this contention. Blumberg filed a notice of claim to the notes under N.J.S. 2A:17-29. He did not avail himself of the statutory procedure made available to him by N.J.S. 2A:17-29, supra, to try out his *202 claim of property, but he (by his attorneys) acknowledged service of notices of motion and appeared generally in the proceedings in aid of execution and in fact moved for affirmative relief therein prior to making any suggestion or objection that he was not subject to the jurisdiction of the court. Cf. White v. White, 16 N.J. 458 (1954); State v. U.S. Steel Corp., 12 N.J. 38, 43 (1953); Trautman v. Higbie, 10 N.J. 239, 242-243 (1952); In re Van Winkle, 3 N.J. 348, 360-361 (1950); R.R. 4:4-6. Compare Whalen v. Young, 15 N.J. 321, 333-334 (1954).
II. APPLICABILITY OF PENNSYLVANIA LAW
The receiver asserted, and Blumberg conceded, on this appeal, that Pennsylvania law governs the validity of the alleged pledge of the Bevko, Inc. notes in question to Blumberg. The evidence is uncontradicted that the pledge, if any, was effected in Pennsylvania, and the obligations of Alrich, O'Hara and Corson were to be met there. Validity of a contract is to be determined by the law of the place of contract. Staedler v. Staedler, 6 N.J. 380, 389 (1951). Under the circumstances of the present case Pennsylvania law clearly applies. Cf. Mill Factors Corporation v. Guardian Trust Co., 107 N.J.L. 529 (E. & A. 1931); see also Goodrich on Conflict of Laws (3rd ed. 1949), sec. 110, pp. 321 et seq.; Stumberg, Conflict of Laws (2nd Ed. 1951), chapter VIII, pp. 224, et seq.
III. DETERMINATION OF THE APPLICABLE PENNSYLVANIA LAW
Among the questions involved is whether the Pennsylvania law proved was adequate to sustain the determination made by the trial court. The receiver, for the first time on this appeal, asserted that Pennsylvania law was not pleaded below and argued that for this reason the Uniform Judicial Notice of Foreign Law Act, N.J.S. 2A:82-27 et seq., was not applicable. We find to the contrary.
*203 The Uniform Judicial Notice of Foreign Law Act, N.J.S. 2A:82-27, provides:
"Whenever the common or statute law of any state is pleaded in an action in any court of this state, the court shall take judicial notice thereof. In the absence of such pleading, it shall be presumed that the common law of such state is the same as the common law as interpreted by the courts of this state."
Insofar as the statute refers to the necessity of "pleading" the foreign law, we have held that the issue of status of the pertinent law of the foreign jurisdiction may be raised not only in a complaint, but in an answer, at a pretrial conference "or, with permission of the court, at the trial itself." Leary v. Gledhill, 8 N.J. 260, 270 (1951).
In the present matter there were no formal pleadings; the matters were asserted by motion and no pretrial conference was had. Under these circumstances the issue as to the foreign law was raised by the receiver during the "trial," i.e., the hearing and reception of evidence on the motions. This is deemed by us to be a sufficient compliance with the statute, N.J.S. 2A:82-27, supra, under the Leary case, supra. Ordinary procedure would call for amendment of the pleadings and pretrial order in the event an issue not raised in the pleadings and pretrial order is tried by consent or without objection, R.R. 4:15-2. However, in the present case since there was an absence of pleadings and pretrial order R.R. 4:121 applied. R.R. 4:121, supra, provides that "the court shall proceed in any lawful manner not inconsistent with the Constitution, these rules or any applicable statutes." In this respect, therefore, the trial court was within its competence in the present matter in reaching its determination without amending the "pleadings."
The arguments addressed by the receiver to this court further assert that the determination of the Pennsylvania law by the Superior Court, Law Division, lacks support in the evidence introduced by the receiver and that Blumberg is precluded from reference to Pennsylvania decisions and statutes not introduced at the trial level. These arguments anticipate the independent investigation and consideration by *204 this court of pertinent Pennsylvania decisions or statutes, and deny our right to resort thereto in the disposition of this appeal.
The Uniform Judicial Notice of Foreign Law Act, sec. 2, N.J.S. 2A:82-28, provides that "The court may inform itself of such laws in such manner as it may deem proper * * *." Mr. Justice Heher, speaking for the former Supreme Court, construed sec. 2 (now N.J.S. 2A:82-28), supra, to provide that the judge is not confined to the evidence of foreign law adduced by the parties. Franzen v. Equitable Life Assur. Society, 130 N.J.L. 457, 461 (Sup. Ct. 1943). The statute further provides "The determination of such laws shall be made by the court * * * and shall be reviewable." N.J.S. 2A:82-29. The Uniform Judicial Notice of Foreign Law Act, N.J.S. 2A:82-27 et seq., supra, specifically applies to any court in this State. The statute is remedial and should "be given a liberal interpretation to suppress the mischief and advance the remedy." Franzen v. Equitable Life Assur. Society, supra, 130 N.J.L., at page 461.
The underlying philosophy of the Uniform Judicial Notice of Foreign Law Act is substantial justice. Mr. Justice Heher, in the Franzen case, supra, stated (130 N.J.L., at page 460):
"* * * the design of this enactment was to achieve that certainty in the ascertainment and application of foreign law which is attainable only when the determination is made by one versed in the philosophy and principles of law and in exegesis after the searching and exhaustive inquiry afforded by judicial notice of the pertinent statutes and decisions of the foreign state sovereignty * * *."
It has been observed that "In dealing with an issue of foreign law, whether at trial or on appeal, the rules of procedure should be designed to bring the foreign law before the court, should be flexible enough to allow for correction of inadvertent omissions, and should be keyed to effect but one result the administration of substantive justice as it would be administered in the foreign court." Note, 37 Cornell L.Q., 748, 756 (1952).
*205 The issue was raised at the trial level and Pennsylvania authorities in addition to those received in evidence at the trial have been brought to the attention of this court in the briefs on appeal. We have accepted this aid and in addition we have made our own independent investigation of Pennsylvania law as expressed in pertinent statutes and judicial decisions of that jurisdiction. In so doing we have invoked our constitutional jurisdiction, N.J. Const. 1947, Art. VI, Sec. V, par. 3, and statutory authority to "inform [ourselves] of such laws in such manner as [we] may deem proper." N.J.S. 2A:82-28, supra. Cf. Franzen v. Equitable Assur. Society, supra, 130 N.J.L., at page 461.
IV. THE MERITS
The principal question involved on the merits is whether the evidence introduced before the trial court shall have been resorted to in order to establish the existence of the alleged pledge of Bevko, Inc. notes in question to Blumberg, where the pledge of those notes was not expressed by specific reference thereto, i.e., by detailed identification of such notes, in the financing contract between the parties dated February 25, 1953. In disposing of the subsidiary questions involved in the determination of this principal question Pennsylvania law is controlling and we rely thereon, taking judicial notice of the statutes and judicial decisions of that state.
In limine it is observed that the Supreme Court of Pennsylvania has held that "[n]otwithstanding the name given it, the parol evidence rule is a rule, not of evidence, but of substantive law: Rest. Contracts, § 237, comment a; Wigmore on Evidence, 3d Ed., Vol. IX, pp. 3, 4, § 2400 (1); Williston on Contracts, Rev. Ed., Vol. 3, p. 1813, § 631." O'Brien v. O'Brien, 362 Pa. 66, 66 A.2d 309, 311, 10 A.L.R.2d 714 (1949). Cf. Harker v. McKissock, 12 N.J. 310, 321 (1953).
The general application of the parol evidence rule in Pennsylvania is that parol evidence is not admissible to alter, vary or contradict the express terms of a valid written agreement. *206 First Nat. Bank of Scranton v. Payne, 349 Pa. 446, 37 A.2d 568, 569 (Sup. Ct. 1944). Cf. Ross v. Orr, 3 N.J. 277 (1949); Shinn v. Black, 97 N.J.L. 219 (E. & A. 1922).
The Pennsylvania Supreme Court in Grubb v. Rockey, 366 Pa. 592, 79 A.2d 255, 258 (1951), expressed the prevailing law on parol evidence as follows:
"The modern Pennsylvania Parol Evidence Rule is well stated by Mr. Justice Stearne in Walker v. Saricks, 360 Pa. 594, 598, 62 A.2d 9, 10: `This Court said in Gianni v. R. Russell & Co., Inc., 281 Pa. 320, 323, 126 A. 791, 792:
"Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement." Martin v. Berens, 67 Pa. 459, 463; Irvin v. Irvin, 142 Pa. 271, 287, 21 A. 816. "All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract * * * and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms cannot be added to nor subtracted from by parol evidence," Union Storage Co. v. Speck, 194 Pa. 126, 133, 45 A. 48, 49; Vito v. Birkel, 209 Pa. 206, 208, 58 A. 127.'"
Cf. Bardwell v. Willis Co., 375 Pa. 503, 100 A.2d 102, 104 (Sup. Ct. 1953).
The exceptions to the main rule are involved in the disposition of this case. Where the contract does not contain the full and exact agreement of the parties "the reason for the rule ceases" and parol evidence is admissible to cure the deficiency. Yezback v. Croce, 370 Pa. 263, 88 A.2d 80, 81-82 (Sup. Ct. 1952). Cf. Massari v. Accurate Bushing Co., 8 N.J. 299, 316 (1951); Schlossman's, Inc. v. Radcliffe, 3 N.J. 430, 434 (1950). It does not apply in matters involving fraud, accident or mistake. Bardwell v. Willis Co., supra; Grubb v. Rockey, supra; First Nat. Bank of Scranton v. Payne, supra.
While there were no pleadings, as such, in the present proceedings, the record of the hearings in the trial court shows that the claim advanced by Blumberg was premised at the trial level on failure of the financing contract dated February 25, 1953 to incorporate the understanding of the *207 parties. The evident intent of the entire transaction was to secure to Blumberg all possible protection, not only for his investment but also for his substantial loans to the individuals, Alrich, O'Hara and Corson, and to Bevko, Inc. A determination that the pledge of the Bevko, Inc. notes in question was contemplated, but by mistake not clearly expressed in the agreement, is consistent with the evidence and conduct of the parties.
It is well established in Pennsylvania that where there are contemporaneous writings relating to the same transaction, being integral parts of the whole transaction, the several writings are to be construed together. Rekas v. Dopkavich, 362 Pa. 292, 66 A.2d 230, 233 (Sup. Ct. 1949). This rule has been applied where other papers are contemporaneous with or closely following the main agreement. Parker v. Oil Well Supply Co., 186 Pa. 294, 40 A. 518 (Sup. Ct. 1898). Cf. Lawrence v. Tandy & Allen, Inc., 14 N.J. 1, 6-8 (1953); Schlossman's, Inc., v. Radcliffe, supra (3 N.J., at page 435). This principle is applicable here. The evidence on this premise supports the trial court's determination that there was a valid pledge of the Bevko, Inc. notes in question to Blumberg. The individuals' promissory notes in which reference was made to "any other property of maker in (Blumberg's) possession" were executed and delivered either on February 25, 1953, if Blumberg's testimony is to be believed (and it was not impeached) or on February 26, 1953, if the dates on the individuals' notes are controlling. In any event, the financing contract of February 25, 1953 in itself demonstrates clearly that these individuals' notes were part and parcel of the one financing transaction. Coterminous construction of these individuals' notes requires effect to be given to the words therein expressly used to identify other collateral, i.e., the Bevko, Inc. notes in question, in addition to those individuals' notes and the assignments of stock in Bevko, Inc. expressly referred to therein.
There was a legal relationship of pledgor and pledgee created by the delivery of the Bevko, Inc. notes in question to Blumberg as collateral on the day he loaned moneys to *208 Alrich, O'Hara and Corson. The Pennsylvania Supreme Court has held that
"* * * Any agreement or instrument by which it is intended to diminish legal rights which normally accrue as a result of a given legal relationship or transaction must spell out the intention of the parties with the greatest of particularity, since such contracts or instruments are construed strictly against the party seeking their protection." Morton v. Borough of Ambridge, 375 Pa. 630, 101 A.2d 661, 663 (1954).
In the present proceedings the receiver sought to diminish, in fact to destroy, Blumberg's rights as pledgee. The rule of the Morton case, supra, under these circumstances weighs against the receiver's contentions.
V. ABSENCE OF ENDORSEMENT
The final question involved is whether the absence of endorsement of the Bevko, Inc. notes by, respectively, Alrich, O'Hara and Corson, defeats the pledge.
The pertinent Pennsylvania statutory provision expressly negatived the necessity of endorsement. 56 P.S. § 101 (1901, May 16, P.L. 194, Ch. I, Art. III, § 49) provided:
"Where the holder of an instrument, payable to his order, transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferer had therein; and the transferee acquires, in addition, the right to have the indorsement of the transferer; but for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made."
56 P.S. § 101, supra, is identical with section 49 of the Uniform Negotiable Instruments Law, 5 U.L.A. (Part I, 1943), sec. 49, pp. 12, 492. Cf. Blaney v. Mellor Co., 351 Pa. 10, 39 A.2d 825 (Sup. Ct. 1944); R.S. 7:2-49; City Nat. Bank & Trust Co. of Chicago v. Oberheide Coal Co., 307 Ill. App. 519, 30 N.E.2d 753 (App. Ct. 1941); Brannan's Negotiable Instruments Law (7th Ed., Beutel, 1948), sec. 49, p. 650 et seq.
In American Exchange Nat. Bank of New York v. Federal Nat. Bank, 226 Pa. 483, 75 A. 683, 684, 685, 27 L.R.A., *209 N.S., 666 (Sup. Ct. 1910), it was held that a pledge of a book account must be made by written transfer, but it was also held that a pledge of incorporeal property such as negotiable instruments or bank deposits could be made by mere delivery of the negotiable instrument or of the bank deposit book. It was held in Camden National Bank v. Fries-Breslin Co., 214 Pa. 395, 63 A. 1022 (Sup. Ct. 1906), that one receiving negotiable paper as collateral security is entitled to be protected, as a bona fide holder, to the same extent as one who becomes the owner of such paper. Cf. Munn v. McDonald, 10 Watts 270, 273 (Pa. Sup. Ct. 1840).
A negotiable note is transferred for "value" when it is transferred to the holder as and for collateral security. Todd v. National Union Bank, 132 Pa. 312, 19 A. 218 (Sup. Ct. 1890). Cf. Camden National Bank v. Fries-Breslin Co., supra. "Value," under the Pennsylvania negotiable instruments statutes applicable at the time of the transactions involved herein, was defined as "any consideration sufficient to support a simple contract," including an antecedent or preexisting debt. 56 P.S. § 62 (1901, May 16, P.L. 194, Ch. I, Art. II, sec. 25). Cf. R.S. 7:2-25; Sladkin v. Ruby, 103 N.J.L. 449 (E. & A. 1927); sec. 25 of the Uniform Negotiable Instruments Law, 5 U.L.A. (Part I, 1943), sec. 25, pp. 8, 287, anno. pp. 320-321; Brannan's Negotiable Instruments Law (7th Ed., Beutel, 1948), sec. 25, pp. 490, 495, 516. There is little doubt that under section 25 of the Uniform Negotiable Instruments Law one who has taken a negotiable instrument in payment of or as collateral security for a debt, including a preexisting debt, is a holder for value. See 45 Mich. L. Rev. 214 et seq. (1947). The Pennsylvania statutes further provided: "Where the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien." 56 P.S. § 64. Cf. R.S. 7:2-27. Compare Blaney v. Mellor Co., supra.
We find that under the pertinent principles of Pennsylvania law, hereinbefore discussed, the trial court's determination that there was a valid pledge of the Bevko, Inc. notes *210 in question, without endorsement, by delivery to Blumberg on February 25, 1953, was not erroneous.
CONCLUSION
For the reasons expressed in this opinion the order of June 10, 1954, of the Superior Court, Law Division, to the extent to which such order was subjected to this appeal, is affirmed.
No costs will be taxed to either party.
For affirmance Chief Justice VANDERBILT, and Justices WACHENFELD, BURLING, JACOBS and BRENNAN 5.
For reversal Justices HEHER and OLIPHANT 2.
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16-1055 (L)
United States v. Prado
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 August Term, 2016
5
6 (Argued: May 10, 2017 Decided: August 5, 2019)
7
8 Docket Nos. 16‐1055‐L, 16‐1212‐cr, 16‐1214‐cr
9
10
11 _____________________________________
12
13 UNITED STATES OF AMERICA,
14
15 Appellee,
16
17 v.
18
19 JAVIER JOAQUIN ALARCON PRADO, LUIS ARMANDO VALENCIA
20 BAUTISTA, HECTOR VALENCIA BAUTISTA,
21
22 Defendants‐Appellants.
23 _____________________________________
24
25 Before:
26
27 LEVAL, POOLER, and HALL, Circuit Judges.
28
29 Appeal from a judgment of the United States District Court for
30 the Southern District of New York (Jed S. Rakoff, J.) convicting Javier
31 Joaquin Alarcon Prado, Hector Valencia Bautista, and Luis Armando
32 Valencia Bautista on their pleas of guilty to conspiracy to distribute
33 cocaine, and to possess cocaine with intent to distribute, while on board
34 a stateless vessel subject to the jurisdiction of the United States, in
35 violation of the Maritime Drug Law Enforcement Act, 46 U.S.C.
36 §§ 70501 et seq. The indictment is dismissed because the government
37 failed to demonstrate, as required by § 70504, that the vessel was
38 subject to the jurisdiction of the United States.
16-1055, 16-1212, 16-1214
United States v. Prado
1 The judgment of the district court is VACATED and the
2 indictment is DISMISSED. Judge Pooler concurs in the judgment by
3 separate opinion.
4
5 EDWARD SCOTT ZAS, Federal
6 Defenders of New York, New
7 York, NY, for Defendant‐Appellant
8 Javier Joaquin Alarcon Prado;
9
10 DONALD JOSEPH YANELLA,
11 III, New York, NY, for Defendant‐
12 Appellant Hector Valencia Bautista;
13
14 STEWART L. ORDEN, Scarsdale,
15 NY, for Defendant‐Appellant Luis
16 Armando Valencia Bautista;
17
18 SIDDHARTHA KAMARAJO,
19 Assistant United States Attorney
20 (Karl N. Metzner, Jason M.
21 Swergold, Assistant United States
22 Attorneys, on the brief), for
23 Geoffrey S. Berman, United States
24 Attorney for the Southern District
25 of New York, New York, NY, for
26 Appellee.
27
28 LEVAL, Circuit Judge:
29 Defendants Joaquin Alarcon Prado, Hector Valencia Bautista, and Luis
30 Armando Valencia Bautista appeal from the judgment of the United States
31 District Court for the Southern District of New York (Jed S. Rakoff, J.),
2
16-1055, 16-1212, 16-1214
United States v. Prado
1 convicting them, on their pleas of guilty, of conspiracy to distribute cocaine,
2 and of possession of cocaine with intent to distribute, while on board a
3 stateless vessel subject to the jurisdiction of the United States in violation of
4 the Maritime Drug Law Enforcement Act, (“MDLEA” or “the Act”), 46 U.S.C.
5 §§ 70501 et seq. The guilty pleas (and the judgments of conviction) are set
6 aside because of the failure to follow Rule 11, Fed. R. Crim. P., in the guilty
7 plea procedure. The indictment is dismissed because the government did not
8 demonstrate that the vessel was subject to the jurisdiction of the United
9 States.1
10 BACKGROUND
11 The district court conducted a hearing in part to determine whether the
12 vessel on board which drugs were found was subject to the jurisdiction of the
13 United States. The theory of the government was that the vessel was subject
14 to the jurisdiction of the United States because it was without nationality, i.e.,
15 not registered in any nation. The government’s evidence submitted at the
16 hearing consisted entirely of the sworn complaint of Andres Mahecha, a
1The changing views of each member of the panel over time regarding the proper
disposition of this case have substantially delayed the formation of a durable
majority in favor of any particular disposition and required reassignment of
authorship of the majority opinion.
3
16-1055, 16-1212, 16-1214
United States v. Prado
1 detective of the New York City Police Department on a task force of the
2 United States Department of Homeland Security (“DHS”), supplemented by
3 exhibits including a video and photographs taken by the Coast Guard
4 showing the interception of the vessel.2
5 According to Mahecha’s account, on June 19, 2015, officers of the
6 United States Coast Guard patrolling the waters of the Pacific Ocean, off the
7 coast of Central America, received a tip from Homeland Security that a
8 Colombian drug cartel “was sending a go‐fast carrying a large shipment of
9 cocaine from Colombia towards Costa Rica.” App’x 13. A “go‐fast” is a small,
10 rapid speed boat, which, because of its speed and low profile, is often used in
11 drug trafficking.
12 Coast Guard officers in a reconnaissance plane spotted a small craft
13 moving at high speed in international waters approximately 300 nautical
14 miles off the border between Nicaragua and Costa Rica.3 A Coast Guard
2 Mahecha does not purport to have witnessed the events described in his sworn
statement. His description of the events is “based on [] participation in the
investigation, [] conversations with other [unidentified] law enforcement agents,
and [] review of documents obtained during the investigation.” App’x 13.
3 We use the term “officers” in reference to the Coast Guard personnel solely to
signify their function in this episode as law enforcement officers, without reference
to whether they held commissioned or enlisted rank in the Coast Guard.
4
16-1055, 16-1212, 16-1214
United States v. Prado
1 cutter then sped to the area and sent out a helicopter and an interceptor
2 launch in pursuit of the go‐fast. When the go‐fast failed to stop after the firing
3 of warning shots, the helicopter crew fired on the vessel and disabled its
4 engines. As the go‐fast came to a stop, one of its occupants was observed
5 throwing bundles into the sea. Officers on the launch boarded the go‐fast and
6 there encountered the three defendants, the only persons aboard. They also
7 found twelve bundles later determined to contain approximately 680
8 kilograms of cocaine. Mahecha’s complaint states, “All three of the
9 defendants claimed to be of Ecuadorian nationality. [] In response to
10 questioning by members of the Boarding Team, none of the defendants
11 claimed to be the master or individual in charge of the Go‐Fast. . . . The
12 Boarding Team also did not find any registration documents [i.e., documents
13 indicating that it was registered as a vessel of any nation] onboard the Go‐
14 Fast.” App’x 14. His affidavit adds that “[t]he Go‐Fast was not flying any flag,
15 nor did it have any signs of registry painted on the side of the vessel.” Id.
16 According to the Government’s memorandum of law filed in the
17 district court, the boarding team removed the cocaine and defendants from
18 the go‐fast, and then set fire to the go‐fast and sank it, concluding that it was a
5
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1 navigation hazard. The defendants were arrested, transported to
2 Guantanamo Bay in Cuba, and from there flown to New York to be charged
3 and tried.
4 Affidavits submitted by defendants Hector Bautista and Javier Prado
5 differ from Mahecha’s account in a few respects. While Mahecha’s affidavit
6 stated that the go‐fast was “not flying any flag,” App’x 14, the defendants’
7 affidavits asserted that the go‐fast had an image of the Ecuadorian flag
8 printed on the side of the vessel (which is corroborated by a video made by
9 the Coast Guard boarding party that was attached to Mahecha’s affidavit).
10 There is no evidence that the officers inquired of the defendants as to the
11 nationality or registration of the vessel, and both Javier Prado and Hector
12 Bautista asserted in their affidavits that the officers did not make any such
13 inquiry. Nor is there evidence (or a contention by the government) that the
14 Coast Guard officers communicated with the registry of Ecuador or any other
15 nation to determine whether the vessel was registered.
16 PROCEDURAL HISTORY
17 Following indictment, the defendants moved for various forms of relief,
18 including dismissal of the indictment. The court conducted a hearing to
6
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1 determine whether the vessel was stateless, at which point it received the
2 evidence described above. On the basis of that evidence, the court concluded
3 that the go‐fast was stateless and therefore subject to the jurisdiction of the
4 United States under 46 U.S.C. § 70502(c)(1)(A). Accordingly, it declined to
5 dismiss the indictment. The defendants moved for reconsideration, but, while
6 the motion was pending, they entered pleas of guilty. They were sentenced to
7 24 months of imprisonment and three years of supervised release. The
8 defendants then brought these appeals.
9 DISCUSSION
10 Notwithstanding their having pleaded guilty, the defendants contend
11 their convictions should be overturned, and the indictment dismissed,
12 because the government failed to show that the go‐fast was stateless and
13 subject to the jurisdiction of the United States, as required by 46 U.S.C.
14 § 70503(e)(1).
15 I. The Requirements of the MDLEA
16
17 The MDLEA, in Section 70503, captioned “Prohibited Acts,” prohibits
18 possession of a controlled substance with intent to distribute “even though . . .
19 committed outside the territorial jurisdiction of the United States,” if the
7
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1 prohibited act is committed aboard a “covered vessel.” “Covered vessel” is
2 defined to include three categories of vessels—one being a “vessel subject to
3 the jurisdiction of the United States.” The pertinent clauses are as follows:
4 (a) Prohibitions.—While on board a covered vessel, an individual
5 may not knowingly or intentionally—
6 (1) manufacture or distribute, or possess with intent to
7 manufacture or distribute, a controlled substance; . . .
8 (b) Extension Beyond Territorial Jurisdiction.—
9 Subsection (a) applies even though the act is committed outside
10 the territorial jurisdiction of the United States.
11 ...
12 (e) Covered Vessel Defined.—In this section the term “covered
13 vessel” means—
14 (1) a vessel of the United States or a vessel subject to the
15 jurisdiction of the United States; or
16 (2) any other vessel if the individual is a citizen of the United
17 States or a resident alien of the United States.
18
19 46 U.S.C. § 70503 (emphasis added).
20 Section 70502, captioned “Definitions,” defines “vessel subject to the
21 jurisdiction of the United States” to include a “vessel without nationality,” as
22 well as several other categories of vessels including, most prominently,
23 vessels that are in, or entering, or have departed from, the waters of the
24 United States, and, only if the foreign nation consents, vessels that are in the
25 waters of a foreign nation or are registered in a foreign nation. See id. at
8
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1 § 70502(c)(1). Whether a vessel is “without nationality” is addressed by
2 § 70502(d) and can turn on the outcome of a “claim of nationality or registry.”
3
4 (d) Vessel Without Nationality.—
5 (1) In general.— In this chapter, the term “vessel without
6 nationality” includes—
7 (A) a vessel aboard which the master or individual in
8 charge makes a claim of registry that is denied by the
9 nation whose registry is claimed;
10 (B) a vessel aboard which the master or individual in
11 charge fails, on request of an officer of the United States
12 authorized to enforce applicable provisions of United
13 States law, to make a claim of nationality or registry for
14 that vessel; and
15 (C) a vessel aboard which the master or individual in
16 charge makes a claim of registry and for which the
17 claimed nation of registry does not affirmatively and
18 unequivocally assert that the vessel is of its nationality.
19 (2) Response to claim of registry. — The response of a
20 foreign nation to a claim of registry under paragraph (1)(A)
21 or (C) may be made by radio, telephone, or similar oral or
22 electronic means, and is proved conclusively by
23 certification of the Secretary of State or the Secretary’s
24 designee.
25 (e) Claim of Nationality or Registry. — A claim of nationality
26 or registry under this section includes only—
27 (1) possession on board the vessel and production of
28 documents evidencing the vessel’s nationality as provided
29 in article 5 of the 1958 Convention on the High Seas;
30 (2) flying its nation’s ensign or flag; or
31 (3) a verbal claim of nationality or registry by the master or
32 individual in charge of the vessel.
33
34 Id. § 70502 (emphasis added).
9
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1 Section 70504, captioned “Jurisdiction and venue,” of which part (a)
2 was added to the MDLEA in 19964, provides:
3 (a) Jurisdiction. —
4 Jurisdiction of the United States with respect to a vessel
5 subject to this chapter is not an element of an offense.
6 Jurisdictional issues arising under this chapter are
7 preliminary questions of law to be determined solely by the
8 trial judge.
9 (b)Venue. — A person violating section 70503 or 70508 —
10 (1) shall be tried in the district in which such offense was
11 committed; or
12 (2) if the offense was begun or committed upon the high
13 seas, or elsewhere outside the jurisdiction of any particular
14 State or district, may be tried in any district.
15 Section 70506(c) provides:
16
17 (c) Simple possession. —
18 (1) In general.—
19 Any individual on a vessel subject to the jurisdiction of the
20 United States who is found by the Secretary, after notice
21 and an opportunity for a hearing, to have knowingly or
22 intentionally possessed a controlled substance within the
23 meaning of the Controlled Substances Act (21 U.S.C. 812)
24 shall be liable to the United States for a civil penalty not to
25 exceed $5,000 for each violation. The Secretary shall notify
26 the individual in writing of the amount of the civil penalty.
27
28 Accordingly, to prosecute a criminal offense in violation of the
29 MDLEA, the government must establish, as a “preliminary question of law to
30 be determined by the court,” that the vessel on which the offense was
4
Pub.L. No. 104‐324, § 1138(a)(5), 110 Stat. 3901 (1996).
10
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1 committed was a covered vessel, which can be “a vessel subject to the
2 jurisdiction of the United States.” One way of proving that—the path
3 undertaken by the government in this case—is by showing that the vessel was
4 “without nationality” as defined in § 70502(d). That section offers three ways
5 in which a vessel can be shown to be without nationality. These require that
6 U.S. law enforcement officers take prescribed steps. If there is a “claim of
7 nationality or registry,” which can be asserted either by “possess[ing] on
8 board the vessel and produc[ing] . . . documents evidencing the vessel’s
9 nationality”; by “flying the nation’s ensign or flag”; or by “a verbal claim of
10 nationality or registry” by the “master or individual in charge.” 46 U.S.C.
11 § 70502(e), then the U.S. law enforcement officer can establish statelessness by
12 seeking verification from the registry of the nation whose registry is claimed;
13 if that registry office either “denies” registration or “does not affirmatively
14 and unequivocally” confirm it, the vessel is deemed “without nationality.”
15 Alternatively, an officer of the United States may “request” of the master or
16 person in charge to know whether there is a claim of nationality or registry,
17 and if that person fails to make a claim of registry, then the vessel is deemed
18 “without nationality.”
11
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1 II. Whether the Government Showed the Vessel Was “Subject
2 to the Jurisdiction of the United States”
3
4 Section 70504(a) imposes the obligation on the trial judge to determine,
5 as a “preliminary question[] of law,” whether the vessel in question was
6 subject to the jurisdiction of the United States. As § 70504(a) requires that the
7 trial judge make this determination as a preliminary matter, (i.e., prior to a
8 jury trial), the defendants’ motion to dismiss the indictment was superfluous
9 in this respect. At the hearing on that question, the burden was on the
10 government to show that the vessel was subject to the jurisdiction of the
11 United States. See, e.g., United States v. Perlaza, 439 F.3d 1149, 1160 (9th Cir.
12 2006) (“For the Government to prosecute someone under the MDLEA, the
13 Government must satisfy . . . [the] ‘statutory jurisdiction’ requirement.”);
14 United States v. Tinoco, 304 F.3d 1088, 1114 (11th Cir. 2006) (same). If an
15 indictment was premised on the vessel having been stateless and neither side
16 offered any evidence on that subject, the court would have no basis for
17 concluding that the vessel was subject to the jurisdiction of the United States
18 and would be compelled to dismiss the indictment.
19 The Coast Guard officers faced the question whether the prohibition of
20 the Act applied on board the go‐fast when they boarded it in international
12
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United States v. Prado
1 waters and found a cargo of a controlled substance aboard. The crucial issue
2 became whether the go‐fast was registered in any nation. If it was registered,
3 then the vessel was not a covered vessel that was “subject to the jurisdiction
4 of the United States,” and the prohibition set forth in MDLEA did not apply.
5 If the vessel was not registered in any nation, then the MDLEA did apply and
6 the defendants’ conduct violated U.S. law. The detailed provisions of the
7 statute, reviewed above, offered various ways for determining statelessness.
8 With respect to the making of a verbal claim of registration by the
9 master (or individual in charge), the formulation of § 70502(e)(3), as to how a
10 claim of registry is made, and that of § 70502(d)(1)(B), as to how a vessel’s
11 statelessness is shown, differ in an important respect. Under clause (e)(3), a
12 verbal assertion of nationality by the master constitutes a claim, which is then
13 tested by a U.S. officer’s inquiry of the nation’s registry authority. On the
14 other hand, the absence of a master’s claim of registration does not, by itself,
15 establish absence of registration. It is only if “on request” of a duly authorized
16 officer, the master “fail[s] to make a claim of nationality or registry,” that
17 statelessness is established.
13
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1 The Coast Guard boarding party’s inattention to the terms of the statute
2 virtually doomed the prosecution to failure at the investigation stage. If the
3 go‐fast was, in fact, not registered in any nation, its status as “subject to the
4 jurisdiction of the United States” could easily have been demonstrated to the
5 satisfaction of the MDLEA’s standards if the boarding party had followed
6 statutorily specified procedure. In the absence of indicia of registration such
7 as flying a nation’s flag, presenting registration papers, or a volunteered
8 assertion of national registration by the master, the statute calls on the
9 investigating officer to ask the master (or individual in charge) whether the
10 vessel is registered in any nation. See 46 U.S.C. § 70502(d)(1)(B). If that request
11 is made, and the master makes no claim of registry in response, that would
12 establish that the vessel is a “vessel without nationality” and thus “subject to
13 the jurisdiction of the United States.” If, on the other hand, there is a claim of
14 registry (such as an assertion of registry by the person in charge, the flying of
15 a nation’s flag, or the presence on board of documents indicating registry), it
16 is then incumbent on the Coast Guard officers to communicate (“by radio,
17 telephone, or similar oral or electronic means,” see id. § 70502(d)(2)) with the
18 registry office of the nation claimed to seek confirmation. Id. § 70502(d)(1)(c).
14
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1 Unless the registry office “affirmatively and unequivocally assert[s]” that the
2 vessel is registered, its failure to do so conclusively establishes statelessness
3 under the statute. Id.
4 The problem for the government in this prosecution was that the Coast
5 Guard officers first failed to follow the procedures by which statelessness can
6 be established, and then destroyed the vessel without having secured a vessel
7 identification number (or other means of identifying the vessel), which made
8 it impossible for the government to establish subsequently by other means
9 that the vessel was without nationality.
10 The district court found that the vessel was subject to U.S. jurisdiction
11 because the defendants, despite having “every reasonable opportunity, and
12 every good reason, to make a claim of nationality,” failed to do so. United
13 States v. Prado, 143 F. Supp. 3d 94, 99 (S.D.N.Y. 2015). That reasoning was not
14 consistent with the statute. As explained above, failure to volunteer a claim of
15 nationality does not suffice. Section 70502(d)(1)(B) makes clear that it is only if
16 the master or person in charge fails “on request of an officer of the United
15
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1 States” to make a claim that the failure establishes statelessness.5 Id. (emphasis
2 added).
3 That statutory distinction is only logical. The failure of the master of a
4 vessel to state the vessel’s nationality when asked supports a strong logical
5 inference of statelessness. On the other hand, mere silence in the absence of a
6 request for information supports no inference at all. In any event, the statute
7 clearly provides that statelessness is established by the master’s failure to
8 assert a claim only when that failure is in response to a request.
9 The District Court further found that “the go–fast had minimal, if any,
10 identifying features[,] [so that] [a]ttempting to trace the vessel back to any
11 possible [registry] documents on land would . . . have been a futile exercise,
12 since there was no meaningful identifying information that could be provided
13 to the Ecuadorian authorities.” Id. at 99. There was, however, no evidentiary
14 basis for the conclusion that the vessel had “no meaningful identifying
15 information.” Neither the Mahecha affidavit, nor any other evidence before
5The government’s evidence showed that none of the three defendants identified
himself as the master. That did not prevent the officers from making the inquiry.
They could have asked all three persons whether the vessel was registered, and if
none responded, that would have shown a failure by whichever was in charge to
make a claim.
16
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1 the court, showed that the vessel lacked a means of identification. It is a
2 common practice in the manufacture of vessels to identify each newly built
3 hull with a “hull identification number” or “HIN,” akin to a VIN for vehicles.
4 Such identification has been legally required by Coast Guard regulations for
5 all boats built in the United States since at least 1983. Hull identification
6 number display, 33 C.F.R. § 181.29 (1983). As with VINs, there is no
7 requirement that such HINs be large or conspicuously displayed. See id.
8 § 181.29(c) (“Each hull identification number must be carved, burned,
9 stamped, embossed, molded, bonded or otherwise permanently affixed to the
10 boat so that alteration, removal, or replacement would be obvious. If the
11 number is on a separate plate, the plate must be fastened in such a manner
12 that its removal would normally cause some scarring of or damage to the
13 surrounding hull area. A hull identification number must not be attached to
14 parts of the boat that are removable.”). The government made no contention
15 that the rules or practices in other countries are different. Neither the
16 Mahecha affidavit, nor the grainy video made by the Coast Guard officers,
17 nor any other evidence showed that the go‐fast lacked an HIN. While the
18 Mahecha affidavit stated that the go‐fast had no “signs of registry painted on
17
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1 the side of the vessel,” App’x 14, it made no assertion demonstrating the
2 absence of an HIN (or other means of identification).
3 The District Court also concluded that the display of the flag of
4 Ecuador affixed to the side of the vessel, as shown on the Coast Guard’s
5 video, was not large or prominent enough to qualify as flying Ecuador’s flag
6 (which under § 70502(e)(2) qualifies as a claim of nationality). Prado, 143 F.
7 Supp. 3d at 100–01. The court cited no authority for such a size or prominence
8 requirement. We need not pass on the correctness of that ruling as a matter of
9 law because nothing turns on it. Even if the go‐fast was not flying the flag,
10 that alone would be insufficient to establish that it was stateless and subject to
11 the jurisdiction of the United States. Under § 70502(c), the absence of a claim
12 of registry does not establish that the vessel is “without nationality.” To
13 establish statelessness in the absence of a claim of registry, the United States
14 officers must make a request of the master or person in charge for a claim of
15 registry. And if a claim is made in any of the ways specified by the statute, the
16 United States officers must seek verification from the claimed “nation of
17 registry.” 46 U.S.C. § 70502(d)(1)(C).
18
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1 Because of the Coast Guard’s failure to follow statutorily prescribed
2 steps that might have established statelessness at least to the satisfaction of
3 the MDLEA’s standards, followed by the Coast Guard’s destruction of the
4 vessel, it became virtually impossible for the government to demonstrate to
5 the court in the statutorily mandated preliminary hearing that the vessel was
6 subject to the jurisdiction of the United States and therefore that the MDLEA
7 applied.
8 Because the evidence presented by the government to the court in
9 support of the preliminary determination required by § 70504 was legally
10 insufficient to support a finding that the go‐fast was without nationality and
11 subject to the jurisdiction of the United States, the District Court’s finding that
12 the go‐fast was subject to the jurisdiction of United States must be vacated.
13 III. Did the government’s failure to demonstrate that the
14 vessel was without nationality mean that the court was
15 without subject matter jurisdiction?
16
17 The government argues that its failure to prove the vessel was subject
18 to the jurisdiction of the United States makes no difference because of the rule
19 that a defendant’s guilty plea waives all defects other than to the court’s
20 subject matter jurisdiction. Defendants respond that the rule cited by the
19
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1 government does not apply because the government’s failure to show that the
2 vessel was “subject to the jurisdiction of the United States” is a defect as to the
3 court’s subject matter jurisdiction. Accordingly, they argue that the federal
4 court lacked subject matter jurisdiction to hear the case, and their guilty pleas
5 did not constitute a waiver of the defect. Although defendants did not make
6 this contention until these appeals, they rely on the proposition that an
7 “objection that a federal court lacks subject‐matter jurisdiction may be raised
8 by a party, or by a court on its own initiative, at any stage in the litigation,
9 even after trial and the entry of judgment.” Arbaugh v. Y&H Corp., 546 U.S.
10 500, 506 (2006) (citations omitted). “Rule 12(h)(3) [Fed R. Crim. P.] instructs:
11 ‘Whenever it appears by suggestion of the parties or otherwise that the court
12 lacks jurisdiction of the subject matter, the court shall dismiss the action.’” Id.
13 We reject the defendants’ argument. Although the MDLEA’s term, “a
14 vessel subject to the jurisdiction of the United States,” has caused confusion,
15 we think it certain for numerous reasons that its function is not to confer
16 subject matter jurisdiction on the federal courts, but rather to specify the reach
17 of the statute beyond the customary borders of the United States.
18 “Jurisdiction” is a chameleon word. The Supreme Court has described it as
20
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1 having “many, too many, meanings.” Id. at 510 (quoting Steel Co. v. Citizens for
2 Better Env’t, 523 U.S. 83, 90 (1998)). Among its possible meanings, the two
3 here in contention are described in the language of legal scholarship as
4 “judicial jurisdiction” (or “jurisdiction to adjudicate”) and “legislative
5 jurisdiction” (or “jurisdiction to prescribe”).
6 Judicial jurisdiction raises the question whether a case comes within the
7 judicial power of the court, so that the court possesses the legal power to
8 adjudicate the case. Legislative, or prescriptive, jurisdiction concerns itself
9 with the reach of a nation’s (or any political entity’s) laws. With respect to
10 conduct occurring outside of a nation’s territory, it asks whether the nation
11 possesses, or has exercised, legislative power over those acts.6 The question
6 Willis L. M. Reese, the reporter for the second conflict of laws restatement, defines
“legislative jurisdiction” as “the power of a state to apply its law to create or affect
legal interests.” Willis L. M. Reese, Legislative Jurisdiction, 78 Colum. L. Rev. 1587,
1587 (1978). Judicial jurisdiction, on the other hand, is “the power of a state to try a
case in its courts. See generally Donald Earl Childress III, “Jurisdiction, limits under
international law,” in Encyclopedia of Private International Law (Elgar 2017)
(discussing the difference between jurisdiction to prescribe; jurisdiction to enforce;
and jurisdiction to adjudicate, of which subject matter jurisdiction and personal
jurisdiction are subcategories).
The Fourth Restatement of Foreign Relations Law makes a similar distinction,
employing the term “jurisdiction to prescribe”:
The foreign relations law of the United States divides
jurisdiction into three categories:
21
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1 whether U.S. statutes reach foreign conduct arises relatively infrequently in
2 the business of the U.S. courts. In contrast, jurisdiction to adjudicate,
3 commonly referred to in the jurisprudence of the federal courts as “subject
4 matter jurisdiction,” is an issue that arises on a daily basis in the United States
5 federal courts, because they are courts of limited jurisdiction and are charged
6 with an “an independent obligation to ensure that they do not exceed the
7 scope of their jurisdiction.” See Henderson ex rel. Henderson v. Shinseki, 562 U.S.
8 428, 434 (2011). As the result of their daily preoccupation with the issues of
9 subject matter jurisdiction, the federal courts have an instinctive inclination to
10 assume that threshold statutory references to “jurisdiction” refer to their
11 subject matter jurisdiction. As discussed below, in subpart 2, the Supreme
12 Court has warned against indulging that inclination.
(a) jurisdiction to prescribe, i.e., the authority of a state to
make law applicable to persons, property, or conduct;
(b) jurisdiction to adjudicate, i.e., the authority of a state to
apply law to persons or things, in particular through the
processes of its courts or administrative tribunals; and
(c) jurisdiction to enforce, i.e., the authority of a state to exercise its
power to compel compliance with law.”
See Restatement (Fourth) of Foreign Relations Law, § 401—Categories of Jurisdiction
(2018).
22
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1 A persuasive opinion of the First Circuit, United States v. Gonzalez, 311
2 F.3d 440 (1st Cir. 2002) (Boudin, J.), demonstrates that the MDLEA’s reference
3 poses the question whether its prohibition on drug possession extends to the
4 vessel in question – not whether a prosecution under the statute falls within
5 the subject matter jurisdiction of the federal courts. We agree. The factors that
6 compel our agreement with Gonzalez are: (i) A general provision of United
7 States law, 18 U.S.C. § 3231, which defines the subject matter jurisdiction of
8 the federal courts in relation to criminal statutes, confers subject matter
9 jurisdiction on the federal courts for such a prosecution. (ii) The Supreme
10 Court, recognizing the many different senses of the word “jurisdiction,” has
11 repeatedly warned against construing provisions that limit a statute’s
12 coverage as references to subject matter jurisdiction unless that meaning was
13 “clearly state[d]” in the statute. See Arbaugh, 546 U.S. at 515‐16. (iii) The
14 natural meaning of the words of the statute, if they are read in context in the
15 manner in which the various provisions and definitions fit together, make
16 clear that the term “vessel subject to the United States” specifies the reach, or
17 coverage, of the statute and does not in any way address the jurisdiction of
18 the court. (iv) Interpreting the phrase as a limitation on the court’s jurisdiction,
23
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United States v. Prado
1 rather than on the reach of the statute, would give the prohibitory clauses a
2 highly expansive and improbable meaning that would affront the sovereignty
3 of other nations. (v) The numerous federal statutes that confer subject matter
4 jurisdiction on federal courts uniformly express that concept through very
5 different formulations. (vi) Perhaps most important, the terms “subject to the
6 jurisdiction of the United States” and “vessel subject to the jurisdiction of the
7 United States” appear repeatedly in the MDLEA and other provisions of the
8 same Title 46 (which governs Shipping), in contexts where those phrases refer
9 unmistakably to the reach of United States laws (as exercises of legislative
10 jurisdiction) and not to the jurisdiction of the courts. (vii) The decisions of
11 other courts that have treated the provision as a limitation on court
12 jurisdiction have either not recognized that it could have another meaning or
13 have not recognized that the same phrase is used incompatibly with their
14 interpretation repeatedly throughout title 46, as well as in a parallel provision
15 of the very same MDLEA.
16 1. The statutory law governing the subject matter jurisdiction of federal courts
17 over federal criminal prosecutions. The question whether the federal courts have
18 subject matter jurisdiction over a prosecution of a criminal offense defined by
24
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United States v. Prado
1 the statutes of the United States is simply and conclusively answered by 18
2 U.S.C. § 3231. It states in clear, unambiguous words, “The district courts of
3 the United States have original jurisdiction . . . of all offenses against the laws
4 of the United States.” If the indictment alleges an offense under U.S. criminal
5 statutes, the courts of the United States have jurisdiction to adjudicate the
6 claim. If the facts fail to show a violation, the court enters judgment for the
7 defendant. It does not dismiss the case for lack of jurisdiction, leaving the case
8 unadjudicated. See United States v. Yousef, 750 F.3d 254, 259 (2d Cir. 2014)
9 (“Federal courts have subject‐matter jurisdiction over federal criminal
10 prosecutions by virtue of 18 U.S.C. § 3231, which vests the district courts with
11 the power to hear ‘all offenses against the laws of the United States.’”); see also
12 Lauritzen v. Larsen, 345 U.S. 571, 575 (1953) (holding that because “[a] cause of
13 action under [federal] law was asserted here, . . . the [federal] court had
14 power to determine whether it was or was not well founded in law and in
15 fact”); United States v. Williams, 341 U.S. 58, 65 (1951) (“The District Court had
16 jurisdiction of offenses against the laws of the United States. 18 U.S.C. § 3231 .
17 . . . Hence, it had jurisdiction of the subject matter, to wit, an alleged violation
18 of a federal conspiracy statute, and, of course, of the persons charged.”);
25
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1 Lamar v. United States, 240 U.S. 60, 65 (1916) (Holmes, J.) (“[N]othing can be
2 clearer than that the district court . . . acts equally within its jurisdiction
3 whether it decides a man to be guilty or innocent under the criminal law, and
4 whether its decision is right or wrong.”); United States v. Shellef, 507 F.3d 82, 96
5 (2d Cir. 2007) (“The district court had jurisdiction over the prosecution of
6 Shellef and Rubenstein pursuant to 18 U.S.C. § 3231 because they were
7 charged with violating federal criminal laws.”). As the offense specified in
8 § 70503 is undoubtedly an “offense under the laws of the United States,”
9 § 3231 confers subject matter jurisdiction of prosecutions under § 70503 on the
10 district courts.
11 To conclude that the district court nonetheless lacked jurisdiction of
12 this prosecution of an offense under the laws of the United States, we would
13 need to conclude that the MDLEA somehow displaced, superseded, or
14 limited § 3231’s express grant of jurisdiction. If it were the intention of the
15 MDLEA to place limits on the federal courts’ subject matter jurisdiction to
16 adjudicate such a case notwithstanding their clear empowerment by § 3231 to
17 do so, one would expect the limiting statute to say something to the effect of
18 “notwithstanding § 3231,” or “notwithstanding any other provision of law.”
26
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1 But there is not a word in the MDLEA to suggest that it conflicts with, limits,
2 or supersedes § 3231’s universal grant of subject matter jurisdiction to the
3 federal courts over criminal offenses specified in federal statutes. See Gonzalez,
4 311 F.3d at 442 (“[U]nless Congress provided otherwise, subject matter
5 jurisdiction existed in the present case [charging the defendant with criminal
6 violation of § 70503] because [the defendant] was charged in district court
7 under . . . a federal criminal statute.”).
8 2. The Supreme Court’s guidance for interpreting ambiguous statutory
9 requirements instructs that such a requirement does not go to subject matter
10 jurisdiction absent a “clear statement” to that effect. The term “jurisdiction” can
11 carry a variety of meanings; “In very general terms, ‘jurisdiction’ means
12 something akin to ‘authority over.’” Gonzalez, 311 F.3d. at 443 (quoting
13 BLACK’S LAW DICTIONARY 855 (7th ed. 1999)).
14 The Supreme Court has repeatedly addressed the problem that arises
15 when a litigant advocates interpreting an ambiguous statutory requirement as
16 a limitation on the subject matter jurisdiction of the federal courts. See
17 Henderson, 562 U.S. 428; Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010);
18 Arbaugh, 546 U.S. 500. In each of these cases, the Court insisted that statutory
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1 limitations should not be understood to limit the subject matter jurisdiction of
2 the courts unless that is the “clearly” stated intention of the statute. And in
3 each of these cases, the Court concluded that the contested ambiguous usage
4 did not refer to the subject matter jurisdiction of the federal courts. See
5 Arbaugh, 546 U.S. at 515 (cautioning that ambiguous statutory requirements
6 should not be interpreted as limiting the power to adjudicate unless “the
7 Legislature clearly states that a threshold limitation on a statute’s scope shall
8 count as jurisdictional” (emphasis added)). The Henderson opinion re‐
9 emphasized Arbaugh’s test, stating, “In Arbaugh, we applied a ‘readily
10 administrable bright line’ rule . . . . [W]e look to see if there is any ‘clear’
11 indication that Congress wanted the rule to be ‘jurisdictional.’” Henderson, 562
12 U.S. at 435‐36. In Reed Elsevier, the Court summarized, “Our recent cases
13 evince a marked desire to curtail . . . drive‐by jurisdictional rulings.” Reed
14 Elsevier, 559 U.S. at 161 (internal quotation marks omitted).
15 The Court has explained that its requirement of a clear statement is
16 justified by the “unfairness and waste of judicial resources . . . entailed in
17 tying [a] requirement to subject–matter jurisdiction.” Arbaugh, 546 U.S. at 515.
18 When a statutory requirement is treated as an obstacle to the court’s subject
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1 matter jurisdiction, the court’s jurisdiction may be challenged for the first
2 time and new arguments raised long after the court has entered judgment. See
3 id. at 506. That is what the Supreme Court seeks to avoid, except where
4 Congress has clearly stated a contrary intention.
5 3. The words “vessel subject to the jurisdiction of the United States” specify
6 how far the prohibitions reach into circumstances potentially conflicting with the
7 sovereignty of other nations and make no apparent reference to the limited subject
8 matter jurisdiction of the district courts. The natural meaning of the statutory
9 words, if read in context rather than in isolation, clearly specifies (and limits)
10 the scope, reach, or coverage of the statutory prohibition, without reference to
11 the court’s jurisdiction. Section 70503(a) make it a criminal offense to possess
12 controlled substances (with intent to distribute) if the possession occurs “on
13 board a covered vessel” (emphasis added). “Covered vessel[s]” include three
14 categories: (i) a vessel of the United States; (ii) a vessel on which the
15 individual who possesses the drugs with intent to distribute is a citizen or
16 resident of the United States; (iii) a vessel subject to the jurisdiction of the
17 United States. See id. at § 70503(e). “Vessel subject to the jurisdiction of the
18 United States” is an umbrella term, which specifies categories of vessels that
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1 are neither vessels of the United States nor vessels on which the person in
2 possession of the drugs is a United States citizen or resident. This category is
3 tailored to exercise Congressional regulatory authority in circumstances
4 where the regulatory interest of the United States is clear, and to avoid
5 exercising regulatory authority where doing so would cause conflict with the
6 sovereignty of other nations. The category includes “vessels without
7 nationality”; vessels that are in, or entering, or have departed from United
8 States waters; and, only if the foreign nation consents to the enforcement of
9 the United States law (or waives objection), vessels registered in a foreign
10 nation, or in the waters of a foreign nation. See id. at § 70502(c)(1). The
11 coverage therefore generally excludes non‐U.S. vessels in the waters of
12 another nation, and vessels registered in another nation, unless that nation
13 consents or waives objection.
14 The MDLEA thus makes clear in what circumstances vessels are
15 covered by the statute’s prohibition. If the vessel falls outside the prescribed
16 coverage, it is not a “covered vessel” and the prohibition specified in § 70503
17 does not apply to it. None of this in any way addresses the jurisdiction of the
18 United States courts, which is normal, because (as demonstrated above) the
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1 jurisdiction of the United States courts over “all offenses against the laws of
2 the United States” is provided by another statute. See 18 U.S.C. § 3231. The
3 function of the term “vessel subject to the jurisdiction of the United States” is
4 to identify those vessels that fall into one of the three categories of vessels that
5 are “covered.”
6 Specifying the circumstances in which a nation’s laws apply
7 extraterritorially typifies a legislature’s exercise of legislative jurisdiction by
8 defining the statute’s reach.7 The general subject of legislative jurisdiction
9 encompasses at least three legislative concerns: (i) whether it is consistent
10 with international law to so extend the reach of the nation’s laws; (ii) whether
11 doing so respects comity among nations, or would cause undesired friction
12 with foreign nations; and, finally, (iii) exactly how the extraterritorial reach of
13 the statute is defined.8 The relevant provisions of the MDLEA evince concern
7 Restatement (Fourth) of Foreign Relations Law, § 401—Categories of Jurisdiction
(2018) (defining “jurisdiction to prescribe” as a state’s authority “the authority of a
state to make law applicable to persons, property, or conduct”); Willis L. M. Reese,
Legislative Jurisdiction, 78 COLUM. L. REV. 1587, 1587 (1978) (describing
“legislative jurisdiction” as “the power of the state to apply its law to create or affect
legal interest”).
8 Courts have long assumed that Congress, in deciding whether and the extent to
which it exercises extraterritorial prescriptive jurisdiction, bears in mind the
potential for international discord that may arise from aggressive exercises of
extraterritorial jurisdiction. Restatement (Fourth) of Foreign Relations Law, § 405—
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1 for each of these. With respect to “vessel[s] subject to the jurisdiction of the
2 United States,” the limits Congress imposed on the reach of the MDLEA to
3 stateless vessels in international waters reflect concern for both international
4 law and prescriptive comity. See McCulloch v. Sociedad Nacional de Marineros de
5 Honduras, 372 U.S. 10, 21 (1963) (finding that the National Labor Relations Act
6 does not apply to foreign‐flagged vessels because of, inter alia, “the well‐
7 established rule of international law that the law of the flag state ordinarily
8 governs the internal affairs of a ship” and “possibility of international
9 discord” that would arise from the “concurrent application of the [NLRA]
10 and the Honduran Labor Code”); see also Lauritzen v. Larsen, 345 U.S. 571, 577
11 (1953) (“While some [shipping laws] have been specific in application to
12 foreign shipping and others in being confined to American shipping, many
Reasonableness in Interpretation, cmt. a (2018) (“Reasonableness and prescriptive
comity: In interpreting the geographic scope of federal law, courts seek to avoid
unreasonable interference with the sovereign authority of other states. This principle
of interpretation accounts for the legitimate sovereign interests of other nations.”); F.
Hoffman‐La Roche Ltd. v. Empagran. S.A, 542 U.S. 155, 164 (2004) (assessing whether
the extraterritorial exercise of prescriptive jurisdiction comports with “prescriptive
comity”). See also Murray v. Schooner Charming Betsy, 2 Cranch 64, 118, 2 L.Ed. 208
(1804) (“[A]n act of congress ought never to be construed to violate the law of
nations if any other possible construction remains.”). Moreover, courts assume that
Congress did not intend to exercise jurisdiction beyond the limits imposed by
international law wherever and thus “will attempt to construe federal statutes to
avoid conflicts with international law governing jurisdiction to prescribe.” Id. at
§ 406—Interpretation Consistent with International Law, cmt. a.
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1 give no evidence that Congress addressed itself to their foreign application
2 and are in general terms which leave their application to be judicially
3 determined from context and circumstance. By usage as old as the Nation,
4 such statutes have been construed to apply only to areas and transactions in
5 which American law would be considered operative under prevalent
6 doctrines of international law.”).
7 Congress here took pains to avoid interference with vessels regulated
8 by other nations (absent the other nation’s consent), such as by excluding
9 from coverage vessels registered in other nations in international waters and
10 vessels within the territorial waters of other nations, and by specifying the
11 particular facts that can demonstrate that a vessel is without nationality and
12 thus subject to the jurisdiction of the United States. In so doing, it specified
13 the extent to which the law overcomes the “presumption against
14 extraterritoriality,” that U.S. laws are generally presumed to have only
15 domestic effect unless Congress clearly manifests a contrary intention. See
16 Morrison v. Natʹl Australia Bank Ltd., 561 U.S. 247, 255 (2010) (holding that
17 “[w]hen a statute gives no clear indication of an extraterritorial application, it
18 has none”); see also RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2093
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1 (2016). The MDLEA specifies that its substantive prohibition applies
2 extraterritorially “even though the [prohibited] act is committed outside the
3 territorial jurisdiction of the United States.” 46 U.S.C. § 70503(b). Defining the
4 extent of extraterritorial application of a law is an exercise of prescriptive
5 jurisdiction.
6 The Supreme Court has chastised us before for treating a question of
7 the prescriptive reach of a U.S. statute as if it placed a limit on the subject
8 matter jurisdiction of the federal courts. In Morrison, our court had dismissed
9 for lack of subject matter jurisdiction a civil suit alleging violation of the
10 antifraud provision of the Securities Exchange Act of 1934 because we
11 concluded that the statute did not apply to the wholly foreign facts. See
12 Morrison, 561 U.S. at 254. The Supreme Court corrected our reasoning,
13 explaining that the extent of the statute’s extraterritorial reach is not an issue
14 related to the court’s jurisdiction: “[T]o ask what conduct § 10(b) reaches is to
15 ask what conduct § 10(b) prohibits, which is a merits question. Subject‐matter
16 jurisdiction, by contrast, refers to a tribunalʹs power to hear a case.” Id.
17 (internal quotation marks omitted).The point was also made by Judge
18 Friendly in Fogel v. Chestnutt, 668 F.2d 100 (2d Cir. 1981): “[W]hen the plaintiff
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1 bases his cause of action upon an act of Congress[,] [the jurisdiction of the
2 court] cannot be defeated by a plea denying the merits of his claim.” Id. at 106
3 (first alteration in original) (quoting Fair v. Kohler Die &Specialty Co., 228 U.S.
4 22, 25 (1913) (Holmes, J.)). Similarly, the question posed by § 70503 whether
5 its prohibition reaches the vessel on the high seas where the contraband cargo
6 was found—is a question of prescriptive jurisdiction.
7 This is not to say that the MDLEA is devoid of potential confusions. In
8 1996, after many years of its prohibition on possession of controlled
9 substances on vessels “subject to the jurisdiction of the United States,”
10 Congress added the provisions now identified as § 70504(a) that
11 “[j]urisdiction of the United States . . . is not an element of an offense,” and
12 that “[a]ll jurisdiction issues arising under this chapter are preliminary
13 questions of law to be determined solely by the trial judge.” 46 U.S.C.
14 § 70504(a). As discussed further below, this amendment has misled some
15 courts to reason that, if the vessel’s status as “subject to the jurisdiction of the
16 United States” is not an element of the offense, it must be a limitation on the
17 court’s subject matter jurisdiction. See United States v. Miranda, 780 F.3d 1185,
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1 1195 (D.C. Cir, 2015); United States v. Bustos‐Useche, 273 F.3d 622, 626 (5th Cir.
2 2001).
3 There are, however, strong reasons to reject that interpretation of the
4 amendment. First, if Congress had intended this addition to change
5 drastically the meaning of the prohibition on possession of narcotics on
6 vessels subject to the jurisdiction of the United States, this would have been
7 an oddly obscure and indirect way to go about saying something that would
8 have been so easy to state in straightforward fashion.
9 The provisions of § 70504(a) were enacted a year after the Supreme
10 Court decided in United States v. Gaudin, 515 U.S. 506, 522–23 (1995), that an
11 “element of the offense” must be submitted to the jury. Presumably that is
12 why Congress described the “jurisdiction of the United States” as “not an
13 element of an offense” in prescribing that it “be determined solely by the trial
14 judge.” However, Congress’s evident desire to exclude these issues from jury
15 consideration did not amount to a congressional statement that they now
16 involved the court’s subject matter jurisdiction. Describing the issue as “not
17 an element of an offense” is not to say that it is not an element of legislative
18 jurisdiction–‐a so‐called “jurisdictional element”—specifying what is needed
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1 so that the reach of the statutory prohibition extends to conduct occurring
2 outside the territorial borders. There is a significant conceptual difference
3 between provisions of a criminal statute that identify the offensive conduct
4 prohibited and provisions that specify the conditions necessary for the statute
5 to reach that conduct. The Supreme Court later explicitly recognized the
6 difference in Torres v. Lynch, 136 S. Ct. 1619, 1630 (2016), noting the distinction
7 between a statute’s “jurisdictional element”—the portion of the statute
8 “connect[ing] the law to one of Congress’s enumerated powers, thus
9 establishing legislative authority”—and the “substantive elements,” which
10 “describe the evil Congress seeks to prevent.”
11 It is true, as Judge Boudin observed in Gonzalez, 311 F.3d at 444, that by
12 allocating “jurisdictional issues” to the judge, “Congress [] introduced a
13 possible Sixth Amendment objection to the statute.”9 But as of 1996, the
9Judge Boudin’s concern came closer to realization in 2016, when the Supreme
Court rendered decisions in Torres and Taylor v. United States, 136 S.Ct. 2074 (2016).
In Torres, the Court asserted in dictum that jurisdictional elements, like offense
elements, must be “proved to a jury beyond a reasonable doubt.” Torres, 136 S.Ct. at
1630. (The assertion was dictum because it had no bearing on the Court’s decision.)
Then in Taylor, the Court stated, “[T]he Government in a Hobbs Act prosecution
must prove beyond a reasonable doubt that the defendant engaged in conduct that
satisfies the Actʹs commerce element, but the meaning of that element is a question
of law.” Taylor, 136 S.Ct. at 2080. This statement was also dictum, which had no
effect on the judgment, as the government had proved the commerce element
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1 Supreme Court had made no such ruling, and there is no reason to suppose
2 that Congress believed it could not, consistent with the Constitution, give the
3 court the sole authority to determine a jurisdictional element. There is
4 likewise no reason to interpret the words of the statute to mean anything
5 other than what they seem on their face to convey.
6 The MDLEA’s legislative history contains no suggestion “that Congress
7 had in mind the court’s subject matter jurisdiction or that it meant to prevent
8 a guilty plea from being given its normal effect.” Gonzalez, 311 F.3d at 443.
9 The conference report on the 1996 Coast Guard Authorization Act, by which
10 what is now § 70504 was added, evidences an intent to strengthen the
11 effectiveness of the MDLEA in combating drug trafficking on the high seas:
12 The Conference substitute [for diverging
13 Senate and House versions of the bill]
14 establishes new law enforcement provisions
15 which expand the Governmentʹs prosecutorial
16 effectiveness in drug smuggling cases. Claims
beyond reasonable doubt in the jury trial, and the Court furthermore made no
mention of whether the commerce element needed to be proved to the jury.
Nonetheless, the Court’s utterances in Torres and Taylor increase the likelihood that
the Court will invalidate § 70504(a)’s provision that the jurisdiction of the United
States be determined solely by the trial judge. In future prosecutions under § 70503
with respect to vessels “subject to the jurisdiction of the United States,” trial courts
might be well advised after making the preliminary determination required by
§ 70504(a) so that trial may proceed, to submit the issue of jurisdiction over the
vessel to the jury notwithstanding the statutory word “solely.”
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1 of foreign registry must be “affirmatively and
2 unequivocally” verified by the nation of
3 registry to be valid. People arrested in these
4 international situations would not be able to
5 use as a defense that the U.S. was acting in
6 violation of international law regarding
7 recognition of registry at the time of the arrest.
8 . . . Jurisdictional issues would always be issues
9 of law to be decided by the trial judge, not
10 issues of fact to be decided by the jury.
11
12 142 Cong. Rec. H11485 § 1138 (Sept. 27, 1996). The President’s signing
13 statement similarly announces a goal to “strengthen drug interdiction by
14 clarifying U.S. jurisdiction over vessels in international waters.” Presidential
15 Statement on Signing the Coast Guard Authorization Act of 1996, 1996 PUB.
16 PAPERS 1869 (Oct. 19, 1996). Interpreting the statutory reference to
17 “jurisdiction of the United States” as meaning the subject matter jurisdiction
18 of the federal courts, thus enabling defendants who had pleaded guilty to
19 reopen the issue of statelessness long after their pleading guilty (at a time
20 when the government might no longer be able to prove the necessary facts to
21 establish jurisdiction), would weaken, not strengthen the Act’s effectiveness
22 in drug interdiction. The meaning of § 70503 did not change as a result of the
23 addition of a requirement that the court decide jurisdiction as a matter of law.
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1 4. Interpreting the phrase, “a vessel subject to the jurisdiction of the United
2 States,” as meaning a restriction on the jurisdiction of federal courts to hear a case
3 (rather than as a limitation on the reach of the statute), would give the prohibitory
4 terms of the statute a highly expansive, bizarre, unlikely meaning that would affront
5 the sovereignty of other nations. Interpreting the phrase, “vessel subject to the
6 jurisdiction of the United States” as a limitation on the jurisdiction of the U.S.
7 courts (rather than as a limitation on the reach of the statute), apart from the
8 fact that it distorts the clear apparent meaning of the statute’s words, causes
9 bizarre distortions to the meaning of the statute that Congress is highly
10 unlikely to have intended.
11 For example, the jurisdiction of the court to adjudicate the prosecution
12 would turn on the government’s ability to prove that the vessel was
13 “covered” for one of the three categories of “covered vessel[s],” but not for
14 the other two. Thus, if the prosecution is brought on the theory that the vessel
15 is a “vessel of the United States” (because the vessel is “owned in any part by
16 an individual who is a citizen of the United States,” see 46 U.S.C.
17 § 70502(b)(2)), or on the theory that the “individual [in possession of the
18 drugs] is a citizen of the United States,” see id. at §§ 70503(e)(1), (2), the court
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1 would have jurisdiction regardless of whether the government proved the
2 facts necessary for coverage. If the government failed to prove that the vessel
3 was covered, the court would exercise jurisdiction and acquit the defendant.
4 On the other hand, if the prosecution were premised on the vessel being
5 “without nationality” (one of the categories of vessels that are “subject to the
6 jurisdiction of the United States”), the failure of the government to prove that
7 the vessel was unregistered would not result in acquittal, but would deprive
8 the court of jurisdiction to enter a judgment of acquittal. There is no apparent
9 reason why Congress would have wanted to make the jurisdiction of the
10 court turn on satisfactory proof of coverage for one of the three categories of
11 covered vessels, but not for the other two.
12 Interpreting “subject to the jurisdiction of the United States” as a
13 limitation on the jurisdiction of the court, rather than on the reach of the
14 statute, would have still more bizarre consequences for the meaning of the
15 statute. If that phrase is a limit on the jurisdiction of the court, rather than on
16 the reach of the statute, it would mean that the statute prohibits drug
17 possession on foreign‐registered vessels and on vessels in the waters of
18 foreign nations, regardless of whether those nations consented. The United
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1 States Coast Guard would be authorized to enforce violations by boarding
2 such vessels in the waters of foreign nations, seizing the drugs, and arresting
3 foreign nationals in possession.10 The only limitation on enforcement would
4 be the unavailability of a court to impose criminal penalties. Passing a law
5 purporting to criminalize drug possession by aliens on vessels registered in
6 other nations or in the waters of other nations would create the very sort of
7 affront to other nations that Congress clearly sought to avoid by the way it
8 tailored the statute’s coverage. The words of the statute show a clear intent of
9 Congress’s that the statute not apply in such circumstances that would affront
10 the sovereignty of other nations. That intent is realized only if “vessel subject
11 to the jurisdiction of the United States” is construed as a limitation on the
12 reach of the statute.
10
As Justice Breyer observed in Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108
(2013) (concurring opinion), “a ship is like land, in that it falls within the jurisdiction
of the nation whose flag it flies.” Id. at 130 (citing McCulloch v. Sociedad Nacional de
Marineros de Honduras, 371 U.S. 10, 20–21 (1963) (referring to “the well‐established
rule of international law that the law of the flag state ordinarily governs the internal
affairs of a ship”); United States v. Palmer, 16 U.S. (3 Wheat) 610, 632 (1818)
(describing piracy as an “offenc[e] against the nation under whose flag the vessel
sails, and within whose particular jurisdiction all on board the vessel are”);
RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 502, cmt d
(1986) (“The flag state has jurisdiction to prescribe with respect to any activity
aboard the ship.”)).
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1 Finally, it would have been inexplicably strange for Congress to
2 criminalize drug possession in those circumstances, only to deny the courts
3 authority to adjudicate the prosecutions for the violations.
4 5.The verbal formulations of statutes conferring subject matter jurisdiction on
5 the courts uniformly adopt a very different terminology. It is further instructive to
6 compare the language of the MDLEA with the many acts of Congress that do
7 confer subject matter jurisdiction on the federal courts. Section 3231, which
8 confers subject matter jurisdiction in the federal courts in criminal cases, and
9 the many statutes of Chapter 85 of the Judicial Code, Title 28, U.S. Code, that
10 confer subject matter jurisdiction on the federal courts in civil cases,
11 uniformly employ a forthright formulation, clearly stating, with tiny
12 variations, “The district courts . . . shall have . . . jurisdiction of [a specified
13 category of case].”11 The MDLEA contains no such language.
11See, e.g., 28 U.S.C. § 1330 (“The district courts shall have original jurisdiction . . . of
any nonjury civil action against a foreign state . . . .”); id. § 1331 (“The district courts
shall have original jurisdiction of all civil actions arising under the Constitution,
laws or treaties of the United States.”); id. § 1332 (“The district courts shall have
original jurisdiction of all civil actions where the matter in controversy exceeds the
sum or value of $75,000, . . . and is between—citizens of different states . . . .”); id.
§ 1333 (“The district courts shall have original jurisdiction, exclusive of the courts of
the states, of: (1) any civil case of admiralty or maritime jurisdiction . . . .”): id. § 1334
(“[T]he district courts shall have original jurisdiction of all cases under title 11
[bankruptcy cases and proceedings] . . . .”); id. § 1335 (“The district courts shall have
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original jurisdiction of any civil action of interpleader or in the nature of
interpleader . . . .”); id. at § 1336 (“Except as otherwise provided by Act of Congress,
the district courts shall have jurisdiction of any civil action to enforce, in whole or in
part, any order of the Surface Transportation Board . . . .”); id. § 1337 (“The district
courts shall have original jurisdiction of any civil action or proceeding arisng under
any Act of Congress regulating commerce or protecting trade and commerce against
restraints and monopolies . . . .”); id. § 1338(a) (“The district courts shall have
original jurisdiction of any civil action arising under any Act of Congress relating to
patents . . . .”); id. § 1338(b) (“The district courts shall have original jurisdiction of
any civil action asserting a claim of unfair competition when joined with a
substantial and related claim under the copyright, patent, plant variety protection or
trademark laws.”): id. § 1339 (“The district courts shall have original jurisdiction of
any civil action arising under any Act of Congress relating to the postal service.”); id.
§ 1340 (“The district courts shall have original jurisdiction of any civil action arising
under any Act of Congress providing for internal revenue . . . .”); id. § 1343 (“The
district courts shall have original jurisdiction of any civil action authorized by law to
be commenced by any person . . . [t]o recover damages for injury to his person or
property, or because of the deprivation of any right or privilege of a citizen of the
United States, by any act done in furtherance of any conspiracy mentioned in section
1985 of Title 42 . . . .”); id. § 1344 (“The district courts shall have original jurisdiction
of any civil action to recover possession of any office, except that of elector of
President or Vice President, United States Senator, Representative in or delegate to
Congress, or member of a state legislature, authorized by law to be commenced,
where in it appears that the sole question touching the title to office arises out of
denial of the right to vote, to any citizen offering to vote, on account of race, color or
previous condition of servitude.”); id. § 1345 (“Except as otherwise provided by Act
of Congress, the district courts shall have original jurisdiction of all civil actions,
suits or proceedings commenced by the United States, or by any agency or officer
thereof expressly authorized to sue by Act of Congress.”); id. § 1346(a) (“The district
courts shall have original jurisdiction, concurrent with the United States Court of
Federal Claims, of . . . [a]ny civil action against the United States for the recovery of
any internal‐revenue tax alleged to have been erroneously or illegally assessed or
collected . . . .”); id. § 1346(d) (“The district courts shall not have jurisdiction under
this section of any civil action or claim for a pension.”); id. § 1346(f) (“The district
courts shall have exclusive original jurisdiction of civil actions under section 2409a
to quiet title to an estate or interest in real property in which an interest is claimed
by the United States.”); id. § 1347 (“The district courts shall have original jurisdiction
of any civil action commenced by any tenant in common or joint tenant for the
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1 The point is not merely that the MDLEA’s formulation differs from that
2 used by Congress to confer jurisdiction on the federal courts. The MDLEA not
3 only uses a very different formulation, but one which, on its face, contains
4 neither a “clear statement” of intent to affect the jurisdiction on the federal
5 courts, nor even a less‐than‐clear statement of such intent. If Congress had
6 intended, either implicitly in enacting §§ 70502 and 70503, or in the 1996
7 amendment, to limit the subject matter jurisdiction of the federal courts, there
8 is every reason to believe it would have used a formula that communicated
9 the intended message. The proposition that the federal courts will have
10 jurisdiction of a specified category of cases is so easy to state in clear, simple
11 language, that it would be inexplicably astonishing if Congress, desiring to
12 achieve that objective, had done such a bad job of stating it in the statutory
13 language.
partition of lands where the United States is one of the tenants in common or joint
tenants.”); id. § 1367 (“(a) Except as provided in subsections (b) and (c) or as
expressly provided otherwise by Federal statute, in any civil action of which the
district courts have original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in the action within
such original jurisdiction that they form part of the same case or controversy under
Article III of the United States Constitution. Such supplemental jurisdiction shall
include claims that involve the joinder or intervention of additional parties.”).
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1 6. Other provisions of the MDLEA and of Title 46 use the formulation of
2 § 70503 in circumstances that cannot refer to the subject matter jurisdiction of the
3 federal courts. Perhaps what most persuasively demonstrates that § 70503’s use
4 of the phrase “vessel subject to the jurisdiction of the United States” is not
5 intended to confer subject matter jurisdiction on the federal courts is that
6 other provisions of the MDLEA and Title 46 employ the same terminology
7 referring to vessels and waters “subject to the jurisdiction of the United
8 States” in a manner that cannot refer to the subject matter jurisdiction of the
9 U.S. courts. Other statutes throughout Title 46, the shipping title of the United
10 States Code, use the phrase “subject to the jurisdiction of the United States” to
11 refer to the waters where the provisions of United States laws will apply.12
12See, e.g., 46 U.S.C. § 2101(49) (defining a “tank vessel” as one which “transfers oil
or hazardous material in a port or place subject to the jurisdiction of the United States”);
id. at § 2301 (stating that the chapter titled “Operation of Vessels Generally” “applies
to a vessel operating on waters subject to the jurisdiction of the United States (including
the territorial sea of the United States as described in Presidential Proclamation No.
5928 of December 27, 1988) and, for a vessel owned in the United States, on the high
seas”); id. § 3715(a)(3) (providing that “[a] vessel may transfer oil or hazardous
material in a port or place subject to the jurisdiction of the United States, when the cargo
has been transferred from another vessel on the navigable waters of the United
States or in the marine environment, only if– . . . the delivering and the receiving
vessel had on board at the time of transfer, a certificate of financial responsibility as
would have been required under section 1016 of the Oil Pollution Act of 1990, had
the transfer taken place in a place subject to the jurisdiction of the United States”); id.
§ 3716(a) (providing that “[a] vessel may not transfer cargo in a port or place subject
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to the jurisdiction of the United States if, before arriving, the vessel has discharged tank
washings containing oil or hazardous material in preparation for loading at that
port or place in violation of the laws of the United States or in a manner or
quantities inconsistent with a treaty to which the United States is a party”); id.
§ 4301(a) (providing that chapter titled “Recreational Vessels” “applies to a
recreational vessel and associated equipment carried in the vessel on waters subject
to the jurisdiction of the United States (including the territorial sea of the United States
as described in Presidential Proclamation No. 5928 of December 27, 1988) and, for a
vessel owned in the United States, on the high seas”); id. § 4304 (stating that “[t]he
Secretary and the Secretary of the Treasury may authorize by joint regulations the
importation of any nonconforming recreational vessel or associated equipment on
conditions, including providing a bond, that will ensure that the recreational vessel
or associated equipment will be brought into conformity with applicable safety
regulations and standards of the Government before the vessel or equipment is
operated on waters subject to the jurisdiction of the United States”); id. § 12115 (c)
(providing that a vessel documented under the “Temporary endorsement for vessels
procured outside the United States” section is “subject to the jurisdiction and laws of
the United States”); id. § 70102 (directing the Secretary of the department in which the
Coast Guard is operating, see id. § 70101 (5), to “conduct an assessment of vehicle
types and United States facilities on or adjacent to the waters subject to the jurisdiction
of the United States to identify those vessel types and United States facilities that pose
a high risk of being involved in a transportation security incident”); id. § 70303(c)(7)
(directing the Secretary to “require each owner or operator of a vessel or facility
located within or adjacent to waters subject to the jurisdiction of the United States to
implement any necessary interim security measures, including cargo security
programs, to deter to the maximum extent practicable a transportation security
incident until the security plan for that vessel or facility operator is approved”); id.
§ 70106(a)(1) (directing the Secretary to “establish deployable specialized forces of
varying capabilities as are needed to safeguard the public and protect vessels,
harbors, ports, facilities, and cargo in waters subject to the jurisdiction of the United
States from destruction, loss or injury from crime, or sabotage due to terrorist
activity”); id. § 70108(d) (describing chain of command “[d]uring a transportation
security incident on or adjacent to waters subject to the jurisdiction of the United
States”); id. § 70113(a) (directing the Secretary to “implement a system to collect,
integrate, and analyze information concerning vessels operating on or bound for
waters subject to the jurisdiction of the United States”).
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1 These provisions do not contemplate proceedings in the federal courts. Some
2 of these references authorize the Secretary to prescribe regulations governing
3 shipping in waters “subject to the jurisdiction of the United States.” Their
4 context clearly refers to the reach of U.S. law and not to the subject matter
5 jurisdiction of the U.S. courts.
6 The most pertinent to our inquiry is another provision of this very
7 statute. Section 70506(c) of the MDLEA, enacted in 2010,13 which, like
8 § 70503(a), prohibits drug possession on “a vessel subject to the jurisdiction of
9 the United States,” applies in circumstances in which the federal courts will
10 play no role whatsoever. Mere possession of a controlled substance (i.e.,
11 without intent to distribute) on “a vessel subject to the jurisdiction of the
12 United States,” is declared to be a “violation,” to be enforced in
13 administrative proceedings conducted by the Secretary. Thus, another section
14 of the same statute employs the same phrase (“a vessel subject to the
15 jurisdiction of the United States”) in the same context (prohibiting drug
16 possession on board the vessel), having no reference to the subject matter
17 jurisdiction of the United States courts, as the proceedings it authorizes will
13 Maritime Drug Law Enforcement Act, 46 U.S.C. § 70506(c), 124 Stat. 2905, 2923(2010).
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1 not be conducted in the United States courts. To accept the defendants’
2 argument that “a vessel subject to the jurisdiction of the United States,” as
3 used in §§ 70502 and 70503, means a limitation on the subject matter
4 jurisdiction of the federal district courts, one would need to construe these
5 words as having a drastically different meaning from the same words used in
6 the same context to define a less serious violation specified in § 70506. See
7 Sorenson v. Sec. of the Treasury of the U.S., 475 U.S. 851, 860 (1986) (“The normal
8 rule of statutory construction assumes that identical words used in different
9 parts of the same act are intended to have the same meaning.” (internal
10 quotation marks omitted)).
11 7. No prior court decisions have advanced persuasive arguments for
12 construing this statute as a limitation of the jurisdiction of the federal courts.
13 While in a few instances courts have treated the MDLEA’s reference to
14 a ”vessel subject to the jurisdiction of the United States” as a limitation on the
15 subject matter jurisdiction of the federal courts, the majority of those decisions
16 have simply assumed reflexively that a reference to “jurisdiction” means the
17 subject matter jurisdiction of the court, without considering any possible
18 alternative meaning. Only three opinions of Courts of Appeals, Gonzalez, 311
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1 F.3d 440, Bustos‐Useche, 273 F.3d 622, and Miranda, 780 F.3d 1185, have
2 confronted the question whether the reference was to the reach of the statute
3 or to the jurisdiction of the court, and only Bustos‐Useche and Miranda have
4 reached the latter conclusion.
5 We turn to the decisions of the various Circuits that treat this language
6 as referring to the subject matter jurisdiction of the court. The majority of
7 opinions dealing with convictions for violation of the MDLEA have been, not
8 surprisingly in view of its geographic situation, in the Eleventh Circuit.
9 Defendants cite the Eleventh Circuit’s decision in United States v. De La Garza,
10 516 F. 3d 1266 (11th Cir. 2008), as having concluded that the MDLEA’s
11 reference to “the jurisdiction of the United States” means the subject matter
12 jurisdiction of the federal courts. This is incorrect. The De La Garza decision
13 did not conclude that the phrase means “within the subject matter jurisdiction
14 of the United States courts.” The De La Garza decision merely noted that the
15 Circuit had previously, in United States v. Tinoco, 304 F.3d 1088, 1107 (8th Cir.
16 2002), “interpreted the ‘on board a vessel subject to the jurisdiction of the
17 United States’ portion of the MDLEA as a congressionally imposed limit on
18 courts’ subject matter jurisdiction.” De La Garza, 516 F.3d at 1271. The De La
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1 Garza opinion recognized in a footnote that the government was challenging
2 Tinoco’s interpretation and was arguing that the statutory reference to
3 “jurisdiction” “deals with the territorial jurisdiction of the United States and
4 not the adjudicatory power of the federal courts.” Id. at 1271–72 n.3. The court
5 avoided deciding the question, concluding that it “need not decide the issue
6 to resolve this appeal” because, regardless of which interpretation of
7 “jurisdiction” was correct, it had been established in the district court
8 proceedings that the vessel was subject to the jurisdiction of the United States.
9 Id.
10 The previous Tinoco opinion had not interpreted the statutory phrase as
11 referring to the subject matter jurisdiction of the courts; it had simply adopted
12 that interpretation from prior rulings of the Eleventh Circuit in United States v.
13 Medina, 90 F.3d 459 (11th Cir. 1996), and United States v. Ayarza‐Garcia, 819
14 F.2d 1043 (11th Cir. 1987). Medina and Ayarza‐Garcia, in turn, had simply
15 assumed that the statutory reference to “jurisdiction” meant the subject
16 matter jurisdiction of the federal courts without considering any alternative
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1 meaning.14 See Medina, 90 F.3d at 463; Ayarza‐Garcia¸819 F.2d at 1048. The
2 question, as seen by the court in all three cases, was whether a factual issue
14Like Medina and Ayarza‐Garcia, our court assumed in United States v. Pinto‐Mejia,
that the reference to “jurisdiction of the United States” in the predecessor to § 70503
meant the subject matter jurisdiction of the court. 720 F.2d 248 (2d Cir. 1983),
modified on denial of reh’g, 728 F.2d 142 (1984). Venezuelan seamen were charged with
possessing controlled substances with intent to distribute on a vessel subject to the
jurisdiction of the United States on the high seas. Id. at 250. After moving
unsuccessfully in the district court to suppress the fruits of the Coast Guard’s search
of their vessel, they pleaded guilty, subject to a stipulation reserving their right to
appeal the denial of their suppression motion. Id. On appeal they argued that “the
United States lack[ed] jurisdiction to prosecute them” because their vessel was not
subject to the jurisdiction of the United States. Id. at 254–55. The government argued
that their challenge to the jurisdiction of the United States should not be considered
because it went beyond the issues preserved for appeal by the stipulation. We
rejected the government’s argument, reasoning that “[a] question as to the court’s
jurisdiction … may be raised at any time during the pendency of the proceedings.”
Id. at 255.
That decision cannot be counted as a holding on the question we consider
here—whether the statute’s reference to “a vessel subject to the jurisdiction of the
United States” defines the reach of the statute or the subject matter jurisdiction of
the court—because the court never considered the question. The government made
no argument that the statutory reference to “jurisdiction” implicated the reach of the
statute rather than the jurisdiction of the court, and the court simply assumed that it
referred to subject matter jurisdiction. Furthermore, at the time of the decision, the
Supreme Court had not yet uttered its admonishments (in the Arbaugh triad
discussed above).
The meaning of the statutory invocation of “jurisdiction” arose again in our
court shortly thereafter in a manner that has no influence on our decision because
the court did not purport to resolve the confusion. In United States v. Henriquez, 731
F.2d 131 (2d Cir. 1983), the defendants, who had been apprehended by the Coast
Guard in international waters, were indicted for possession of marijuana with intent
to distribute on vessel that was unregistered and therefore subject to the jurisdiction
of the United States. The defendants contended the vessel was registered in
Honduras. On that ground, they had moved in the District Court for to dismiss the
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1 necessary to establish the subject matter jurisdiction of the court should be decided
2 by the court, or submitted to the jury as an element of the offense. Ayarza‐
3 Garcia and Medina had ruled that a factual issue necessary to the
4 determination of the court’s subject matter jurisdiction should be treated as an
5 “element” of the crime and submitted to the jury. Medina, 90 F.3d at 463–64;
indictment for lack of subject matter jurisdiction. “[B]oth counsel and [the district] court
treated the question of statelessness as part of the issue of subject matter jurisdiction
. . . .” Id. at 135. The district court found that the government had adequately
demonstrated statelessness, and therefore denied the defendants’ motion. The
defendants then entered conditional guilty pleas, reserving the right to appeal
“subject matter jurisdiction.” They argued on appeal that the government’s evidence
failed to show that the vessel was stateless. The government argued that this issue
was not preserved for appeal. Notwithstanding that all the participants in the
district court including the government had treated the statutory reference to
“jurisdiction” as a limitation on the court’s subject matter jurisdiction, the
government now argued on appeal that “it does not fall under the rubric ‘subject
matter jurisdiction,’ but rather goes to the merits,” id. at 135, so that the defendants’
appellate attack on the district court’s finding of statelessness was not within subject
matter jurisdiction, which the defendants had reserved for appellate review. The
government argued that our Pinto‐Mejia decision had fallen “into the trap against
which Judge Friendly warned in Fogel v. Chestnutt, 668 F. 2d 100, 105‐07 (2d Cir.
1981)]” that a failure to prove a claim means only that the claim fails and not that the
court lacks subject matter jurisdiction. Henriquez, 731 F.2d at 135. While suggesting
inferentially that the government may well be correct in arguing against Pinto‐
Mejia’s reading of the statute, id. (“[W]hether or not one agrees with the
Government that the Pinto‐Mejia panel fell into the trap, . . . .”), our court refrained
from deciding whether the statutory reference to “jurisdiction” invokes the subject
matter jurisdiction of the court. In view of the fact that both counsel and the court
below had “treated the question of statelessness as part of the issue of subject matter
jurisdiction,” id., the court expressed “no doubt that the issue of ‘statelessness’ was
preserved for review” by the stipulation, and did not rule on the issue before us, id.
.
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1 Ayarza‐Garcia¸819 F.2d at 1048. Subsequent to those decisions, however, and
2 prior to the Tinoco case, Congress amended the MDLEA by adding the
3 provision of § 70504(a) that “[j]urisdiction of the United States . . . is not an
4 element of an offense,” and that “[j]urisdictional issues . . . are preliminary
5 questions of law to be determined solely by the trial judge.” 46 U.S.C.
6 § 70504(a) (emphasis added). The Tinoco court viewed the intervening
7 amendment of the statute as a Congressional rejection of Medina’s ruling that
8 factual issues involved in the determination of the court’s jurisdiction should
9 go to the jury. Tinoco thus, while continuing to assume that “jurisdiction of
10 the United States” referred to the subject matter jurisdiction of the United
11 States courts, concluded that the issue was “solely one of subject matter
12 jurisdiction for the court to decide, and not an element of the MDLEA
13 substantive offense.” Tinoco, 304 F.3d at 1112 (emphasis added).
14 In sum, throughout the history of MDLEA litigation in the Eleventh
15 Circuit, the court never decided whether the MDLEA’s reference to “a vessel
16 subject to the jurisdiction of the United States” refers to the reach of the
17 United States statute or to the subject matter jurisdiction of the United States
18 court to adjudicate the criminal prosecution. The Circuit’s most recent case,
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1 De La Garza, the only case in which the question was raised, explicitly left the
2 issue unresolved.
3 In Miranda, 780 F.3d 1185, the District of Columbia Circuit did confront
4 the meaning of the statutory phrase and concluded that it constitutes a
5 limitation on the subject matter jurisdiction of the district courts. The opinion
6 without doubt presents a dazzlingly imaginative array of arguments, but we
7 find them unpersuasive. The essential core of its reasoning begins with the
8 justified perception that the interception of vessels on the high seas by United
9 States law enforcement officers presents a risk of violations of international
10 law and affronts to other nations. On that basis, the Miranda opinion assumes
11 that that Congress must have wanted defendants who pleaded guilty to
12 remain free thereafter to invoke jurisdiction‐related objections to their
13 convictions, so as to better protect the interests of foreign nations with respect
14 to comity and international law and that Congress therefore must have
15 intended the “jurisdiction of the United States” provision of § 70503 to mean
16 the subject matter jurisdiction of the court, as that understanding would free
17 defendants to raise these objections even long after the entry of judgment
18 against them. See id. at 1194 (“In that setting, it is eminently understandable
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1 why Congress would want the ‘[j]urisdiction of the United States with respect
2 to a vessel’ to be insulated from waiver or forfeiture by a defendant, and
3 would also want courts in every case—and at every level of review—to assure
4 that the requirement is satisfied.”(emphasis added and internal citations
5 omitted) (quoting 46 U.S.C. § 70504(a)).
6 The opinion cites no evidence in support of its speculation that
7 Congress was concerned to free criminal defendants after pleading guilty to
8 raise for affronts to comity and international law. That proposition,
9 furthermore, is both far‐fetched and inconsistent with explicit provisions of
10 the MDLEA. Section 70505 specifies that a defendant “does not have standing
11 to raise a claim of failure to comply with international law as a basis for a
12 defense.” It adds that “a failure to comply with international law does not
13 divest a court of jurisdiction and is not a defense.” 46 U.S.C. § 70505.15 It is
14 very difficult to reconcile the intentions Miranda attributes to Congress with
15 the provisions Congress enacted.
15The provision of § 70505 that a failure to comply with national ʺdoes not divest the court
of jurisdictionʺ demonstrates that, when Congress wanted to speak of the courtʹs
jurisdiction, it did so directly and clearly.
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1 The government has no need, furthermore, to rely on defendant‐drug
2 traffickers to protect the Nation’s interest in its foreign relations. The
3 Departments of State and Justice are both parts of the executive branch. If a
4 particular prosecution would cause undesirable friction with a foreign nation
5 because of Coast Guard transgressions on another nation’s maritime
6 sovereignty, the government can simply drop the prosecution without need
7 for the defendant to serve as a protesting ambassador, and without need for
8 the court’s approval to achieve a diplomatic objective. Cf. Kiobel v. Royal Dutch
9 Petroleum Co., 569 U.S. 108, 116 (2013) (reasoning that the unique role of the
10 Executive branch in foreign relations should lead courts to be cautious in
11 “impinging” on the Executive’s management of foreign affairs); United States
12 v. Curtiss‐Wright Export Corp., 299 U.S. 304, 320 (1936) (recognizing that the
13 executive branch is the “sole organ of the federal government in the field of
14 foreign relations”).
15 A further serious flaw in the Miranda opinion’s assessment is its
16 unawareness that, as explained above in Part III(c) at page 50, the same
17 shipping title of the United States Code repeatedly uses the phrase—“subject
18 to the jurisdiction of the United States”—to mean legislative jurisdiction,
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1 including a nearly identical usage in the MDLEA to prescribe a variant of the
2 prohibited conduct where the reference cannot be to the subject matter
3 jurisdiction of the federal court as the court will have no role in the
4 prosecution.
5 While quoting from the Supreme Court’s Arbaugh opinion to the effect
6 that “[i]f the Legislature clearly states that a threshold limitation on the
7 statute’s scope shall count as jurisdictional, then courts will be duly
8 instructed,” Miranda, 780 F.3d at 1192 (quoting Arbaugh, 546 U.S. at 515–16),
9 the Miranda opinion obscures the intended thrust of the Arbaugh triad, which
10 is that threshold statutory requirements should be construed as limitations on
11 subject matter jurisdiction only if that intention is “clearly stated” in the
12 statute. Nor does it acknowledge that its justification for construing the
13 statute as a limitation on the courts’ subject matter jurisdiction is the very
14 reason given by the Supreme Court for its admonishment not to interpret
15 unclear coverage limitations in that manner—to wit, the uncertainty, waste,
16 and lack of finality that result because this interpretation allows a dissatisfied
17 party to reopen the issue long after the issuance of a final judgment. See
18 Arbaugh, 546 U.S. at 515.
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1 Miranda argues that congressional intention to refer to subject matter
2 jurisdiction is clearly stated, indeed “self‐evident,” because § 70504(a) groups
3 references to “jurisdiction” together with the provision relating to venue,
4 which “by nature speaks to the authority of the district court to hear a case.”
5 Id. at 1196 (The “entire provision, including the references to ‘jurisdiction’ self‐
6 evidently concerned the authority of district courts, not the legislative
7 authority of Congress.” (emphasis added)). We respectfully disagree. If
8 § 70504 were being construed in isolation, the argument would have more
9 force. But the mere fact that § 70504’s reference to jurisdiction is grouped with
10 a provision for venue does not negate and alter the meaning of the
11 jurisdictional provision it refers to in § 70503. The grouping in § 70504 makes
12 perfect sense with regard to the MDLEA’s grouping of subjects. Sections
13 70502 and 70503 specify the definition of the offense and the reach of the
14 statute. Section 70504 turns to issues for trial, designating the proper district
15 for trial and telling how issues are to be divided as between judge and jury.
16 The grouping of issues in § 70504 furnishes no reason to interpret the
17 language of §§ 70502 and 70503 as meaning anything other than what it
18 appears on its face to say.
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1 Miranda further argues that “when Congress establishes a so‐called
2 ‘jurisdictional element’ addressing the reach of its legislative authority,
3 Congress does not use the term ‘jurisdiction’ in the statute.” Id at 1195.
4 Miranda illustrates the proposition by referring to statutes criminalizing
5 conduct when committed “by . . . ‘an officer, director, agent or employee . . .
6 with any Federal Reserve bank’” or making it unlawful to possess in a school
7 zone a firearm “that has moved in or that otherwise affects interstate or
8 foreign commerce.” Id. (quoting 18 U.S.C. §§ 656, 922(q)(2)(A)). The opinion
9 then asserts that the notion of a “jurisdictional element” is not an appropriate
10 way to refer to a statutory term defining the reach of the statute but is rather a
11 mere colloquialism used by lawyers and judges. Id. It is simply incorrect that
12 the use of the word “jurisdiction” with reference to the reach of the statute is
13 merely a colloquialism that Congress would not employ in a statute. As
14 discussed above, the terms “legislative jurisdiction,” “prescriptive
15 jurisdiction,” and “jurisdiction to prescribe” are well‐recognized in legal
16 scholarship, and in such documents as the American Law Institute’s
17 Restatement of Foreign Relations Law, especially with reference to the reach
18 of the nation’s laws beyond its territorial borders. See Reese, supra note 6, at
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1 1587; Childress, supra note 6. And Congress used “jurisdiction” numerous
2 times in Title 46 to refer to the reach of the U.S. law. Second, while Miranda is
3 correct that most statutes set forth the jurisdictional elements by naming
4 them, rather than referring to them as “jurisdictional,” there is an obvious
5 reason why § 70503 uses the term “subject to the jurisdiction of the United
6 States,” elsewhere enumerating the facts that define the reach of that
7 jurisdiction. Unlike Congress’s employment in other statutes of one‐factor
8 jurisdictional elements such as “by a Federal Reserve Bank,” or “affect[ing]
9 interstate commerce,” the facts that may cause a vessel to be “subject to the
10 jurisdiction of the United States” involve numerous complex alternatives,
11 which are spelled out at length in § 70502 under “Definitions.” To have
12 included all those complexities in § 70503 together with the offense element
13 would have been unwieldy and confusing.
14 A final illogic we find in Miranda’s arguments is that, while giving great
15 importance to this altogether understandable use of a different approach to
16 the identification of “jurisdictional elements” than in other statutes, Miranda
17 dismisses without discussion the government’s observation that the MDLEA
18 formulation, if construed as conferring subject matter jurisdiction on the
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1 courts, differs drastically from the virtual blueprint statutory formulation that
2 is used again and again in the United States Code to confer subject matter
3 jurisdiction on the federal courts. Id. at 1195. (See discussion above at III(4)).
4 The reasoning of the Fifth Circuit in Bustos‐Useche, 273 F.3d 622 , was
5 far simpler than in Miranda. As in our case and in Miranda, the defendant in
6 Bustos‐Useche had pleaded guilty without reservation to a violation of § 70503
7 in that he possessed controlled substances with intent to distribute on board a
8 vessel subject to the jurisdiction of the United States. The vessel was alleged
9 to be subject to the jurisdiction of the United States not because it was
10 stateless but because Panama, the nation of registry, had given “express
11 permission for the enforcement of United States laws on the vessel.” Id. at 624.
12 After the entry of judgment based on a guilty plea, the defendant argued on
13 appeal that U.S. jurisdiction was not established because Panama’s consent
14 was given only after U.S. officers had seized the cocaine. Accordingly, he
15 argued that he never possessed the cocaine at a time when the vessel was
16 subject to the jurisdiction of the United States because the vessel did not
17 become so subject until after he was no longer in possession. Id. at 625.
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1 The government argued that by pleading guilty without reservation,
2 the defendant had waived the claim. The Fifth Circuit reasoned that whether
3 the defendant had waived the claim turned on “whether the jurisdictional
4 requirements of [the MDLEA] are merely substantive elements of the crime or
5 prerequisites of the district court’s subject matter jurisdiction.” Id. at 626.
6 Recognizing that the 1996 amendment provided that jurisdiction of the
7 United States is not an element of the offense and is to be determined by the
8 trial judge, the court concluded on that basis in a single sentence that the
9 determination of jurisdiction of the United States “is a prerequisite to the
10 court’s jurisdiction” and that the defendant was “therefore not foreclosed
11 from raising the issue on appeal.” Id. The court nonetheless went on to affirm
12 his conviction on the ground that Panama’s consent, even delivered
13 subsequent to the seizure of the cocaine, established the jurisdiction of the
14 United States. Id. at 629.
15 As with Miranda, the Bustos‐Useche court reached its conclusion that the
16 statute’s jurisdictional requirement was a limitation on the court’s subject
17 matter jurisdiction without awareness that § 70506(c) and Title 46 use the
18 same language in circumstances that unmistakably refer to the reach of the
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1 statute and cannot mean to define the subject matter jurisdiction of the courts.
2 The Bustos‐Useche court, in 2001, furthermore, did not have the benefit of the
3 Supreme Court’s later admonition in the Arbaugh triad that statutory
4 references to “jurisdiction” should not be interpreted as limitations on subject
5 matter jurisdiction unless that intention was “clearly stated” in the statute.
6 And, as discussed above, the fact that Congress did not regard the vessel’s
7 subjectivity to the reach of U.S. law as an offense element did not necessarily
8 mean, as the court seemed to assume, that Congress considered this
9 requirement as a limitation on the subject matter jurisdiction of the federal
10 courts. At the time of the 1996 amendments, there was no judge‐made law to
11 the effect that Congress could not, consistent with the Sixth Amendment,
12 withdraw a jurisdictional element from jury consideration.16 In our view,
16
Judge Pooler’s concurring opinion expresses the view that the MDLEA
“clearly states” a Congressional intent that the words, “a vessel subject to the
jurisdiction of the United States” serve as a limitation on the subject matter
jurisdiction of the federal courts. Concurring Op. at 3, 5. The only statutory text on
which Judge Pooler relies as supporting her finding of such intention is § 70504(a),
which says:
Jurisdiction of the United States with respect to a vessel
subject to this chapter is not an element of an offense.
Jurisdictional issues arising under this chapter are
preliminary questions of law to be determined solely by
the trial judge.
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Judge Pooler argues that Congress cannot have intended its use of the word
“jurisdiction” as a so‐called “jurisdictional element” referring to Congress’s
legislative jurisdiction (to define the reach of the statute), or provided that it was “to
be determined solely by the trial judge,” for two reasons: First, that would be
“contrary to the clear statutory language” providing that “[j]urisdiction of the
United States with respect to a vessel . . . is not an element of an offense,”and
second, such an interpretation would “inject[] serious constitutional concerns into
the statute,” Concurring Op. at 7, because “the Fifth and Sixth Amendments ‘require
criminal convictions to rest upon a jury determination that the defendant is guilty of
every element of the crime with which he is charged beyond a reasonable doubt.”’
Concurring Op. at 9 (quoting United States v. Gaudin, 515 U. S. 506, 510 (1995)). Judge
Pooler posits that there can be no such thing as a “‘preliminary question of law’ . . .
that is not a question of subject matter jurisdiction or ‘an element of an offense.’”
Concurring Op. at 10 (quoting 46 U.S.C. § 70504(a)).
We find neither argument persuasive. Both fail for the same reason. Both
arguments are based on law established by the Supreme Court many years after
Congress enacted § 70504(a). Neither contemplates the law as it was in 1996. When
Congress enacted § 70504(a), jurisdictional elements of criminal statutes relating to
Congress’s exercise of its legislative jurisdiction were widely regarded as different
from the substantive elements of the criminal offense that defined the antisocial
conduct being prohibited. At the time, there was no inconsistency between Congress
prescribing what was called a “jurisdictional element” and asserting that the
jurisdictional element is “not an element of an offense.” Nor was it constitutionally
objectionable to consign the jurisdictional element to the trial judge, rather than the
jury.
Seventeen years later, such a distinction became problematic when the
Supreme Court asserted in United States v, Alleyne, 570 U.S. 99, 103 (2013), and in
Torres v. Lynch, 136 S. Ct. 1619, 1630 (2016), that any fact necessary to increase the
penalty for an offense is necessarily deemed an offense element that must be
submitted to the jury, and that jurisdictional elements must be proved to the jury
just like the substantive elements of a crime. But in 1996, a statutory assertion that a
jurisdictional element was “not an element of an offense” and was to be decided
“solely by the trial judge” was neither an inconsistency nor a constitutional problem.
In support of her argument, Judge Pooler contends her view is supported by the
Supreme Court’s holding in United States v. Gaudin, 515 US 506, 510 (1995), decided
prior to the enactment of § 70504(a)) requiring submission of “every element of the
crime” to the jury for determination beyond a reasonable doubt. The reliance is
misplaced. The Gaudin ruling related to a substantive element of the crime charged
65
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United States v. Prado
1 none of the opinions construing the MDLEA’s jurisdictional requirements as a
2 limitation on the subject matter jurisdiction of the federal courts refutes the
(the materiality of a false statement in a fraud prosecution)—not a jurisdictional
element. Gaudin’s requirement of submission of “every element of the crime” to the
jury did not address jurisdictional elements. That holding was perfectly compatible
with the proposition that a jurisdictional element is “not an element of an offense”
and may therefore be consigned solely to the trial judge.
Judge Pooler also offers a policy‐based reason for her interpretation.
Following views expressed by the D.C. Circuit in Miranda, she argues that, because
of the risk of harm to international relations arising from arrests and seizures on
foreign vessels outside the United States, the issue of the jurisdiction of the United
States with respect to a vessel should be ”insulated from waiver or forfeiture by a
defendant” so that the courts “in every case—and at every level of review—[could]
assure that the requirement is satisfied.” Concurring Op. at 12–13 (quoting Miranda,
780 F.3d at 1194). Judge Pooler attributes that intention to Congress. However, the
reason she advances in support of her interpretation—preserving parties’ ability to
reopen judgments with respect to previously forfeited matters in subsequent
appellate stages of the litigation—is precisely the reason given by the Supreme
Court for not interpreting statutory limitations as limitations on the court’s
jurisdiction, absent a “clear statement” of such congressional intent. See Arbaugh, 546
U.S. at 515 (observing that “tying [a] requirement to subject‐matter jurisdiction”
results in “unfairness and waste of judicial resources”); Part III(2), supra (discussing
Arbaugh, Reed Elsevier, and Henderson).
Judge Pooler attributes to Congress an intention to rely on defendants to
protect the interests of foreign nations and thus guard against international friction
by raising failures of proof that a vessel was within the jurisdiction of the United
States even after having pled guilty. She fails, however, to acknowledge that the
terms of the statute provide strong evidence that Congress’s intention was the
contrary. Section 70505 of the MDLEA specifies that a defendant “does not have
standing to raise a claim of failure to comply with international law as a basis for a
defense.” It adds that “[a] failure to comply with international law does not divest a
court of jurisdiction and is not a defense.” 46 U.S.C. § 70505.
In short, we find nothing persuasive in Judge Pooler’s argument that the
language of section 70504(a) clearly states a congressional intent to limit the subject
matter jurisdiction of the court, as required by the Supreme Court.
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1 persuasive reasoning of Gonzalez, especially as supplemented by the
2 MDLEA’s and Title 46’s usages of the same words in provisions that cannot
3 refer to the subject matter jurisdiction of the courts.
4 IV. Whether Defendants’ Guilty Pleas Must Be Vacated Because of
5 Deficiencies in the Plea Proceedings.
6
7 The final question before us is whether, even if the MDLEA’s
8 jurisdictional requirement pertains to the reach of the statute and not to the
9 subject matter jurisdiction of the court, the defendants’ guilty pleas
10 nonetheless should not be treated as waivers of their claim that the
11 jurisdiction of the United States was not shown, because the plea procedure
12 did not adhere to the requirements of Fed. R. Crim. P. 11. The rule advocated
13 by the government—that a guilty plea waives all defects except to the court’s
14 jurisdiction—applies only to valid guilty pleas, and the defendants’ guilty
15 pleas were defective.
16 Our court and others have ruled that a defective guilty plea will not
17 necessarily be deemed to waive all objections to a conviction. For example, we
18 ruled in United States v. Gonzalez, 420 F.3d 111, 131–34 (2d Cir. 2005), that two
19 Rule 11 errors in the guilty plea proceeding—a violation of Rule 11(b)(1)(C),
20 which requires the court to “inform the defendant of, and determine that the
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United States v. Prado
1 defendant understands . . . the right to a jury trial,” Fed. R. Crim. P.
2 11(b)(1)(C), in failing to tell the defendant of his right to have the jury
3 determine drug quantity, and a violation of the obligation under Rule 11(b)(3)
4 to determine that there was a “factual basis for the plea” with respect to drug
5 quantity—required that the judgment of conviction be vacated and the
6 defendant be permitted to withdraw his plea. In United States v. Fisher, 711
7 F.3d 460, 465 (4th Cir. 2013), the Fourth Circuit found a defendant’s guilty
8 plea invalid and permitted him to withdraw because of the reasonable
9 probability that “impermissible government conduct” induced the defendant
10 to plead guilty. Id. at 467–69. And in United States v. Velazquez, 855 F.3d 1021,
11 1039 (9th Cir. 2017), the Ninth Circuit vacated defendant’s guilty plea on the
12 ground that the district court had erroneously denied her motion to substitute
13 counsel.
14 Notwithstanding the provision of Rule 11(h) that “a variance from the
15 requirements of this rule is harmless error if it does not affect substantial
16 rights,” Fed. R. Crim. P. 11(h), we have found in several instances that
17 deficiencies in the Rule 11 proceedings did affect substantial rights and
18 therefore prevailed over the concept that a plea waives all defects.
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1 Repeatedly, we have ruled that the court’s failure to elicit a factual basis for
2 the conviction would justify vacating the plea. See, e.g., United States v.
3 Culbertson, 670 F.3d 183, 189‐92 (2d Cir. 2012) (vacating defendant’s plea of
4 guilty to conspiracy to import cocaine and heroin for lack of sufficient factual
5 basis as to drug quantity); United States v. Adams¸448 F.3d 492, 497‐502 (2d Cir.
6 2006) (vacating defendant’s conviction on a plea of guilty to conspiracy to
7 import cocaine and heroin for lack of sufficient factual basis as to the requisite
8 intent, drug quantity, and drug type); Gonzalez, 420 F.3d at 133; United States
9 v. Andrades, 169 F.3d 131, 134‐36 (2d Cir. 1999) (vacating defendant’s
10 conviction on a plea of guilty to conspiracy to distribute cocaine base for lack
11 of sufficient factual basis as to “identity of defendant’s coconspirators or other
12 necessary facts”); Montgomery v. United States, 853 F.2d 83, 85‐86 (2d Cir. 1988)
13 (permitting defendant to withdraw plea of guilty to conspiracy to distribute
14 heroin for lack of sufficient factual basis); Godwin v. United States, 687 F.2d
15 585, 590–91 (2d Cir. 1982) (finding that defendant’s guilty plea was accepted
16 without sufficient factual basis where defendant’s statements at the plea
17 proceeding “essentially [denied] the intent element of the offense,” and the
18 district court lacked “some basis” in the record “for doubting his account”).
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United States v. Prado
1 In this instance, we find that the plea proceedings departed from the
2 requirements of Rule 11 in two significant related respects. Rule 11(b)(1)(G)
3 requires that the court “must inform the defendant of, and determine that the
4 defendant understands, . . . the nature of each charge to which the defendant
5 is pleading.” Fed. R. Crim. P. 11(b)(1)(G). Rule 11(b)(3) requires the court to
6 “determine that there is a factual basis for the plea.”
7 The defendants could not be guilty of the offense unless the vessel on
8 which they possessed drugs was “subject to the jurisdiction of the United
9 States.” The theory of the prosecution was that the vessel was subject to the
10 jurisdiction of the United States because it was a “vessel without nationality.”
11 In advising the defendants of the nature of the charge, the court did inform
12 them of aspects of the requirements of the charge, such as that they were
13 accused of “conspiracy, that is to say an agreement between each defendant
14 and at least one other person, to violate the Maritime Drug Law Enforcement
15 Act by dealing in cocaine.” App’x 388. But the court made no reference either
16 to the requirement that the vessel have been subject to the jurisdiction of the
17 United States or to the crucial issue of its statelessness. Nor did the
18 defendants demonstrate awareness in their allocutions of the crucial
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United States v. Prado
1 significance of statelessness. Each of them acknowledged having agreed to
2 transport cocaine on a boat that traveled the high seas, but none said anything
3 about the boat’s nationality or of its being subject to the jurisdiction of the
4 United States.
5 The court may have believed it was unnecessary to explain these issues
6 in view of the fact that the defendants had moved through counsel to dismiss
7 the indictment on the ground that statelessness had not been established. But
8 Rule 11 does not allow the court to assume that a pleading defendant
9 understands the charge because its nature has been the subject of discussion
10 and argument by the defendant’s counsel. A plea of guilty requires the
11 personal participation of the defendant, and the court is obligated to inform
12 the defendant of the nature of the charge.
13 In addition, the court failed to determine, as required by Rule 11(b)(3),
14 that there was “a factual basis for the plea.” In view of the probability, as a
15 practical matter, that the defendants did understand from their attorneys that
16 statelessness was an issue, this violation was even more problematic. In fact,
17 as discussed at length in the early portions of this opinion, there was no
18 factual basis for the plea, at least so far as could be demonstrated. Because of
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United States v. Prado
1 the Coast Guard’s failure to follow statutorily approved procedures for
2 demonstrating the statelessness of the vessel and its subsequent destruction
3 of the vessel, the government was unable to demonstrate that the vessel was
4 stateless and therefore “subject to the jurisdiction of the United States,” unless
5 the defendants themselves supplied the missing information. The defendants
6 never provided this information, and in fact, as defendants note, there was no
7 mention of the issue of statelessness during the plea proceedings.
8 Rule 11(h) provides that “[a] variance from the requirements of this
9 rule is harmless error if it does not affect substantial rights.” Fed. R. Crim. P.
10 11(h). If the record had presented a convincing showing that the defendant
11 understood the nature of the charges in pleading guilty, and sources other
12 than the defendants’ allocutions confirmed a factual basis for the plea, the
13 violations of Rule 11 would perhaps not have affected substantial rights. But
14 where the record provided no basis for a finding that the vessel was
15 unregistered, or otherwise subject to the jurisdiction of the United States, the
16 defendants’ drug possession did not come within the reach of the MDLEA.
17 They had not committed a criminal offense under the laws of the United
18 States. There was no valid basis for their convictions. The deficiencies in the
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United States v. Prado
1 Rule 11 procedure affected the defendants’ substantial rights. Their guilty
2 pleas and the judgments of conviction must be vacated.
3 VI. Disposition.
4 Section 70504(a) of the MDLEA requires the court to make a
5 preliminary determination of jurisdictional issues. The import of this rule,
6 although unstated, is that if the government fails to establish the jurisdictional
7 element, such as by failing to show that the vessel was subject to the
8 jurisdiction of the United States, the court should dismiss the indictment. In
9 this case, for reasons explained above, the indictment should have been
10 dismissed upon the government’s failure to demonstrate at the pretrial
11 hearing that the vessel was subject to the jurisdiction of the United States. The
12 error was not cured by the defendants’ subsequent defective guilty pleas.
13 CONCLUSION
14 The judgments of conviction are hereby VACATED and the indictment
15 is DISMISSED.
73
1 POOLER, Circuit Judge, concurring in the judgment:
2 The Maritime Drug Law Enforcement Act (the “MDLEA”) makes it illegal
3 to engage in specified drug trafficking activity “[w]hile on board a covered
4 vessel.” 46 U.S.C. § 70503(a). The MDLEA defines the term “covered vessel” to
5 mean “(1) a vessel of the United States or a vessel subject to the jurisdiction of the
6 United States; or (2) any other vessel if the individual is a citizen of the United
7 States or a resident alien of the United States.” Id. § 70503(e). The terms “vessel of
8 the United States” and “vessel subject to the jurisdiction of the United States”
9 are, in turn, statutorily defined. Id. §§ 70502(b), (c).
10 The majority and I both agree that the government has failed to establish
11 that Defendants‐Appellants’ “go‐fast” was a “vessel subject to the jurisdiction of
12 the United States.” Id. § 70503(e). Moreover, we both agree that that failure
13 requires vacatur of the judgments of conviction and dismissal of the indictment.
14 We disagree, however, about why the government’s failure in this regard
15 demands that result.
16 Our disagreement centers on the following statutory command:
17 “Jurisdiction of the United States with respect to a vessel subject to this chapter is
18 not an element of an offense. Jurisdictional issues arising under this chapter are
1
1 preliminary questions of law to be determined solely by the trial judge.” 46
2 U.S.C. § 70504(a). The majority concludes that neither this language nor the
3 above‐quoted jurisdictional language in Section 70503 imposes any limit on
4 federal courts’ subject‐matter jurisdiction. The majority nevertheless holds that
5 the government’s failure of proof about whether the “go‐fast” was “subject to the
6 jurisdiction of the United States,” 46 U.S.C. § 70503(e), means that the plea
7 proceedings were deficient—because Defendants‐Appellants’ guilty pleas lacked
8 a factual basis—and thus violated Rule 11 of the Federal Rules of Criminal
9 Procedure.
10 If I agreed that the language in Section 70504(a) does not speak to federal
11 courts’ subject‐matter jurisdiction, I would further agree with the majority
12 regarding the inadequacy of the plea proceedings. However, consistent with the
13 majority of circuits to consider the issue, I would hold that the MDLEA imposes
14 limits on federal courts’ subject‐matter jurisdiction. See United States v. Miranda,
15 780 F.3d 1185, 1192 (D.C. Cir. 2015); United States v. De La Garza, 516 F.3d 1266,
16 1271 (11th Cir. 2008); United States v. Bustos‐Useche, 273 F.3d 622, 626 (5th Cir.
17 2001). But see United States v. González, 311 F.3d 440, 443 (1st Cir. 2002).
2
1 DISCUSSION
2 I. The Clear‐Statement Rule
3 To determine whether statutory language imposes a limit on federal
4 courts’ subject‐matter jurisdiction, we ask whether that language “clearly states”
5 that the limitation at issue is “jurisdictional.” Reed Elsevier, Inc. v. Muchnick, 559
6 U.S. 154, 163 (2010) (internal quotation marks omitted); see also Henderson ex rel.
7 Henderson v. Shinseki, 562 U.S. 428, 435‐36 (2011) (“[W]e look to see if there is any
8 clear indication that Congress wanted the rule to be jurisdictional.” (internal
9 quotation marks omitted)). “If the Legislature clearly states that a threshold
10 limitation on a statute’s scope shall count as jurisdictional, then courts and
11 litigants will be duly instructed and will not be left to wrestle with the issue.”
12 Arbaugh v. Y&H Corp., 546 U.S. 500, 515‐16 (2006) (footnote omitted). “But when
13 Congress does not rank a statutory limitation on coverage as jurisdictional,
14 courts should treat the restriction as nonjurisdictional in character.” Id. at 516.
15 Although the Supreme Court has described this rule as a “readily
16 administrable bright line,” id., the line is not so bright that its application is
17 always straightforward. Indeed, in determining whether a limitation “is one that
18 is properly ranked as jurisdictional,” we need not find “an express designation”
3
1 in order to find a clear statement. Reed Elsevier, 559 U.S. at 168; see also Henderson,
2 562 U.S. at 436 (“Congress, of course, need not use magic words in order to speak
3 clearly on this point.”). Rather, as with other efforts to divine legislative intent,
4 courts must also examine, among other things, the “text and structure” of the
5 particular statute to determine whether they clearly indicate Congress’s intention
6 to impose a limit on federal courts’ subject‐matter jurisdiction. Reed Elsevier, 559
7 U.S. at 162.
8 For instance, in Arbaugh, the Supreme Court held that Title VII’s
9 15‐employee numerosity requirement was not a jurisdictional limitation. 546 U.S.
10 at 516. In so concluding, it observed that “the 15‐employee threshold appears in a
11 separate provision [from Title VII’s jurisdiction‐granting provision] that does not
12 speak in jurisdictional terms or refer in any way to the jurisdiction of the district
13 courts.” Id. at 515 (internal quotation marks omitted). Likewise, in Reed Elsevier,
14 the Court reasoned that the registration requirement in Section 411(a) of the
15 Copyright Act, “like Title VII’s numerosity requirement, is located in a provision
16 separate from those granting federal courts subject‐matter jurisdiction over those
17 respective claims.” 559 U.S. at 164. Similarly, in Henderson, the Supreme Court
18 found it significant that Congress placed “the 120‐day deadline for seeking
4
1 Veterans Court review” within “a subchapter entitled ‘Procedure’” rather than
2 the “subchapter entitled ‘Organization and Jurisdiction,’” which the Court took
3 as a signal that Congress “regarded the 120‐day limit as a claim‐processing rule.”
4 Henderson, 562 U.S. at 438‐39.
5 Applying this rule to Section 70504(a), I find clear indication that Congress
6 intended to impose limits on federal courts’ jurisdiction. In other words, if
7 alleged criminal conduct occurs on a vessel that is not subject to the jurisdiction
8 of the United States, then any corresponding criminal charges are beyond federal
9 courts’ jurisdiction to entertain.
10 II. The MDLEA Limits Federal Courts’ Jurisdiction
11 The strongest indication that Congress intended to limit federal courts’
12 subject‐matter jurisdiction is in the structure of the relevant statutory provision
13 itself. See Reed Elsevier, 559 U.S. at 162. When it revised the MDLEA in 1996,
14 Congress placed that provision under a newly created section entitled
15 “Jurisdiction and venue.” 46 U.S.C. § 70504. By placing the relevant provision
16 under that heading, Congress “provide[d] some indication of [its] intent.” See
17 Henderson, 562 U.S. at 440; see also Miranda, 780 F.3d at 1196 (“In other instances
5
1 in which Congress uses the term ‘jurisdiction and venue,’ the statute
2 indisputably pertains to the jurisdiction of the courts.”).1
3 Moreover, that the MDLEA makes “[j]urisdictional issues . . . preliminary
4 questions of law to be determined solely by the trial judge,” 46 U.S.C. § 70504(a),
5 provides another strong indication that Congress meant to place a “threshold
6 limitation on [the] statute’s scope” that we should “count as jurisdictional.”
7 Arbaugh, 546 U.S. at 515. “The ‘preliminary question’ set out in § 70504(a) . . .
8 operates precisely in the nature of a condition on subject‐matter jurisdiction:
9 subject‐matter jurisdiction presents a question of law for resolution by the court
10 . . . .” Miranda, 780 F.3d at 1193. Indeed, “courts have an obligation to determine
11 whether subject‐matter jurisdiction exists as a preliminary matter.” Id. (internal
12 quotation marks omitted); see also Arbaugh, 546 U.S. at 514.
13 Although this understanding of the reference to jurisdictional issues in
14 Section 70504(a) is, admittedly, not without fault, the other possible
1The majority does not pause long on this point, concluding that Congress used
the heading “Jurisdiction and venue” merely because the section “turns to issues
for trial.” I do not find such a facile explanation persuasive in light of the other
instances in which Congress has used that heading in circumstances that clearly
relate to a court’s subject‐matter jurisdiction. E.g., 29 U.S.C. § 1370(c); 40 U.S.C. §
123(d).
6
1 understandings of that term do not withstand scrutiny. Most significantly, if the
2 concept of jurisdiction as it is employed in Section 70504(a) is meant to
3 encompass the reach of the MDLEA—that is, the reach of Congress’s legislative
4 jurisdiction—rather than the federal courts’ jurisdiction, it is necessarily
5 transformed into a jurisdictional element of the offense. That interpretation is
6 contrary to the clear statutory language and injects serious constitutional
7 concerns into the statute.
8 Generally, when Congress is concerned with its own legislative power, it
9 delineates the limits of that power in the definition of the crime it creates in what
10 has become known as a “jurisdictional element.” See Gonzalez, 311 F.3d at 446.
11 That is because Congress “may enact only those criminal laws that are connected
12 to one of its constitutionally enumerated powers.” Torres v. Lynch, 136 S. Ct. 1619,
13 1624 (2016). “As a result, most federal offenses include, in addition to substantive
14 elements, a jurisdictional one . . . .” Id. Jurisdictional elements include, for
15 instance, requirements that a crime took place on “federal land,” see, e.g., United
16 States v. Davis, 726 F.3d 357, 362‐67 (2d Cir. 2014), involved a “federally insured
17 bank,” see, e.g., United States v. Schermerhorn, 906 F.2d 66, 69‐70 (2d Cir. 1990), or
18 had an “effect on interstate commerce,” see, e.g., United States v. Farrish, 122 F.3d
7
1 146, 148‐49 (2d Cir. 1997). So while substantive elements of a crime “relate to the
2 harm or evil the law seeks to prevent,” jurisdictional elements “tie[] the
3 substantive offense . . . to one of Congress’s constitutional powers . . . , thus
4 spelling out the warrant for Congress to legislate.” Torres, 136 S. Ct. at 1624
5 (internal quotation marks omitted). Nevertheless, proof of a jurisdictional
6 element “is no different from proof of any other element of a federal crime.” Hugi
7 v. United States, 164 F.3d 378, 381 (7th Cir. 1999).
8 As noted above, the problem with treating the reference to jurisdiction in
9 Section 70504(a) as an element of the offense is twofold. First, it contradicts the
10 explicit language of the statute, which provides, “Jurisdiction of the United
11 States with respect to a vessel subject to this chapter is not an element of an offense.”
12 46 U.S.C. § 70504(a) (emphasis added). I would adhere to that plain language.2
2 Indeed, Congress appears to have added the disputed language in 1996 in
response to the fact that the circuit courts of appeal that had explicitly decided
the issue had treated the jurisdictional provisions of the MDLEA as creating a
jurisdictional element. See United States v. Medina, 90 F.3d 459, 464 (11th Cir.
1996); United States v. Medjuck, 48 F.3d 1107, 1110 (9th Cir. 1995); United States v.
Martinez‐Hidalgo, 993 F.2d 1052, 1057 (3d Cir. 1993); United States v. Piedrahita‐
Santiago, 931 F.2d 127, 129 (1st Cir. 1991); cf. H.R. Rep. 104‐854, at 142 (1996)
(Conf. Rep.), as reprinted in 1996 U.S.C.C.A.N. 4292, 4337 (noting that the 1996
enactment “establishes new law enforcement provisions which expand the
Government’s prosecutorial effectiveness in drug smuggling cases,” including by
8
1 See United States v. Rowland, 826 F.3d 100, 108 (2d Cir. 2016) (“If the meaning is
2 plain, the inquiry ends there.”).
3 Second, and more significantly, even if we were content to disregard that
4 clear instruction, construing the MDLEA’s reference to jurisdiction as a
5 jurisdictional element creates serious constitutional problems. That is because the
6 Fifth and Sixth Amendments “require criminal convictions to rest upon a jury
7 determination that the defendant is guilty of every element of the crime with
8 which he is charged, beyond a reasonable doubt.” United States v. Gaudin, 515
9 U.S. 506, 510 (1995); see also Sullivan v. Louisiana, 508 U.S. 275, 277‐78 (1993) (“The
10 prosecution bears the burden of proving all elements of the offense charged and
11 must persuade the factfinder ‘beyond a reasonable doubt’ of the facts necessary
12 to establish each of those elements.” (citations omitted)). Jurisdictional elements
13 are no different; they must be proven to a jury beyond a reasonable doubt.3 See,
14 e.g., United States v. Parkes, 497 F.3d 220, 229‐30 (2d Cir. 2007).
making “[j]urisdictional issues . . . issues of law to be decided by the trial judge,
not issues of fact to be decided by the jury”).
3Contrary to the majority’s suggestion, the notion that jurisdictional elements
must be proven to a jury beyond a reasonable doubt pre‐dates Congress’s 1996
revisions to the MDLEA, see, e.g., United States v. DiSanto, 86 F.3d 1238, 1246 (1st
Cir. 1996); United States v. Nukida, 8 F.3d 665, 669‐73 (9th Cir. 1993); United States
v. Medeiros, 897 F.2d 13, 15 (1st Cir. 1990), though it was concededly not
9
1 However, Section 70504(a) provides that “[j]urisdictional issues” are “to be
2 determined solely by the trial judge.” 46 U.S.C. § 70504(a). If the term
3 “[j]urisdictional issues” in fact refers to a jurisdictional element of the offense,
4 taking those issues away from a jury’s consideration almost certainly runs afoul
5 of the above‐described constitutional protections, which may well require
6 striking Section 70504(a) as unconstitutional. I would construe the statute in a
7 way that avoids this constitutional concern. See Clark v. Martinez, 543 U.S. 371,
8 380‐82 (2005) (discussing the canon of constitutional avoidance, describing it as
9 “a tool for choosing between competing plausible interpretations of a statutory
10 text”); United States v. Jin Fuey Moy, 241 U.S. 394, 401 (1916) (“A statute must be
11 construed, if fairly possible, so as to avoid not only the conclusion that it is
12 unconstitutional, but also grave doubts upon that score.”).
13 I also reject the notion that Congress instead permissibly created a
14 “preliminary question[] of law,” 46 U.S.C. § 70504(a), that is not a question of
15 subject‐matter jurisdiction or “an element of an offense,” id., but is still an
universally accepted, see, e.g., United States v. Calvi, 830 F. Supp. 221, 222 n.1
(S.D.N.Y. 1993).
10
1 essential ingredient to a criminal conviction.4 Indeed, a fact that must be proven
2 before a person can be convicted of a crime is precisely what an element of an
3 offense is. See Elements of Crime, Black’s Law Dictionary (11th ed. 2019) (defining
4 the elements of a crime as “[t]he constituent parts of a crime . . . that the
5 prosecution must prove to sustain a conviction”). I thus regard the choice before
6 us as a binary one. Congress’s use of the term “vessel subject to the jurisdiction
7 of the United States” in connection with criminal MDLEA violations that may be
8 brought in federal court admits but two choices: the term “[j]urisdictional issues”
9 either pertains to courts’ subject‐matter jurisdiction or refers to a jurisdictional
10 element that must be submitted to a jury. The statutory text clearly precludes the
11 latter. 46 U.S.C. § 70504(a).
12 Construing a statute to instead create a middle path that navigates
13 between these two choices perilously dulls the line between “what conduct [a
14 statute] prohibits,” Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 254 (2010), and
15 the “threshold limitation[s] on a statute’s scope,” Arbaugh, 546 U.S. at 515. To
4 The majority concludes that Defendants‐Appellants’ boat was not subject to the
jurisdiction of the United States, and thus, their guilty pleas lacked a factual
basis. In other words, “[t]he defendants could not be guilty of the offense unless
the vessel on which they possessed drugs was ‘subject to the jurisdiction of the
United States.’”
11
1 dull that line is to venture down a dangerous path, the terminus of which is a
2 rule that would allow criminal trials to become rife with “preliminary questions
3 of law” on which a person’s guilt hinges but which are decided solely by a judge.
4 There is no room in our system of justice for such a rule. Cf. Blakely v. Washington,
5 542 U.S. 296, 305‐08 (2004) (discussing the fundamental importance of the
6 constitutional right to be tried by a jury).
7 Finally, as the District of Columbia Circuit has observed, “there are strong
8 reasons”—grounded in international comity concerns rather than solicitude for
9 defendants’ rights—“to conclude that Congress intended the ‘jurisdiction of the
10 United States with respect to a vessel’ to be non‐waivable and non‐forfeitable by
11 a defendant and to be independently confirmed by courts regardless of whether
12 it is raised.” Miranda, 780 F.3d at 1193. For instance, under the MDLEA, once the
13 captain of a vessel makes a claim of nationality, the U.S. government must
14 contact the nation whose protection is claimed and ask whether it asserts
15 authority over the vessel. 46 U.S.C. §§ 70502(d)(2), (e). The statute also allows the
16 government to exercise authority over “a vessel registered in a foreign nation if
17 that nation has consented or waived objection to the enforcement of United
18 States law by the United States.” Id. § 70502(c)(1)(C). Similarly, the MDLEA
12
1 explicitly denies standing to defendants to raise objections based on international
2 law but grants such standing to foreign nations.5 Id. § 70505. With the
3 understanding—rooted in the text of the MDLEA itself—that Congress was
4 concerned about international relations, “it is eminently understandable why
5 Congress would want the ‘[j]urisdiction of the United States with respect to a
6 vessel’ to be insulated from waiver or forfeiture by a defendant, and would also
7 want courts in every case—and at every level of review—to assure that the
8 requirement is satisfied.” Miranda, 780 F.3d at 1194 (citation omitted).
9 The majority’s most persuasive point is that 18 U.S.C. § 3231 grants district
10 courts “original jurisdiction, exclusive of the courts of the States, of all offenses
11 against the laws of the United States.” 18 U.S.C. § 3231. Nevertheless, it does not
12 necessarily follow that the MDLEA contains no limit on that seemingly blanket
5 The majority claims to find support in 46 U.S.C. § 70505, which provides, inter
alia, “A failure to comply with international law does not divest a court of
jurisdiction and is not a defense to a proceeding under this chapter.” This
language, the majority concludes, “demonstrates that, when Congress wanted to
speak of the court’s jurisdiction, it did so directly and clearly.” However, it is at
least equally compelling to read that language as demonstrating that the MDLEA
does concern itself with the subject‐matter jurisdiction of the federal courts—that
is, absent Section 70505’s express caveat, a failure to comply with international
law might otherwise deprive federal courts of jurisdiction, the apparent blanket
grant of subject‐matter jurisdiction in 18 U.S.C. § 3231, discussed below,
notwithstanding.
13
1 grant of subject‐matter jurisdiction. Cf. Morales v. Trans World Airlines, Inc., 504
2 U.S. 374, 384 (1992) (observing that it is “a commonplace of statutory
3 construction that the specific governs the general”). For instance, our Court has
4 “jurisdiction of appeals from all final decisions of the district courts.” 28 U.S.C.
5 § 1291. However, when it comes to appeals from criminal sentences, our
6 jurisdiction instead derives from 18 U.S.C. § 3742(a). See United States v. Hotaling,
7 634 F.3d 725, 728 (2d Cir. 2011). In contrast to Section 1291, “which grants broad
8 appellate jurisdiction,” Section 3742 “confers limited appellate jurisdiction.”
9 United States v. Doe, 93 F.3d 67, 67‐68 (2d Cir. 1996).
10 The majority also observes that Title 46 of the United States Code
11 repeatedly uses the phrase “vessel subject to the jurisdiction of the United States”
12 in contexts that clearly do not refer to courts’ subject‐matter jurisdiction. That is
13 true. However, I simply do not attach the same significance to that fact. There are
14 numerous other instances where a particular phrase takes on jurisdictional
15 significance in one statute but not others. Consider 18 U.S.C. § 3231, which grants
16 federal district courts with “original jurisdiction, exclusive of the courts of the
17 States, of all offenses against the laws of the United States.” The phrase “offenses
18 against the laws of the United States” carries obvious jurisdictional significance;
14
1 it defines the contours of Congress’s grant of subject‐matter jurisdiction to the
2 federal courts. Yet a similar phrase is used throughout the United States Code in
3 contexts that do not speak to courts’ jurisdiction. E.g., 18 U.S.C. § 3332(a) (“It
4 shall be the duty of each such grand jury impaneled within any judicial district to
5 inquire into offenses against the criminal laws of the United States alleged to have
6 been committed within that district.” (emphasis added)); 25 U.S.C. § 2802(c)(2)
7 (“[T]he responsibilities of the Office of Justice Services in Indian country shall
8 include . . . in cooperation with appropriate Federal and tribal law enforcement
9 agencies, the investigation of offenses against criminal laws of the United States . . . .”
10 (emphasis added)). Similarly here, the fact that Congress used the phrase “vessel
11 subject to the jurisdiction of the United States” throughout Title 46 does not
12 “most persuasively demonstrate[]” much—aside from Congress’s intent to
13 import that phrase as a limitation on courts’ subject‐matter jurisdiction by using
14 it in Section 70503 and referencing it in 70504(a).
15 CONCLUSION
16 I conclude with the following observation. The majority and I chart
17 different courses but reach the same destination: the conclusion that Defendants‐
18 Appellants’ convictions must be vacated and the indictment dismissed. Thus, in
15
1 this case, there is little practical consequence, if any, whether one understands
2 the jurisdictional issues referenced in Section 70504(a) as referring to courts’
3 subject‐matter jurisdiction or only the reach of the MDLEA itself. I suspect the
4 same will be true in most MDLEA cases.
5 Indeed, even if, as in this case, a criminal defendant pleads guilty, he or
6 she can still challenge on appeal whether the vessel on which he or she was
7 apprehended was “subject to the jurisdiction of the United States.” See 46 U.S.C.
8 § 70503(e). If the vessel was not, as the majority concludes here, there will be no
9 factual basis for the guilty plea, Fed. R. Crim. P. 11(b)(3), requiring that we vacate
10 the judgment of conviction and dismiss the indictment. The only difference, as
11 the majority observes, is that, if the issue is one of subject‐matter jurisdiction, it
12 can be raised for the first time on appeal. E.g., Yong Qin Luo v. Mikel, 625 F.3d 772,
13 775 (2d Cir. 2010). But, even under the majority’s interpretation, a district court is
14 statutorily required in every case to determine “[j]urisdictional issues” as
15 “preliminary questions.” 46 U.S.C. § 70504(a). That determination, if not objected
16 to, would be subject to the not‐insurmountable requirements of plain error
17 review should a defendant challenge it on appeal. See Fed. R. Crim. P. 52(b); see
18 also United States v. Garcia, 587 F.3d 509, 515 (2d Cir. 2009).
16
1 Because I agree with the disposition of this appeal, I concur in the
2 judgment.
17
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. PD-0447-06
RODOLFO RANGEL, Appellant
v.
THE STATE OF TEXAS
ON STATE'S AND APPELLANT'S
PETITIONS FOR DISCRETIONARY REVIEW
FROM THE SECOND COURT OF APPEALS
WICHITA COUNTY
Per curiam. Womack, J., concurred. Cochran, J., filed a dissenting opinion in
which Johnson, J., joined.
O P I N I O N
Rodolfo Rangel was convicted of, among other things, aggravated sexual assault of
a child. The trial judge assessed his punishment at fifty years' imprisonment.
Rangel appealed, claiming that the trial judge's decision to admit a videotaped
interview of the child-victim with a CPS investigator in lieu of the victim's testimony
violated his rights under the Confrontation Clause to the Sixth Amendment. (1) Rangel alleged
that the videotaped interview was inadmissible because he did not have an opportunity to
cross-examine the victim and the victim's statements constituted testimonial hearsay. (2) The
court of appeals held that the victim's statements were testimonial under the United States
Supreme Court's decisions in Crawford v. Washington and Davis v. Washington. (3) However,
the court went on to hold that Rangel waived his confrontation challenge because he failed
to avail himself of the procedure set out in Article 38.071, Section 2(b), (4) which, according to
the court, "provides an effective alternative means to the traditional face-to-face confrontation
at trial." (5)
Both Rangel and the State petitioned us for review. We granted both petitions.
The State's ground for review asks us to decide the following issue:
Did the court of appeals apply the correct analysis to determine that the
statement of a four-year-old child was testimonial under Crawford v.
Washington?
Directed at the court of appeal's holding that he waived his confrontation claim,
Rangel's ground for review reads as follows:
Whether [Rangel's] Sixth Amendment rights were violated when the
unavailable complainant's testimonial hearsay statements were admitted into
evidence pursuant to statutory authority.
We conclude that our decision to grant review of the State's and Rangel's petitions
was improvident. We should make clear that in dismissing these petitions we are in no way
endorsing the court of appeals's opinion. In her dissent, Judge Cochran does not address why
the issues are not properly before us. In reviewing whether the court of appeals erred by
holding that the videotaped statement of the victim is "testimonial" under Crawford, we are
limited to considering only the evidence before the judge at the time the ruling was made. (6)
A thorough review of the record reveals that all of the evidence--most importantly, the
videotape and the evidence concerning the circumstances surrounding the interview--that
would be required to properly analyze the court's ruling was admitted after the trial judge
made his ruling on Rangel's confrontation objection. The issue was never consensually re-litigated by the parties at a later time. (7) We refuse to examine the propriety of a trial judge's
ruling based on evidence that the trial judge had no opportunity to consider when he made
his ruling. Judicial restraint and prudence prevent us from reaching out and grabbing issues
simply because they are interesting and important. We will exercise our discretionary review
authority only where the issues are properly presented for our consideration. By exercising
our discretionary review authority in this manner, it cannot be said, with any validity, that we
"shirk our duty . . . ." The State's petition is therefore dismissed as improvidently granted.
Further, because our decision to grant review of Rangel's petition was predicated on our
decision to address the threshold "testimonial" issue, we also dismiss Rangel's petition as
improvidently granted.
DATE DELIVERED: February 13, 2008
PUBLISH
1. Rangel v. State, 199 S.W.3d 523, 532 (Tex. App.--Fort Worth 2006).
2. Id.
3. Id. at 535; Crawford v. Washington, 541 U.S. 36 (2004); Davis v. Washington,
126 S. Ct. 813 (2006).
4. Rangel, 199 S.W.3d at 537.
5. Id. at 536.
6. Weatherred v. State, 15 S.W.3d 540, 542 (Tex. Crim. App. 2000) (citing Hoyos
v. State, 982 S.W.2d 419, 422 (Tex. Crim. App. 1998); Hardesty v. State, 667 S.W.2d
130, 133 n. 6 (Tex. Crim. App. 1984)); Rachal v. State, 917 S.W.2d 799, 809 (Tex. Crim.
App. 1996).
7. Rachal, 917 S.W.2d at 809 (citing Hardesty, 667 S.W.2d at 135 n.6).
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366 U.S. 82 (1961)
IN RE ANASTAPLO.
No. 58.
Supreme Court of United States.
Argued December 14, 1960.
Decided April 24, 1961.
CERTIORARI TO THE SUPREME COURT OF ILLINOIS.
*83 Petitioner argued the cause and filed a brief pro se.
William C. Wines, Assistant Attorney General of Illinois, argued the cause for the State of Illinois, respondent. With him on the brief were William L. Guild, Attorney General, and Raymond S. Sarnow and A. Zola Groves, Assistant Attorneys General.
Briefs of amici curiae, urging reversal, were filed by Roscoe T. Steffen for the American Civil Liberties Union and by David Scribner, Leonard B. Boudin, Ben Margolis, William B. Murrish and Charles Stewart for the National Lawyers Guild.
MR. JUSTICE HARLAN delivered the opinion of the Court.
The questions presented by this case are similar to those involved in No. 28, Konigsberg v. State Bar of California, decided today, ante, p. 36.
In 1954 petitioner, George Anastaplo, an instructor and research assistant at the University of Chicago, having previously passed his Illinois bar examinations, was denied admission to the bar of that State by the Illinois Supreme Court.[1] The denial was based upon his refusal to answer *84 questions of the Committee on Character and Fitness as to whether he was a member of the Communist Party.[2] This Court, two Justices dissenting, refused review. 348 U. S. 946. In 1957, following this Court's decisions in the earlier Konigsberg case, 353 U. S. 252, and in Schware v. Board of Bar Examiners of New Mexico, 353 U. S. 232, Anastaplo sought to have the Character Committee rehear his application for certification. The Committee, by a divided vote, refused, but the State Supreme Court reversed and directed rehearing.[3]
*85 The ensuing lengthy proceedings before the Committee,[4] at which Anastaplo was the only witness, are perhaps best described as a wide-ranging exchange between the Committee and Anastaplo in which the Committee sought to explore Anastaplo's ability conscientiously to swear support of the Federal and State Constitutions, as required by the Illinois attorneys' oath, and Anastaplo undertook to expound and defend, on historical and ideological premises, his abstract belief in the "right of revolution," and to resist, on grounds of asserted constitutional right and scruple, Committee questions which he deemed improper.[5] The Committee already had before it uncontroverted evidence as to Anastaplo's "good moral character," in the form of written statements or affidavits *86 furnished by persons of standing acquainted with him, and the record on rehearing contains nothing which could properly be considered as reflecting adversely upon his character or reputation or on the sincerity of the beliefs he espoused before the Committee.[6] Anastaplo persisted, however, in refusing to answer, among other inquiries,[7] the Committee's questions as to his possible membership in the Communist Party or in other allegedly related organizations.
Thereafter the Committee, by a vote of 11 to 6, again declined to certify Anastaplo because of his refusal to answer such questions, the majority stating in its report to the Illinois Supreme Court:
"his [Anastaplo's] failure to reply, in our view, (i) obstructs the lawful processes of the Committee, (ii) prevents inquiry into subjects which bear intimately upon the issue of character and fitness, such as loyalty to our basic institutions, belief in representative government and bona fides of the attorney's oath and (iii) results in his failure to meet the burden of establishing that he possesses the good moral character and fitness to practice law, which are conditions to the granting of a license to practice law.
"We draw no inference of disloyalty or subversion from applicant's continued refusal to answer questions concerning Communist or other subversive affiliations. We do, however, hold that there is a strong public interest in our being free to question applicants for admission to the bar on their adherence to our basic institutions and form of government *87 and that such public interest in the character of its attorneys overrides an applicant's private interest in keeping such views to himself. By failing to respond to this higher public interest we hold that the applicant has obstructed the proper functions of the Committee.. . . We cannot certify the applicant as worthy of the trust and confidence of the public when we do not know that he is so worthy and when he has prevented us from finding out."
At the same time the full Committee acknowledged that Anastaplo
"is well regarded by his academic associates, by professors who had taught him in school and by members of the Bar who know him personally . . .";
that it had
"not been supplied with any information by any third party which is derogatory to Anastaplo's character or general reputation . . .";
and that it had
"received no information from any outside source which would cast any doubt on applicant's loyalty or which would tend to connect him in any manner with any subversive group."
Further, the majority found that Anastaplo's views
"with respect to the right to overthrow the government by force or violence, while strongly libertarian and expressed with an intensity and fervor not necessarily shared by all good citizens, are not inconsistent with those held by many patriotic Americans both at the present time and throughout the course of this country's history and do not in and of themselves reveal any adherence to subversive doctrines."
*88 Upon review, the Illinois Supreme Court, over three dissents,[8] confirmed the Committee's report and refusal to certify Anastaplo, reaffirming in its per curiam opinion the court's
". . . earlier conclusion that a determination as to whether an applicant can in good conscience take the attorney's oath to support and defend the constitutions of the United States and the State of Illinois is impossible where he refuses to state whether he is a member of a group dedicated to the overthrow of the government of the United States by force and violence." 18 Ill. 2d 182, 200-201, 163 N. E. 2d 429, 439.
We granted certiorari, 362 U. S. 968, and set the matter for argument along with the Konigsberg case, ante, p. 36, and Cohen v. Hurley, post, p. 117.
Two of the basic issues in this litigation have been settled by our contemporary Konigsberg opinion. We have there held it not constitutionally impermissible for a State legislatively, or through court-made regulation as here and in Konigsberg, to adopt a rule that an applicant will not be admitted to the practice of law if, and so long as, by refusing to answer material questions, he obstructs a bar examining committee in its proper functions of interrogating and cross-examining him upon his qualifications. That such was a proper function of the Illinois Character Committee is incontestably established by the opinions of the State Supreme Court in this case. 3 Ill. *89 2d, at 476, 121 N. E. 2d, at 829; 18 Ill. 2d, at 188, 163 N. E. 2d, at 432.[9]
We have also held in Konigsberg that the State's interest in enforcing such a rule as applied to refusals to answer questions about membership in the Communist Party outweighs any deterrent effect upon freedom of speech and association, and hence that such state action does not offend the Fourteenth Amendment.[10] We think that in this respect no valid constitutional distinction can be based on the circumstance that in Konigsberg there was some, though weak, independent evidence that the applicant had once been connected with the Communist Party, while here there was no such evidence as to *90 Anastaplo. Where, as with membership in the bar, the State may withhold a privilege available only to those possessing the requisite qualifications, it is of no constitutional significance whether the State's interrogation of an applicant on matters relevant to these qualifications in this case Communist Party membershipis prompted by information which it already has about him from other sources, or arises merely from a good faith belief in the need for exploratory or testing questioning of the applicant. Were it otherwise, a bar examining committee such as this, having no resources of its own for independent investigation, might be placed in the untenable position of having to certify an applicant without assurance as to a significant aspect of his qualifications which the applicant himself is best circumstanced to supply. The Constitution does not so unreasonably fetter the States.[11]
Two issues, however, do arise upon this record which are not disposed of by Konigsberg. The first is whether Anastaplo was given adequate warning as to the consequences of his refusal to answer the Committee's questions relating to Communist Party membership. The second is whether his exclusion from the bar on this ground was, in the circumstances of this case, arbitrary or discriminatory.
I.
The opinions below reflect full awareness on the part of the Character Committee and the Illinois Supreme Court of Anastaplo's constitutional right to be warned in advance of the consequences of his refusal to answer.[12]*91 Cf. Konigsberg v. State Bar, 353 U. S., at 261. On the part of Anastaplo, he stands in the unusual position of one who had already been clearly so warned as a result of his earlier exclusion from the bar for refusal to answer the very question which was again put to him on rehearing. See note 2, supra. Anastaplo nevertheless, contends in effect that he was lulled into a false sense of security by various occurrences at the Committee hearings: (1) several statements by Committee members indicating that all questions asked and refused an answer should not be considered as bearing the same level of importance in the eyes of the Committee;[13] and (2) a statement by one of the principal Committee members that Illinois had no "per se" rule of exclusion, that is that Anastaplo's refusal to answer would not automatically operate to exclude him from the bar.[14]
*92 These suggestions, whether taken separately or together, can only be viewed as insubstantial. The sum and substance of the matter is that throughout the renewed proceedings petitioner was fully aware that his application for admission had already once been rejected on the very ground about which he now professes to have been left in doubt, and that the Committee made manifest both that it continued to attach special importance to its Communist Party affiliation questions, and that adverse *93 consequences might well follow if Anastaplo persisted in refusing to answer them.
What follows will suffice to show that statements to the effect that the Committee as a whole did not necessarily approve or adopt every question asked by any of its members can hardly be taken as having left petitioner in doubt as to the central importance and general approval of questions about Communist Party membership. At an early stage of the proceedings Anastaplo was informed:
"Now you have asked for a warning when we put a question to you that we think is a pivotal, important question in connection with your qualification. I must tell you that we consider that question, `Are you a member of the Communist Party,' such a question; and that the refusal to answer it may have serious consequences to your application."
And at the last hearing one of the leading Committee members responded to Anastaplo's insistence on being told even more explicitly what refusals to answer would be of significance to the Committee, by pointing out that
"The Supreme Court of Illinois has ruled that it is proper for us to ask you whether you are a member of the Communist Party. You have refused to answer the question."[15]
Further, petitioner's repeated objections throughout the hearings to the effect that there was no basis for the Committee's evident purpose to give much greater emphasis to questions about Communist Party membership than to other unanswered inquiries, dispel any doubt that *94 Anastaplo was quite aware that Communist-affiliation questions were to be treated differently from other questions he had refused to answer.
The other aspect of petitioner's claim on lack of adequate warning is equally untenable. It is true that the Committee told Anastaplo that his refusal to answer questions would not ipso facto result in his exclusion from the bar, but only that it "could and might." This, however, certainly did not give rise to constitutional infirmity. Even as to one charged with crime due process does not demand that he be warned as to what specific sanction will be applied to him if he violates the law. It is enough that he know what sanction "could and might" be visited on him. Anastaplo was entitled to no more. It is of course indubitable that by reason of the original rejection of his application, Anastaplo knew of Illinois' rule of exclusion for refusal to answer relevant questionsindeed the very questions involved here.[16]
Petitioner having been fairly warned that exclusion from admission to practice might follow from his refusal to answer, it must be found that this requirement of due process was duly met.
II.
Petitioner's claim that the application of the State's exclusionary rule was arbitrary and discriminatory in the circumstances of this case must also be rejected. It is contended (1) that Anastaplo's refusal to answer these *95 particular questions did not obstruct the Committee's investigation, because that body already had before it uncontroverted evidence establishing petitioner's good character and fitness for the practice of law; and (2) that the real reason why the State proceeded as it did was because of its disapproval of Anastaplo's constitutionally protected views on the right to resist tyrannical government. Neither contention can be accepted.
It is sufficient to say in answer to the first contention that even though the Committee already had before it substantial character evidence altogether favorable to Anastaplo, there is nothing in the Federal Constitution which required the Committee to draw the curtain upon its investigation at that point. It had the right to supplement that evidence and to test the applicant's own credibility by interrogating him. And to those ends the Committee could insist upon unprivileged answers to relevant questions, such as we have held in our today's Konigsberg opinion those relating to Communist affiliations were, even though as to them the Committee could not, as it did not, draw an unfavorable inference from refusal to answer. Konigsberg v. State Bar of California, supra.
As to the second contention, there is nothing in the record which would justify our holding that the State has invoked its exclusionary refusal-to-answer rule as a mask for its disapproval of petitioner's notions on the right to overthrow tyrannical government.[17] While the Committee's majority report does observe that there was "a serious question" whether Anastaplo's views on the right to resist judicial decrees would be compatible with his taking of the attorney's oath, and that "certain" members of the Committee thought that such views affirmatively *96 demonstrated his disqualification for admission to the bar,[18] it is perfectly clear that the Illinois Bar Committee and Supreme Court regarded petitioner's refusal to cooperate in the Committee's examination of him as the basic and only reason for a denial of certification.[19]
A different conclusion is not suggested by the circumstances that the Committee when it reheard Anastaplo evinced its willingness to consider the effect of petitioner's refusal to answer in light of what might transpire at the hearings, and that it continued to explore petitioner's views on resistance and overthrow long after it became clear that he would refuse to answer Communist-affiliation questions. These factors indicate no more than that the Committee was attempting to exercise an informed judgment as to whether the situation was an appropriate one for waiver of the Committee's continuing requirement, earlier enforced after the first Anastaplo hearings, that such questions must be answered. Finally, contrary to the assumption on which some of the arguments on behalf of Anastaplo seem to have proceeded, we do not understand that Illinois' exclusionary requirement will continue to operate to exclude Anastaplo from the bar any longer than he continues in his refusal to answer. We *97 find nothing to suggest that he would not be admitted now if he decides to answer, assuming of course that no grounds justifying his exclusion from practice resulted. In short, petitioner holds the key to admission in his own hands.
We conclude with observing that our function here is solely one of constitutional adjudication, not to pass judgment on what has been done as if we were another state court of review, still less to express any view upon the wisdom of the State's action. With appropriate regard for the limited range of our authority we cannot say that the State's denial of Anastaplo's application for admission to its bar offends the Federal Constitution.[20] The judgment of the Illinois Supreme Court must therefore be
Affirmed.
MR. JUSTICE BLACK, with whom THE CHIEF JUSTICE, MR. JUSTICE DOUGLAS and MR. JUSTICE BRENNAN concur, dissenting.
The petitioner George Anastaplo has been denied the right to practice law in the State of Illinois for refusing to answer questions about his views and associations. I think this action by the State violated rights guaranteed to him by the First and Fourteenth Amendments. The reasons which lead me to this conclusion are largely the same as those expressed in my dissenting opinion in Konigsberg v. State Bar of California, the companion case decided today, ante, p. 56. But this case provides such a striking illustration of the destruction that can be inflicted upon individual liberty when this Court fails to *98 enforce the First Amendment to the full extent of its express and unequivocal terms that I think it deserves separate treatment.
The controversy began in November 1950,[1] when Anastaplo, a student at the University of Chicago Law School, having two months previously successfully passed the Illinois Bar examination, appeared before the State's Committee on Character and Fitness for the usual interview preliminary to admission to the Bar. The personal history form required by state law had been filled out and filed with the Committee prior to his appearance and showed that Anastaplo was an unusually worthy applicant for admission. His early life had been spent in a small town in southern Illinois where his parents, who had immigrated to this country from Greece before his birth, still resided. After having received his precollege education in the public schools of his home town, he had discontinued his education, at the age of eighteen, and joined the Air Force during the middle of World War II flying as a navigator in every major theater of the military operations of that war. Upon receiving an honorable discharge in 1947, he had come to Chicago and resumed his education, obtaining his undergraduate degree at the University of Chicago and entering immediately into the study of law at the University of Chicago Law School. His record throughout his life, both as a student and as a citizen, was unblemished.
The personal history form thus did not contain so much as one statement of fact about Anastaplo's past life or conduct that could have, in any way, cast doubt upon his fitness for admission to the Bar. It did, however, contain *99 a statement of opinion which, in the minds of some of the members of the Committee at least, did cast such doubt and in that way served to touch off this controversy. This was a statement made by Anastaplo in response to the command of the personal history form: "State what you consider to be the principles underlying (a) the Constitution of the United States." Anastaplo's response to that command was as follows:
"One principle consists of the doctrine of the separation of powers; thus, among the Executive, Legislative, and Judiciary are distributed various functions and powers in a manner designed to provide for a balance of power, thereby intending to prevent totally unrestrained action by any one branch of government. Another basic principle (and the most important) is that such government is constituted so as to secure certain inalienable rights, those rights to Life, Liberty and the Pursuit of Happiness (and elements of these rights are explicitly set forth in such parts of the Constitution as the Bill of Rights.). And, of course, whenever the particular government in power becomes destructive of these ends, it is the right of the people to alter or to abolish it and thereupon to establish a new government. This is how I view the Constitution." (Emphasis supplied.)
When Anastaplo appeared before a two-man Subcommittee of the Committee on Character and Fitness, one of its members almost immediately engaged him in a discussion relating to the meaning of these italicized words which were substantially taken from that part of the Declaration of Independence set out below.[2] This discussion *100 soon developed into an argument as Anastaplo stood by his statement and insisted that if a government gets bad enough, the people have a "right of revolution." It was at this juncture in the proceedings that the other member of the Subcommittee interrupted with the question: "Are you a member of any organization that is listed on the Attorney General's list, to your knowledge?" And this question was followed up a few moments later with the question: "Are you a member of the Communist Party?"[3] A colloquy then ensued *101 between Anastaplo and the two members of the Subcommittee as to the legitimacy of the questions being asked, Anastaplo insisting that these questions were not reasonably related to the Committee's functions and that they violated his rights under the Constitution, and the members *102 of the Subcommittee insisting that the questions were entirely legitimate.
The Subcommittee then refused to certify Anastaplo for admission to the Bar but, instead, set a further hearing on the matter before the full Committee. That next hearing, as well as all of the hearings that followed, have been little more than repetitions of the first. The rift between Anastaplo and the Committee has grown ever wider with each successive hearing. Anastaplo has steadfastly refused to answer any questions put by the Committee which inquired into his political associations or religious beliefs. A majority of the members of the Committee, faced with this refusal, has grown more and more insistent that it has the right to force him to answer any question it sees fit to ask. The result has been a series of hearings in which questions have been put to Anastaplo with regard to his "possible" association with scores of organizations, including the Ku Klux Klan, the Silver Shirts (an allegedly Fascist organization), every organization on the so-called Attorney General's list, the Democratic Party, the Republican Party, and the Communist Party. At one point in the proceedings, at least two of the members of the Committee insisted that he tell the Committee whether he believes in a Supreme Being and one of these members stated that, as far as his vote was concerned, a man's "belief in the Deity . . . has a substantial bearing upon his fitness to practice law."
It is true, as the majority points out, that the Committee did not expressly rest its refusal to certify Anastaplo for admission to the Bar either upon his views on the "right of revolution," as that "right" is defined in the Declaration of Independence, or upon his refusal to disclose his beliefs with regard to the existence of God,[4]*103 or upon his refusals to disclose any of his political associations other than his "possible" association with the Communist Party. But it certainly cannot be denied that the other questions were asked and, since we should not presume that these members of the Committee did not want answers to their questions, it seems certain that Anastaplo's refusal to answer them must have had some influence upon the final outcome of the hearings. In any case, when the Committee did vote, 11-6, not to certify Anastaplo for admission, not one member who asked any question Anastaplo had refused to answer voted in his favor.
The reasons for Anastaplo's position have been stated by him time and againfirst, to the Committee and, later, in the briefs and oral arguments he presented in his own behalf, both before this Court and before the Supreme Court of Illinois. From a legal standpoint, his position throughout has been that the First Amendment gave him a right not to disclose his political associations or his religious beliefs to the Committee. But his decision to refuse to disclose these associations and beliefs went much deeper than a bare reliance upon what he considered to be his legal rights. The record shows that his refusal to answer the Committee's question stemmed primarily from his belief that he had a duty, both to society and to the legal profession, not to submit to the demands of the Committee because he believed that the questions had been asked solely for the purpose of harassing him because he *104 had expressed agreement with the assertion of the right of revolution against an evil government set out in the Declaration of Independence. His position was perhaps best stated before the Committee in his closing remarks at the final session:
"It is time now to close. Differences between us remain. I leave to others the sometimes necessary but relatively easy task of praising Athens to Athenians. Besides, you should want to higher praise than what I have said about the contribution the bar can make to republican government. The bar deserves no higher praise until it makes that contribution. You should be grateful that I have not made a complete submission to you, even though I have cooperated as fully as good conscience permits. To the extent I have not submitted, to that extent have I contributed to the solution of one of the most pressing problems that you, as men devoted to character and fitness, must face. This is the problem of selecting the standards and methods the bar must employ if it is to help preserve and nourish that idealism, that vital interest in the problem of justice, that so often lies at the heart of the intelligent and sensitive law student's choice of career. This is an idealism which so many things about the bar, and even about bar admission practices, discourage and make unfashionable to defend or retain. The worthiest men live where the rewards of virtue are greatest.
"I leave with you men of Illinois the suggestion that you do yourselves and the bar the honor, as well as the service, of anticipating what I trust will be the judgment of our most thoughtful judges. I move therefore that you recommend to the Supreme Court of Illinois that I be admitted to the bar of this *105 State. And I suggest that this recommendation be made retroactive to November 10, 1950 when a young Air Force veteran first was so foolish as to continue to serve his country by daring to defend against a committee on character and fitness the teaching of the Declaration of Independence on the right of revolution."
The reasons for the Committee's position are also clear. Its job, throughout these proceedings, has been to determine whether Anastaplo is possessed of the necessary good moral character to justify his admission to the Bar of Illinois. In that regard, the Committee has been given the benefit of voluminous affidavits from men of standing in their professions and in the community that Anastaplo is possessed of an unusually fine character. Dr. Alexander Meiklejohn, Professor of Philosophy, Emeritus, at the University of Wisconsin, for example, described Anastaplo as "intellectually able, a hard, thorough student and moved by high devotion to the principles of freedom and justice." Professor Malcolm P. Sharp of the University of Chicago Law School stated: "No question has ever been raised about his honesty or his integrity, and his general conduct, characterized by friendliness, quiet independence, industry and courage, is reflected in his reputation." Professor Roscoe T. Steffen of the University of Chicago Law School said: "I know of no one who doubts his honesty and integrity." Yves R. Simon, Professor of Philosophy at the University of Chicago, said: "I consider Anastaplo as a young man of the most distinguished and lofty moral character. Everybody respects him and likes him." Angelo G. Geocaris, a practicing attorney in the City of Chicago, said of Anastaplo: "His personal code of ethics is unexcelled by any practicing attorney I have met in the state of Illinois." Robert J. Coughlan, Division Director of *106 a research project at the University of Chicago, said: "His honesty and integrity are, in my opinion, beyond question. I would highly recommend him without the slightest reservation for any position involving the highest or most sacred trust. The applicant is a rare man among us today: he has an inviolable sense of Honor in the great traditions of Greek culture and thought. If admitted to the American Bar, he could do nothing that would not reflect glory on that institution."
These affidavits and many more like them were presented to the Committee. Most of the statements came from men who knew Anastaplo intimately on the University of Chicago campus where Anastaplo has remained throughout the proceedings here involved, working as a research assistant and as a lecturer in Liberal Arts and studying for an advanced degree in History and Social Sciences. Even at the present time, he is still there preparing his doctoral dissertation which, understandably enough, is tentatively entitled "The Historical and Philosophical Background of the First Amendment of the Constitution of the United States."
The record also shows that the Committee supplemented the information it had obtained about Anastaplo from these affidavits by conducting informal independent investigations into his character and reputation. It sent agents to Anastaplo's home town in southern Illinois and they questioned the people who knew him there. Similar inquiries were made among those who knew him in Chicago. But these intensive investigations apparently[5] failed to produce so much as one man in Chicago or in the whole State of Illinois who could say or would say, directly, indirectly or even by hearsay, one thing derogatory *107 to the character, loyalty or reputation of George Anastaplo, and not one man could be found who would in any way link him with the Communist Party. This fact is particularly significant in view of the evidence in the record that the Committee had become acquainted with a person who apparently had been a member of a Communist Party cell on the University of Chicago campus and that this person was asked to and did identify for the Committee every member of the Party whom he knew.
In addition to the information it had obtained from the affidavits and from its independent investigations, the Committee had one more important source of information about Anastaplo's character. It had the opportunity to observe the manner in which he conducted himself during the many hours of hearings before it. That manner, as revealed by the record before us and undenied by any findings of the Committee to the contrary, left absolutely nothing to be desired. Faced with a barrage of sometimes highly provocative and totally irrelevant questions from men openly hostile to his position, Anastaplo invariably responded with all the dignity and restraint attributed to him in the affidavits of his friends. Moreover, it is not amiss to say that he conducted himself in precisely the same manner during the oral argument he presented before this Court.
Thus, it is against the background of a mountain of evidence so favorable to Anastaplo that the word "over-whelming" seems inadequate to describe it that the action of the Committee in refusing to certify Anastaplo as fit for admission to the Bar must be considered. The majority of the Committee rationalized its position on the ground that without answers to some of the questions it had asked, it could not conscientiously perform its duty of determining Anastaplo's character and fitness to be a lawyer. A minority of the Committee described *108 this explanation as "pure sophistry." And it is simply impossible to read this record without agreeing with the minority. For, it is difficult to see what possible relevancy answers to the questions could have had in the minds of these members of the Committee after they had received such completely overwhelming proof beyond a reasonable doubt of Anastaplo's good character and staunch patriotism. I can think of no sound reason for further insistence upon these answers other than the very questionable, but very human, feeling that this young man should not be permitted to resist the Committee's demands without being compelled to suffer for it in some way.
It is intimated that the Committee's feeling of resentment might be assuaged and that Anastaplo might even be admitted to the Bar if he would only give in to the demands of the Committee and add the requested test oath to the already overwhelming proof he has submitted to establish his good character and patriotism. In this connection, the Court says: "We find nothing to suggest that he would not be admitted now if he decides to answer, assuming of course that no grounds justifying his exclusion from practice resulted. In short, petitioner holds the key to admission in his own hands." However well this familiar phrase may fit other cases, it does not fit this one. For the attitude of the Committee, as revealed by the transcript of its hearings, does not support a belief that Anastaplo can gain admission to the Illinois Bar merely by answering the Committee's questions, whatever answers he should give. Indeed, the Committee's own majority report discloses that Anastaplo's belief in the "right of revolution" was regarded as raising "a serious question" in the minds of a majority of the Committee with regard to his fitness to practice law and that "certain" members of that majority (how many, we cannot know) have already stated categorically that they will *109 not vote to admit an applicant who expresses such views. Nor does the opinion of the Illinois Supreme Court indicate that Anastaplo "holds the key to admission in his own hands." Quite the contrary, that court's opinion evidences an almost insuperable reluctance to upset the findings of the Committee. Certainly, that opinion contains nothing that even vaguely resembles the sort of implicit promise that would justify the belief asserted by the majority here. And, finally, I see nothing in the majority opinion of this Court, nor in the majority opinions in the companion cases decided today, that would justify a belief that this Court would unlock the door that blocks his admission to the Illinois Bar if Anastaplo produced the "key" and the state authorities refused to use it.
The opinion of the majority already recognizes that there is not one scrap of evidence in the record before us "which could properly be considered as reflecting adversely upon his [Anastaplo's] character or reputation or on the sincerity of the beliefs he espoused before the Committee," and that the Committee had not received any "information from any outside source which would cast any doubt on applicant's loyalty or which would tend to connect him in any manner with any subversive group.' " The majority opinion even concedes that Anastaplo was correct in urging that the questions asked by the Committee impinged upon the freedoms of speech and association guaranteed by the First and Fourteenth Amendments. But, the opinion then goes on to hold that Anastaplo can nonetheless be excluded from the Bar pursuant to "the State's interest in having lawyers who are devoted to the law in its broadest sense . . . ."[6] I cannot regard that holding, as applied to a man like Anastaplo, as in any way justified. *110 Consider it, for example, in the context of the following remarks of Anastaplo to the Committee remarks the sincerity of which the majority does not deny:
"I speak of a need to remind the bar of its traditions and to keep alive the spirit of dignified but determined advocacy and opposition. This is not only for the good of the bar, of course, but also because of what the bar means to American republican government. The bar when it exercises selfcontrol is in a peculiar position to mediate between popular passions and informed and principled men, thereby upholding republican government. Unless there is this mediation, intelligent and responsible government is unlikely. The bar, furthermore, is in a peculiar position to apply to our daily lives the constitutional principles which nourish for this country its inner life. Unless there is this nourishment, a just and humane people is impossible. The bar is, in short, in a position to train and lead by precept and example the American people."[7]
These are not the words of a man who lacks devotion to "the law in its broadest sense."
The majority, apparently considering this fact irrelevant because the State might possibly have an interest in learning more about its Bar applicants, decides that Anastaplo can properly be denied admission to the Bar by purporting to "balance" the interest of the State of Illinois in "having lawyers who are devoted to the law in its broadest sense" against the interest of Anastaplo *111 and the public in protecting the freedoms of the First Amendment, concluding, as it usually does when it engages in this process, that "on balance" the interest of Illinois must prevail.[8] If I had ever doubted that the "balancing test" comes close to being a doctrine of governmental absolutismthat to "balance" an interest in individual liberty means almost inevitably to destroy that libertythose doubts would have been dissipated by this case. For this so-called "balancing test"which, as applied to the First Amendment, means that the freedoms of speech, press, assembly, religion and petition can be repressed whenever there is a sufficient governmental interest in doing sohere proves pitifully and pathetically inadequate to cope with an invasion of individual liberty so plainly unjustified that even the majority apparently feels compelled expressly to disclaim "any view upon the wisdom of the State's action."
I, of course, wholeheartedly agree with the statement of the majority that this Court should not, merely on the ground that such action is unwise, interfere with governmental action that is within the constitutional powers of that government. But I am no less certain that this Court should not permit governmental action that plainly abridges constitutionally protected rights of the People merely because a majority believes that on "balance" it is better, or "wiser," to abridge those rights than to leave them free. The inherent vice of the "balancing test" is that it purports to do just that. In the context of its reliance upon the "balancing test," the Court's disclaimer *112 of "any view upon the wisdom of the State's action" here thus seems to me to be wholly inconsistent with the only ground upon which it has decided this case.
Nor can the majority escape from this inconsistency on the ground that the "balancing test" deals only with the question of the importance of the existence of governmental power as a general matter without regard to the importance of its exercise in a particular case. For in Barenblatt v. United States the same majority made it clear that the "balancing test" is to be applied to the facts of each particular case: "Where First Amendment rights are asserted to bar governmental interrogation resolution of the issue always involves a balancing by the courts of the competing private and public interests at stake in the particular circumstances shown."[9] (Emphasis supplied.) Thus the Court not only "balances" the respective values of two competing policies as a general matter, but also "balances" the wisdom of those policies in "the particular circumstances shown." Thus, the Court has reserved to itself the power to permit or deny abridgment of First Amendment freedoms according to its own view of whether repression or freedom is the wiser governmental policy under the circumstances of each case.
The effect of the Court's "balancing" here is that any State may now reject an applicant for admission to the Bar if he believes in the Declaration of Independence as strongly as Anastaplo and if he is willing to sacrifice his career and his means of livelihood in defense of the freedoms of the First Amendment. But the men who founded this country and wrote our Bill of Rights were strangers neither to a belief in the "right of revolution" nor to the urgency of the need to be free from the control of government *113 with regard to political beliefs and associations. Thomas Jefferson was not disclaiming a belief in the "right of revolution" when he wrote the Declaration of Independence. And Patrick Henry was certainly not disclaiming such a belief when he declared in impassioned words that have come on down through the years: "Give me liberty or give me death." This country's freedom was won by men who, whether they believed in it or not, certainly practiced revolution in the Revolutionary War.
Since the beginning of history there have been governments that have engaged in practices against the people so bad, so cruel, so unjust and so destructive of the individual dignity of men and women that the "right of revolution" was all the people had left to free themselves. As simple illustrations, one government almost 2,000 years ago burned Christians upon fiery crosses and another government, during this very century, burned Jews in crematories. I venture the suggestion that there are countless multitudes in this country, and all over the world, who would join Anastaplo's belief in the right of the people to resist by force tyrannical governments like those.
In saying what I have, it is to be borne in mind that Anastaplo has not indicated, even remotely, a belief that this country is an oppressive one in which the "right of revolution" should be exercised.[10] Quite the contrary, *114 the entire course of his life, as disclosed by the record, has been one of devotion and service to his countryfirst, in his willingness to defend its security at the risk of his own life in time of war and, later, in his willingness to defend its freedoms at the risk of his professional career in time of peace. The one and only time in which he has come into conflict with the Government is when he refused to answer the questions put to him by the Committee about his beliefs and associations. And I think the record clearly shows that conflict resulted, not from any fear on Anastaplo's part to divulge his own political activities, but from a sincere, and in my judgment correct, conviction that the preservation of this country's freedom depends upon adherence to our Bill of Rights. The very most that can fairly be said against Anastaplo's position in this entire matter is that he took too much of the responsibility of preserving that freedom upon himself.
This case illustrates to me the serious consequences to the Bar itself of not affording the full protections of the First Amendment to its applicants for admission. For this record shows that Anastaplo has many of the qualities that are needed in the American Bar.[11] It shows, not only that Anastaplo has followed a high moral, ethical and patriotic course in all of the activities of his life, but also that he combines these more common virtues with the uncommon virtue of courage to stand by his principles at any cost. It is such men as these who have most greatly honored the profession of the lawmen like Malsherbes, who, at the cost of his own life and the lives of his family, sprang unafraid to the defense of Louis XVI against the *115 fanatical leaders of the Revolutionary government of France[12]men like Charles Evans Hughes, Sr., later Mr. Chief Justice Hughes, who stood up for the constitutional rights of socialists to be socialists and public officials despite the threats and clamorous protests of self-proclaimed superpatriots[13]men like Charles Evans Hughes, Jr., and John W. Davis, who, while against everything for which the Communists stood, strongly advised the Congress in 1948 that it would be unconstitutional to pass the law then proposed to outlaw the Communist Party[14] men like Lord Erskine, James Otis, Clarence Darrow, and the multitude of others who have dared to speak in defense of causes and clients without regard to personal danger to themselves. The legal profession will lose much of its nobility and its glory if it is not constantly replenished with lawyers like these. To force the Bar to become a *116 group of thoroughly orthodox, time-serving, government-fearing individuals is to humiliate and degrade it.
But that is the present trend, not only in the legal profession but in almost every walk of life. Too many men are being driven to become government-fearing and time-serving because the Government is being permitted to strike out at those who are fearless enough to think as they please and say what they think.[15] This trend must be halted if we are to keep faith with the Founders of our Nation and pass on to future generations of Americans the great heritage of freedom which they sacrificed so much to leave to us. The choice is clear to me. If we are to pass on that great heritage of freedom, we must return to the original language of the Bill of Rights. We must not be afraid to be free.
MR. JUSTICE BRENNAN, with whom THE CHIEF JUSTICE joins, dissenting.
I join MR. JUSTICE BLACK'S dissent. I add only that I think the judgment must also be reversed on the authority of Speiser v. Randall, 357 U. S. 513, for the reasons expressed in my dissent in Konigsberg v. State Bar of California, ante, p. 80.
NOTES
[1] The Illinois procedure for admission to the bar was thus summarized by the State Supreme Court (3 Ill. 2d, at 475-476, 121 N. E. 2d, at 829):
"In the exercise of its judicial power over the bar, and in discharge of its responsibility for the choice of personnel who will compose that bar, this court has adopted Rule 58, (Ill. Rev. Stat. 1951, chap. 110, par. 259.58,) which governs admissions and provides, among other things, that applicants shall be admitted to the practice of law by this court after satisfactory examination by the Board of Examiners and certification of approval by a Committee on Character and Fitness. Section IX of the rule provides for the creation of such committees and imposes upon them the duty to examine applicants who appear before them for moral character, general fitness to practice law and good citizenship. Still another condition precedent to admission to practice law in this State, imposed by the legislature, is the taking of an oath to support the constitution of the United States and the constitution of the State of Illinois. (Ill. Rev. Stat. 1951, chap. 13, par. 4.)"
[2] On that occasion the State Supreme Court said (3 Ill. 2d, at 480, 121 N. E. 2d, at 831):
"It is our opinion, therefore, that a member of the Communist Party may, because of such membership, be unable truthfully and in good conscience to take the oath required as a condition for admission to practice, and we hold that it is relevant to inquire of an applicant as to his membership in that party. A negative answer to the question, if accepted as true, would end the inquiry on the point. If the truthfulness of a negative answer were doubted, further questions and information to test the veracity of the applicant would be proper. If an affirmative answer were received, further inquiry into the applicant's innocence or knowledge as to the subversive nature of the organization would be relevant. Under any hypothesis, therefore, questions as to membership in the Communist Party or known subversive `front' organizations were relevant to the inquiry into petitioner's fitness for admission to the bar. His refusal to answer has prevented the committee from inquiring fully into his general fitness and good citizenship and justifies their refusal to issue a certificate."
[3] In remanding the matter to the Character Committee, the Illinois Supreme Court stated (see 18 Ill. 2d, at 186, 163 N. E. 2d, at 431):
" `The principal question presented by the petition for rehearing concerns the significance of the applicant's views as to the overthrow of government by force in the light of Konigsberg v. State Bar of California, 353 U. S. 252, and Yates v. United States, 1 L. ed. 2d 1356, 77 S. Ct. 1064. Additional questions presented concern the applicant's activities since his original application was denied, and his present reputation.
" `We are of the opinion that the Committee should have allowed the petition for rehearing and heard evidence on these matters, and the Committee is requested to do so, and to report the evidence and its conclusions.' "
[4] The proceedings consumed six hearing days, and resulted in a transcript of over 400 pages.
[5] More particularly: petitioner was first asked routine questions about his personal history. He refused, on constitutional grounds, to answer whether he was affiliated with any church. He answered all questions about organizational relationships so long as he did not know that the organization was "political" in character. He refused, on grounds of protected free speech and association, to answer whether he was a member of the Communist Party or of any other group named in the Attorney General's list of "subversive" organizations, including the Ku Klux Klan and the Silver Shirts of America.
Much of the ensuing five sessions was devoted to discussion of Anastaplo's reasons for believing that inquiries into such matters were constitutionally privileged, and to an unjustifiable attempt, later expressly repudiated by the Committee, to delve into the consistency of petitioner's religious beliefs with an attorney's duty to take an oath of office.
A substantial part of the proceedings revolved around Anastaplo's views as to the right to revolt against tyrannical government, and the right to resist judicial decrees in exceptional circumstances.
[6] Although the transcript of the prior Committee proceedings has not been made part of the record before us, it is evident that it contained nothing which affirmatively reflected unfavorably on petitioner's character or reputation.
[7] See note 5, supra.
[8] Two dissenting opinions were filed. Justice Bristow dissented on constitutional grounds. 18 Ill. 2d, at 201, 163 N. E. 2d, at 439. Justices Schaefer and Davis, joining in a single opinion, did not reach the constitutional questions. 18 Ill. 2d, at 224, 163 N. E. 2d, at 928.
[9] In its second opinion, the State Supreme Court stated (18 Ill. 2d, at 188, 163 N. E. 2d, at 432):
"The committee further advises us that it has conducted no independent investigation into Anastaplo's character, reputation or activities. For the very practical reason that the committee has no personnel or other resources for any such investigation, the committee states that it has traditionally asserted the view that it cannot be expected to carry the burden of establishing, by independent investigation, whether an applicant possesses the requisite character and fitness for admission to the bar and that a duty devolves upon the applicant to establish that he possesses the necessary qualifications and that it is then the duty of the committee to test, by hearings and questioning of the applicant, the worth of the evidence which he proffers. We agree, and have held that the discretion exercised by the Committee on Character and Fitness will not ordinarily be reviewed. In re Frank, 293 Ill. 263."
[10] The fact that in Konigsberg the materiality of questions relating to Communist Party membership rested directly on the existence of a California statute disqualifying from membership in the bar those advocating forcible overthrow of government, whereas here materiality stemmed from their bearing upon the likelihood that a bar applicant would observe as a lawyer the orderly processes that lie at the roots of this country's legal and political systems, cf. Barenblatt v. United States, 360 U. S. 109, is of course a circumstance of no significance.
[11] Cf. Garner v. Los Angeles Board, 341 U. S. 716; American Communications Assn. v. Douds, 339 U. S. 382.
[12] The Committee's majority report states:
"The Committee repeatedly warned the applicant that questions regarding Communist affiliation were viewed as important by the Committee members and that his failure to respond to them could adversely affect his application for admission to the bar."
The Illinois Supreme Court stated (18 Ill. 2d, at 196, 163 N. E. 2d, at 436):
". . . no problem exists as to inadequate notice of the consequences of a refusal to answer; the applicant was specifically notified both by the Illinois Supreme Court in its opinion in 3 Ill. 2d 471, and by the committee on rehearing that his continued refusal to answer might lead to the denial of his application."
[13] It was stated at one point in the Committee hearings: "It has been pointed out before to you, that the mere fact that a question is asked does not indicate that other people would have asked or approved that question, nor does it indicate that any particular weight will be attached to the answer or failure to answer the question; do you understand?" It should be observed, however, that this remark, as was also the case with an earlier similar remark, was made in the context of questions involving petitioner's religious beliefs. See note 5, supra.
[14] This aspect of Anastaplo's contention is based on the following episode relating to the Committee's Communist Party questions:
"Mr. Anastaplo: . . . I would like to find out exactly what this entails. You are not suggesting that refusal to answer that question would per se block my admission to the bar?
"Commissioner Stephan: No, I am saying your refusal to answer that question as to whether you are a member of the Communist Party, could and might.
"Mr. Anastaplo: I see.
"Commissioner Stephan: To us, it is relevant to your character and fitness. If you should answer the question `yes,' I am not at all sure that would end the inquiry. I think if you should answer it `yes,' the committee should be entitled to probe further and find out what kind of Communist Party member the applicant might be, whether he is an active member, whether he is a dues-paying member, whether he is a policy-making member, whether he is an officer in a local group, or just what he is. So I would point out the seriousness of that issue to you at this time.
"Mr. Anastaplo: I assume that the committee does not care to state why this is a particularly serious issue with respect to me? I meanI notice you say nothing about the Ku Klux Klan or the Silver Shirts of America, about which you have also asked with the same amount of emphasis up to this point, and which I have refused to answer for the same reasons. Would you care to indicate why you say this about this question and not about the other ones?
"Commissioner Stephan: I think there is an easy answer to that. This committee has not come into beingthis committee cannot completely ignore the history of this proceeding.
"Commissioner ____________: But the history includes that question, and that question has been before two of the high courts of the country.
"Commissioner Stephan: Whatever the relevance of other questions, we consider that one quite relevant."
[15] The particular importance which the Committee attached to its Communist Party questions was still further brought home to Anastaplo by the fact that after this Court's decisions in Beilan v. Board of Education, 357 U. S. 399, and Lerner v. Casey, 357 U. S. 468, had come down, the Committee wrote Anastaplo specifically drawing his attention to them.
[16] We find it difficult to understand how it can be seriously suggested, as it further is, that petitioner was put off guard by the fact that instead of standing on petitioner's mere refusal to answer such questions, the Committee proceeded to interrogate him widely. Not only are subsequent events generally irrelevant to an earlier warning, but a large part of the questioning which Anastaplo now complains led him astray was in fact devoted to exploring the bearing of these questions on his fitness for admission to the bar and his reasons for declining to answer them.
[17] Both the Committee's report and the State Supreme Court's opinion make it apparent that this area of Anastaplo's views played no part in his exclusion from the bar. See pp. 86-88, supra; 18 Ill. 2d, at 188, 163 N. E. 2d, at 432.
[18] This of course could hardly be so in the context of the illustrations which Anastaplo gave of his views as to when a right to resist might arise. These were: Nazi Germany; Hungary during the 1956 revolt against Russia; a hypothetical decree of this Court establishing "some dead pagan religion as the official religion of the country . . ."; a capital sentence of Jesus Christ. Asked to give a more realistic instance of when resistance would be proper, Anastaplo summarized: "I know of no decree, off hand, in the history of American government, where such a single instance has occurred. NoI grant that it is hard to find these instances. I think it is important to insist that there might be such instances." Nothing in the State Court's opinion remotely suggests its approbation of these views of "certain" Committee members.
[19] Supra, pp. 86-88.
[20] Apart from anything else, there is of course no room under our Rules for the suggestion made in petitioner's brief that he be admitted to the Bar of this Court, "independently of the action Illinois might be induced to take." See Rule 5, Revised Rules of this Court.
[1] As the majority points out, the record in the first series of hearings, which culminated in a denial of certiorari by this Court (348 U. S. 946), is not a part of the record in this case but we take judicial notice of it. National Fire Ins. Co. v. Thompson, 281 U. S. 331, 336, and cases cited there.
[2] "We hold these truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of HappinessThat to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness."
[3] The following excerpt from the record of the first hearing indicates clearly the connection between Anastaplo's views on the "right of revolution" and the questions subsequently asked him about his "possible" political associations:
"Commissioner MITCHELL: When you say `believe in revolution,' you don't limit that revolution to an overthrow of a particular political party or a political government by means of an election process or other political means?
"Mr. ANASTAPLO: I mean actual use of force.
"Commissioner MITCHELL: You mean to go as far as necessary?
"Mr. ANASTAPLO: As far as Washington did, for instance.
"Commissioner MITCHELL: So that would it be fair to say that you believe the end result would justify any means that were used?
"Mr. ANASTAPLO: No, the means proportionate to the particular end in sight.
"Commissioner MITCHELL: Well, is there any difference from your answer and my question?
"Mr. ANASTAPLO: Did you ask
"Commissioner MITCHELL: I asked you whether you thought that you believe that if a change, or overthrow of the government were justified, that any means could be used to accomplish that end.
"Mr. ANASTAPLO: Now, let's say in this positive concrete situation I am not quite sure what it means in abstract.
"Commissioner MITCHELL: I will ask you in detail. You believe that assuming the government should be overthrown, in your opinion, that you and others of like mind would be justified in raising a company of men with military equipment and proceed to take over the government of the United States, of the State of Illinois?
"By shaking your head do you mean yes?
"Mr. ANASTAPLO: If you get to the point where overthrow is necessary, then overthrow is justified. It just means that you overthrow the government by force.
"Commissioner MITCHELL: And would that also include in your mind justification for putting a spy into the administrative department, one or another of the administrative departments of the United States or the government of the State of Illinois?
"Mr. ANASTAPLO: If you got to the point you think the government should be overthrown, I think that would be a legitimate means.
"Commissioner MITCHELL: There isn't any difference in your mind in the propriety of using a gun or using a spy?
"Mr. ANASTAPLO: I think spies have been used in quite honorable causes.
"Commissioner MITCHELL: Your answer is, you do think so?
"Mr. ANASTAPLO: Yes.
"Commissioner BAKER: Let me ask you a question. Are you aware of the fact that the Department of Justice has a list of what are described as subversive organizations?
"Mr. ANASTAPLO: Yes.
"Commissioner BAKER: Have you ever seen that list?
"Mr. ANASTAPLO: Yes.
"Commissioner BAKER: Are you a member of any organization that is listed on the Attorney General's list, to your knowledge? (No answer.) Just to keep you from having to work so hard mentally on it, what organizationsgive me all the organizations you are affiliated with or are a member of. (No answer.) That oughtn't to be too hard.
"Mr. ANASTAPLO: Do you believe that is a legitimate question?
"Commissioner BAKER: Yes, I do. We are inquiring into not only your character, but your fitness, under Rule 58. We don't compel you to answer it. Are you a member of the Communist Party?"
[4] As the majority points out, the Committee eventually did expressly disavow any right to insist upon an answer to this question. This came at the end of a long disagreement between Anastaplo and certain members of the Committee with respect to the vitality of an old Illinois decision which indicated that a belief in God might be necessary in order to take an oath to testify. The Committee's abandonment of the point came only after Anastaplo produced a more recent Illinois case disapproving the earlier decision. It is interesting to note that neither of the Committee members who had expressed such a strong interest in knowing whether Anastaplo believes in God voted in favor of his certification.
[5] The record shows that although Anastaplo repeatedly requested that the Committee allow him to see any reports that resulted from these independent investigations, the Committee, without denying that such reports existed, refused to produce them.
[6] Konigsberg v. State Bar of California, decided today, ante, pp. 36, 52, which the majority here relies upon as also having settled the issue in this case.
[7] These remarks were made by Anastaplo in his closing argument before the Committee. He also introduced evidence to the Committee that he had earlier expressed similar views in a book review published in 1954. See Anastaplo, Review: Drinker, Legal Ethics, 14 Law. Guild Rev. 144.
[8] I think the majority has once again misapplied its own "balancing test," for the interests it purports to "balance" are no more at stake here than in Konigsberg. Moreover, it seems clear to me that Illinois, like California, is placing the burden of proof upon applicants for the Bar to prove they do not advocate the overthrow of the Government. Thus the decision here, like that in Konigsberg, is contrary to Speiser v. Randall, 357 U. S. 513.
[9] 360 U. S. 109, 126. The majority in Barenblatt then proceeded to "balance" those interests on the basis of the particular record of that case. Id., at 127-134.
[10] Anastaplo's belief in the "right of revolution," as disclosed by this record, is no different from that expressed by Professor Chafee: "Most of us believe that our Constitution makes it possible to change all bad laws through political action. We ought to disagree vehemently with those who urge violent methods, and whenever necessary take energetic steps to prevent them from putting such methods into execution. This is a very different matter from holding that all discussion of the desirability of resorting to violence for political purposes should be ruthlessly stamped out. There is not one among us who would not join a revolution if the reason for it be made strong enough." Chafee, Free Speech in the United States 178 (Harvard University Press, 1942).
[11] For a similar case, see In re Summers, 325 U. S. 561, in which a 5-4 majority of this Court upheld an informal order of the Illinois Supreme Court denying Bar admission to Clyde W. Summers on the ground that his religious beliefs were inconsistent with the Illinois Constitution.
[12] At the time of his decision to volunteer his services in defense of Louis XVI, Malsherbes, a man of more than seventy, was apparently completely safe from the post-revolutionary blood bath which then enveloped France. For, although active in public life prior to the Revolution, he had always been a friend of the people and, in any case, he had largely passed out of the public mind with his retirement some years earlier. Within a year of his unsuccessful defense of the life of France's former king, however, he, together with his entire family, was convicted by a revolutionary tribunal on the vague charge of conspiracy against "the safety of the State and the unity of the Republic." Malsherbes was then taken to the guillotine where, after being forced to witness the beheading of the other members of his family, he paid with his life for his courage as a lawyer. This story has been interestingly told by John W. Davis. See Davis, The Lawyers of Louis XVI, in The Lawyer, April 1942, p. 5, at 6-13.
[13] The story of Hughes' participation in the fight against the action of the New York Legislature in suspending five of its members in 1920 on the ground that they were socialists is told in John Lord O'Brian, Loyalty Tests and Guilt by Association, 61 Harv. L. Rev. 592, 593-594.
[14] See Barenblatt v. United States, 360 U. S. 109, 147-148 (dissenting opinion).
[15] See, e. g., Barsky v. Board of Regents, 347 U. S. 442; Uphaus v. Wyman, 360 U. S. 72; Barenblatt v. United States, 360 U. S. 109; Uphaus v. Wyman, 364 U. S. 388; Wilkinson v. United States, 365 U. S. 399; Braden v. United States, 365 U. S. 431; Konigsberg v. State Bar of California, supra.
| {
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631 F.Supp.2d 823 (2009)
John DOE # 2, et al.
v.
TANGIPAHOA PARISH SCHOOL BOARD, et al.
Civil Action No. 08-1172.
United States District Court, E.D. Louisiana.
June 24, 2009.
*825 Ronald Lawrence Wilson, Ronald L. Wilson, Attorney at Law, New Orleans, LA, Daniel Mach, Heather L. Weaver, American Civil Liberties Union Foundation, Washington, DC, J. Michael Johnson, Alliance Defense Fund, Shreveport, LA, Katharine Murphy Schwartzmann, American Civil Liberties Union Foundation, New Orleans, LA, for John Doe # 2, et al.
J. Michael Johnson, Alliance Defense Fund, Shreveport, LA, Christopher M. Moody, Moody & Moody, Hammond, LA, Scott U. Schlegel, Scott Schlegel, Attorney at Law, Metairie, LA, Timothy D. Chandler, Alliance Defense Fund, Folsom, CA, for Tangipahoa Parish School Board, et al.
ORDER AND REASONS
MARTIN L.C. FELDMAN, District Judge.
Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;. . . .
One wonders whether the Founding Fathers ever envisioned the intense . . . at times, malevolent . . . discourse these simple, instructive words would evoke throughout the land for over 200 years. Should "In God We Trust" be removed from our currency? Should the opening of Court not begin with an incantation to God to "save the United States and this Honorable Court"? Indeed, should reference to an awareness of God be stricken from the federal Constitutional oath of office? Or from the revered Declaration of Independence? Where does the injunction of the First Amendment lead us?
This case involves a prayer . . . a Christian prayer . . . at school board meetings in Tangipahoa Parish.
Before the Court are the parties' cross-motions for summary judgment. For the reasons that follow, the motions are DENIED. This Court holds that the U.S. Supreme Court's exception for legislative prayer applies to the Tangipahoa Parish School Board. Whether the School Board can avoid charges of exploitation of religion and proselytizing must await trial.
Background
This lawsuit arises out of a challenge by public school students and their parents to the Tangipahoa Parish School Board's policy of opening school board meetings with a prayer delivered by a member of the local clergy.
Procedural History
In 2003, "John Doe" filed suit in federal court against the defendants, alleging that their practice of opening School Board meetings with a prayer violated the Establishment Clause of the First Amendment to the U.S. Constitution. Ruling that Marsh v. Chambers does not apply in the public school context, another Section of this Court held that the defendants' practice was unconstitutional and enjoined them. See Doe v. Tangipahoa Parish Sch. Bd., No. 03-2780, 2005 WL 517341, at *5-9 (Feb. 24, 2005). Assuming without deciding that the School Board was a "legislative or other deliberative body" within the meaning of the Supreme Court's Marsh v. *826 Chambers decision, a divided panel of the Fifth Circuit then affirmed in part, holding that the School Board's practice of opening its meetings with a sectarian Christian prayer fell outside the Marsh legislative prayer exception. Doe v. Tangipahoa Parish Sch. Bd., 473 F.3d 188, 197, 205 (5th Cir.2006), vacated on reh'g en banc, 494 F.3d 494 (5th Cir.2007). But, on rehearing en banc, the Fifth Circuit reconsidered and held that the district court record contained insufficient evidence that the plaintiff Doe had ever attended any Board meetings; the Court of Appeals vacated and remanded the divided panel decision, on the single ground that the plaintiff had not proved standing to bring suit. Doe v. Tangipahoa Parish Sch. Bd., 494 F.3d 494, 499 (5th Cir.2007) (en banc). After the School Board adopted a new policy in August 2007, John Doe again filed suit (on behalf of himself and his minor child, "Minor Doe"), along with his wife, "Sally Doe", and his daughter, "Jane Doe."
The School Board
The Tangipahoa Parish School Board is by law responsible for the operation and government of the 35 public schools, with more than 18,000 students, that comprise the Tangipahoa Parish School System. The Board holds public meetings twice monthly in the board room of the School System's Central Office in Amite, Louisiana.
Tangipahoa is a largely Christian community, and all current Board members identify themselves as Christians. The Parish is also home to many residents of non-Christian faiths (and to residents of no faith at all).
The School Board has no student board members. Nor are students required to attend School Board meetings. Students are, however, regularly invited to attend and do participate in School Board meetings, by leading the Pledge of Allegiance, reciting the Preamble to the U.S. Constitution, and performing patriotic songs. The School Board also invites students to meetings to receive special recognition and rewards, and students participate in special ceremonies held during such meetings. Students also have the right to attend Board meetings to appeal certain disciplinary actions, such as expulsion, and to object to or comment on Board policies.
The Board's Policy
The Tangipahoa Parish School Board "has long maintained a tradition of solemnizing its proceedings by allowing for an opening prayer before each meeting, for the benefit and blessing of the Board."[1] The School Board has opened its meeting with an invocation since 1973; board members, teachers, students, and invited clergy have delivered the prayers, which often have referred to Jesus or other Christian themes. In August 2004, several months after John Doe filed his first suit against the School Board and its members, the Board members considered requiring that these invocations be nonsectarian and nonproselytizing, but apparently unanimously rejected the proposal.
On August 21, 2007, less than a month after the Fifth Circuit issued its en banc ruling, and vacated its divided panel decision, the School Board voted "to adopt [a] formal, written policy to clarify and codify its invocation practices." The new policy authorizes the School Board to invite and host a rotating roster of Parish clergy to deliver prayers to "solemnize proceedings" and "acknowledge and express the Board's *827 respect for the diversity of religious denominations and faiths . . . practiced among the citizens of Tangipahoa Parish."
The current statement of the School Board's policy, on its face, articulates homage and respect to diverse established religious faiths:
1. In order to solemnize proceedings of the Tangipahoa Parish School Board, it is the policy of the Board to allow for an invocation or prayer to be offered before its meetings for the benefit of the Board.
2. The prayer shall not be listed or recognized as an agenda item for the meeting or as part of the public business.
3. No member of employee of the Board or any other person in attendance at the meeting shall be required to participate in any prayer that is offered.
4. The prayer shall be voluntarily delivered by an eligible member of the clergy in the Parish of Tangipahoa, Louisiana. To ensure that such person (the "invocation speaker") is selected from among a wide pool of the parish's clergy, on a rotating basis, the invocation speaker shall be selected according to the following procedure:
a. The Secretary to the Tangipoha Parish School Board (the "Secretary") shall compile and maintain a database (the "Congregations List") of the religious congregations with an established presence in the local community of Tangipahoa Parish.
b. The Congregations List shall be compiled by referencing the listing for "churches," "congregations," or other religious assemblies in the annual Yellow Pages phone book(s) published for Tangipahoa Parish, research from the Internet, and consultation with local chambers of commerce. All religious congregations with an established presence in the local community of Tangipahoa Parish are eligible to be included in the Congregations List, and any such congregation can confirm its inclusion by specific written request to the Clerk.
c. The Congregations List shall also include the name and contact information of any chaplain who may serve one or more of the fire departments or law enforcement agencies of Tangipahoa Parish.
d. The Congregations List shall be updated by reasonable efforts of the Secretary, in November of each calendar year.
e. Within thirty (30) days of the effective date of this policy, and on or about December 1 of each calendar year thereafter, the Secretary shall mail an invitation addressed to the "religious leader" of each congregation listed on the Congregations List, as well as to the individual chaplains included on the Congregations List.
f. The invitation shall be dated at the top of the page, signed by the Secretary at the bottom of the page, and read as follows:
Dear Religious Leader,
The Tangipahoa Parish School Board makes it a policy to invite members of the clergy in Tangipahoa Parish to voluntarily offer a prayer before the beginning of its meetings for the benefit and blessing of the Board. As the leader of one of the religious congregations with an established presence in the local community, or in your capacity as a chaplain for one of the local fire departments or law enforcement agencies, you are eligible to offer this important service at an upcoming meeting of the Board.
*828 If you are willing to assist the Board in this regard, please send a written reply at your earliest convenience to the Board secretary at the address included on this letterhead. Clergy are scheduled on a first-come, first-serve basis. The dates of the Board's scheduled meetings for the upcoming year are listed on the following attached page. If you have a preference among the dates, please state that request in your written reply.
This opportunity is voluntary and you are free to offer the invocation according to the dictates of your own conscience. To maintain a spirit of respect and ecumenism, the Board requests only that the prayer opportunity not be exploited as an effort to convert others to the particular faith of the invocation speaker, nor to disparage any faith or belief different than that of the invocation speaker.
. . .
g. As the invitation letter indicates, the respondents to the invitation shall be scheduled on a first-come, first-serve basis to deliver the invocations.
5. No invocation speaker shall receive compensation for his or her service.
6. The Secretary shall make every reasonable effort to ensure that a variety of eligible invocation speakers are scheduled for the Board meetings. In any event, no invocation speaker shall be scheduled to offer a prayer at consecutive meetings of the Board, or at more than three (3) Board meetings in any calendar year.
7. Neither the Board nor the Secretary shall engage in any prior inquiry, review of, or involvement in, the content of any prayer to be offered by an invocation speaker.
8. Shortly before the opening gavel that official begins the meeting and the agenda/business of the public, the President of the Board shall introduce the invocation speaker and the person selected to recite the Pledge of Allegiance following the invocation, and invite only those who wish to do so to stand for those observances of and for the Board.[2]
9. This policy is not intended, and shall not be implemented or construed in any way, to affiliate the Board with, nor express the Board's preference for or against, any faith or religious denomination. Rather, this policy is intended to acknowledge and express the Board's respect for the diversity of religious denominations and faiths represented and practiced among the citizens of Tangipahoa Parish.
10. To clarify the Board's intentions, as stated herein above, the following disclaimer shall be included in at least 10 point font at the bottom of any printed *829 Board meeting agenda: "Any invocation that may be offered before the official start of the Board meeting shall be at the voluntary offering of a private citizen, to and for the benefit of the Board. The views or beliefs expressed by the invocation speaker have not been previously reviewed or approved by the Board, and the Board does not endorse the religious beliefs or views of this or any other speaker."
The Invocation Policy was unanimously adopted, 9-0.
In carrying out the policy, School Board Secretary, Cynthia Jenkins, compiles the Congregation List by consulting the local yellow pages telephone directory; she copies the alphabetical listing for all "Churches" included there, and that became the Board's initial mailing list.[3] The School Board then sends a letter to religious leaders within the geographical boundaries of Tangipahoa Parish. Any congregation within the Parish can confirm its inclusion by submitting a written request to the Board. The only churches or religious congregations excluded from the mailing list are those that are outside the geographic boundaries of Tangipahoa Parish.[4]
The Board has no editorial power over the prayer's content. It keeps its distance. With its written disclaimer printed on each meeting agenda, the Board specifically denies any approval or endorsement of the religious beliefs or views of the invocation speakers. (When defendant Caves, the Board's Policy Committee Chairman, was asked if someone would be allowed to deliver a Satanic invocation, he responded: ". . . As long as it follows the policy, I don't care what denomination they are. . . . [W]e can't discriminate." Other Board members, however, have suggested that the intent of the policy was to begin the meetings with Christian prayer.)
The pre-meeting prayer is voluntary: it is offered 5 to 7 minutes before the Board meeting begins, and is followed by a 3 to 4 minute break before the opening gavel and formal call to order.[5] After the call to order, if any student guest is present to lead the Pledge of Allegiance or sing a patriotic song, the guest is introduced at that point, post-gavel, and performs.
The Does have each attended Board meetings (or, in the case of Minor Doe, claim to intend to do so in the future) where invocations were given.[6] Because of *830 some unspecific student presence in School Board meetings, the Does bring this action (their second challenge pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201) to the right of Tangipahoa Parish School Board to sanction pre-meeting prayer. They seek a declaratory judgment that the defendants' policy violates the Establishment Clause of the First Amendment, and injunctive relief to enjoin defendants from continuing the practice. The plaintiffs and the defendants now both seek summary judgment.
I.
Standing
As a threshold issue, before proceeding to the merits of the Establishment Clause issue, the Court must be satisfied that the Does have standing to challenge the School Board's invocation policy.
Article III of the United States Constitution commands that a litigant must have standing to invoke the power of a federal court. The Court's focus, in assessing standing, is on the parties' right to have the Court decide the merits of the dispute. See Doe v. Beaumont Indep. Sch. Dist., 240 F.3d 462, 466 (5th Cir.2001) (citing Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). To establish standing, the Does must show that they each personally suffered some actual or threatened "injury in fact" that is "fairly traceable" to the challenged policy that "would be redressed" by a favorable decision in Court. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).[7]
The Court must also be faithful to three prudential concerns when assessing standing:
1) whether the plaintiff's complaint falls within the zone of interests protected by the . . . constitutional provision at issue;
2) whether the complaint raises abstract questions amounting to generalized grievances which are more appropriately resolved by legislative branches; and
3) whether the plaintiff is asserting his or her own legal rights and interests rather than the legal rights and interests of third parties.
Murray v. City of Austin, 947 F.2d 147, 151 (5th Cir.1991). "Standing to sue must be proven, not merely asserted, in order to provide a concrete case or controversy and to confine the courts' rulings within our proper judicial sphere." Doe v. Tangipahoa Parish School Bd., 494 F.3d 494, 499 (5th Cir.2007) (noting that "[n]o amount of creative inferences from the pretrial order or `stipulations' can overcome [the necessary proof in the record required to show standing]" and that the Board's failure to contest standing cannot create jurisdiction *831 because standing is not subject to waiver by the parties).
"The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Elrod v. Burns, 427 U.S. 347, 373, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). The question becomes whether the Does have alleged a personal loss of First Amendment freedoms; "[i]t is not enough to simply argue that there has been some violation of the Establishment Clause; they must allege a personal violation of rights." See Croft v. Governor of Texas, 562 F.3d 735, 745 (5th Cir.2009) (citations omitted).
The plaintiffs are Tangipahoa Parish schoolchildren and their parents "who are directly affected by the . . . practices against which their complaints are directed." See Abington School District v. Schempp, 374 U.S. 203, 225 n. 9, 83 S.Ct. 1560, 10 L.Ed.2d 844 (1963). (The parents, John and Sally Doe, corrected the earlier standing flaw and now sue on behalf of themselves and as parent and next friend of their minor child, Minor Doe.) The record evidence reflects that each of the plaintiffs, except Minor Doe, who allegedly plans to attend meetings in the future, have attended Board meetings where invocations were given, and have been exposed to prayers;[8] each one of the plaintiffs intends to attend School Board meetings in the future (even Jane Doe, who apparently has since graduated from the high school). Each of the plaintiffs have established injury in fact on this record. As attendees of the meetings, they have, if the prayer policy is found to be unconstitutional, suffered an injury that is traceable to the defendants' prayer policy, and their injuries would be redressed if the Court enjoined the Board from continuing its prayer policy. Each of the Does, at the very least, has alleged sufficient threatened injury, cf. Doe v. Beaumont Indep. Sch. Dist., 240 F.3d 462, 466 (5th Cir.2001) (students attending public school and parents of students attending public school "enjoy a cluster of rights vis-a-vis their schoolsa relationship which removes them from the sphere of `concerned bystanders'"), and the Doe parents and Jane Doe have alleged actual exposure to the offensive practice. See Doe v. Tangipahoa Parish School Bd., 494 F.3d 494, 497 (5th Cir.2007) (noting that there was "no evidence *832 of . . . exposure [to invocations] in the record of this case, which was . . . tried on stipulations"). The plaintiffs have standing.[9]See Wynne v. Town of Great Falls, 376 F.3d 292, 294 (4th Cir.2004) (plaintiff, who "regularly attended" council meetings at which prayers occurred, had standing); Coles v. Cleveland Bd. of Educ., 171 F.3d 369, 374 (6th Cir.1999) (student and teacher, who attended board meeting at which prayer took place, had standing); Murray v. City of Austin, 947 F.2d 147, 151 (5th Cir.1991) (plaintiff, who submitted affidavit alleging exposure to cross on city's insignia, had standing); Doe v. Beaumont Indep. Sch. Dist., 240 F.3d 462, 467 (5th Cir.2001)(en banc)(holding that exclusion from the "benefits of a school-financed educational offering [is] a concrete, judicially cognizable injury" such that students and parents had standing to bring Establishment Clause challenge where they alleged that they could not "participate in the school's offered program without taking part in an unconstitutional practice").
II.
The Establishment Clause
This case presents the acutely quarrelsome issue of whether the Tangipahoa Parish School Board's practice of opening its meetings with a prayer can meet today's precedential demands of the Establishment Clause of the First Amendment.
To answer the question, the Court must sort through the doctrinal tension that is First Amendment Establishment Clause jurisprudence[10] to decide whether, as plaintiffs' wish, school board meetings are more like public school classrooms and public school extracurricular activities, or, *833 whether, in reality, school board meetings are more like the legislative sessions of states and Congress or other deliberative bodies. If viewed through the plaintiffs' eyes, the wall of separation between church and state is at its unyielding highest: in the public school context, the U.S. Supreme Court has been especially and understandably vigilant in prohibiting school-sponsored religious activity. But if the meetings are legislative or otherwise deliberative in nature, the wall between church and state is considerably lower: in respecting the long history of prayer (dating back to the nation's First Congress) to open legislative sessions, the high court has upheld government-sponsored prayer in the context of legislative and other deliberative bodies.
Mindful that constitutional issues should be decided on the most narrow, and limited basis, and that the First Amendment's Establishment Clause involves delicate, fact-sensitive and historic issues, the Court's analysis is informed by the constitutional text, set on the stage of our Founding history.
Religion enjoys special constitutional status: its own explicit treatment in the text of the Bill of Rights to the Constitution was crucial to ensure that the incendiary struggles that American colonists had confronted would not continue to plague the new Republic's citizens.[11] The Establishment Clause of the First Amendment, made applicable to states through the Fourteenth Amendment, provides that a state "shall make no law respecting an establishment of religion." U.S. CONST. Amend. I. The purpose of the Free Exercise and Establishment Clauses of the First Amendment, as explained by the high court, is "to prevent, as far as possible, the intrusion of either [the church or the state] into principles of the other." Lemon v. Kurtzman, 403 U.S. 602, 614, 91 S.Ct. 2105, 2112, 29 L.Ed.2d 745 (1971); Lee v. Weisman, 505 U.S. 577, 589, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992) ("The design of the Constitution is that preservation and transmission of religious beliefs and worship is a responsibility and a choice committed to the private sphere, which itself is promised freedom to pursue that mission."). "At the same time, however, [the Supreme Court] has recognized that `total separation is not possible in an absolute sense['] . . . [s]ome relationship between government and religious organizations is inevitable." Lynch v. Donnelly, 465 U.S. 668, 687, 104 S.Ct. 1355, 79 L.Ed.2d 604 (1984)(citing Lemon, 403 U.S. at 672, 91 S.Ct. 2105). An open acknowledgment of a Supreme Being has, from the Founding, been part of the fabric of our national spirit . . . with some limits.
"It is beyond dispute that, at a minimum," the Supreme Court has observed, "the Constitution guarantees that government may not coerce anyone to support or participate in religion or its exercise, or otherwise act in a way which `establishes a [state] religion or religious faith or tends to do so.'" Lee v. Weisman, 505 U.S. 577, 589, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992) (citations omitted); see also County of Allegheny v. ACLU, 492 U.S. 573, 605, 109 S.Ct. 3086, 3107, 106 L.Ed.2d 472 (1989)("Whatever else the Establishment Clause may mean (and we have held it to mean no official preference even for religion over nonreligion), it certainly means at the very least that government may not demonstrate a preference for one particular *834 sect or creed (including a preference for Christianity over other religions").)
The constitutional propriety of the School Board's policy depends on whether the Court embraces the defendants' argument that the School Board is a public body and that the permissive prayer principles applicable to legislative prayer apply, or whether the Court adopts the plaintiffs' plea that the School Board is distinct from a legislative body, given the occasional participation of students, so that the more restrictive principles applicable, in the public school prayer context, must apply. Our historic distaste for state-compelled religion drives this principled dispute.
A. Public School Prayer Cases
In the public school prayer context, the Supreme Court's Establishment Clause jurisprudence has been particularly vigilant in sustaining almost every challenge to government-sponsored religious expression or involvement in the public schools. Similarly, the Fifth Circuit has "evaluated state action challenged on Establishment Clause grounds under each of `three complimentary (and occasionally overlapping) tests' established by the Supreme Court." Freiler v. Tangipahoa Parish Bd. of Edu., 185 F.3d 337, 343 (5th Cir.1999) (citations omitted) (noting "[o]ur multi-test analysis in past cases has resulted from an Establishment Clause jurisprudence rife with confusion and from our own desire to be both complete and judicious in our decision-making").[12]
The first test"widely criticized and occasionally ignored"the Lemon test, continues to lurk behind Establishment Clause cases. Id. at 344. The Lemon test comes in three parts; a state practice is unconstitutional if: (1) it lacks a secular purpose;[13] (2) its primary effect either advances or inhibits religion; or (3) it excessively entangles government with religion. Id. (citing Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S.Ct. 2105, 2111, 29 L.Ed.2d 745 (1971)). The second part, the endorsement test, is whether the government somehow endorses religion by means of the challenged policy. Id. (citing County of Allegheny v. ACLU, 492 U.S. 573, 594, 109 S.Ct. 3086, 3101, 106 L.Ed.2d 472 (1989)). Government action is obviously "endorsement" when it "conveys a message that religion is `favored,' `preferred,' or `promoted' over other beliefs." *835 County of Allegheny, 492 U.S. at 593, 109 S.Ct. 3086. Neutrality must never be sacrificed. The third test, the coercion factor, calls on courts to consider school-sponsored religious activity "in terms of the coercive effect the activity has on students." Freiler, 185 F.3d at 343 (citing Lee v. Weisman, 505 U.S. 577, 589, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992)). Applying this test, a First Amendment violation is found when "(1) the government directs (2) a formal religious exercise (3) in such a way as to oblige the participation of objectors." Id. (citing Jones v. Clear Creek Indep. Sch. Dist., 977 F.2d 963, 970 (5th Cir.1992)).
According to the Fifth Circuit, "[t]he decision to apply a particular Establishment Clause test rests upon the nature of the Establishment Clause violation asserted." Id. (noting that school board's mandate that a disclaimer be read before teaching of evolution in elementary and secondary school classes did not direct student participation in a formal religious exercise; accordingly, application of the coercion test was unnecessary).[14]
B. The "Legislative Prayer" Exception
Legislature-sponsored prayer, however, is subject to vastly different treatment than public school-sponsored prayer. Indeed, in stark contrast to the vigilance with which the Supreme Court prohibits school-sponsored religious activity,[15] government-sponsored prayer in opening legislative sessions is constitutionally permissible and untainted. In Marsh v. Chambers, 463 U.S. 783, 103 S.Ct. 3330, 77 L.Ed.2d 1019 (1983), the high court crafted a narrow exception to traditional Establishment Clause analysis: because the opening of legislative sessions with the recitation of prayer is deeply embedded in the "unique history" and tradition of this country, the Supreme Court upheld as constitutionally permissible the Nebraska state legislature's practice of beginning each session with a prayer from a chaplain, even one paid by the state. Id. at 790-93, 103 S.Ct. 3330. In so doing, the Supreme Court eliminated legislative prayer from its traditional Establishment Clause disability, relying on what it considered to be an unavoidable historical analysis to justify the practice of legislative prayers.[16]Id.
Since Marsh, lower federal courts have extended Marsh's reach to include opening prayers before municipal (deliberative) bodies, like county boards and city councils,[17] but the Supreme Court has avoided extending Marsh's reach to Establishment Clause cases generally. See, e.g., County *836 of Allegheny v. ACLU, 492 U.S. 573, 603, 109 S.Ct. 3086, 106 L.Ed.2d 472 (1989)(rejecting the dissenting argument that the Marsh historical analysis controlled the constitutionality of traditional creche displays at Christmas, noting "[h]owever history may affect the constitutionality of nonsectarian references to religion by government, history cannot legitimate practices that demonstrate the government's allegiance to a particular sect or creed"); Edwards v. Aguillard, 482 U.S. 578, 583 n. 4, 107 S.Ct. 2573, 2577, 96 L.Ed.2d 510 (1987)("such a historical approach is not useful in determining the proper roles of church and state in public schools, since free public education was virtually nonexistent at the time the Constitution was adopted").
Even legislative prayer, however, is not without constitutional limits. In Marsh, after determining that legislative prayer was constitutional, the Supreme Court proceeded to discuss whether particular features of the state legislature's invocations were problematic. Marsh, 463 U.S. at 792-93, 103 S.Ct. 3330. The Court noted that the prayers at issue were Judeo-Christian and that, "[a]lthough some of [the chaplain's] earlier prayers were often explicitly Christian, [he] removed all references to Christ after a 1980 complaint from a Jewish legislator." Id. at 793 n. 14, 103 S.Ct. 3330. The Court went on to observe that "[t]he content of the prayer is not of concern to judges" when "there is no indication that the prayer opportunity has been exploited to proselytize or advance any one, or to disparage any other, faith or belief." Id. at 794-95, 103 S.Ct. 3330. And that is the key. Lower courts have ever since tried to determine how to apply this language, and what sorts of limitations Marsh meant to place on legislative prayer. Exploitation and proselytizing hold the answer. The Tangipahoa Parish School Board must pay close attention to that.
Although the Supreme Court has directly addressed the constitutionality of legislative prayer only once, it explained, six years after Marsh, in County of Allegheny:
[I]n Marsh itself, the Court recognized that not even the "unique history" of legislative prayer . . . can justify contemporary legislative prayers that have the effect of affiliating the government with any one specific faith or belief. The legislative prayers involved in Marsh did not violate this principle because the particular chaplain had "removed all references to Christ."
492 U.S. at 603, 109 S.Ct. 3086 (citations omitted). The Seventh Circuit has stated that it "read[s] Marsh as hinging on the nonsectarian nature of the invocations at issue." Hinrichs v. Bosma, 440 F.3d 393 (7th Cir.2006) (citing Doe v. Vill. of Crestwood, 917 F.2d 1476, 1479 (7th Cir.1990), among other cases); the Seventh Circuit later reversed itself and remanded with instructions to dismiss for lack of standing. Hinrichs v. Speaker of the House of Representatives of the Ind. Gen. Assembly, 506 F.3d 584, 585 (7th Cir.2007). In an unpublished decision, Bacus v. Palo Verde Unified School District Board of Education, the Ninth Circuit held that, even if Marsh applied to the school board meeting context, the school board's practice of sectarian invocations (which ended "in the Name of Jesus") violated the Establishment Clause. 52 Fed.Appx. 355 (9th Cir. 2002)(the overtly Christian prayers were an inappropriate effort to "advance" Christianity as condemned by Marsh or to show the government's "allegiance" to that faith as targeted in Allegheny).
The Fourth Circuit has stopped short of holding that Marsh commands that legislative prayer must be nonsectarian. See Turner v. City Council of the City of Fredericksburg, Virginia, 534 F.3d 352, (4th *837 Cir.2008) (O'Connor, Associate Justice (Retired)) (holding that the city council's decision to open its legislative meetings with nondenominational prayers does not violate the Establishment Clause). Compare Wynne v. Town of Great Falls, 376 F.3d 292 (4th Cir.2004)(striking down town's practice of opening city council meetings with Christian prayers because such prayers violated the rule that legislative prayers not affiliate the government with the Christian religion) with Simpson v. Chesterfield County Bd. of Supervisors, 404 F.3d 276 (4th Cir.2005)(upholding local board's policy, which required that prayers be nonsectarian, as permissible under Marsh and Allegheny).[18] The Tenth Circuit, like the Fourth, also focuses on whether the prayer opportunity has been exploited, but has concluded that Marsh does not prohibit prayers that invoke "particular concept[s] of God." Snyder v. Murray City Corp., 159 F.3d 1227, 1233-34, 1234 n. 10 (10th Cir.1998) (en banc) (city was "within its rights under Marsh" to deny permission to speaker to recite his proposed prayer, where prayer "aggressively proselytize[d] for his particular religious views and strongly disparage[d] other religious views").
The Eleventh Circuit, in a scholarly and insightful opinion, explicitly rejected an argument that Marsh permits only nonsectarian prayer; rather, that court cautioned, courts should not evaluate the content of the prayers, absent evidence of exploitation. Pelphrey v. Cobb County, Georgia, 547 F.3d 1263, 1271 (11th Cir.2008) (to read Marsh as allowing only nonsectarian prayers "is at odds with the clear directive by the [Supreme Court] that the content of the legislative prayer `is not of concern to judges where . . . there is no indication that the prayer opportunity has been exploited to proselytize or advance any one. . . faith or belief'"). In rejecting the sectarian/nonsectarian bright-line test, the Eleventh Circuit reads Marsh to favor a factor-based test, noting that the Marsh Court considered several factors to determine whether the legislative prayers had been exploited to advance one faith: "The [Supreme] Court weighed the chaplain's religious affiliation, his tenure, and the overall nature of his prayers." Id. (citing Marsh, 463 U.S. at 792-95, 103 S.Ct. 3330). "The `nonsectarian' nature of the chaplain's prayers [in Marsh] was one factor in this fact-intensive analysis." Id. at 1272 (noting the difficulty in identifying the boundary between sectarian and nonsectarian expressions; not even counsel for plaintiff could provide a workable definition of sectarian expressions).[19] Ultimately, *838 the Eleventh Circuit concluded that the (1) identity of the speakers (who included members of the Jewish, Unitarian, and Muslim faiths) and (2) the prayers at issue (which included a diversity of religious expressions (including references to "Jesus Christ", "Allah", "Mohammed", and the Torah)), when compared to the Judeo-Christian prayers permitted in Marsh, supported the finding that the prayers taken as a whole did not advance any particular faith. Id. at 1277-78.
Finally, at least one court has rejected Marsh's application altogether, in the context of school board prayer: the only appellate court to rule on the issue of whether Marsh's exception for legislative prayer applies to school board meetings has ruled that it does not; the Sixth Circuit decided that the traditional Establishment Clause school prayer line of cases applies to opening school board meetings with prayers. Coles v. Cleveland Board of Education, 171 F.3d 369, 381 (6th Cir.1999) ("the fact that school board meetings are an integral component of the Cleveland public school system serves to remove it from the logic in Marsh and to place it squarely within the history and precedent concerning the school prayer line of cases").[20]
This Court must therefore determine whether a school board is more like a legislature or other deliberative public body, or more somehow like a public school.
III.
Constitutional issues should be decided on the most narrow, limited basis. See Dallas Joint Stock Land Bank v. Davis, 83 F.2d 322, 323 (5th Cir.1936) ("[I]t is a settled rule in the federal courts that questions of constitutional law . . . will be decided only where a patent necessity for such decision exists, and then only no more broadly than the precise situation in question requires"); see also Liverpool, N.Y. & Philadelphia S.S. Co. v. Comm'rs of Emigration, 113 U.S. 33, 39, 5 S.Ct. 352, 28 L.Ed. 899 (1885)(admonishing "never to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied").
A.
The Does invoke the reasoning of Coles, urging the Court that traditional Establishment Clause jurisprudence applicable to school prayer cases applies to the Tangipahoa Parish School Board's prayer policy. The Court disagrees: Marsh applies to this deliberative public body, and it strains reason to conclude otherwise.
The command of Marsh is plain:
The opening of sessions of legislative and other deliberative public bodies with prayer is deeply embedded in the history and tradition of this country.
463 U.S. 783, 786, 103 S.Ct. 3330. The Does argue, unpersuasively, that the Court should discount the phrase "and other deliberative *839 bodies" as mere dicta. But the function of the School Board, and the nature of its meetings, lead the Court's inquiry to an application of Marsh.
Indeed, it is beyond dispute that the School Board is a public body.[21] Because the function of the School Board, as the body governing public schools, is more like a legislature than a public school classroom or event, and is patently a deliberative body under the law, the plaintiffs fail to persuade the Court that traditional Establishment Clause principles of Lemon apply.[22] However, the constitutional permissiveness of Marsh-context prayer is measured strictly by notions of exploitation and proselytizing, and it is in that arena that the School Board could have grave problems.
As noted, opening government sessions with prayer pursuant to Marsh is not without constitutional limits: the Tangipahoa Parish School Board may not implement a prayer policy that advances one religion; the Court must examine whether in this case the prayer opportunity has been exploited to advance Christianity. To proselytize. In applying Marsh, the Court approves and aligns itself with Pelphrey's wise and thoughtful approach; the Eleventh Circuit expressly rejected the application of a sectarian/nonsectarian bright line test. See Pelphrey, 547 F.3d at 1278 ("Marsh prohibited the selection of invocational speakers based on an "impermissible motive" to prefer certain beliefs over others"). Fidelity to Marsh commands not a content-based approach, or an inquiry into whether prayers are sectarian or nonsectarian at the outset, but, rather, focuses on exploitation of the prayer opportunity and efforts, direct or not, to proselytize; to promote or sell a religion. The Supreme Court in Marsh discussed the tenure of the hired chaplain and held "[a]bsent proof that the chaplain's reappointment stemmed from an impermissible motive,. . . long tenure does not in itself conflict with the Establishment Clause." Marsh, 463 U.S. at 793-94, 103 S.Ct. 3330. Noting that the prayers were offered in the Judeo-Christian tradition, the Supreme *840 Court refused to examine their content because:
The content of the prayer is not of concern to judges where, as here, there is no indication that the prayer opportunity has been exploited to proselytize or advance any one, or to disparage any other, faith or belief. That being so, it is not for us to embark on a sensitive evaluation or to parse the content of a particular prayer.
Marsh, 463 U.S. at 794-95, 103 S.Ct. 3330. In other words, in light of the historical background of legislative prayer, Marsh teaches us that sectarian references do not inherently violate the Establishment Clause; rather, important factors inform the constitutionality of legislative prayer practice: the identity of the speaker, the selection of the speaker, the method and process of selection, and the nature of the prayers. Pelphrey, 547 F.3d at 1277-79. In approving Pelphrey and Marsh, this Court refuses to "reduc[e] Marsh to a sectarian/non-sectarian litmus test." See Doe v. Tangipahoa Parish Sch. Bd., 473 F.3d 188, 212 (5th Cir.2006)(Clement, J., concurring in the judgment in part and dissenting in the judgment in part).[23]
B.
The Court's examination of whether the School Board had an impermissible motive in enacting its prayer policy, or any determination as to whether the prayer opportunity has been exploited to advance one faith over another is inhibited by an incomplete record. While the defendants insist that their prayer policy is at least as inclusive as the ones upheld in Simpson and Pelphrey, summary judgment is inappropriate on this record: unlike the diverse prayergivers (prayers were offered by members of the Jewish, Unitarian, Muslim and Christian faiths) and diverse references in the prayers at issue in Simpson and Pelphrey, here, the parties sharply dispute whether the prayer opportunity before School Board meetings has been exploited to advance Christianity. (And the repetition of Ms. Jenkins in "mistakenly" inviting only out-of-parish Christian clergy is perturbing.) The Court finds that factual issues, such as the following, preclude summary judgment:
whether School Board's policy exploits the prayer opportunity to proselytize or advance Christianity, or to disparage other faiths or beliefs;[24]
*841 whether the School Board has violated its own speaker selection policy by reaching outside the Parish to Christian clergy but not other clergy of other faiths.[25]
Accordingly, a trial on the merits to fully resolve the issues of the School Board's prayer policy, and to determine whether the prayer opportunity has been exploited, must take place. The cross-motions for summary judgment are therefore DENIED.
NOTES
[1] Indeed, the School Board had an earlier and challenged history of sponsoring prayer and promoting Christianity in the public schools it governs. See, e.g., Freiler v. Tangipahoa Parish Bd. of Edu., 185 F.3d 337 (5th Cir.1999)(parents succeeded in challenging school board's requirement that disclaimer be read immediately before teaching evolution classes).
[2] On April 9, 2009, the School Board unanimously voted to adopt a revision to this paragraph, to clarify in writing what the Board says has been its actual practice since the time of the policy's adoption on August 21, 2007; the amended paragraph 8 reads:
Shortly before the opening of the gavel that officially begins the meeting and the agenda/business of the public, the President of the Board shall introduce the invocation speaker and invite only those who wish to do so to stand for this observance of and for the Board. No person who may be scheduled to speak and/or offer, perform, or recite the Pledge of Allegiance, National Anthem, Preamble to the Constitution, or other ceremonial gesture after the Board meeting begins shall be required to attend or observe any invocation offered before the Board meeting. Instead, such person shall always be introduced and invited to speak or perform after the subsequent opening gavel and call to order for the meeting, and, unlike the invocation, such person's speech or performance shall be formally recognized and listed as a full part of the Board meeting and agenda.
[3] She also says that she double-checked on the internet to confirm precise addresses and locations of a handful of churches to ensure the churches were located within the Parish line.
[4] Whether appearance and practice equate with one another, is a serious and disputed issue. In 2007 and 2008, the congregation list included Christian congregations from outside the Parish lines (contrary to the letter of the policy), but included no churches of other, non-Christian denominations, even though there are some closer to Tangipahoa Parish than the additional Christian churches located outside of Tangipahoa Parish. Indeed, during oral argument, counsel for the School Board admitted that Ms. Jenkins twice (mistakenly) invited Christian clergy from outside the Parish, but never "mistakenly" or otherwise invited non-Christian clergy from outside the Parish. That is of concern to the Court.
[5] Members of the public are free to enter and exit the meeting room at will through a set of doors in the back of the room.
[6] Four of the meetings in particular (attended by John Doe) began with following invocations:
On October 2, 2007, Rev. Francis Williams, of Butlers A.M.E. Zion Church prayed: "Overall give us an understanding that we may be able to come together and live according to your holy word. One Lord, One Faith, One Baptism. . . . That together we may grow and be one. In Jesus' name we pray. Amen."
On January 22, 2008, Jerusalem Baptist Church Rev. Stacy Morgan's prayer included: "Not only are they accountable to their conscience, nor are they only accountable to their constituents but, more importantly, they are accountable to an eternal God. . . . In Christ name, we pray, Amen."
On February 19, 2008, Rev. Robert Mader, of the St. Paul Lutheran Church, prayed: "Heavenly Father, Lord of the universe, King of all creations, you have made all things and you have made us in your image and in your likeness. . . . In thy name, the precious name of Jesus the Christ. Amen."
On March 4, 2008, Rev. Bobby Showers, in his closing remarks referenced Jesus Christ.
[7] The actual injury requirement ensures that issues will be resolved "not in the rarified atmosphere of a debating society, but in a concrete factual context." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982).
[8] John Doe has attended many Board meetings both before and after the adoption of the August 2007 invocation policy; invocations were given at almost every Board meeting he has attended, and every one of the prayers was Christian (including prayers delivered at the October 2, 2007, January 22, 2208, February 19, 2008, and March 4, 2008 meetings). Sally Doe attended Board meetings prior to the adoption of the August 2007 policy, but invocations were given at the meetings she attended. Sally Doe intends to attend Board meetings in the future.
Jane Doe, who apparently recently graduated from a Parish school, attended one Board meeting during the 2007-2008 school year to speak on a school policy matter. Jane believes that the School Board does not care about her feelings on the issue of school board prayer. Also, she says she has Wiccan, atheist, and Satanist friends, and she objects to the Board's policy and believes it is offensive and unfair to non-Christians. Finally, Minor Doe is enrolled in a Parish school. She uncertain about what she believes, but does not subscribe to the same Christian belief system as most of her classmates (she does believe in some type of higher power and prayer). Minor Doe has not attended a School Board meeting, but she plans to go and would like to participate by leading the Pledge of Allegiance or reciting the Preamble to the Constitution; however, she is concerned that she will be subjected to prayer at the meeting and she worries she would be heckled whether she stood up for the prayer or not (because others would pick on her either way, knowing she did not share their beliefs). Minor Doe would like for the invocation policy to cease so she can attend Board meetings without fear of being embarrassed by her peers.
[9] The Doe parents, John and Sally Doe, object to the Board's policy and practice of invocations because: they do not reflect John Doe's religious beliefs and they send a message to their children that the Board approves of Christian prayer; Sally Doe says the school-sponsored prayer interferes with her right to direct the religious upbringing of her children.
The Doe parents also assert that they have standing because they have requested to give invocations at Board meetings, and were refused; thus, they urge, they have been denied the opportunity to give an invocation that comports with their religious beliefs. See Simpson v. Chesterfield County Bd. of Supervisors, 404 F.3d 276, 280 n. 2 (4th Cir.2005) ("Simpson's exclusion from the list of those eligible to give an invocation is an injury sufficient to satisfy standing requirements"); Snyder v. Murray City Corp., 159 F.3d 1227, 1229-30 (10th Cir.1998) (plaintiff denied opportunity to present prayer at city council meeting). Because the Doe parents have sufficiently shown standing based on their direct contact with prayers at Board meetings, the Court need not address any other basis for standing, or the assertion that the Doe parents have taxpayer standing; the Court notes that the Does have not submitted any record evidence confirming that the School Board expends any funds on its prayer policy.
[10] As the Sixth Circuit has remarked:
Although th[e] constitutional directive is seemingly straightforward, the case law that has developed under the Establishment Clause has transformed it into a "blurred, indistinct, and variable barrier" whose application turns on sifting through the facts of each individual case. [Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971).] A single factual difference consequently can serve to entangle or free a particular governmental practice from the reach of the Clause's constitutional prohibition. Compare Lynch v. Donnelly, 465 U.S. 668, 687, 104 S.Ct. 1355, 79 L.Ed.2d 604 (1984)(holding that a nativity scene in a town square did not violate the Establishment Clause because it was surrounded by secular Christmas figures) with Allegheny County v. Greater Pittsburgh ACLU, 492 U.S. 573, 601-02, 109 S.Ct. 3086, 106 L.Ed.2d 472 (1989) (holding that a nativity scene in a town square violate[d] the Establishment Clause because it stood apart from the other Christmas decorations on display in the square).
Coles v. Cleveland Board of Education, 171 F.3d 369, 376 (6th Cir.1999).
[11] Indeed, as the Supreme Court has remarked:
It is a matter of history that th[e] practice of establishing governmentally composed prayers for religious services was one of the reasons which caused many of our early colonists to leave England and seek religious freedom in America.
Engel v. Vitale, 370 U.S. 421, 82 S.Ct. 1261, 8 L.Ed.2d 601 (1962).
[12] A number of federal courts have held that school-sponsored prayer is unconstitutional in a variety of contexts that extend beyond the walls of the public school classroom, including school-sponsored ceremonies, athletic events, and extracurricular activities. See, e.g., Borden v. Sch. Dist., 523 F.3d 153, 166, 174-75 (3d Cir.2008), cert. denied, ___ U.S. ___, 129 S.Ct. 1524, 173 L.Ed.2d 656 (2009)(noting that "if a school `affirmatively sponsors the particular religious practice of prayer,' it is in violation of the Establishment Clause," and holding each coach's participation in pre-game football prayers to be unconstitutional)(quoting Santa Fe Indep. Sch. Dist. v. Doe, 530 U.S. 290, 313, 120 S.Ct. 2266, 147 L.Ed.2d 295 (2000)); Doe v. Duncanville Indep. Sch. Dist., 70 F.3d 402, 406-07 (5th Cir.1995)(basketball games and practices); Jager v. Douglas County Sch. Dist., 862 F.2d 824, 832 (11th Cir.1989) (rejecting as "meritless" the School District's argument that "the school prayer cases are not implicated here because pre-game invocations occur outside the instructional environment of the classroom"); Steele v. Van Buren Pub. Sch. Dist., 845 F.2d 1492, 1495 (8th Cir.1988) (band practice and performances).
[13] In evaluating secular purpose, it must be "sincere" and not a "sham." Wallace v. Jaffree, 472 U.S. 38, 64, 105 S.Ct. 2479, 86 L.Ed.2d 29 (1985). As the Fifth Circuit observed, "the `touchstone' is neutrality, and it is only `[w]hen the government acts with the ostensible and predominant purpose of advancing religion [that] it violates the central Establishment Clause value of official religious neutrality.'" Croft v. Governor of Texas, 562 F.3d 735, 741 (5th Cir.2009).
[14] In a recent public school prayer case, the Fifth Circuit simply applied Lemon v. Kurtzman to determine that a statute that required a mandatory moment of silence in Texas schools did not have a primary effect of advancing or inhibiting religion and the statute did not foster an excessive entanglement with religion. Croft v. Governor of Texas, 562 F.3d 735 (5th Cir.2009).
[15] See, e.g., Lee v. Weisman, 505 U.S. 577, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992)(distinguishing Marsh as a narrow decision limited to its unique history, the Supreme Court applied the Lemon test to strike down school's practice of inviting clergymen to give nonsectarian invocations a public school graduation ceremonies).
[16] Resorting to a historical analysis to uphold legislative prayer was necessary; otherwise, the prayers would not have survived the traditional Establishment Clause tests the Supreme Court had relied on prior to, and since, Marsh. See Marsh, 463 U.S. at 796, 103 S.Ct. 3330 (Brennan, J., dissenting).
[17] See, e.g., Pelphrey v. Cobb Co., Ga., 547 F.3d 1263 (11th Cir.2008) (county commission and planning commission); Simpson v. Chesterfield Co. Bd. of Supervisors, 404 F.3d 276 (4th Cir.2005), cert. denied, 126 S.Ct. 426 (2005)(county board); Snyder v. Murray, 159 F.3d 1227 (10th Cir.1998)(city council); Dobrich v. Walls, 380 F.Supp.2d 366 (D.Del. 2005)(school board).
[18] In permitting a county to invite clergy from diverse congregations to offer diverse prayers at government meetings, the Fourth Circuit in Simpson distinguished its earlier decision in Wynne because the prayers of the city council in Wynne had been exploitative and had "underminded . . . participation by persons of all faith in public life." Id.
[19] The Pelphrey court wrote:
The taxpayers' counsel fared no better than his client in providing a consistent and workable definition of sectarian expressions. In the district court, counsel . . . deemed "Heavenly Father" and "Lord" nonsectarian, even though his client testified to the contrary. At . . . oral argument [in the circuit court], counsel asserted two standards to determine when references are impermissibly "sectarian"[, first stating] "It is sectarian when the . . . prayer has the effect of affiliating the government with one specific faith or belief," but he later described a reference as "sectarian" when it "invokes the name of a divinity . . . in which only one faith believes." Counsel had difficulty applying [both] standard[s] to various religious expressions. When asked, for example, whether "King of kings" was sectarian, he replied, "King of kings may be a tough one . . . It is arguably a reference to one God . . . it might not be sectarian."
Id. at 1272.
[20] Coles, factually different because meetings took place at school and a student was a board member, is also a perversion of Marsh, as several judges of the Sixth Circuit have caustically observed when that court denied a request for an en banc rehearing:
The panel's opinion, which the failure of the court to grant rehearing en banc allows to stand, represents a radical departure from Supreme Court precedent on the permissibility of prayer and solemnization at the beginning of government functions. . . . The panel majority's attempt to carve out an exception for bodies that deal with educational subjects is unconvincing. This is especially so in light of the large proportion of the attention of general legislative bodies that is consumed with the subject of education.
Coles v. Cleveland Bd. of Edu., 183 F.3d 538, 539 (6th Cir.1999) (Boggs, Circuit Judge, dissenting from the denial of rehearing en banc, joined by Judges David A. Nelson, Alan E. Norris, Suhreinrich, Siler and Batchelder).
[21] Neither party seriously disputes that the Tangipahoa Parish School Board, a creature of the state constitution (La. Const. art. VIII § 9(A)), is a public body, as defined by Louisiana law. La.R.S. § 42:4.2 (West 2001). As administrators of public education, the elected members of the School Board are responsible for the operation and government of the 35 public schools (with more than 18,000 students) that comprise the Tangipahoa Parish school system. Indeed, the School Board is a state agency with duties and obligations defined by statute; a sampling of the School Board's statutory duties include: "determin[ing] the number of schools to be opened, the location of school houses, the number of teachers to be employed [and their salaries]"; "adopt[ing] rules and regulations governing the terms and conditions, including fees if any, under which [school] buildings . . . [may] be used outside of regular school hours for academic purposes [such as] tutoring and study hall"; "mak[ing] such rules and regulations for its own government, not inconsistent with [other] law[s] or with [other] regulations"; "securing for the schools . . . all funds destined for the support of the schools[.]" See generally La.R.S. § 17:81.
[22] The Does, however, argue that the unspecific participation of students at the board meetings distinguishes those meetings from legislative (or other public body) sessions and thus demands application of traditional Establishment Clause rules. The Court acknowledges that constituency is relevant in traditional Establishment Clause jurisprudence, but Marsh is an exception to that line of cases. Indeed, that school children may participate in school board meetings cannot be dispositive of the constitutional analysis: students may well visit a state or federal legislative session, or some municipal body session as part of field trip for a political science class or civics course, or visit a courtroom, but finding that school children are present would not render unconstitutional opening those sessions with prayer.
[23] Attempts to apply a sectarian/non-sectarian "bright line" test by evaluating prayer content first "needlessly puts federal courts in the position of drawing the constitutional (and theological) line between sectarian and non-sectarian prayer" in violation of Supreme Court precedent. Id. (Clement, J., concurring in the judgment in part and dissenting in the judgment in part)(citing Marsh). Indeed, the Supreme Court has admonished against court intrusion into prayer content as itself violative of the Establishment Clause. See Lee v. Weisman, 505 U.S. at 581, 112 S.Ct. at 2652 (public school officials should not have directed rabbi to provide a nonsectarian invocation at graduation ceremony, noting that government should generally have no role in "direct[ing] and controll[ing] the content of . . . prayers").
[24] The plaintiffs cite to select deposition testimony of various board members that stated that board members could not recall a non-Christian invocation; in addition:
Ann Smith testified: "the mindset is that invocation is prayer and it's a Christian prayer."
Robert Potts, confronted with the possibility of someone giving a Satanist invocation, declared: "it would not happen again with that dude, you can rest assured of that[;] we are talking about a Christian prayer."
Bailey-Simmons, when asked whether the policy was "made by Christians and for Christians", stated: "I mean, it has turned out to be that way, and that's the dominant faith or dominant belief."
On the other hand, the defendants introduced evidence suggesting that it was the Board members' intent that no one would be excluded from giving the invocation as long as they met the location requirements, and that no research into Tangipahoa Parish's demographics was done before adoption of the policy.
[25] The plaintiffs submit evidence that the School Board violated its own speaker selection procedure by including only Christian churches outside of Tangipahoa Parish on the Congregation List in 2007 and 2008. As indicative of the motivation behind the prayer policy, the plaintiffs note that all School Board members are Christian; the plaintiffs also point to former School Board president Link, who stated that the selection procedure provides "control over an individual belonging to an organized religion because you know what they are going to say because they belongif I am a Catholic and I get up there and start expounding all kind of crazy stuff, you pretty well are certain that they are going to follow certain beliefs that's put forth by their church."
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
APR 11 1997
TENTH CIRCUIT
PATRICK FISHER
Clerk
DUANE E. BROOKS,
Plaintiff - Appellant,
v. No. 96-1265
(D. Ct. No. 96-S-127)
JERRY NICHOLS, Officer, (D. Colo.)
Defendant - Appellee.
ORDER AND JUDGMENT *
Before TACHA, BALDOCK, and LUCERO, Circuit Judges.
After examining the briefs and the appellate record, this three-judge panel
has determined unanimously that oral argument would not be of material
assistance in the determination of this appeal. See Fed. R. App. P. 34(a); 10th
Cir. R. 34.1.9. The cause is therefore ordered submitted without oral argument.
This appeal is from an order of the district court dismissing pro se
petitioner’s complaint brought pursuant to 42 U.S.C. § 1983 (1994) and 18 U.S.C.
§§ 241-242 (1969) as legally frivolous under 28 U.S.C. § 1915(e)(2)(B)(I) and for
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. This court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
failure to state a claim upon which relief may be granted pursuant to
§ 1915(e)(2)(B)(ii). Petitioner appeals on the ground that the district court erred
in failing to find that petitioner’s constitutional rights were denied by Officer
Jerry Nichols because of his alleged lack of qualifications and licensing to utilize
bloodhounds in law enforcement activities. We affirm.
In his pro se complaint Mr. Brooks alleges that his constitutional rights
were violated by Officer Nichols during a burglary in progress at a location in
Aurora, Colorado. On appeal, he alleges that Officer Nichols was not licensed,
certified, or qualified to handle bloodhounds and that various supervisory
officials and governmental entities failed to adequately train, supervise, and
control individual police officers in the handling of bloodhounds. He alleges
gross negligence and reckless conduct on behalf of Officer Nichols and the lack
of police policy for training and development of employees.
We construe Mr. Brooks’ complaint liberally because he represents himself.
Haines v. Kerner, 404 U.S. 519 (1972). After a lengthy delay, Mr. Brooks has
complied with the filing fee requirements of 28 U.S.C. § 1915 (1994) as amended
by the Prison Litigation Reform Act of 1996, Pub. L. No. 104-34, 110 Stat. 1321
(1996). Even construing the complaint liberally, we agree with the district court
that Mr. Brooks has failed entirely to state a claim upon which relief can be
granted and find further that the complaint is legally frivolous under 28 U.S.C. §
-2-
1915(e). Just as he did in the district court, Mr. Brooks fails to show what his
involvement in the incident in question was and provides only vague and
conclusory assertions about the alleged violations of constitutional rights. We
affirm the order of the district court for substantially the reasons given by the
district court in its order dated May 22, 1996 dismissing this action. AFFIRMED.
ENTERED FOR THE COURT,
Deanell Reece Tacha
Circuit Judge
-3-
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NO. 07-10-0135-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
--------------------------------------------------------------------------------
JULY 22, 2010
--------------------------------------------------------------------------------
DONALD EARL COLLINS,
Appellant
v.
THE STATE OF TEXAS,
Appellee
_____________________________
FROM THE 249TH DISTRICT COURT OF JOHNSON COUNTY;
NO. F42536; HONORABLE D. WAYNE BRIDEWELL, PRESIDING
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Opinion
--------------------------------------------------------------------------------
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
We have before us a rather novel question posed by Donald Earl Collins. After the State succeeded in having his community supervision or probation revoked, he asked the trial court to grant him credit on his ten-year prison sentence equal to the time he sat in prison while serving a different sentence. The trial court granted him some relief but not all that he sought. We affirm the judgment.
Background
The circumstances before us involve two distinct driving while intoxicated offenses for which appellant was prosecuted simultaneously. One resulted in his conviction and imprisonment (Conviction A). The other resulted in his conviction and probation (Conviction B). The two sentences were then ordered to run concurrently. As a condition of appellant's probation, he was required to particate in a substance abuse program. While serving his prison sentence for Conviction A, the State sent appellant to the program in question. He refused to participate in it. Instead, he, as opposed to the State, moved to have his probation revoked. Nothing transpired with regard to his motion, though. Several months later, the State filed its own motion, which was heard by the trial court. That resulted in the revocation of appellant's probation and sentence to prison for Conviction B. Before sentencing, though, appellant asked the court to credit him with time spent serving Conviction A. The trial court refused that as well as his request for credit for the period beginning from the time he moved to revoke his own probation. The trial court did grant him credit, though, from the time the State filed its motion.
Jail Time Credit
Simply put, appellant wants his Conviction B sentence to be credited for time spent serving his Conviction A sentence. At most, the period contemplated should begin either at the time he began serving his Conviction A sentence or at the time he moved to revoke his probation. Because both issues before us are premised on that contention, we consider them together.
It is true that a defendant normally is entitled to credit for the time he spends confined while awaiting the adjudication of a motion to revoke. Ex parte Bates, 978 S.W.2d 575, 577-78 (Tex. Crim. App. 1998). Yet, seldom, if ever, is it the defendant that seeks to have his probation terminated. The desire to end probation usually is that of the State. But, whether it is the State or the defendant that moves for revocation is unimportant to our resolution of this appeal. This is so because a condition precedent to the validity of either argument is non-existent, that condition being compliance with art. 42.03 §2(a) of the Texas Code of Criminal Procedure.
Through art. 42.03 §2(a), the legislature directed that in all criminal cases, "the judge of the court in which the defendant is convicted shall give the defendant credit on the defendant's sentence for the time that the defendant has spent . . . in jail for the case, other than confinement served as a condition of community supervision, from the time of his arrest and confinement until his sentence by the trial court . . . ." Tex. Code Crim. Proc. Ann. art. 42.03 §2(a)(1) (Vernon Supp. 2009) (emphasis added). As can be seen, the plain wording of the provision mandates that the defendant receive credit for the time spent jailed before his conviction. But, of import is the phrase "for the case" appearing in the statute. From its location in the edict, the credit at issue relates not just to any time the defendant spent incarcerated before conviction. Rather, it is the time one is incarcerated for the case in which he is ultimately tried and convicted. See Martinez v. State, No. 13-04-0085-CR, 2005 Tex. App. Lexis 6000 at *8 (Tex. App. - Corpus Christi July 28, 2005, no pet.) (not designated for publication) (stating that the trial court must award credit for time served in the same offense and not time spent serving a sentence in an independent cause).
According to the record before us, appellant was not jailed for the crime underlying Conviction B prior to the time the trial court revoked his probation. Indeed, his plea bargain excluded that since he was granted probation; that is, he was not supposed to go to jail for having committed that offense. Instead, his imprisonment arose from the sentence levied in response to Conviction A. Consequently, the circumstances at issue do not fit those contemplated by art. 42.03 §2(a)(1). And, because of that, it matters not who filed the motion to revoke.
Appellant's issues are overruled, and the judgment of the trial court is affirmed.
Brian Quinn
Chief Justice
Publish.
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People v Valdez (2014 NY Slip Op 07958)
People v Valdez
2014 NY Slip Op 07958
Decided on November 18, 2014
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on November 18, 2014
Friedman, J.P., Acosta, Saxe, Manzanet-Daniels, Gische, JJ.
13526 1218N/12
[*1] The People of the State of New York, Respondent,
v Jose Valdez, Defendant-Appellant.
Steven Banks, The Legal Aid Society, New York (Allen Fallek of counsel), for appellant.
Cyrus R. Vance, Jr., District Attorney, New York (Diane N. Princ of counsel), for respondent.
Judgment, Supreme Court, New York County (Laura A. Ward, J.), rendered August 13, 2012, convicting defendant, upon his plea guilty, of criminal sale of a controlled substance in the third degree, and sentencing him to a term of one year, unanimously affirmed.
Defendant made a valid waiver of his right to appeal (see People v Ramos, 7 NY3d 737 [2006]; People v Lopez, 6 NY3d 248 [2006]). Regardless of whether defendant made a valid waiver of his right to appeal, the court properly denied defendant's suppression motion. Defendant's present suppression arguments are unpreserved and we decline to review them in the interest of justice. We note that the People were never placed on notice of any need to develop the record (see People v Martin, 50 NY2d 1029 [1980]; People v Tutt, 38 NY2d 1011 [1976]) as to the particular issues defendant now raises. As an alternative holding, we find that the hearing record, and the reasonable inferences to be drawn therefrom, support the conclusion that defendant was lawfully seized pursuant to the fellow officer rule.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: NOVEMBER 18, 2014
CLERK
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119 Ga. App. 186 (1969)
166 S.E.2d 584
CAPITAL AUTOMOBILE COMPANY
v.
GENERAL MOTORS ACCEPTANCE CORPORATION et al.
44144.
Court of Appeals of Georgia.
Argued January 8, 1969.
Decided February 12, 1969.
Westmoreland, Hall & O'Brien, Donald E. O'Brien, John L. Westmoreland, Jr., for appellant.
Davis & Stringer, Thomas O. Davis, Stone & Stone, Noah J. Stone, Wilkerson, Nance & Head, for appellees.
*187 EBERHARDT, Judge.
The conclusion which appellant Capital Automobile Company desires us to reach upon this review of the denial of its motion for summary judgment is that the evidence conclusively shows that M. M. Armistead, in his purchase of a Cadillac, knowingly dealt individually with James W. Bailey, Capital's automobile salesman who actually had title to the automobile, so that Armistead cannot look to Capital for recompense because of the foreclosure of a security interest created by Bailey covering the automobile. The litigation was instituted when General Motors Acceptance Corporation (hereafter called GMAC), claiming an indebtedness of $4,892.59, sought to foreclose a "contract retaining title" which it had purchased from Capital. This contract, entered into on April 26, 1966, between Bailey as purchaser and Capital as seller, provided for the sale of a new 1966 Cadillac for a cash delivered price of $7,133.39, with a cash down payment of $1,614.90, the deferred balance to be paid in eleven monthly instalments of $100 with a final payment of $4,892.59. On May 25 a certificate of title was issued showing Bailey as owner and GMAC as the lienholder. Bailey made the payments of $100 but failed to pay the last instalment under the "balloon note." When the levy was made the automobile had been sold to Armistead in the transaction with Bailey here under investigation, and Armistead interposed his claim. He also filed a third-party complaint against Capital, contending that if GMAC held a valid lien superior to his title, Capital would be liable over to him as for a breach of warranty of title, and because Capital put Bailey in a position, while apparently acting within his authority as Capital's salesman, to commit a fraud upon him by selling him an automobile subject to a security interest under the Motor Vehicle Certificate of Title Act while purportedly selling him the automobile out of Capital's inventory, in which event he would normally expect to take free of security agreements covering the inventory. See Code Ann. § 68-405a; Code Ann. § 109A-9-307 (1); McDonald v. Peoples Auto Loan &c. Corp., 115 Ga. App. 483, 486 (154 SE2d 886). Under this record there can be no question but that Bailey was the owner of the automobile at the time of the transaction with Armistead *188 (see Code Ann. § 68-411a (c); Thornton v. Alford, 112 Ga. App. 321 (145 SE2d 106)), and that there is no presumption that Capital owned the automobile merely by virtue of its alleged possession through Bailey, its agent. Wreyford v. Peoples Loan &c. Corp., 111 Ga. App. 221 (141 SE2d 216). Thus Armistead's claim as to Capital's breach of warranty of title must fail, and the only issue raised for our consideration is whether the trial court properly found a genuine issue of fact as to whether Armistead, in his purchase of the Cadillac, knowingly dealt with Bailey as an individual, in which event Armistead could not claim he was defrauded.[1]
In its motion for summary judgment against Armistead, Capital specified the pleadings, the affidavit of its president, and the deposition of its secretary-treasurer. In response Armistead filed his affidavit, where he stated in substance:
In October, 1964, he went to Capital's place of business and talked with Bailey, one of Capital's salesmen, about purchasing a Cadillac. The dealings with Bailey culminated in the sale to Armistead of a 1964 Cadillac, $2,000 cash being paid at the time and the balance two or three days later. At the time of the purchase Bailey informed Armistead that a certificate of title to the automobile showing Armistead as owner would be obtained and sent to him, and thereafter this was accomplished.
Then in October, 1966, Armistead wanted to buy another Cadillac and went to Capital's place of business, again talking with Bailey. Bailey showed Armistead several Cadillacs on the premises, some new and some demonstrators. "Said salesman then told claimant [Armistead] that they have a car he thought claimant would like, `but it is at [my] house today.'" Bailey suggested that they go out to the house and look at the automobile, and drove Armistead there in one of Capital's automobiles. Armistead examined the car and liked it. "Salesman Bailey went in the house and came back out and said the *189 car delivered for $7,133 and that he would let claimant have all off that the Company would allow. Bailey went to make a telephone call and came back and told claimant that they would sell him the car for $5,500. including sales tax." Bailey drove Armistead back to Capital's place of business in the automobile, where Armistead paid him $2,500 in cash and stated he would make a loan and pay the balance the next day, which was subsequently done. Bailey then delivered the car to Armistead at Capital's place of business and told him the title papers would be delivered. Armistead did not receive the papers, however, and each time Armistead called, Bailey stated that the papers would be sent to him.
In May or June, 1967, Armistead became impatient about the matter and went to Capital's place of business and requested his title papers from a Mr. Roy Roberts, an officer of the company. When Armistead gave Roberts the identification number of the automobile, Roberts replied that he had caught Bailey stealing but that he was under bond, and that he would look into the matter and let Armistead know. Roberts did not call, however, and the next thing he heard was that the automobile was being levied upon, which was the first notice he had that GMAC claimed a security interest.
Elwyn C. Tomlinson, president of Capital, stated in his affidavit that the automobile had been sold by Capital to Bailey on April 26, 1966; that whatever sums of money paid by Armistead for the automobile were paid to Bailey; that Capital never received any part of the purchase price; that the check and receipt involved in the Armistead-Bailey transaction were made payable to Bailey individually; that Bailey did not have authority to sell the automobile on behalf of Capital or to represent to anyone that it was Capital's property; and that Bailey was not acting on behalf of Capital in the transaction.
The check for the $3,000 balance given by Armistead to Bailey was made payable to "James W. Bailey" and was indorsed by Bailey. The receipt given by Bailey for the cash down payment was made out on what appears to be the back of a bank deposit slip and reads:
"10/19/66
"Received of M. M. Armistead $2,500 cash deposit on `66 *190 Cadillac from James W. Bailey. 1966 Cadillac Sedan DeVille List Price $7,133."
In the face of this evidence produced by Capital, however, Armistead states in paragraph 5 of his affidavit: "Claimant says that he purchased said automobile from Capital Automobile Company through its salesman, James W. Bailey, and that said Company is a Cadillac automobile dealer and held said salesman out to the public, including claimant, as its duly authorized agent to sell automobiles."
C. W. Minton, secretary-treasurer of Capital, stated in interrogatories propounded by Armistead that no new Cadillac was sold to or purchased by any of its salesmen to be used as demonstrators; that no automobile was sold or financed by Capital to any salesman to be used as a demonstrator; that the Cadillac in question was sold outright to Bailey for his own personal use with no requirement or request that it be used as a demonstrator, and that it was financed by GMAC to Bailey on terms the two parties decided upon; that the automobile in question was not included as an item of liability in Capital's claim against the bonding company for Bailey's acts and that in general there was no plan or requirement whereby salesmen financed new Cadillacs each year to be used as demonstrators under any arrangement such as that of Bailey's agreement of April 26, 1966.
Minton gave conflicting answers on his deposition, however. He testified that although Capital had "house" demonstrators, and although most cars sold to employees were supposed to be for their own personal use under a plan where "we allow them to go along till a few months before the new models are going to come out and let them sell them then, you see, so they can get them another one," Capital required Bailey and other salesmen to buy or "floor plan" the new models as they came in and use them as demonstrators. Generally the idea was that salesmen such as Bailey would buy a new Cadillac on time and use it as a demonstrator in the sale of Capital's automobiles. "That's generally the idea because GMAC has for salesmen a special demonstrator plan. They recognize that dealers or salesmen would prefer to use his own automobile." The "demonstrator *191 plan" generally provided for 11 or 12 payments and the final one for the balance, and the "billing out" to Bailey of the automobile in question was on the special GMAC demonstrator plan. In that transaction Bailey paid out only $165.49 actual cash instead of the $1,614.90 cash down payment noted in the contract, the balance being discounted.
Minton further testified that it was common knowledge among the trade that sometimes a salesman will buy a prospective customer's used car at a price higher than the appraised value if the customer will buy the new car. Minton also knew that Bailey and the other salesmen occasionally bought and sold cars individually, although there was no sign on Capital's premises informing the public of this fact. These cars were kept in various places. "Sometimes they try to keep them on the lot, but we cannot hold them here, so they have their own places that they stash them away." Bailey and the other salesmen had dealer tags on their own automobiles which Capital got for them every year under its master dealer's tag and in the same series. Minton further testified from his records that the Cadillac sold to Armistead in 1964 was a "Bailey demonstrator."
From a consideration of this evidence and the contentions of the parties we have concluded that the crucial matters in this appeal relate to the construction of paragraph 5 of Armistead's affidavit and the credibility problem it raises. For Armistead, in spite of the fact that he made his check payable to Bailey individually and received an individual receipt from him which was not on one of Capital's customary receipt blanks, nevertheless states in his affidavit that "he purchased said automobile from Capital Automobile Company through its salesman, James W. Bailey." Is this statement to be disregarded as an unsupported legal conclusion, or is it to be taken as a statement as to who Armistead thought he was dealing with? In other words, is this statement to be construed as evidencing Armistead's state of mind or intention in this transaction so as to support his contention that he was acting upon Bailey's misrepresentation? In answering this question we are bound by the familiar rule that the party opposing the motion for summary judgment is to be given the benefit of all reasonable doubts in determining *192 whether a genuine issue exists and the trial court, construing the evidence most favorably to the opposing party, must give him the benefit of all favorable inferences that may be drawn from the evidence. See, e.g., Holland v. Sanfax Corp., 106 Ga. App. 1, 5 (126 SE2d 442); McCarty v. National Life &c. Ins. Co., 107 Ga. App. 178 (129 SE2d 408). Accordingly we must construe Armistead's affidavit as stating that he thought he was dealing with Capital through its agent, Bailey.
We now encounter the difficulty that although Armistead evidences this state of mind by his affidavit, the making of the check to Bailey as an individual and Bailey's giving him an individual receipt for the cash is strong evidence to the contrary. This appears to pose a problem as to the credibility of Armistead's statement in the affidavit.
"The question of the credibility of witnesses and the related right of cross examination is a murky area of the summary judgment law with conflicting concepts in hostile array. Cases like this, having as an essential factor the state of mind or intent of a person, are difficult of solution." Darby v. Interstate Life &c. Ins. Co., 107 Ga. App. 409, 410 (130 SE2d 360). Accordingly, in a summary judgment case, this court cannot consider the credibility of a witness or his affidavit (Darby v. Interstate Life &c. Ins. Co., supra; Raven v. Dodd's Auto Sales & Service, 117 Ga. App. 416, 421 (3) (160 SE2d 633)) and a jury must resolve this question and the conflict in the evidence which it produces. It is therefore our conclusion that the trial court properly refused to take from the jury the question of whether Armistead knowingly dealt with Bailey as an individual, and accordingly the judgment must be
Affirmed. Bell, P. J., and Deen, J., concur.
NOTES
[1] In addition to denying Capital's motion for summary judgment, the court granted GMAC's motion for summary judgment and ordered that the foreclosure and levy proceed to sale. There is no appeal or enumeration of error concerning this judgment.
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831 S.W.2d 5 (1992)
Curtis Anthony MAYES, Appellant,
v.
The STATE of Texas, Appellee.
No. 01-90-00579-CR.
Court of Appeals of Texas, Houston (1st Dist).
April 2, 1992.
Opinions on Motion for Rehearing July 2, and August 31, 1992.
*6 Jules L. Laird, Jr., Houston, for appellant.
John B. Holmes, Jr., Dist. Atty., Kimberly Aperauch Stelter, Scott Durfee, Asst. Dist. Attys., Houston, for appellee.
Before O'CONNOR, DUGGAN, and DUNN, JJ.
OPINION
DUNN, Justice.
After finding appellant, Curtis Anthony Mayes, guilty of possession of a controlled substance and the enhancement allegations to be true, the jury assessed punishment at 55-years confinement.
While responding to a disturbance call, Houston Police Officer Richard Pederson saw appellant walk from behind a small business strip center. Appellant was carrying a beer can in his hand. Pederson testified that he watched appellant walk across the street to a vacant house, where he fell backwards onto a discarded couch on the front porch. Based on appellant's behavior, Pederson believed he was intoxicated. After questioning appellant, Pederson arrested him for public intoxication.
During a brief pat down for weapons, Pederson discovered a long, glass crack pipe in appellant's front pants pocket. Pederson testified that appellant's condition was consistent with one who was coming "off" a cocaine high and that cocaine residue was visible from the outside of the pipe. Residue inside the glass pipe tested positive in a field test for cocaine.
The remaining residue was later chemically analyzed. The State's chemist testified that cocaine residue was visible and that he was able to collect .2 milligrams pure cocaine from the residue inside the pipe by using a solvent.
In his first point of error, appellant asserts the evidence was insufficient to show that he knowingly possessed the cocaine in question. Appellant contends that due to the trace amount of residue obtained, the testimony of the peace officer and the chemist is insufficient to show he knowingly possessed cocaine. We disagree.
In reviewing the sufficiency of the evidence, this Court must view the evidence in the light most favorable to the verdict and consider whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1974); Manuel v. State, 782 S.W.2d 335, 336 (Tex.App.Houston [1st Dist.] 1989, pet.ref'd). To prove the unlawful possession of a controlled substance, the State must prove: (1) the accused exercised care, custody, control, and management over the contraband; and (2) the accused knew the matter possessed was contraband. Manuel, 782 S.W.2d at 336.
This Court has recently held that if the controlled substance can be seen and measured, the amount is sufficient to establish that the appellant knew it was a controlled substance. Thomas v. State, 807 S.W.2d 786, 789 (Tex.App.Houston [1st Dist.] 1991, pet. granted).[1]
*7 Both Pederson and the chemist testified that residue was visible and that .2 milligrams of pure cocaine was recovered.
Therefore, appellant's first point of error is overruled.
In his second point of error, appellant argues the evidence was insufficient because the cocaine was not introduced into evidence and the court's charge authorized a conviction that was not supported by the evidence.
The relevant portion of the charge reads as follows:
Before you would be warranted in convicting the defendant you must find beyond a reasonable doubt that the substance alleged to have been found by the State is cocaine and you must find beyond a reasonable doubt that the defendant voluntarily had the same in his possession and that he knew the substance was cocaine.
Based upon this charge, appellant makes two contentions. First, relying on Arceneaux v. State, 803 S.W.2d 267 (Tex.Crim. App.1990), he contends the State was required to introduce the cocaine itself into evidence. We disagree.
Arceneaux is distinguishable from the case at bar. The Arceneaux jury charge contained the following:
Before you would be warranted in convicting the defendant you must find from the evidence beyond a reasonable doubt that the exhibit introduced in evidence by the State is cocaine.
Arceneaux v. State, 803 S.W.2d at 268 (emphasis added). The court reasoned that once a phrase is incorporated into the jury instruction in such a way that the jury must find it before a verdict of guilt is authorized, it must be proved or the verdict will be deemed contrary to the law and evidence. Id. at 270.
In the present charge, the language is critically different from the Arceneaux charge. Here, the State need only prove that "the substance alleged to have been found by the State is cocaine." The testimony of the officer and the chemist was sufficient to meet this burden.
Second, appellant contends the State increased its burden by requiring a showing beyond a reasonable doubt that he voluntarily had cocaine on his possession and that the evidence was insufficient to meet this burden. We disagree.
Possession must be voluntary. Section 6.01 of the Texas Penal Code provides:
(a) A person commits an offense only if he voluntarily engages in conduct, including an act, an omission, or possession.
(b) Possession is a voluntary act if the possessor knowingly obtains or receives the thing possessed or is aware of his control of the thing for a sufficient time to permit him to terminate his control.
Tex.Penal Code Ann. § 6.01(a) and (b) (Vernon 1974).
The State did not increase its burden of proof. The charge simply required the State to show the substance was cocaine and, as required by the Penal Code, possession was voluntary.
Here, Pederson testified that due to its shape and its location in appellant's front pants pocket, it would have been impossible for appellant not to have felt the crack pipe when he sat down. Appellant was aware of his control and, thus, the State has met the requisite burden of proof.
Appellant's second point of error is overruled.
In his third point of error, appellant complains the trial court erred when it refused to include his requested jury charge. At the conclusion of the guilt or innocence phase, appellant objected to the trial court's jury charge and requested a charge for the possession of drug paraphernalia as a lesser included offense. Appellant argues possession of drug paraphernalia is a lesser included offense of possession of cocaine.
Before a charge on a lesser included offense can be given, two requirements must be met. Lincecum v. State, 736 S.W.2d 673, 678 (Tex.Crim.App.1987); Johnson v. State, 773 S.W.2d 721, 722 (Tex. AppHouston [1st Dist] 1989, pet. refd). First, the lesser included offense must be included within the proof necessary to establish the offense charged. Lincecum, 736 S.W.2d at 678. Second, there must be some evidence in the record that if the defendant is guilty, he is guilty of only the lesser offense. Id.
Here, the second requirement is clearly not met. The cocaine was recovered from the pipe. Thus, there is no evidence in the record that the appellant is guilty of only the lesser offense. Thus, a lesser included *8 offense charge would not have been appropriate.
Appellant's third point of error is overruled.
The judgment is affirmed.
O'CONNOR, J., dissents.
O'CONNOR, Justice, dissenting.
I dissent. I do not believe the State proved that Curtis Anthony Mayes, the appellant, knowingly possessed 0.2 milligrams of cocaine.
In point of error one, the appellant argues the evidence was insufficient to show that he knowingly possessed the cocaine in question. I agree. The trace amount of residue obtained through a spectrograph test is insufficient to show the appellant knowingly possessed cocaine.[1]
To explain my dissent, I ask the reader tomorrow morning, before you put sugar into your coffee, to spill a minute amount of sugar on the table. Then, separate one grain of sugar from the rest. (If you are over 35 years of age, you will probably need your reading glasses.) With the tip of your finger pick up one grain of sugar and put it in the palm of your hand. It is hard to see, but hold it up to light. The appellant in this case was indicted for possessing that amount of cocaine, was convicted of possessing that amount of cocaine, and was sentenced to 55 years in the penitentiary for possessing that amount of cocaine.
Today's holding, that a person can be found guilty of possession of 0.2 milligrams of cocaine, which is about the size of one grain of sugar,[2] stretches the logic of our criminal laws to the breaking point. That a person who possessed the equivalent of one grain of sugar of cocaine, can be sent to the penitentiary for 55 years, goes a long way to explain why our jails are filled beyond capacity.
The appellant, who appeared intoxicated, was seen drinking a beer. Officer Pederson, who testified the appellant's condition was consistent with one who was coming "off" a cocaine high, was not an expert and could not distinguish between intoxication from beer and cocaine. If we reduce Pederson's testimony to its actual value, none, the State proved that the appellant was drunk, had a glass pipe in his pocket, and the glass pipe had a residue of cocaine.
We have no information about the glass pipe and how it came into the appellant's possession. A neighbor and friend of the appellant testified that he had seen discarded glass pipes and syringes in the neighborhood and had found some in his own front yard. He testified that he had never seen the appellant use drugs. (The appellant's prior convictions were not for drug offenses.)
To find the appellant guilty, we must infer that he took some action to possess the pipe knowing that it had cocaine residue in it. The possession of a dirty glass pipe, or as in Jarrett, a piece of a car antennae, should not be enough to find, beyond a reasonable doubt, that the defendant was guilty of possession of cocaine. Neither should it be enough to send a defendant to the penitentiary for 55 years, or as in Jarrett, for 44 years.
The following amounts of controlled substances have been held sufficient to convict for possession: 23.8 milligrams, Huff v. State, 630 S.W.2d 711, 713 (Tex.App. Houston [1st Dist.] 1981, pet. ref'd); 9.5 milligrams, Simpson v. State, 668 S.W.2d 915, 918 (Tex.App.Houston [1st Dist] 1984, no pet); 3.9 milligrams (0.4 in a syringe and 3.5 milligrams in a bag), Lavigne v. State, 782 S.W.2d 253 (Tex.App. Houston [14th Dist.]), affd, 803 S.W.2d 302 (Tex.Crim.App.1990); 3.2 milligrams, Kent v. State, 562 S.W.2d 855, 856 (Tex. Crim.App.1978); 2.2 milligrams, Manuel v. State, 782 S.W.2d 335, 337 (Tex.App. Houston [1st Dist] 1989, pet. ref'd); 2 milligrams, Jarrett v. State, 818 S.W.2d 847 (Tex.App.Houston [1st Dist.] 1991, no pet.); 1.7 milligrams, Tomlin v. State, 338 S.W.2d 735, 737 (Tex.Crim.App.1960); 0.8 milligrams, Thomas v. State, 807 S.W.2d 786 (Tex.App.Houston [1st Dist] 1991, pet. granted); 0.3 milligrams, Alejandro v. State, 725 S.W.2d 510, 515 (Tex.App. Houston [1st Dist] 1987, no pet).
In Coleman v. State, 545 S.W.2d 831, 835 (Tex.Crim.App.1977), the Court of Criminal Appeals held that 5.06 milligrams *9 was not sufficient to support a conviction.[3] Thus, of the above cases, any amount less than 5.06 milligrams is probably suspect. Here we have two-tenths of a milligram. If 5.06 milligrams was not enough to sustain a conviction, two-tenths of a milligram is also insufficient.
Today's holding, that 0.2 milligrams is sufficient to find a defendant guilty of possession of cocaine, reaches beyond any other holding on trace amounts of drugs. On this record, the State should have charged the appellant with possession of drug paraphernalia, not cocaine. Tex. Health 481.125 (Vernon Pamph.1992).
I would reverse and remand for the entry of acquittal.
OPINION ON MOTION FOR REHEARING
DUNN, Justice.
On motion for rehearing, appellant complains the trial court erred when it refused to include his requested jury charge. At the conclusion of the guilt or innocence phase, appellant objected to the trial court's jury charge and requested a charge for the possession of drug paraphernalia as a lesser included offense. Appellant argues possession of drug paraphernalia is a lesser included offense of possession of cocaine.
Before a charge on a lesser included offense can be given, two requirements must be met. Lincecum v. State, 736 S.W.2d 673, 678 (Tex.Crim.App.1987); Johnson v. State, 773 S.W.2d 721, 722 (Tex. App.Houston [1st Dist.] 1989, pet. ref d). First, the lesser included offense must be included within the proof necessary to establish the offense charged. Lincecum, 736 S.W.2d at 678. Second, there must be some evidence in the record that if the defendant is guilty, he is guilty of only the lesser offense. Id.; Royster v. State, 622 S.W.2d 442, 447 (Tex.Crim.App.1981).
While proving appellant possessed cocaine, the State also proved appellant possessed drug paraphernalia. Therefore, the lesser included offense of possession of drug paraphernalia was included within the proof necessary to establish the offense charge of possession of cocaine. However, there was no evidence presented at trial which showed that appellant, if guilty, was only guilty of the lesser included offense of possession of drug paraphernalia. Royster, 622 S.W.2d at 447. We note there is no conflicting evidence concerning an element of the greater offense (possession of cocaine), which is not an element of the lesser included offense of possession of drug paraphernalia, so that the trial court needed to give a charge on possession of drug paraphernalia. Id. at 446.
Appellant's motion for rehearing is overruled.
The judgment is affirmed.
OPINION ON STATE'S MOTION FOR REHEARING
DUNN, Justice.
On appellant's motion for rehearing, we held that appellant met the first prong of the Royster[1] test because the lesser included offense of possession of drug paraphernalia was included within the proof necessary to establish the offense charge of possession of cocaine, so that possession of drug paraphernalia was a lesser included offense of the offense of possession of cocaine. However, we found that appellant failed to meet the second prong of the Royster test because he did not show that if he was guilty, he was guilty of only the lesser included offense. After reconsideration, we hold that appellant did not meet the first prong of the Royster test.
At trial, appellant objected to the trial court's jury charge and requested a charge for the possession of drug paraphernalia as a lesser included offense. Appellant argued that possession of drug paraphernalia is a lesser included offense of possession of cocaine.
Before a charge on a lesser included offense can be given, two requirements must be met. Lincecum v. State, 736 S.W.2d 673, 678 (Tex.Crim.App.1987); Johnson v. State, 773 S.W.2d 721, 722 (Tex. App.Houston [1st Dist.] 1989, pet. ref d). First, the lesser included offense must be included within the proof necessary to establish the offense charged. Lincecum, 736 S.W.2d at 678. Second, there must be some evidence in the record that if the defendant is guilty, he is guilty of only the lesser offense. Id.; Royster, 622 S.W.2d *10 at 447. "Merely because a lesser offense is included within the proof of a greater offense, however, does not always warrant a jury charge on the lesser offense." Aguilar v. State, 682 S.W.2d 556, 558 (Tex. Crim.App.1985).
The offense of possession of drug paraphernalia is not within the proof necessary to establish the offense of possession of cocaine. Tex.Code Crim.P.Ann. art. 37.-09(1) (Vernon 1981); see Sims v. State, 833 S.W.2d 281 (Tex.App.Houston [14th Dist.], n.w.h.). Therefore, appellant did not meet the first prong of the Royster test. Royster, 622 S.W.2d at 447. Also, appellant failed to meet the second prong of the Royster test because there was no evidence presented at trial which showed that appellant, if guilty, was only guilty of the lesser included offense of possession of drug paraphernalia. Id. We note there is no conflicting evidence concerning an element of the greater offense (possession of cocaine), which is not an element of the lesser included offense of possession of drug paraphernalia, so that the trial court needed to give a charge on possession of drug paraphernalia. Id. at 446.
The State's motion for rehearing is denied and the judgment is affirmed.
NOTES
[1] See also Lavigne v. State, 782 S.W.2d 253, 256 (Tex.App.Houston [14th Dist.] 1989) aff'd, 803 S.W.2d 302 (Tex.Crim.App. 1990) (possession of a minute amount of cocaine is sufficient to sustain a conviction, if the amount possessed is capable of being measured).
[1] The trace amount of 0.2 milligrams was obtained by dissolving the pipe's residue in twothirds normal sulfuric acid and then extracted into chloroform and then back into sulfuric acid. This liquid substance was then placed under the ultraviolet spectrometer. The liquid's ultraviolet radiation was similar to cocaine heat.
[2] In Jarrett v. State, 818 S.W.2d 847, 850 (Tex. App.Houston [1st Dist.] 1991, no pet.) (O'Connor, J., dissenting), the testimony showed that 2 milligrams of cocaine was the equivalent of 10 grains of sugar. If 2 milligrams equals 10 grains of sugar, 0.2 milligrams equals 1 grain of sugar.
[3] In Coleman, the defendant was found with 5/28,000 of an ounce, which is the equivalent of 5.06 milligrams. The formula is 5/28,000 oz. =.XXXXXXXXX oz.; .XXXXXXXXX oz. / 1 x 1 mg. /.00003527 oz. = 5.06 mg.
[1] Royster v. State, 622 S.W.2d 442 (Tex.Crim. App.1981).
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-6103
NATHANIEL SINGLETON,
Plaintiff - Appellant,
v.
FOOD SERVICE OFFICER MR. NELSON; FOOD SERVICE MR. TAYLOR;
FOOD SERVICE MR. CRAZE; FOOD SERVICE MS. JOHNSON; FOOD
SERVICE MS. VENTON; ADMINISTRATIVE FOOD SERVICE BROWN;
ADMINISTRATIVE FOOD SERVICE ARGLINE,
Defendants - Appellees.
Appeal from the United States District Court for the District of
South Carolina, at Aiken. R. Bryan Harwell, District Judge.
(1:12-cv-02985-RBH-SVH)
Submitted: April 17, 2014 Decided: April 22, 2014
Before WILKINSON, KING, and DUNCAN, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Nathaniel Singleton, Appellant Pro Se. Marshall Prince, II,
Assistant United States Attorney, Columbia, South Carolina, for
Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Nathaniel Singleton seeks to appeal the district
court’s order adopting the magistrate judge’s recommendation to
dismiss some, but not all, of Singleton’s claims asserted under
Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics,
403 U.S. 388 (1971). This court may exercise jurisdiction only
over final orders, 28 U.S.C. § 1291 (2012), and certain
interlocutory and collateral orders, 28 U.S.C. § 1292 (2012);
Fed. R. Civ. P. 54(b); Cohen v. Beneficial Indus. Loan Corp.,
337 U.S. 541, 545-46 (1949). The order Singleton seeks to
appeal is neither a final order nor an appealable interlocutory
or collateral order. Accordingly, we dismiss the appeal for
lack of jurisdiction. We dispense with oral argument because
the facts and legal contentions are adequately presented in the
materials before this court and argument would not aid the
decisional process.
DISMISSED
2
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Filed 8/21/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
NICHOLAS DEL CASTILLO
Petitioner,
v.
THE SUPERIOR COURT OF THE CITY A157306
AND COUNTY OF SAN FRANCISCO,
(City & County of San Francisco
Respondent; Superior Court No. 230880)
PEOPLE OF THE STATE OF
CALIFORNIA,
Real Party in Interest.
Petitioner Nicholas Del Castillo seeks a writ directing the trial court to set aside an
information for failure to begin his preliminary hearing within 60 days of his
arraignment. We shall issue the writ.
BACKGROUND
On December 27, 2018, a felony complaint was filed against Del Castillo alleging
residential burglary with a hot prowl allegation, vandalism, and receiving stolen property.
On December 28, 2018, he was arraigned on the complaint, and the preliminary hearing
was set for January 10, 2019. On January 10, the court granted the People’s request for a
one-day continuance. On January 11, 2019, Del Castillo waived his right to a
preliminary hearing within 10 days, but expressly preserved his right to have the hearing
commence within 60 days. The preliminary hearing was set for February 19, 2019.
On February 19, 2019, Del Castillo did not appear at the preliminary hearing
because he was in custody at San Francisco General Hospital. His hearing was continued
to February 21, 2019, and again to February 22, 2019. On both days the court stated Del
Castillo remained in the hospital. The preliminary hearing was continued to February 26,
2019, the 60th day from Del Castillo’s December 28, 2018 arraignment.
On February 26, 2019, Del Castillo was still hospitalized. The court bailiff stated
“I called SFGH. He’s on 5150 hold still. He is not able to come to court.” The court
continued the hearing until that same afternoon in order to obtain additional information
from the hospital about whether it would be detrimental to bring Del Castillo to court.
During the afternoon session, defense counsel reported that she had spoken with Dr.
Peters and was informed that no assessment had been made as to whether bringing Del
Castillo to court would be detrimental to his mental well-being. The magistrate stated, “I
don’t have enough information to be able to resolve this,” and continued the hearing until
February 27. Defense counsel objected on the grounds that Penal Code section 859b 1
requires that the case be dismissed when the preliminary hearing is not held within 60
days of arraignment.
On February 27, 2019, Del Castillo was still hospitalized and did not appear in
court. The magistrate reported that she spoke with a Dr. Pratt and based on the
information provided by Dr. Pratt, she concluded it would be detrimental to bring Del
Castillo to court. The preliminary hearing did not begin until March 1, 2019, at which
time, Del Castillo moved for dismissal under section 859b. The magistrate denied the
motion. Del Castillo was held to answer on the charges.
On April 2, 2019, Del Castillo moved to set aside the information arguing that he
was denied his right to have a preliminary hearing commence within 60 days of
arraignment. The court denied Del Castillo’s motion finding, “The Court takes judicial
notice of what a 51/50 reference is. It means a person is a danger to himself or to others,
he’s being evaluated. [¶] The Court finds that this is proper good cause. In these
circumstances, there was communication with San Francisco SFGH, we . . . don’t know
1
All further unspecified statutory references are to the Penal Code.
2
who, but with the hospital, they said that he can’t be transported, that he’s on a 51/50
hold . [¶] . . . [¶] The Court finds good cause. The Court denies the defense’s motion to
dismiss the information.”
Del Castillo now seeks a peremptory writ of prohibition or any other appropriate
relief from the court’s order denying his motion to set aside the information pursuant to
section 995.
On June 20, 2019, we requested an informal opposition to the writ petition and a
reply, and issued notice under Palma v. U.S. Industrial Fasteners Inc. (1984) 36 Cal.3d
171, 180, that we may issue a peremptory writ in the first instance.
DISCUSSION
“The magistrate shall dismiss the complaint if the preliminary examination is set
or continued more than 60 days from the date of the arraignment, plea, or reinstatement
of criminal proceedings pursuant to Chapter 6 (commencing with Section 1367) of Title
10 of Part 2, unless the defendant personally waives his or her right to a preliminary
examination within the 60 days.” (§ 859b.)
“[O]n its face section 859b’s 60-day rule is absolute and requires dismissal of a
felony complaint against a non-consenting defendant whose preliminary hearing is set or
continued more than 60 days from arraignment.” (Ramos v. Superior Court (2007) 146
Cal.App.4th 719, 730.) Although section 859b includes a good-cause exception to the
10-court-day rule, there is no exception from the 60-day rule, which indicates the
Legislature did not intend a good-cause exception can apply to the 60-day rule. (Id. at p.
731.)
The People do not defend the trial court’s finding of good cause for a continuance.
Instead, the People argue that the 60-day period was tolled under Welfare and Institutions
Code section 4011.6, which provides for the transfer of jailed inmates who may be
mentally disordered to a facility for 72-hour treatment and evaluation pursuant to Welfare
3
and Institutions Code section 5150. 2 As discussed below, transfer of an inmate to a
facility for a mental health evaluation does not automatically toll a defendant’s speedy
trial rights under section 859b.
Section 4011.6 states, in relevant part: “If a prisoner is detained in a facility
pursuant to those articles of the Welfare and Institutions Code and if the person in charge
of the facility determines that arraignment or trial would be detrimental to the well-being
of the prisoner, the time spent in the facility shall not be computed in any statutory time
requirements for arraignment or trial in any pending criminal or juvenile proceedings.
Otherwise, this section shall not affect any statutory time requirements for arraignment or
trial in any pending criminal or juvenile proceedings.” (§ 4011.6.) The People assert that
prior to February 26, 2019, the magistrate reasonably relied upon reports that Del Castillo
was hospitalized pursuant to Welfare and Institutions Code section 5150 because he was
a danger to himself or to others and therefore the 60-day period was tolled.
Initially, the express tolling language of section 4011.6 refers to “any statutory
time requirements for arraignment or trial,” and does not specifically reference
preliminary hearings. However, even assuming (without deciding) that the statute
provides for tolling of the 60-day period applicable to preliminary hearings, the record
2
Welfare and Institutions Code section 5150, subdivision (a) provides: “When a
person, as a result of a mental health disorder, is a danger to others, or to himself or
herself, or gravely disabled, a peace officer, professional person in charge of a facility
designated by the county for evaluation and treatment, member of the attending staff, as
defined by regulation, of a facility designated by the county for evaluation and treatment,
designated members of a mobile crisis team, or professional person designated by the
county may, upon probable cause, take, or cause to be taken, the person into custody for a
period of up to 72 hours for assessment, evaluation, and crisis intervention, or placement
for evaluation and treatment in a facility designated by the county for evaluation and
treatment and approved by the State Department of Health Care Services. At a minimum,
assessment, as defined in Section 5150.4, and evaluation, as defined in subdivision (a) of
Section 5008, shall be conducted and provided on an ongoing basis. Crisis intervention,
as defined in subdivision (e) of Section 5008, may be provided concurrently with
assessment, evaluation, or any other service.”
4
does not support tolling in this case. The tolling provisions apply only “if the person in
charge of the facility determines that arraignment or trial would be detrimental to the
well-being of the prisoner.” (§ 4011.6.) Here, there is no evidence that anyone made
such a determination prior to February 26, 2019. On February 27, 2019, the 61st day
from arraignment, the magistrate stated that she spoke with Dr. Pratt that morning and
she determined “it would be detrimental to bring [Del Castillo] to court. That was the
opinion of Dr. Pratt.” There is no evidence in the record that Dr. Pratt was the “person in
charge of the facility,” but even assuming Dr. Pratt had the requisite authority under
section 4011.6, the determination was not made within the 60-day time period proscribed
by section 859b.
There is no statutory provision that automatically tolls section 859b’s 60-day time
period for defendants who are receiving a mental health evaluation. Section 4011.6
provides for tolling only if a specific determination is made. Nothing in this record
establishes that prior to February 26, 2019, a determination was made that it would be
detrimental to Del Castillo’s well-being if he was brought to court. Any such
determination made on February 27, 2019, was beyond the permissible 60-day time
period.
The People urge the court to remand for further preliminary hearing proceedings
under section 995a, to afford the People the opportunity to prove Dr. Pratt’s authority.3
3
Section 995a, subdivision (b) provides, in relevant part:
(1) Without setting aside the information, the court may, upon motion of the
prosecuting attorney, order further proceedings to correct errors alleged by the defendant
if the court finds that such errors are minor errors of omission, ambiguity, or technical
defect which can be expeditiously cured or corrected without a rehearing of a substantial
portion of the evidence. The court may remand the cause to the committing magistrate for
further proceedings, or if the parties and the court agree, the court may itself sit as a
magistrate and conduct further proceedings. When remanding the cause to the
committing magistrate, the court shall state in its remand order which minor errors it
finds could be expeditiously cured or corrected.
5
But the People cite no authority holding section 995a may be used to cure a violation of
section 859b. In any event, no purpose would be served by the proposed remand
because, as discussed above, the required section 4011.6 determination was not made
within the section 859b’s 60-day time period.
DISPOSITION
The accelerated Palma procedure (Palma, supra, 36 Cal.3d 171) is appropriate
here because “petitioner’s entitlement to relief is so obvious that no purpose could
reasonably be served by plenary consideration of the issue. . . .” (Ng v. Superior Court
(1992) 4 Cal.4th 29, 35.)
Let a peremptory writ of mandate issue directing respondent superior court to
vacate its order of April 19, 2019, denying petitioner’s Penal Code section 995 motion,
and to issue a new order granting the motion and setting aside the information.
Our decision is immediately final as to this court. (Cal. Rules of Court, rule
8.490(b)(2)(A).)
(2) Any further proceedings conducted pursuant to this subdivision may include
the taking of testimony and shall be deemed to be a part of the preliminary examination.
6
_________________________
Siggins, P. J.
WE CONCUR:
_________________________
Fujisaki, J.
_________________________
Petrou, J.
Del Castillo v. Superior Court, A153706
7
Trial Court: San Francisco City & County Superior
Court
Trial Judge: Honorable Eric R. Fleming
Counsel:
Manohar Raju, Public Defender, Matt Gonzalez, Chief Attorney, Dorothy Bischoff,
Sierra Villaran, Deputy Public Defenders, for Petitioner.
Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant Attorney General,
Jeffrey M. Laurence, Senior Assistant Attorney General, Laurence K. Sullivan,
Supervising Deputy Attorney General, Rene A. Chacon, Supervising Deputy Attorney
General, for Real Parties in Interest.
8
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429 F.Supp. 188 (1977)
UNITED STATES of America, Plaintiff,
v.
Stephen Keith SPEERS and James Lee Nowlin, Defendants.
Cr. No. 77-00013-D.
United States District Court, W. D. Oklahoma.
February 3, 1977.
*189 David L. Russell, U. S. Atty., by Richard F. Campbell, III, Asst. U. S. Atty., Oklahoma City, Okl., for plaintiff.
Larry M. Spears, Oklahoma City, Okl., for defendant Speers.
John P. Sopher, Oklahoma City, Okl., for defendant Nowlin.
ORDER
DAUGHERTY, Chief Judge.
The above Defendants are charged in a two-count Indictment with stealing and converting to their own use property of the United States and receiving, concealing or retaining property of the United States with intent to convert such property to their own use knowing the same to have been stolen pursuant to 18 United States Code § 641 and 18 United States Code § 2. The alleged property of the United States consists of five items of Sony video equipment. The Defendants have each filed Motions to Suppress.
One Motion of each Defendant seeks to suppress as evidence any identifications made by reason of any photographs on the basis that said identifications were tainted. The Plaintiff has responded to these Motions stating that no identification of either Defendant was made by reason of a photograph. On the basis of such Response, each Defendant withdrew his Motion to Suppress Identification by reason of tainted photographs.
Each Defendant also moved to suppress as evidence all evidence obtained as a result of his arrest or any other form of search on the basis that any such evidence was obtained illegally in violation of Defendants' rights. In response to said Motions the Plaintiff asserts that the five items of property mentioned in the Indictment were *190 seized from Defendants' motor vehicle in compliance with the law citing Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 and Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706. Plaintiff also cites United States v. Thomas, 289 F.Supp. 364 (S.D.N.Y.1968).
An evidentiary hearing has been conducted on the latter Motions which reveals that a locksmith by the name of James R. Perry (Perry) was called to a shopping center parking lot to make a set of keys for a Ford van. He proceeded to the designated location, identified the two Defendants as being there in possession of the van and made two sets of keys for the same. Perry noticed that the van had a Texas tag. As he made out a bill in the amount of $14.50 for the keys he was told by Defendant Speers that they had no money but they would trade him a Sony TV (which was a Sony video monitor), one of the five items of property described in the Indictment, for the keys. Perry advised that this could not be done unless he called his shop, which he did, and as a result of this conversation advised the Defendants that he would have to have the serial number of the Sony and some identification before the exchange could be made. He did obtain the serial number of the Sony, Speers said he had no identification and Defendant Nowlin produced a drivers license but he snatched the same from Perry as Perry was in the act of writing down the drivers license number. At this juncture Perry called the police and reported possible stolen property in the possession of Defendants in their van in the shopping center parking lot.
When a police officer reached the scene Perry advised him of the foregoing events. The police officer noticed that the van had an expired 1975 Texas tag. The officer asked the Defendants about the exchange of the Sony TV for the key and they acknowledged that such an exchange had been offered. The officer asked the Defendants if they minded if he checked the Sony TV. The Defendants said they had no objection to his doing so and pointed to the TV set in the space between the two front seats in the van. As the officer undertook to examine the Sony TV he saw two tablets on the floor of the passenger side of the pickup. The tablets were white and yellow. Upon this discovery the Defendants were arrested for possession of a controlled substance, they were advised of their rights and as another police car had arrived each Defendant was put in the back of a different police car. The arresting officer thought the pills were amphetamines but he was not sure. No field test was made on the pills. A NCIC check was made on the Sony TV monitor. The report came back that it was clear. Following the arrest of Defendants the officers called for a wrecker and then made an inventory of the vehicle at the scene prior to the arrival of the wrecker. The officer testified that such an inventory was standard procedure. In making the inventory they found the other four items of Sony equipment described in the Indictment. When asked about whose van it was the Defendants said that it belonged to a person by the name of Rick whose last name was unknown and from whom they had borrowed the same in Shawnee, Oklahoma. Also that they bought the Sony equipment at a tavern for $150.00. The evidence did not disclose whether charges have been filed with reference to the two pills (two additional pills were found as the vehicle was inventoried); or whether the two pills were a controlled substance.
In arguments counsel for Defendants acknowledge that the officer had a right to be where he was in the parking lot near the van and was given the right by Defendants to reach in the van and get the Sony TV which was in plain view between the front seats of the van for the purpose of examining the same. Defendants contend, however, that the officer did not know that the two pills were a contraband controlled substance, that the arrest of Defendants by reason of the two pills was only on suspicion and was an illegal arrest and that anything following in the way of a search or inventory of the van was tainted by the illegal arrest.
*191 Plaintiff counters the argument of Defendants by saying that under the circumstances of this case including the involvement of a mobile motor vehicle the officer had probable cause to search the vehicle for stolen property and that such search was not dependent upon the requirement of a valid arrest for either the possession of a controlled substance or any other offense. Plaintiff argues that such probable cause to search the van consisted of the information furnished him by locksmith Perry and the van having expired foreign license plates. Plaintiff cites Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970) for the proposition that if there is probable cause to believe a crime is or has been committed, an automobile, because of its mobility, may be searched without a warrant in circumstances that would not justify a warrantless search of a house or office; that here the car was mobile (keys had been made to allow the same to be moved); that exigent circumstances were present and that with the knowledge then possessed by the officer there was probable cause to suspect stolen property to be in the van which permitted the officer to make a warrantless search of such van; that stolen property found in such search was legally obtained and hence is admissible in evidence herein. The Government also appears to urge that following the arrest of Defendants for possession of a controlled substance, whether such arrest was legal or not, required the officer to impound Defendants' vehicle for safekeeping following which under standard police department procedure an inventory of the contents of the vehicle was made; that stolen property found in such inventory was legally obtained and hence is admissible in evidence herein. In this regard Plaintiff cites the recent case of South Dakota v. Opperman, 428 U.S. 364, 96 S.Ct. 3092, 49 L.Ed.2d 1000 (1976).
There can be no doubt that the warrantless seizure of the Sony TV located between the front seats of the van was not constitutionally forbidden. There is no contention that the consent given by Defendants to the seizure was involuntary. It is well settled that one of the specifically established exceptions to the requirement of both a warrant and probable cause is a search that is conducted pursuant to a voluntary consent. Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). It is equally well established that incriminating objects which are visible and accessible, falling in plain view of an officer who has the right to be in a position to have the view, may be seized without a warrant. Harris v. United States, 390 U.S. 234, 88 S.Ct. 992, 19 L.Ed.2d 1067 (1968). Whether the issue is approached from the plain view standpoint or from that of consent, the seizure of this item was reasonable and violated no constitutional right of the Defendants.
The other four items of Sony equipment described in the Indictment were also the fruits of constitutionally permissible actions by the police officers. Warrantless searches of automobiles have usually been upheld where the police have exercised a form of custody or control over the automobile. In Harris v. United States, supra, the automobile had been identified leaving the site of the robbery and impounded as evidence. An examination of the automobile in accordance with a regulation of the local police department was made which exposed the criminal evidence to plain view. In Cooper v. California, 386 U.S. 58, 87 S.Ct. 788, 17 L.Ed.2d 730 (1967), the accused was arrested for selling heroin and his automobile was impounded pending forfeiture proceedings. Over four months later a search was conducted. In Cady v. Dombrowski, supra, the automobile had been involved in an accident and towed by police to a privately owned service station. It was later searched by police, as a part of the department's standard procedure to retrieve a revolver, which, it was believed, had been in the possession of the driver of the automobile, a Chicago police officer. The Court in Cady analyzed the justification for these searches as follows:
"In Harris the justification for the initial intrusion into the vehicle was to safeguard the owner's property, and in Cooper *192 it was to guarantee the safety of the custodians. Here the justification, while different, was as immediate and constitutionally reasonable as those in Harris and Cooper: concern for the safety of the general public who might be endangered if an intruder removed a revolver from the trunk of the vehicle." 413 U.S. at 447, 93 S.Ct. at 2531.
The latest expression of the Supreme Court on this type of police procedure was in South Dakota v. Opperman, supra, decided July 6, 1976. There the car had been impounded for multiple parking violations by the police who following standard procedures inventoried the contents of the car and the Court pointed out:
"The decisions of this Court point unmistakably to the conclusion reached by both federal and state courts that inventories pursuant to standard police procedures are reasonable."
428 U.S. at 372, 96 S.Ct. at 3098.
Here the Defendants had been taken into custody and the van had been impounded for removal to a parking lot by a private wrecker operator. The police inventoried the contents pursuant to established departmental policy. As noted by the Court in Opperman:
"When vehicles are impounded, local police departments generally follow a routine practice of securing and inventorying the automobiles' contents. These procedures developed in response to three distinct needs: the protection of the owner's property while it remains in police custody, United States v. Mitchell, 458 F.2d 960, 961 (CA9 1972); the protection of the police against claims or disputes over lost or stolen property, United States v. Kelehar, 470 F.2d 176, 178 (CA5 1972); and the protection of the police from potential danger, Cooper v. California, 386 U.S. at 61-62 [87 S.Ct. 788, 790]. The practice has been viewed as essential to respond to incidents of theft or vandalism."
At 369, 96 S.Ct. at 3096.
The caretaking procedure by the Oklahoma City Police Department likewise is designed to serve these purposes. The inventory here was necessary to protect the car owner, to protect the police and the public from any potential danger, and to protect the city and the officers from claims of lost or stolen property. As in Opperman there is no contention that this standard procedure, basically the same as that followed by police departments throughout the country, was a pretext concealing an investigatory police motive. There is nothing in the circumstances of this case to condemn the conduct of the police in proceeding with the inventory as "unreasonable" under the Fourth Amendment.
The routine, administrative, caretaking inventory is not dependent upon a finding of "probable cause". South Dakota v. Opperman, 428 U.S. at 370, n. 5, 96 S.Ct. 3092. Similarly, the validity of the arrest is irrevelant to the validity of the inventory search. The procedure was invoked by the caretaking role in which the police found themselves after the arrest. The impoundment was justified, and in fact mandated under State law (47 O.S.A. § 22.20). Because the motor vehicle was lawfully within governmental custody, the inventory was necessary, without regard to the arrest, to safeguard the interests described above, i. e. protection of the police from danger, protection of the police against claims and disputes over lost or stolen property, and protection of the owner's property while it remains in police custody. It was the lawful impoundment and not the arrest which triggered the inventory procedure and rendered the intrusion "reasonable" within the meaning of the Fourth Amendment. Even if there had been no arrest, the conclusion would be the same.
Moreover, if the claim were made that the protective procedure was a subterfuge for a criminal investigation, and there is no evidence to support such a claim, the court finds that there was exigent circumstances and probable cause to justify the search. The officers knew that the defendants had sought to satisfy a $14.50 bill for the keys by trading a much more valuable Sony TV. The defendants were in a vehicle *193 with an expired Texas tag for which allegedly the keys had been lost and were unable or unwilling to furnish identification. The circumstances were utterly inconsistent with lawful conduct. In considering whether the Constitution required a search warrant under these circumstances, they must be evaluated as they would have appeared to prudent, cautious and trained police officers. United States v. Miller, 460 F.2d 582 (CA10 1972); Trusty v. State of Oklahoma, 360 F.2d 173 (CA10 1966); Murray v. United States, 351 F.2d 330 (CA10 1965), cert. denied, 383 U.S. 949, 86 S.Ct. 1207, 16 L.Ed.2d 211; Chappel v. United States, 119 U.S.App.D.C. 356, 342 F.2d 935 (1965). As pointed out by the court in United States of America v. Nevarez-Alcantar, 495 F.2d 678, 681 (CA10 1974):
"In determining probable cause `practical considerations of everyday life' must prevail. Brinegar v. United States, 338 U.S. 160, [69 S.Ct. 1302, 93 L.Ed. 1879] (1949); United States v. Romero, 484 F.2d 1324 (10th Cir. 1973). Probable cause exists where the facts and circumstances within the arresting officer's knowledge are sufficient in themselves to warrant a prudent man into believing that an offense has been or is being committed. Beck v. Ohio, 379 U.S. 89, [85 S.Ct. 223, 13 L.Ed.2d 142] (1964); Draper v. United States, 358 U.S. 307, [79 S.Ct. 329, 3 L.Ed.2d 327] (1959); United States v. Smaldone, 485 F.2d 1333 (10th Cir. 1973); Taylor v. United States, 334 F.2d 386 (10th Cir. 1964)."
The test for probable cause is simply one of common sense. Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949); United States v. Johnson, 461 F.2d 285 (CA10 1972). By this practical, objective standard probable cause existed for an investigatory search. Exigent circumstances were present because the vehicle could be quickly moved from the locality. Carroll v. United States, supra. When there is both probable cause and a mobile vehicle, under the teaching of Chambers v. Maroney, supra, a search without a warrant is authorized. Stone v. Patterson, 468 F.2d 558 (CA10 1972). Thus, the search of the van without a warrant, on the record here, if placed in the criminal context, nevertheless was permissible under this long recognized exception to the warrant requirement of the Fourth Amendment.
For the foregoing reasons the Motions to Suppress by the Defendants will be denied.
IT IS SO ORDERED.
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644 S.E.2d 256 (2007)
George S. PAPADOPOULOS, Plaintiff,
v.
STATE CAPITAL INSURANCE COMPANY and North Carolina Insurance Guaranty Association, Defendants.
No. COA06-455.
Court of Appeals of North Carolina.
May 15, 2007.
G. Hugh Moore, Sanford, for plaintiff.
Baucom, Claytor, Benton, Morgan & Wood, P.A., by James F. Wood, III, Charlotte; and Nelson Mullins Riley & Scarborough, LLP, by Christopher J. Blake, Joseph W. Eason, and Leslie Lane Mize, Raleigh, for defendants.
ELMORE, Judge.
George S. Papadopoulos (plaintiff) brought a breach of contract action against State Capital Insurance Company (State Capital). While the action was pending, an order of liquidation with a finding of insolvency was entered against State Capital; the North Carolina Insurance Guaranty Association (the NCIGA) was substituted as defendant in the action with the consent of all parties (State Capital and the NCIGA, collectively "defendant"). On 7 April 2005, Judge James F. Ammons, Jr. entered an order denying defendant's motion for summary judgment, and on 10 October 2005, following a jury *258 trial, Judge Jack A. Thompson entered final judgment against defendant and denied defendant's motion for judgment notwithstanding the verdict. It is from these orders that defendant now appeals. Plaintiff cross-appeals from the judgment entered 10 October 2005 by Judge Jack A. Thompson. After a thorough review of the record, we find no error.
Plaintiff owned a house in Sanford, North Carolina. In 1986, plaintiff moved to Massachusetts, hiring Wayne Spivey (Spivey), an experienced real estate broker, to manage the property as a rental. In August 2000, the property's tenants moved out. Shortly thereafter, Spivey discovered that the house had been vandalized. Spivey contacted plaintiff, the police, and the local agent of State Capital, which insured the property. A repairman was called and an estimate received; however, further vandalism, including a broken window, was discovered before the repairs could be accomplished. Spivey again contacted plaintiff, a repairman, and the police; plaintiff then contacted State Capital, which sent an adjuster to examine the house. Once again, before any repairs could be made, the house was vandalized, with burns and additional broken windows. Spivey yet again contacted the repairman, who told him that the repair cost would be an additional three or four hundred dollars. At this point, Connie Cockerham (Cockerham), an agent for State Capital, told Spivey not to bother getting yet another estimate from the repairman, but simply to have the work done.
After the vandalism of the house, plaintiff submitted a claim for $3,500.00; he was paid $2,700.00 by State Capital in satisfaction of that claim. As a result of the vandalism, the City of Sanford contacted plaintiff via its city code inspector, Carlton Anglin (Anglin). Anglin informed plaintiff of several violations, and placed a sign reading "Under Minimum Housing" on the house.[1] In addition, a hearing was scheduled for 20 November 2000. A fire destroyed the house before that hearing was held.
On 12 November 2000, the police called Spivey to the house after they discovered a smoldering blanket inside it. Later that night, Spivey was again called to the house; this time the entire house was ablazed, and it burned to the ground. Spivey contacted plaintiff. Plaintiff authorized Spivey to have the debris removed, and Spivey did so. The removal cost $4,000.00, and was performed with the consent of Cockerham, who told plaintiff that he should pay for it, but that it was covered under his insurance policy.
Cockerham never indicated to plaintiff that there was a possibility the claim might be denied; to the contrary, she told him in January 2001 that she had calculated the value of the house to be $90,148.00, and that that amount, when combined with the cost of debris removal and loss of rent, would essentially max out his policy limits. Plaintiff contacted Cockerham to see if anything was required of him to finalize the claim. The first indication that he had that there was any coverage issue at all was when he was so informed by Cockerham on 20 March 2001. Surprised by this new information, plaintiff memorialized their conversation in a letter sent to Cockerham that day.[2] Plaintiff again spoke with Cockerham on 21 June 2001, at which point Cockerham informed plaintiff that although no final decision had been made, the company was leaning towards providing coverage. Approximately one week later, plaintiff heard from defendant's trial counsel. Upon State Capital's denial of his claim, plaintiff filed suit for breach of contract.
Defendant first contends that the trial court erred in denying its motion for summary judgment. This argument is essentially repeated in defendant's contention that the trial court committed reversible error in denying defendant's motions for directed verdict and judgment notwithstanding the *259 verdict. Accordingly, we will address these contentions together.
"The standard of review on appeal from summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law." Litvak v. Smith, ___ N.C.App. ___, ___, 636 S.E.2d 327, 329 (2006) (quoting Gattis v. Scotland Cty. Bd. of Educ., 173 N.C.App. 638, 639, 622 S.E.2d 630, 631 (2005)). "On appeal our standard of review for a judgment notwithstanding the verdict is the same as that for a directed verdict; that is, whether the evidence was sufficient to go to the jury." Overton v. Purvis, 162 N.C.App. 241, 244, 591 S.E.2d 18, 21 (2004) (quoting Whitaker v. Akers, 137 N.C.App. 274, 277, 527 S.E.2d 721, 724 (2000)) (internal quotations omitted). "When considering a motion for a directed verdict, a trial court must view the evidence in the light most favorable to the non-moving party, giving that party the benefit of every reasonable inference arising from the evidence," and resolving "[a]ny conflicts and inconsistencies in the evidence . . . in favor of the non-moving party." Jernigan v. Herring, ___ N.C.App. ___, ___, 633 S.E.2d 874, 876-77 (2006) (citations omitted). Furthermore, the motion must be denied "[i]f there is more than a scintilla of evidence supporting each element of the non-moving party's claim. . . ." Id. at ___, 633 S.E.2d at 877.
Defendant relied on four separate grounds for summary judgment at trial. Specifically, defendant claimed (1) that plaintiff's house was not damaged by an "occurrence" as defined by the policy; (2) that the policy excluded coverage for vandalism and malicious mischief to vacant properties; (3) that the policy excluded coverage for loss due to plaintiff's neglect; and (4) that the policy excluded coverage for faulty, inadequate, or defective maintenance. Defendant essentially reiterates these claims on appeal.
Defendant first claims that the insurance contract requires that the fire be caused by an "occurrence" as defined by the contract, and that in this case the fire was caused by arson. "Occurrence" is defined in the contract as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in . . . `property damage.'" Although defendant claims that "[t]he evidence was uncontroverted that [p]laintiff's house was destroyed by arson, which is an intentional act," nowhere does defendant provide examples of this evidence. Nor does defendant cite to pages in the transcript, or otherwise point the Court towards a source at which might verify its claim. In fact, plaintiff contradicts this claim, stating in his brief that "there is absolutely no evidence that the fire was intentionally set by plaintiff or anyone else." Moreover, the report prepared by defendant's investigator states that "[d]ue to the degree of destruction to the risk, a specific origin and cause of this fire could not be determined." It appears, therefore, that this is a genuine issue of material fact, which would preclude summary judgment. Likewise, because plaintiff, as the non-moving party, is entitled to resolution of any conflicts and inconsistencies in his favor, a directed verdict is also inappropriate.
Defendant next argues that the policy excluded coverage for vandalism and malicious mischief to vacant buildings. Specifically, defendant points to that part of the policy that reads: "we do not insure . . . loss caused by . . . (f) vandalism or malicious mischief, theft or attempted theft if the dwelling has been vacant for more than 30 consecutive days immediately before the loss." Once again, the Court notes that there is no conclusive evidence as to the origins of the fire. As such, neither summary judgment nor a directed verdict is appropriate on this issue. We therefore decline to issue an opinion on whether arson constitutes vandalism for purposes of exclusionary clauses in this State.
Additionally, as plaintiff points out in his brief, the provision cited by defendant is located in a "Special Form" providing "Extended Coverage." While there is also a vacancy exclusion found in the main policy, it applies only to risks located in Protection Classes 9, 9S or 10; plaintiff's house was classified as Protection Class 4.
Defendant next contends that the policy excluded coverage for loss due to plaintiff's neglect. Specifically, the contract reads:
*260 We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.
* * *
Neglect, meaning [the insured's] neglect to use all reasonable means to save and preserve property at and after the time of a loss.
Defendant argues that Spivey, as plaintiff's agent, failed to secure the house, have repairs made, or have the power turned on, thus increasing the risk of vandalism through his neglect. Again, this presents a question of fact, which was properly sent to the jury.
Finally, defendant claims that the policy excluded coverage for faulty, inadequate, or defective maintenance. It relies on a judicial admission by plaintiff that the house had been condemned. Regardless of the truth of that admission, however, this is yet again a question for the jury, to which the trial court properly submitted it.
Defendant presents one additional ground for its motion for directed verdict: it claims that plaintiff failed to present competent evidence of the proper measure of damages. Defendant concedes that evidence of the value of the property prior to the vandalism was provided, and does not argue that the estimates given for the repair work were incorrect. Given that information, the proper measure of damages remained a jury question. Accordingly, this assignment of error is without merit.
Defendant's next main contention is that the trial court erred in allowing Spivey to offer opinion evidence on the value of the house. Defendant first argues that because the proper measure of damages is the difference between the fair market value of the house immediately before and immediately after the fire, evidence of Spivey's opinion on the value of the house prior to the vandalism is irrelevant. We disagree. Testimony as to value prior to the vandalism, when coupled with estimates of the cost of repairing the damage, which were also entered into evidence, is clearly relevant to the case. Defendant also argues that the prejudicial impact of the admission of the testimony outweighs any probative value. Again, we disagree. The question clearly asked for the value prior to the vandalism, and defendant was free to cross-examine. Furthermore, defendant's contention that the witness gave an inconsistent response in his prior deposition is simply beside the point. This goes to the witness's credibility, and while it would be appropriate for defendant to impeach the witness on cross-examination, it does not bear on the admissibility of the statement. This assignment of error is without merit.
Defendant next contends that the trial court erred in admitting testimony that contradicted an admission by plaintiff. Specifically, plaintiff admitted that the house had been condemned prior to the fire in his response to defendant's request for admissions. However, as defendant concedes in its brief, plaintiff filed a supplemental response a mere fifteen minutes after his original admission.[3] Defendant relies on Rule 36 of the North Carolina Rules of Civil Procedure, which states in pertinent part:
Effect of admission. Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission. Subject to the provisions of Rule 16 governing amendment of a pretrial order, the court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits.
N.C. Gen.Stat. § 1A-1, Rule 36(b) (2005).
Plaintiff sought to supplement his response under Rule 26(e), which addresses supplementation of responses to requests for discovery. Specifically, plaintiff relied upon *261 Rule 26(e), which states in pertinent part: "A party is under a duty seasonably to amend a prior response if he obtains information upon the basis of which (i) he knows that the response was incorrect when made. . . ." N.C. Gen.Stat. § 1A-1, Rule 26(e)(2) (2005).
"Although a specific statute controls over a general statute if the two cannot be reconciled . . . the Rules of Civil Procedure must be interpreted as a whole." Clark v. Visiting Health Prof'ls, Inc., 136 N.C.App. 505, 508, 524 S.E.2d 605, 607 (2000) (citations omitted). In this case, where it is clear that the admission was incorrect, and plaintiff attempted to supplement his response, the trial judge's allowance of the testimony was not error. Moreover, even if it had been, defendant's assertion that it was prejudiced by the allowance is disingenuous given its concession that it received the correction a mere fifteen minutes after the admission was made. The trial court allowed defendant to raise the issue of the admission to the jury, and even instructed the jury on the admission. Accordingly, this assignment of error must fail.
Finally, defendant assigns as error the trial court's instructions to the jury, as well as the trial court's refusal to submit its requested instructions to the jury. We first note that the issue of the instructions as given was not properly preserved for appeal. "A party may not assign as error any portion of the jury charge . . . unless he objects thereto. . . ." N.C.R.App. P. 10(b)(2) (2007). Here, defendant stated to the trial court that its "only objection would be the [trial court's] ruling that it will not give the request for instructions that was filed by the defendant prior to the call of the case." Defendant therefore waived the issue of the instructions as given. See, e.g., Alford v. Lowery, 154 N.C.App. 486, 490, 573 S.E.2d 543, 546 (2002) (holding that a party's argument concerning a jury instruction "was waived by [the party] because the issue was not properly preserved for appellate review" under N.C.R.App. P. 10(b)(2)).
"When a party requests a jury instruction, the trial court is obligated to so instruct if the instruction is a correct statement of the law and the evidence supports it." Cap Care Grp., Inc. v. McDonald, 149 N.C.App. 817, 823, 561 S.E.2d 578, 582 (2002) (citation omitted). Having reviewed defendant's requested instructions, we hold that they did not represent a correct statement of the law. As such, the trial court did not err in its refusal to submit the requested instructions to the jury.
On cross-appeal, plaintiff assigns as error the trial court's refusal to grant him prejudgment interest. This Court has previously held that "the identity of the [NCIGA] as a statutory creation . . . relieves it from liability for prejudgment interest." City of Greensboro v. Reserve Insurance Co., 70 N.C.App. 651, 664, 321 S.E.2d 232, 240 (1984). Accordingly, having performed a thorough review of both the appeal and cross-appeal, we find no error in the underlying action.
No error.
Judges MCGEE and BRYANT concur.
NOTES
[1] This sign is the topic of some dispute between the parties. It appears that the sign had two sides; the side of the sign already described and the other side, which read "Condemned."
[2] The letter was actually sent by plaintiff's son, a practicing attorney in West Virginia admitted to the North Carolina Bar, to whom plaintiff had granted power of attorney. Indeed, throughout the dealings between the parties, it seems that plaintiff's son represented plaintiff's interests.
[3] Defendant asserts that plaintiff never amended his admission concerning the placement of a "CONDEMNED" sign on the property. The Court recognizes from the record that there is no dispute between the parties as to the placement of that sign; plaintiff merely states that the sign was two-sided.
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718 N.W.2d 726 (2006)
KENOSHA COUNTY DEP'T OF HUMAN SERVS. v. KATRINA R.
No. 2005AP1581.
Supreme Court of Wisconsin.
June 14, 2006.
Petition for review denied. ABRAHAMSON, C.J., dissents.
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Filed 6/26/15 Johnson v. Fresno County Employees’ Retirement Assn. CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
GARY JOHNSON,
F069503
Plaintiff and Appellant,
(Super. Ct. No. 12CECG00759)
v.
FRESNO COUNTY EMPLOYEES’ OPINION
RETIREMENT ASSOCIATION,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Fresno County. Debra J.
Kazanjian, Judge.
Moscone Emblidge Sater & Otis; Moscone Embridge & Otis, G. Scott Emblidge
and Matthew K. Yan for Plaintiff and Appellant.
Reed Smith, Harvey L. Leiderman, Jeffrey R. Rieger and Dennis Peter Maio for
Defendant and Respondent.
-ooOoo-
During the last few years of his employment with the County of Fresno (County),
appellant Gary Johnson, was on assignment in Sacramento County. The County paid
appellant a flat monthly allowance on top of his regular salary to cover appellant’s out-of-
town living expenses.
When appellant retired, respondent, the Fresno County Employees’ Retirement
Association (FCERA), calculated appellant’s pension without including this flat monthly
allowance as part of appellant’s final compensation. Appellant filed a claim with the
FCERA seeking to have the flat monthly allowance included in his pension calculation.
The FCERA denied appellant’s claim and declared the flat monthly allowance was not
pensionable.
Appellant then filed a petition for writ of mandate in the trial court. The trial court
denied appellant’s petition on the ground that appellant’s claim was barred by a class
action settlement agreement. The court did not rule on whether the flat monthly
allowance is “compensation earnable” and therefore included in the final compensation
calculation. (Gov. Code,1 §§ 31461, 31462.)
Appellant challenges the trial court’s ruling on two grounds. Appellant argues that
the release in the class action settlement agreement does not cover his claim because the
flat monthly allowance reimbursement method did not exist when the agreement was
signed. Rather, at that time, the County reimbursed employees for expenses incurred
while on assignment on a dollar-for-dollar basis. Appellant further contends that the flat
monthly allowance is pensionable compensation under the California Supreme Court case
of Ventura County Deputy Sheriffs’ Assn. v. Board of Retirement (1997) 16 Cal.4th 483
(Ventura).
Contrary to appellant’s position, his claim is barred by the class action settlement
agreement. Accordingly, the judgment will be affirmed.
1 All further statutory references are to the Government Code.
2.
BACKGROUND
1. The CalWIN program and expense reimbursement policies.
The California Work Opportunity and Responsibility to Kids Information
Network, referred to as “CalWIN,” is an online computer system and database used to
administer public welfare and assistance programs throughout California. Employees
from various California counties designed the CalWIN software and were required to live
near the project site in Folsom.
Beginning in February 2000, Fresno County employees on assignment to the
CalWIN project were reimbursed for actual, authorized expenditures. This policy was
“‘adopted to allow additional reimbursement to the employee as an incentive for
volunteering to relocate.’” In May 2000, the County adopted the CalWIN policy under
which “CalWIN workers could obtain cash advances and reimbursement on a monthly
basis for meals and incidentals” and “did not need to provide proof of expenses unless it
was requested.”
In December 2001, the County modified its CalWIN reimbursement policy. The
County “‘did away with the dollar-for-dollar reimbursement scheme and, instead, put into
place a flat monthly allowance … for staff members assigned to the project on a long-
term basis.’” This allowance covered “‘expenses including lodging/utilities, meals, and
transportation/mileage’, plus a ‘gross-up’ to account for taxes on these sums.’”
The County defined the flat monthly allowance as standardized amounts paid each
month as an estimate of the employees’ liability for the actual costs plus taxation of those
costs in order to provide total reimbursement to the employee. The County’s reason for
this policy switch was to minimize tracking and reporting requirements. Nevertheless,
each employee was required to certify under penalty of perjury the distance between the
employee’s county headquarters and the project site, the amount of monthly rent or
mortgage at the project site, and that the employee will continue to maintain his or her
primary residence at a net expense in excess of $200 per month. The employee was
3.
further required to semi-annually submit CalWIN expense claims providing rental
receipts, a lease agreement, or other suitable documentation attesting to payment for
lodging in the Sacramento area.
2. The Ventura II litigation and settlement.
Under the County Employees Retirement Law of 1937 (CERL), Government
Code section 31450 et seq., retirement benefits are calculated based on a retired
employee’s “final compensation” as defined by sections 31460, 31461 and 31462 or
31462.1. (Salus v. San Diego County Employees Retirement Assn. (2004) 117
Cal.App.4th 734, 736.) This final compensation involves: compensation in the form of
cash, rather than in the form of in-kind goods and services or time off; cash earned during
a usual work period, as opposed to cash earned for overtime; and cash earned before
retirement, rather than at or after retirement. (Ibid.)
In Ventura, supra, 16 Cal.4th 483, the California Supreme Court defined certain
aspects of final compensation under CERL. There, a group of law enforcement officers
argued their final compensation should include salary enhancements they received in
cash from their county employer under the terms of a memorandum of understanding.
These enhancements included a uniform maintenance allowance, bilingual premium pay,
educational incentive pay, additional compensation for scheduled meal periods for
designated employees, pay in lieu of annual leave accrual, and a motorcycle bonus. (Id.
at p. 488.)
The Ventura court extensively analyzed certain sections of CERL in order to
ascertain what must be included in an employee’s “final compensation” for purposes of
calculating his or her pension. The court explained that, while only cash payments
received by an employee qualify as compensation within the meaning of Government
Code section 31640, when cash is paid in lieu of other in-kind benefits, those payments
qualify as compensation. The court noted that the “Legislature has recognized that some
employees receive remuneration other than wages or salary but has concluded that if
4.
those ‘advantages’ are not paid in cash, their value need not be included in
‘compensation’ for purposes of computing a pension. It has not done so for cash
payments made in lieu of providing the same advantages in kind. When paid in cash, the
payment is remuneration and, as it is not excluded, it is ‘compensation’ under section
31460.” (Ventura, supra, 16 Cal.4th at p. 497.) Accordingly, the court held that, in
addition to an employee’s base salary, other forms of cash remuneration, excluding
overtime, had to be included in calculating the employee’s final compensation for
purposes of a CERL retirement pension. Thus, the Ventura plaintiffs’ final compensation
included the premiums at issue, i.e., the uniform maintenance allowance, educational pay,
bilingual pay, payments in lieu of accrued vacation time, etc. (Ventura, supra, at pp.
487-505.) The Ventura court disapproved a long-standing Court of Appeal decision upon
which many counties had relied in making pension calculations. (Id. at pp. 505-507.)
Following Ventura, a number of class action lawsuits were filed in various
counties alleging noncompliance with Ventura in the computation of retirement benefits.
These cases were collectively referred to as the Ventura II litigation. (Chisom v. Board of
Retirement of Fresno County Employees’ Retirement Assn. (2013) 218 Cal.App.4th 400,
405 (Chisom).) The parties to the Fresno County Ventura II litigation, including
appellant, reached a final settlement pursuant to a settlement agreement effective
December 15, 2000.
Under this settlement agreement, the class received an increased service retirement
benefit comprised of both a statutory benefit and a supplemental benefit for members
retiring on and after January 1, 2001. The agreement purported to be a compromise that
was meant to fully resolve and settle all of the Fresno County Ventura II lawsuits and all
issues between the parties therein. (Chisom, supra, 218 Cal.App.4th at pp. 406-407.)
The settlement was intended “to be complete and final with respect to the issues that it
has resolved and that the settlement will not be changed on behalf of settling parties or
the class members in response to later court developments, whether favorable or
5.
unfavorable.” The parties specifically agreed “that petitioners and class members will
forbear bringing any future demand, claim or lawsuit seeking to enlarge, define, narrow,
or in any other way relate to the scope of the decision of the California Supreme Court in
[Ventura], or the items of compensation to be included for benefit purposes under the
1937 County Employees Retirement law. All parties agree that this forbearance
agreement applies to all items of compensation which were included or which could have
been included” (italics added) in the Ventura II actions.
3. Appellant’s retirement increase request.
Appellant participated in the CalWIN program and received a flat monthly
allowance of $3,930 from March 2003 through December 2007. Appellant retired from
County employment in August 2008. In calculating appellant’s retirement benefits, the
FCERA did not include the flat monthly allowance amount of approximately $47,000 per
year.
In 2011, appellant filed a claim with the FCERA requesting that the flat monthly
allowance be included as part of his final compensation in his retirement benefit
calculation. The FCERA referred appellant’s claim to a referee.
Following a hearing, the referee found in favor of appellant and recommended that
the FCERA adjust appellant’s pension to include the CalWIN flat monthly allowance.
The referee concluded that the flat monthly allowance constituted compensation under
section 31460 and, being analogous to a uniform allowance, was pensionable under
Ventura. The referee also rejected the County’s claim that the 2000 settlement barred
appellant’s claim because the reimbursement policy at issue was instituted after the
settlement was reached.
After hearing argument, the FCERA rejected appellant’s claim and the referee’s
proposed decision. The FCERA disagreed with the referee’s interpretation of the CERL
and the settlement agreement.
6.
4. The trial court proceeding.
Appellant petitioned the trial court for a writ of mandate. The trial court denied
the petition finding the settlement agreement barred appellant’s claim. The court
determined the settlement agreement expressed the mutual intent of the parties to waive
the right to present future unknown items for determination of whether they constitute
compensation for purposes of calculation of retirement benefits.
DISCUSSION
Appellant argues that his pension claim is not barred by the release in the 2000
class action settlement agreement because the CalWIN reimbursement policy was not
adopted until 2001. Therefore, appellant contends, the calculation of his pension benefit
was not a claim that could have been included in the class action.
The interpretation of a settlement agreement is governed by the principles
applicable to any other contract. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
Where, as here, the interpretation of the agreement is based solely on its own language,
the construction is a question of law. (Id. at p. 1166.)
The release and forbearance provisions in the settlement agreement are
unambiguous. (Chisom, supra, 218 Cal.App.4th at p. 416.) The settlement agreement
provides “that it disposes of all claims and issues among the parties, including those
relating to or arising out of the Ventura case, and that the parties would forbear from
bringing any future suit under the Ventura case.” (Ibid.) This forbearance provision is
applicable “‘to all items of compensation which were included or which could have been
included in [the Ventura II litigation].’” (Ibid.)
Appellant contends his claim could not have been included in the Ventura II
litigation because the flat monthly allowance reimbursement method did not exist at that
time. As support for his position, appellant notes that the pre-2001 policy was a non-
taxed dollar-for-dollar reimbursement that required CalWIN participants to keep receipts
of their actual incurred expenses while the 2001 flat monthly allowance was neither
7.
tailored to actual expenses nor required receipts and was taxed. Appellant characterizes
the 2001 flat monthly allowance as “a sea change” that was paid to CalWIN participants
to compensate them for the added burden of working on a project several hours from
home.
However, when the County first adopted the reimbursement policy for CalWIN
participants in February 2000, one purpose was to allow additional reimbursement to the
employees as an incentive for volunteering to relocate. Then in May 2000 the County
modified the CalWIN policy to permit the CalWIN workers to obtain cash advances and
reimbursement on a monthly basis for meals and incidentals. Moreover, the workers did
not need to provide proof of expenses unless it was requested. Thus, before the Ventura
II litigation settlement, the CalWIN participants received their reimbursement in advance
of incurring the expenses and were not required to provide proof of their actual expenses.
When the County modified the reimbursement policy in 2001 to put the flat
monthly allowance in place, the scheme was not materially changed from the May 2000
policy. As before, the participants were: paid in advance based on expense estimates;
required to provide proof of payment for lodging; and required to certify the distance they
traveled. Both before and after the Ventura II settlement, the County wanted to provide
total reimbursement to the CalWIN workers and motivate them to relocate. The 2001
policy differed from the May 2000 policy in that the County, rather than the employee,
estimated the monthly expenses in advance and no receipts were ever required for meals
and incidentals. The reason behind this policy change was to simplify the paperwork.
Also, the County grossed up the amount to cover the taxes on the flat monthly allowance
to provide total reimbursement of expenses.
Thus, based on the policy in place in May 2000, a claim that the CalWIN
reimbursement amounts were pensionable could have been asserted in connection with
the Ventura II litigation. The administrative differences between the 2000 policy and the
2001 policy are not so significant that the potential claim did not exist when the litigation
8.
was settled. Thus, as a member of the class in the Ventura II cases, appellant waived and
released his claim and is barred from pursuing it. (Cf. Chisom, supra, 218 Cal.App.4th at
p. 416.)
In light of this conclusion, we need not decide whether the FCERA erred when it
refused to include the flat monthly allowance in calculating appellant’s pension benefit.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to respondent.
_____________________
LEVY, J.
WE CONCUR:
_____________________
HILL, P.J.
_____________________
GOMES, J.
9.
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127 F.Supp.2d 981 (2000)
ORIX REAL ESTATE CAPITAL MARKETS, LLC, Plaintiff,
v.
SUPERIOR BANK, FSB, Defendant.
No. 00 C 4841.
United States District Court, N.D. Illinois, Eastern Division.
December 22, 2000.
*982 David Thomas Beech Audley, Stacy Lee Prange, Chapman & Cutler, Chicago, IL, for Orix Real Estate Capital Markets, LLC.
Leann Pedersen Pope, Marjorie Golis Wilde, Burke, Warren, MacKay & Serritella, P.C., Chicago, IL, for Superior Bank. FSB.
MEMORANDUM OPINION AND ORDER
BUCKLO, District Judge.
Starting in 1994, ORIX Real Estate Capital Markets ("ORIX") invested in some subordinated securities based in pooled residential mortgage loans offered by Superior Bank ("Superior"). There were contracts or Pooling Service Agreements ("PSA") governing the purchase. ORIX alleges that, when 46 of the loans were liquidated as of the filing of the complaint, the mortgage pools securing these investments declined in value, and were shown on analysis to have included many poor quality loans. ORIX also alleges that Superior lied about the quality and other features of these securities in its disclosure documents. ORIX filed this diversity lawsuit, to be decided under New York law, alleging (1) breach of warranty, (2) negligence, (3) breach of fiduciary duty, and (4) fraud. Superior Bank moves to dismiss, and I grant the motion in part and deny it in part.
I.
This is a diversity case between corporations, and my jurisdiction is in virtue of 28 U.S.C. § 1332(c). ORIX is a Delaware LLC with its principal place of business in Dallas, Texas. Superior is a federal stock or savings bank chartered under the Federal Home Loan Bank Board. It is "located in" Illinois. Apart from a narrow list of kinds of cases that does not apply here, 28 U.S.C. § 1348 specifies that "[a]ll national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located." In a diversity case, I apply state substantive law, here undisputedly that of New York, and federal procedural law. Lexington Ins. Co. v. Rugg & Knopp, 165 F.3d 1087, 1090 (7th Cir.1999). I attempt to predict how the New York Court of Appeals would decide the issues presented here. Id. In the absence of New York authority, I may consider decisions from other jurisdictions. Id. On a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), I take as true the plaintiff's well-pleaded factual allegations and draw all reasonable *983 inferences in its favor. Ogden Martin Sys. of Indianapolis, Inc. v. Whiting Corp., 179 F.3d 523, 526 (7th Cir.1999). I grant the motion only if it appears beyond doubt that the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. Id. The issue is not whether a plaintiff will ultimately prevail but whether it is entitled to offer evidence to support the claims. Sapperstein v. Hager, 188 F.3d 852, 855 (7th Cir.1999).
II.
A.
The defendant argues that the breach of warranty claim (count I) must be dismissed because the express terms of the governing contracts limit ORIX's remedies for any breach of warranty to cure after notice of breach or a repurchase of the loan, see PSA § 20.3(b), barring compensatory damages. That would not by itself warrant dismissal, because "[u]nder Rule 54(c) [I must] grant whatever relief is appropriate ..., even if the parties have not specifically requested it." Old Republic Insurance Co. v. Employers Reinsurance Corp., 144 F.3d 1077, 1081 (7th Cir. 1998).
However, I can reconstrue the motion with respect to count I as a motion to strike the prayer for compensatory damages. ORIX opposes the motion, thus reconstrued, arguing that it will have no remedy because the loans have been liquidated. The contract therefore fails of its essential purpose. Superior disputes whether this contract defense applies outside a UCC context ORIX's cases are all UCC or near enough (one concerns a lease of goods, now but not then covered under the UCC). The state case law reveals only a few old cases outside a sale or lease of goods context where this defense is authorized or even discussed. See, e.g., Callanan v. Powers, 199 N.Y. 268, 92 N.E. 747, 752 (1910) (permitting recission); see also Lorillard v. Clyde, 142 N.Y. 456, 37 N.E. 489 (1894); W.K. Ewing Co. v. New York State Teachers' Retirement Sys., 14 A.D.2d 113, 218 N.Y.S.2d 253 (1961). However, the leading English case on failure of essential purpose, Krell v. Henry, 2 K.B. 740 (1903), concerns a short term apartment lease, the purpose of which was to witness Edward VII's coronation, a ceremony that was later cancelled due to Edward's illness; this would not have been a UCC contract. I predict that if this defense were to arise outside the UCC context, the New York courts would allow it.
No matter. The payment of the liquidation price of a loan is payment of an amount of money, which is completely fungible: it does not matter whether the money comes from the sale of a mortgage on a particular property or from another source. In its reply, Superior admits as much. Therefore, if there was a shortfall of a sort that would trigger the repurchase clause of the PSA, the contract says that Superior shall make up the difference. There is no practical difference between this "repurchase" remedy and compensatory damages. I therefore deny the motion construed as a motion to strike the prayer for compensatory damages.
B.
ORIX's count II alleges that Superior was negligent in its management of the properties and mortgages that secured some of the certificants at issue in this case, failing to exercise due care in originating and approving loans to unqualified homebuyers, allowing loans to go past due and delaying foreclosure for no good reason, and so forth. Under New York law, "a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated. This legal duty must spring from circumstances extraneous to" the contract. Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 521 N.Y.S.2d 653, 516 N.E.2d 190, 193-94 (1987). ORIX responds that the "extraneous" circumstances are that Superior "acted as the *984 originator (before the PSAs were even in effect) of those loans, and thereafter [as] the servicer, Calculating Agent, and Reporting Agent, and by doing so undertook to perform those tasks with reasonable care." This is because "investors such as ORIX ... were relying upon Superior as an originator and servicer to conduct itself within industry norms apart from the PSAs." I don't understand, however, how this is duty apart from the contractual arrangements under which ORIX sues in count I.
Moreover, negligence requires not only fault and causation, but also injury. See Johnson v. Harrington, 215 A.D.2d 857, 626 N.Y.S.2d 324, 325 (1995). If there were no contractual arrangements under which ORIX could sue, it would have had no investments in Superior's certificates and therefore would not have suffered any losses to recover. There were contracts here, the breach of which ORIX alleges caused its injury. Those contracts preempt any tort claims. ORIX cites Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 583 N.Y.S.2d 957, 593 N.E.2d 1365 (1992), for the proposition that a party may be held liable in tort on the facts that underlie a breach of contract, but here the court noted the special nature of the defendant's business, fire alarms, was what gave rise to a duty independent of the contract, and it treated the plaintiff as seeking not contract damages but only recovery in tort. Id. at 962, 593 N.E.2d 1365. In Rodin Properties-Shore Mall, N.V. v. Ullman, 264 A.D.2d 367, 694 N.Y.S.2d 374 (1999), also cited by ORIX, the tort liability depended on the defendant being a "professional appraiser [who, as such,] ... owed a duty to plaintiff independent of any contractual obligation." Id. at 376, 694 N.Y.S.2d 374. The court emphasized that it was the defendant's role as a professional that gave rise to tort liability there. Here, Superior was a business and did not hold itself out as having professional expertise of the sort required of an appraiser. These cases, therefore, are distinguishable. Count II is dismissed.
C.
ORIX claims that Superior breached a fiduciary duty it had to ORIX by behaving in the manner alleged. In New York, there is no fiduciary duty in "an arm's length business transaction without special circumstances which might give rise to a fiduciary relationship." Ponte & Sons, Inc. v. American Fibers Int'l, 222 A.D.2d 271, 635 N.Y.S.2d 193, 194 (1995). ORIX contends that there were such circumstances because Superior "took on significant responsibilities to service and account for the mortgage pool loans." This is just silly. ORIX cites no New York law, offering only a California case. The New York courts have said that the "mortgaging of real property" is a central example of the kind of "arms-length transaction[]" that precludes "the kind of position of trust with plaintiffs that would create a fiduciary relationship between the [parties]." Chester Color Separations, Inc. v. Trefoil Capital Corp., 222 A.D.2d 276, 636 N.Y.S.2d 613, 614 (1995). This case does not involve direct mortgaging, but the relationship of an investor in a mortgage pool to the investment manager is even more arms-length, if anything, than that of a mortgage lender to a mortgagor. No "relationship involving trust or confidence is present." Rabouin v. Metropolitan Life Ins. Co., 182 Misc.2d 632, 699 N.Y.S.2d 655, 657 (1999) (Management of pooled assets by insurance company does not create fiduciary relationship with insured.).
Orix is not a naif or a patsy but "a sophisticated institutional investor" that "has acted in the capacity of an arm's-length contractual counterparty"; Superior was not its "financial advisor or fiduciary." CIBC Bank & Trust Co. (Cayman) Ltd. v. Credit Lyonnais, 270 A.D.2d 138, 704 N.Y.S.2d 574, 575 (2000). The essential elements of a fiduciary relation are (1) reliance, and (2) de facto control and dominance. *985 See United States v. Reed, 601 F.Supp. 685, 708 (S.D.N.Y.1985) (discussing New York and other cases), rev'd in part on other grounds, 773 F.2d 477 (2d Cir.1985). That Superior took on itself certain contractual responsibilities to service and account for mortgage loan pools does not mean that there was the sort of special relation of "great intimacy, confidentiality, reliance and superiority of influence," 601 F.Supp. at 704, of the sort required for a fiduciary relationship. What ORIX alleges involves at most a breach of contract. The breach of fiduciary duty claim is dismissed.
D.
ORIX's final count is that Superior fraudulently induced it to enter into the PSA by intentionally misrepresenting (1) the nature and quality of the mortgages, and (2) that it would service the mortgage pool to the benefit of all investors, having no intention of doing so. Superior objects that the facts underlying this count are merely those sustaining the breach of warranty claim. A separate cause of action seeking damages for intentional fraud "cannot stand when the only fraud alleged relates to breach of a contract." Shlang v. Bear's Estates Dev. of Smallwood, N.Y., Inc., 194 A.D.2d 914, 599 N.Y.S.2d 141, 143 (1993). However, a fraud action may be maintained where a plaintiff pleads a breach of duty separate from, or in addition to, a breach of the contract. First Bank of the Americas v. Motor Car Funding, Inc., 257 A.D.2d 287, 690 N.Y.S.2d 17, 21 (1999). For example, a party who is fraudulently induced to enter into a contract may sue for fraud and breach of contract. Id.; accord Shlang, 599 N.Y.S.2d at 143. The alleged misrepresentations "must be misstatements of material fact or promises made with a present, albeit undisclosed, intent not to perform them." Shlang, 599 N.Y.S.2d at 143.
This case is on all fours with First Bank. There, the plaintiff contracted to buy used car loans from the defendant with certain warranties. The defendant made representations about "the quality of the collateral, the individual borrowers' credit history and the amount of the borrowers' down payments." The plaintiff there alleged that these representations were false and it had been fraudulently induced to buy less valuable loans, which it would have rejected if it had known the truth. 690 N.Y.S.2d at 19. The Appellate Division held that the claim was actionable. ORIX alleges that Superior made present lies about the quality and nature of the loans it sold to ORIX in its disclosure documents, and that ORIX relied on these lies, without which it would not have bought this particular pig in a poke. Count IV stands.
III.
Finally, Superior argues that the fraud count is barred by the statute of limitations and the pleading requirements of Fed.R.Civ.P. 9(b) and (f).[1] In New York, a cause of action sounding in fraud must be "commenced within six years from the date that the alleged fraud was committed, or two years from the date the fraud was discovered or, with the exercise of reasonable diligence, should have been discovered." Cappelli v. Berkshire Life Ins. Co., 713 N.Y.S.2d 756, 757 (2000). Superior says that ORIX alleges that it purchased the certificates at issue in or about April or June 1995, and because it does not specify when the fraud occurred or was discovered, it has not shown that the claim is not time barred "as [it] likely may be."
This won't do. The statute of limitations is an affirmative defense under Rule 8(c), Venters v. City of Delphi, 123 F.3d 956, 967 (7th Cir.1997). Allocation of the burden of proof is determined by state *986 law. Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 235 n. 2. (7th Cir.1991). In New York, "the burden of proving the applicability of the affirmative defense of the statute of limitations is upon the party asserting it." Brush v. Olivo, 81 A.D.2d 852, 438 N.Y.S.2d 857, 859 (1981). Superior has not met its burden by saying that it may be likely that ORIX's claim is time-barred.
Finally, Superior argues that the fraud count fails to allege "the critical fact of when certain nondisclosures occurred with specificity." Fed.R.Civ.P. 9(b) requires that fraud be alleged with specificity as to time. See Midwest Commerce Banking Co. v. Elkhart City Centre, 4 F.3d 521, 524 (7th Cir.1993) ("Rule 9(b) require[s the plaintiff to] set forth the date and content of the statements or omissions that it claimed to be fraudulent."). The complaint alleges that ORIX reviewed the allegedly fraudulent disclosures, and, in reliance upon them, purchased the securities in dispute; more precise dates (e.g., "December 17, 1993") are given with references to particular documents pertaining to classes of certificates in paragraphs 13-25 of the complaint. What more specificity would be required the time of day? Furthermore, pleadings that are specific enough to satisfy Rule 9(b) are also specific enough to satisfy Rule 9(f).
IV.
Superior's motion to dismiss counts II and III is GRANTED. Its motion to dismiss counts I and IV is DENIED.
NOTES
[1] It also argues that the negligence and fiduciary duty counts are time-barred, but since I have dismissed these counts above, I need not discuss them under this heading.
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923 F.2d 253
59 USLW 2468
UNITED STATES of America, Appellee,v.Horacio ALVARADO, Defendant-Appellant.
No. 162, Dockets 88-1303(L), 88-1420.
United States Court of Appeals,Second Circuit.
Submitted Aug. 22, 1990.Decided Jan. 16, 1991.
Abraham L. Clott, The Legal Aid Soc., New York City, submitted a letter brief, for defendant-appellant.
Frank J. Marine, Sp. Counsel, Organized Crime Section, U.S. Dept. of Justice, Washington, D.C., submitted a letter brief, for appellee.
Before NEWMAN, PRATT and MAHONEY, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
1
This appeal, alleging that a prosecutor used peremptory challenges in a discriminatory manner, is before us on remand from the Supreme Court. The appeal is brought by Horacio Alvarado from a judgment of the District Court for the Eastern District of New York (John R. Bartels, Judge) convicting him, after a jury trial, of extortion and conspiracy to commit extortion, in violation of 18 U.S.C. Secs. 1951, 1952 (1988). Alvarado, who is described by his counsel as half Black and half Puerto Rican, contests as discriminatory the Government's use of peremptory challenges against Blacks and Hispanics. On our prior consideration, United States v. Alvarado, 891 F.2d 439 (2d Cir.1989) (Alvarado I ), we did not rule on whether the appellant had presented in the District Court a prima facie case of discriminatory use of peremptory challenges, sufficient to require the prosecutor to provide nondiscriminatory explanations, see Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986), or whether the partial explanations volunteered by the prosecutor were sufficient. Instead, we ruled that Alvarado's claim warranted no appellate relief because the jury ultimately empaneled adequately reflected the Black and Hispanic population of the Eastern District.
2
In response to Alvarado's petition for a writ of certiorari, the Solicitor General suggested to the Supreme Court that we had erred in rejecting the Batson challenge on the basis of the ultimate composition of the jury, but nevertheless urged that certiorari should be denied because Alvarado had failed to establish a prima facie case of discrimination and because the prosecutor's volunteered reasons were race-neutral. In a 5-4 decision, the Supreme Court granted the petition, vacated our judgment, and remanded "for further consideration in light of the position asserted by the Solicitor General."1 Alvarado v. United States, --- U.S. ----, 110 S.Ct. 2995, 2996, 111 L.Ed.2d 439 (1990).
3
In giving the case reconsideration, we note that the Solicitor General appears to have misunderstood our opinion. He seems to have believed that we thought that the "equal protection analysis [of Batson ] would be inapplicable to a case in which the defendant's jury mirrored the community." See Brief for United States in Opposition to Petition for Writ of Certiorari at 12, Alvarado v. United States, supra (No. 89-6985). On the contrary, we thought the Batson equal protection analysis was very much applicable and emphasized the obligation of the judicial officer supervising the jury selection to enforce its requirements. Alvarado I, 891 F.2d at 445. Our point was that in those rare cases where the corrective action required to be taken by Batson during jury selection is not taken, the incremental benefit of enforcing Batson by reversing convictions obtained with fairly representative juries was not warranted. Id. Nevertheless, we recognize that it is now prudent to focus our reconsideration upon the two issues that the Supreme Court recognized we did not reach in our prior opinion--whether appellant established a prima facie case of intentional discrimination and whether the prosecutor gave adequate race-neutral explanations for the challenges against minority members of the venire. See Alvarado v. United States, 110 S.Ct. at 2996.2
4
1. Prima facie showing of discrimination. Jury selection was conducted before a magistrate without objection, a practice we have approved. See United States v. Vanwort, 887 F.2d 375, 382-83 (2d Cir.1989), cert. denied sub nom. Chapoteau v. United States, --- U.S. ----, 110 S.Ct. 1927, 109 L.Ed.2d 290 (1990). The jury was chosen using the "jury box" system, with peremptory challenges exercised in "rounds." See United States v. Blouin, 666 F.2d 796 (2d Cir.1981). In round one, the prosecution challenged a Black, William Clark; in round two, a White; in round three, an Hispanic, Mario Garcia; in round four, a Black, Essie Callier; in round six, a White. In round five, the prosecution waived its challenge at a time when three minority members were seated in the jury box, available for challenge. In the selection of the three alternates, the prosecution used its one challenge against a Black, Sondra Brown.
5
Upon Alvarado's assertion of a Batson claim, the Magistrate, though not requiring explanations from the prosecution, afforded an opportunity to state reasons "[i]f you wish to say anything." The prosecution then volunteered reasons for the four minority challenges: Clark was challenged because his youth and lack of experience made him an inappropriate candidate for foreman, which the prosecution assumed he would become by virtue of his being seated as juror number one; Garcia was challenged because his lack of fluency in English caused concern that he might have difficulty understanding tape recordings; Callier was challenged because, with children the age of the defendant, she might be unduly sympathetic; Brown was challenged because she was a social worker, and might for that be reason be sympathetic. The Magistrate accepted the explanations as to Clark and Brown, but made no findings with respect to Garcia and Callier. Without clarifying whether he was finding that no prima facie case of discrimination had been established or that Alvarado had not prevailed on the ultimate issue of proving discriminatory intent, the Magistrate rejected the Batson claim.
6
Renewing his challenge in light of the Supreme Court's remand, appellant first contends that a prima facie case of discrimination was established. He points out that the prosecution used four of its seven challenges against minority members of the venire, with three out of six used to challenge minority members in selection of the twelve regular members of the jury. There is no indication that any of the prosecution's "questions and statements during voir dire," Batson, 476 U.S. at 97, 106 S.Ct. at 1723, revealed evidence of discriminatory intent. Appellant urges us to consider at this point what he regards as the inadequate explanations offered by the prosecution for its challenges. However, the initial question is whether appellants presented a prima facie case sufficient to require explanations; that determination must be made before the explanations are considered.
7
Batson 's citation of Castaneda v. Partida, 430 U.S. 482, 97 S.Ct. 1272, 51 L.Ed.2d 498 (1977), in connection with the assessment of a prima facie case, Batson, 476 U.S. at 96, 106 S.Ct. at 1722, indicates that statistical disparities are to be examined. Here, the prosecution's challenge rate against minorities was 50 percent (three of six) in the selection of the jury of 12, and 57 percent (four of seven) in the selection of the jury of 12 plus alternates. Whether this rate creates a statistical disparity would require knowing the minority percentage of the venire; for example, if the minority percentage of the venire was 50, it could be expected that a prosecutor, acting without discriminatory intent, would use 50 percent of his challenges against minorities. Only a rate of minority challenges significantly higher than the minority percentage of the venire would support a statistical inference of discrimination. We are not informed of the minority percentage of the venire in this case, but we may accept as a surrogate for that figure the minority percentage of the population of the Eastern District, from which the venire was drawn. That percentage is 29. See Alvarado I, 891 F.2d at 444 & n. 5.
8
We think a challenge rate nearly twice the likely minority percentage of the venire strongly supports a prima facie case under Batson. The Government opposes this conclusion, pointing to the prosecution's waiver of a challenge in the fifth round, when minority veniremen were in the jury box, subject to peremptory challenge. Though failure to exercise an available challenge against minority veniremen has been mentioned in the decisions of some courts finding no prima facie case of discrimination, see United States v. Moore, 895 F.2d 484, 486 n. 5 (8th Cir.1990); United States v. Grandison, 885 F.2d 143, 148 (4th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 2178, 109 L.Ed.2d 507 (1990), the fifth round waiver here does not defeat a prima facie case. The discrimination condemned by Batson need not be as extensive as numerically possible. A prosecutor may not avoid the Batson obligation to provide race-neutral explanations for what appears to be a statistically significant pattern of racial peremptory challenges simply by forgoing the opportunity to use all of his challenges against minorities.
9
2. Adequacy of prosecutor's explanations. The task of assessing the prosecutor's explanations, in order to determine the ultimate issue of whether discrimination has been shown, falls primarily upon the judicial officer conducting the jury selection, whose determinations as to the credibility of the proffered explanations are entitled to "appropriate deference." Batson, 476 U.S. at 98 n. 21, 106 S.Ct. at 1724 n. 21. In this case, the Magistrate made findings that the prosecution's explanations were race-neutral as to Clark and Brown, but made no findings as to Garcia and Callier. We think the appropriate course is to remand for findings by the Magistrate as to Garcia and Callier and an ultimate determination on the issue of discriminatory intent based on all the facts and circumstances. See United States v. Mitchell, 877 F.2d 294, 303 (4th Cir.1989). An explanation for a particular challenge need not necessarily be pigeon-holed as wholly acceptable or wholly unacceptable. The relative plausibility or implausibility of each explanation for a particular challenge, assessed in light of the prosecution's acceptance of jurors with similar circumstances, may strengthen or weaken the assessment of the prosecution's explanation as to other challenges and thereby assist the fact-finder in determining overall intent. Moreover, as both sides acknowledge, the prosecution's decision not to use an available challenge against minority veniremen is also a relevant circumstance to be weighed.3
10
We appreciate that the Magistrate might encounter some difficulty recalling the circumstances of the jury selection and might conclude that examination of the record, supplemented by such further hearing on remand as he deems appropriate, may not yield a satisfactory basis for determining the prosecution's state of mind when the jury was selected. If he concludes that the passage of time has unduly impaired his ability to make a fair determination of the prosecution's intent, he may so state, in which event the District Court shall order a new trial. But if appropriate findings may conveniently be made, this should be done, with the District Court authorized then either to reinstate the judgment of conviction or order a new trial, depending upon the Magistrate's findings. See United States v. Alcantar, 897 F.2d 436 (9th Cir.1990) (disagreeing with District Court's conclusion on remand on the Batson claim and ordering new trial).
11
The judgment of the District Court is vacated, and the case is remanded for further proceedings consistent with this opinion.
1
Interestingly, the Supreme Court did not follow the practice it customarily used in earlier days when acting in response to a confession of error by the Solicitor General. In the past, the Supreme Court has made its own independent determination of the issue on which the Solicitor General has disagreed with a court of appeals. See Gibson v. United States, 329 U.S. 338, 344 n. 9, 67 S.Ct. 301, 304 n. 9, 91 L.Ed. 331 (1946); Young v. United States, 315 U.S. 257, 258-59, 62 S.Ct. 510, 511-12, 86 L.Ed. 832 (1942); see also DeMarco v. United States, 415 U.S. 449, 451, 94 S.Ct. 1185, 1186, 39 L.Ed.2d 501 (1974) (Rehnquist, J., dissenting) ("It is well established that this Court does not, or at least should not, respond in Pavlovian fashion to confessions of error by the Solicitor General."); Petite v. United States, 361 U.S. 529, 533, 80 S.Ct. 450, 452, 4 L.Ed.2d 490 (1960) (Brennan, J., dissenting) ("Even where the Government confesses error, this Court examines the case on the merits itself...."). More recently, however, without assessing the issue for itself, the Court has remanded for reconsideration in light of the Solicitor General's position. See Chappell v. United States, --- U.S. ----, 110 S.Ct. 1800, 108 L.Ed.2d 931 (1990); Biddle v. United States, 484 U.S. 1054, 108 S.Ct. 1004, 98 L.Ed.2d 971 (1988); Malone v. United States, 484 U.S. 919, 108 S.Ct. 278, 98 L.Ed.2d 239 (1987)
2
The Supreme Court's opinion leaves some ambiguity as to whether we may consider both the existence of a prima facie case and the adequacy of the prosecutor's explanations, or only the latter issue. In papers submitted at our invitation after the remand, both parties have agreed that both issues are properly before us
3
We do not agree with the Government, however, that the fact that one of the two prosecutors is Black is a circumstance weighing against a finding of discrimination
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Case: 12-10854 Document: 00512171653 Page: 1 Date Filed: 03/12/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 12, 2013
No. 12-10854
Summary Calendar Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
DANNY RAY ALEXANDER,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:11-CR-328-1
Before KING, CLEMENT, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Danny Ray Alexander pleaded guilty to one count of being a felon in
possession of a firearm in violation of 18 U.S.C. § 922(g)(1). He was sentenced
to 180 months of imprisonment and a two-year term of supervised release. On
appeal, Alexander challenges his conviction on the ground that the factual basis
for his plea was insufficient to allege an offense because it did not admit that his
firearm possession was an act of interstate commerce. The Government moves
for summary affirmance or, alternatively, for an extension of time to file a brief.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 12-10854 Document: 00512171653 Page: 2 Date Filed: 03/12/2013
No. 12-10854
As Alexander concedes, our review in this case is only for plain error since
he failed to object in the district court to the adequacy of the factual basis to
support his plea. See United States v. Garcia-Paulin, 627 F.3d 127, 131 (5th Cir.
2010). To show plain error, Alexander must show a forfeited error that is clear
or obvious and that affects his substantial rights. See Puckett v. United States,
556 U.S. 129, 135 (2009). If he makes such a showing, this court has the
discretion to correct the error but only if it seriously affects the fairness,
integrity, or public reputation of judicial proceedings. See id.
A conviction under § 922(g)(1) requires proof that “(1) that the defendant
previously had been convicted of a felony; (2) that he knowingly possessed a
firearm; and (3) that the firearm traveled in or affected interstate commerce.”
United States v. Meza, 701 F.3d 411, 418 (5th Cir. 2012). The factual basis to
which Alexander stipulated is sufficient to sustain each of these elements, and
Alexander does not contend otherwise. Instead, he asserts that § 922(g)(1) is
constitutionally invalid to the extent that it attempts to criminalize the
possession by a convicted felon of a firearm that has traveled between states at
some unknown time in the past. He asserts that such possession, to be
considered ongoing commerce, must be tethered to some requirement that the
firearm has been purchased, sold, or transported within a specified time period.
In support of this assertion, he relies on his interpretation of a recent Supreme
Court case, Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566 (2012), as
establishing that the Commerce Clause permits Congress to regulate or prohibit
only activities that are ongoing and that are economic in nature.
Alexander acknowledges he cannot show error that is clear or obvious
under current law. He raises the issue here to preserve it for further review. He
also seeks to preserve for further review his contentions that the issue whether
a factual basis admits a constitutional offense presents the question whether
there can be a cognizable finding of guilt and that such an issue ought not be
reviewed only for plain error.
2
Case: 12-10854 Document: 00512171653 Page: 3 Date Filed: 03/12/2013
No. 12-10854
Alexander has not met his burden under the plain error standard. The
district court’s judgment is AFFIRMED. The Government’s motion for summary
affirmance and its alternative motion for an extension of time to file a brief are
DENIED.
3
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THE THIRTEENTH COURT OF APPEALS
13-18-00262-CV
Maria G. Rodriguez a/k/a Maria G. Casarez and Ismael Casarez Sr.
v.
Deutsche Bank National Trust Company, as Trustee, in trust for Registered Holders of
Long Beach Mortgage Loan Trust 2004-2, Asset Backed Certificates, Series 2004-2
On Appeal from the
County Court at Law No. 3 of Cameron County, Texas
Trial Court Cause No. 2017-CCL-01102
JUDGMENT
THE THIRTEENTH COURT OF APPEALS, having considered this cause on
appeal, concludes that the judgment of the trial court should be affirmed. The Court
orders the judgment of the trial court AFFIRMED. Costs of the appeal are adjudged
against appellants, Maria G. Rodriguez a/k/a Maria G. Casarez and Ismael Casarez Sr.
and Marte C. Guillen, as surety on the supersedeas bond.
We further order this decision certified below for observance.
April 2, 2020
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United States Court of Appeals
for the Federal Circuit
______________________
JOHN W. MORRISON,
Petitioner
v.
DEPARTMENT OF THE NAVY,
Respondent
______________________
2016-2542
______________________
Petition for review of the Merit Systems Protection
Board in No. PH-0752-14-0669-B-1.
______________________
Decided: November 29, 2017
______________________
MICHAEL KATOR, Kator Parks Weiser & Harris, PLLC,
Washington, DC, argued for petitioner. Also represented
by DANIEL R. CLARK; JEREMY WRIGHT, Austin, TX.
RENEE BURBANK, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for respondent. Also represented by
CHAD A. READLER, ROBERT E. KIRSCHMAN, JR., ALLISON
KIDD-MILLER.
______________________
Before NEWMAN, CLEVENGER, and BRYSON, Circuit Judges.
2 MORRISON v. DEP’T OF THE NAVY
PER CURIAM.
John W. Morrison petitions for review of a decision of
the Merit Systems Protection Board (“MSPB” or “Board”)
relating to his retirement from a civilian position with the
Department of the Navy. Because the Board’s ruling was
not a “final order” or a “final decision” in his case, we
dismiss Mr. Morrison’s petition for lack of jurisdiction. 28
U.S.C. § 1295(a)(9); see also 5 U.S.C. § 7703(b)(1)(A).
BACKGROUND
Mr. Morrison worked as a firefighter at the Naval
Submarine Base New London in Groton, Connecticut.
Mr. Morrison’s position was designated as “Non-Critical
Sensitive.” As a condition of his employment, he was
required to maintain a security clearance. In August
2011, the Navy revoked Mr. Morrison’s eligibility for a
security clearance, citing concerns regarding his personal
finances. Mr. Morrison appealed the revocation to the
Navy’s Personnel Security Appeals Board. The revocation
was upheld based on Mr. Morrison’s history of financial
delinquency and his continued debt of more than $36,000.
The Navy subsequently initiated removal proceedings
for Mr. Morrison. It issued him a notice of proposed
removal on March 28, 2012, based on his failure to main-
tain the requisite security clearance. Mr. Morrison pro-
tested the proposed removal, but on July 13, 2012,
Regional Fire Chief Stephan Cox wrote a letter finalizing
the decision to remove him. In the letter, Regional Fire
Chief Cox wrote: “I . . . find that the charge of ‘Denied
Eligibility to Access Non-Critical Sensitive Areas’ is fully
supported by the evidence and your removal is warranted
and will be effected on 13 July 2012.”
Although Regional Fire Chief Cox signed the letter, it
was not formally issued to Mr. Morrison at that time.
Instead, District Fire Chief Thomas Clapsadle, who was
to deliver the letter of decision, offered Mr. Morrison the
MORRISON v. DEP’T OF THE NAVY 3
option to retire preemptively, in lieu of the termination.
Mr. Morrison had expressed concern that his retirement
benefits would be jeopardized if he were fired, and he
chose to retire effective as of July 13, 2012.
In reality, Mr. Morrison’s retirement benefits were
never at risk due to his pending termination, as he would
have received his retirement benefits regardless of
whether he retired or was terminated. See 5 U.S.C.
§§ 8312-8315 (identifying particular circumstances, not
present here, in which a government employee may lose
entitlement to retirement pay). After learning that his
retirement benefits were not at risk, Mr. Morrison filed an
appeal with the Merit Systems Protection Board, claiming
that his retirement was involuntary, and thus he had, in
effect, been unlawfully removed from his position.
The administrative judge who was assigned to the
case initially dismissed Mr. Morrison’s appeal for lack of
jurisdiction on the ground that he had failed to make a
non-frivolous showing that his retirement was involun-
tary. On Mr. Morrison’s petition for review, the full
Board held that Mr. Morrison’s allegations that an agency
manager had told him he would lose his retirement bene-
fits if he were terminated were sufficient to call for a
jurisdictional hearing. The Board therefore remanded the
case to the administrative judge for that purpose.
On remand, the administrative judge conducted a
hearing and determined that Mr. Morrison’s retirement
was involuntary. The administrative judge found that
Mr. Morrison had entertained the belief that he would
lose his retirement benefits if he were removed, and that
District Fire Chief Clapsadle had not corrected that
misinformation or referred Mr. Morrison to a knowledge-
able person who could correct that misinformation so that
Mr. Morrison could make an informed choice concerning
his retirement. Based on those findings, the administra-
tive judge concluded that Mr. Morrison “did not make an
4 MORRISON v. DEP’T OF THE NAVY
informed choice when he chose to retire based on the
mistaken assumption that he would lose his retirement
benefits if he was issued a letter of termination, which the
agency failed to correct.”
The administrative judge ruled that Mr. Morrison was
entitled to be returned to the status quo ante: reinstate-
ment as of July 13, 2012. The administrative judge
added, however, that “further consideration of the status
quo ante is warranted under the circumstances of this
case.” The administrative judge noted that Mr. Morrison
involuntarily resigned “immediately preceding the issu-
ance of a decision letter removing him effective that day,”
and concluded that, although Mr. Morrison should be
restored to the status quo ante, he “cannot be placed in a
better position than he would have enjoyed if he had not
resigned on July 13, 2012.”
The Navy petitioned for review by the full Board,
which affirmed the administrative judge’s decision re-
garding Mr. Morrison’s involuntary retirement. As to
that issue, the Board ruled that “an agency is required to
provide employees with adequate information in order to
make an informed retirement decision.” Applying that
standard, the Board found no reason to disturb the ad-
ministrative judge’s determination that Mr. Morrison’s
retirement was involuntary.
With regard to the remedy, however, the Board modi-
fied the administrative judge’s decision “to clarify how the
facts of this case may affect the status quo ante relief.”
The Board explained that “status quo ante relief requires
that the agency first determine if and when the appellant
would have been removed had he not retired. . . . If, as
suggested by the unissued decision letter in the record,
the agency would have removed [Mr. Morrison] effective
July 13, 2012, then [his] retirement effective that date
would not be cancelled [and Mr. Morrison] would not be
entitled to reinstatement or any back pay based on the
MORRISON v. DEP’T OF THE NAVY 5
involuntary retirement action at issue in this appeal . . . .”
The Board added that if Mr. Morrison “would not have
been removed, or the effective date of the removal would
have occurred after July 13, 2012, then the appropriate
relief in this appeal would be to cancel the involuntary
retirement, restore him with appropriate back pay and
other benefits from July 13, 2012, until the date he
otherwise would have separated from service by either a
removal action or the mandatory retirement age, and to
adjust his retirement annuity accordingly, i.e., potentially
a later retirement date.” 1
Mr. Morrison petitions this court for review of the
Board’s decision. He argues that the Board improperly
permitted the Navy to reconstruct what would have
happened if his involuntary retirement had not occurred.
Instead, he contends that he is entitled to back pay as a
matter of law for the period between July 13, 2012, and
the date of his mandatory retirement in June 2014.
DISCUSSION
Our jurisdiction over petitions for review of orders of
the Merit Systems Protection Board appeals derives from
28 U.S.C. § 1295(a)(9). That statute provides that this
court shall have exclusive jurisdiction of an appeal “from
a final order or final decision” of the Board. See also 5
U.S.C. § 7703(b)(1)(A) (“[A] petition to review a final order
1 Although not part of the record in this case, the
parties have informed us that the Navy subsequently
found that Mr. Morrison would have been terminated as
of July 13, 2012, and took the steps necessary to complete
the removal action. The Navy therefore did not award
Mr. Morrison any back pay. Mr. Morrison has filed a
separate appeal from that action to the Board. That
appeal was dismissed without prejudice pending the
outcome of this proceeding.
6 MORRISON v. DEP’T OF THE NAVY
or final decision of the Board shall be filed in the United
States Court of Appeals for the Federal Circuit.”). Our
jurisdiction over a petition therefore turns on whether the
determination that the petitioner seeks to appeal “consti-
tutes a ‘final order or final decision’ for purposes of section
1295(a)(9).” Weed v. Soc. Sec. Admin., 571 F.3d 1359,
1361 (Fed. Cir. 2009) (quoting Haines v. Merit Sys. Prot.
Bd., 44 F.3d 998, 1000 (Fed. Cir. 1995)).
The statutory requirement that we limit our review to
“final” orders and decisions of the Board parallels the
familiar “final judgment rule” in appellate proceedings,
which is aimed at curbing “piecemeal appellate review of
trial court decisions which do not terminate the litiga-
tion.” United States v. Hollywood Motor Car Co., 458 U.S.
263, 265 (1982). As a general rule, an order is final only
when it “ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment.”
Catlin v. United States, 324 U.S. 229, 233 (1945).
The same policy underlies the principle that “an order
remanding a matter to an administrative agency for
further findings and proceedings is not final.” Cabot
Corp. v. United States, 788 F.2d 1539, 1542 (Fed. Cir.
1986); see also Caesar v. West, 195 F.3d 1373, 1374 (Fed.
Cir. 1999) (“Remands to administrative agencies, because
they mark a continuation of the case, are not generally
considered final decisions for jurisdictional purposes.”);
see generally 15B Charles A. Wright et al., Federal Prac-
tice and Procedure § 3914.32, at 237-38 (2d ed. 2006)
(“The general rule is that a remand is not appealable as a
final decision . . . . Since the remand is not final, it can be
reviewed on appeal from the eventual final disposi-
tion . . . .”).
In determining whether an agency has remanded the
case for further proceedings, we look to whether the
agency has required further administrative adjudication;
we do not base our decision on whether the agency has
MORRISON v. DEP’T OF THE NAVY 7
formally denominated its action as a “remand.” If the
agency’s order contemplates further adjudication or other
proceedings beyond the ministerial implementation of the
agency’s directive, the order will be treated as a remand.
See Weed, 571 F.3d at 1362 (dismissing appeal for lack of
jurisdiction where the Board’s decision was “in essence[] a
remand” because it forwarded the petition to the Board’s
regional office for “further adjudication” and ordered the
Social Security Administration to reconstruct the hiring
process for the position for which the petitioner had
applied); Cummings v. Office of Pers. Mgmt., 500 F. App’x
941, 944 (Fed. Cir. 2013) (“While the MSPB’s decision
does not explicitly remand the case to [the agency], in
substance, it acts as a remand for further adjudication
regarding Mr. Cummings’ total years of service. . . .
Given that proceedings continue in [the agency], the
MSPB’s decision was not ‘final’ because it failed to dispose
of the ‘entire action.’ We therefore lack jurisdiction over
Mr. Cummings’ appeal at this time.” (internal citation
omitted)). 2
Although the Board concluded that Mr. Morrison’s
retirement was involuntary and that he should be re-
turned to the status quo ante, the Board did not “dispos[e]
of [the] entire action.” Haines, 44 F.3d at 1000. Rather,
the Board stated that, to ascertain the appropriate relief,
2 Mr. Morrison argues that the Board’s order was
final because the Board denominated its decision as its
“final order.” The Board’s characterization of its order
does not, however, govern our jurisdiction under our
jurisdictional statutes. In the Weed case, for example, the
Board characterized its order as a “final decision,” see
Weed v. Soc. Sec. Admin., 107 M.S.P.R. 142, 149 (2007),
but we nonetheless held that the Board’s action was not
final for purposes of our jurisdiction, Weed, 571 F.3d at
1361.
8 MORRISON v. DEP’T OF THE NAVY
“the agency [must] first determine if and when [Mr.
Morrison] would have been removed had he not retired.”
The Board then outlined various potential outcomes,
depending on how the Navy ultimately decided that
question. Because it is not the case that the Board’s
decision left “nothing for the [agency] to do but execute
judgment,” the Board’s ruling was not a final order or
decision, and we lack jurisdiction over the petition for
review. See Cabot, 788 F.2d at 1543 (an order seeking
“additional findings, determination, and redetermination”
from the agency is not final for purposes of appellate
review); see also Gingery v. Dep’t of Def., 392 F. App’x 855,
856 (Fed. Cir. 2010) (“[A] Board decision directing an
agency to reconstruct the hiring process does not qualify
as a final judgment for purposes of invoking our jurisdic-
tion.”); Marshall v. Dep’t of Health & Human Servs., 587
F.3d 1310, 1315 (Fed. Cir. 2009) (“Mr. Marshall could not
have appealed the MSPB’s first reconstruction order
[because] . . . ‘an order remanding a matter to an adminis-
trative agency for further findings and proceedings is not
final.’” (quoting Cabot, 788 F.2d at 1542)).
Mr. Morrison argues that the Board merely sent this
case back to the Navy to implement and comply with the
Board’s decision, not to conduct any further proceedings.
We disagree. As the Board’s opinion makes clear, the
Board required the Navy to decide, in the first instance,
whether and when Mr. Morrison would have been termi-
nated if he had not retired. That was the critical modifi-
cation that the Board made to the initial decision, in
which the administrative judge had ruled that Mr. Morri-
son “would have been separated effective July 13, 2012.”
The Board directed that such a determination had to be
made by the agency. 3 As such, the Board’s decision was
3 Mr. Morrison suggests that on remand the agency
was virtually certain to decide that he would have been
MORRISON v. DEP’T OF THE NAVY 9
not final for purposes of 28 U.S.C. § 1295(a)(9), and we
therefore dismiss the petition without reaching the mer-
its.
No costs.
DISMISSED
removed as of July 13, 2012, and that subsequent events
have proved that to be true. But our jurisdiction cannot
turn on a party’s estimate of the probability of losing on
remand. And the fact that there has been a decision by
the agency on remand, which has been appealed to the
Board, is a further indication that it is not this appeal,
but the subsequent one, which includes the full record of
the remand proceedings, that is the proper vehicle for
determining whether Mr. Morrison is entitled to back pay
for any or all of the period between July 13, 2012, and his
mandatory retirement date in June 2014.
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701 F.2d 807
83-1 USTC P 9255
Joseph T. SMITH and Marie A. Smith, Petitioners-Appellants,v.COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
No. 82-7090.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Sept. 16, 1982.Decided March 16, 1983.
Joseph T. Smith, pro se.
Kenneth Greene, Dept. of Justice, Washington, D.C., for respondent-appellee.
On Appeal From The Decisions Of The United States Tax Court.
Before MERRILL, Senior Circuit Judge, FLETCHER and BOOCHEVER, Circuit Judges.
BOOCHEVER, Circuit Judge:
1
The issue in this case is the interpretation of the phrase "paid by the United States" in I.R.C. Sec. 911(a)(1) as worded in 1975 and 1976.1 Petitioner Joseph Smith excluded overtime pay he received as a customs inspector in the Bahamas from his taxable income on the theory that it was paid by private airlines, not the United States. The Commissioner issued a deficiency, and the Tax Court agreed. We affirm.
2
I.R.C. Sec. 911(a), as it appeared in 1975 and 1976, provided in relevant part:
3
Sec. 911. Earned income from sources without the United States
4
(a) General Rule.
5
The following items shall not be included in gross income and shall be exempt from taxation under this subtitle:
6
(1) Bona fide resident of foreign country. [For certain qualified persons,] amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) which constitute earned income attributable to services performed during such uninterrupted period.
7
Smith argues that his overtime pay was excludible under section 911(a)(1) because the government billed airline companies who requested customs inspections during off hours for the overtime services of U.S. Customs officials. Smith characterizes the United States as a mere conduit for funds paid to him by the airlines.
8
Airlines requesting overtime services are required to pay a reasonable rate of extra compensation for those services, and to post a bond or deposit sufficient funds with the Customs Service. 19 U.S.C. Secs. 267 (1976), 1451 (Supp. V 1981).2 These statutes indicate that the airlines' payment obligation is to the United States government, not to the individual customs inspector who performs the overtime services. The airlines must pay "the appropriate customs officer", who in turn pays the inspectors. 19 U.S.C. Sec. 267 (1976). In spite of the implication in section 267 that the overtime is paid with the very funds provided by the airline ("who shall pay the same to the ... officers and employees"), it was stipulated in the Tax Court that the United States government, not the individual customs inspector, bore the risk of nonpayment by the airlines. Moreover, the customs inspectors on overtime were considered employees of the United States, not the airlines. They performed the same pre-clearance customs inspections during regular duty hours and on overtime. They were subject to hiring, firing, and supervision by the Customs Service, not the airlines who requested their services.
9
The relevant cases refute Smith's argument that the overtime compensation was "paid by" the airlines and not the government. In cases dealing with employees performing services for the government of Iran, several courts have held that a United States employee is not entitled to exclude income under section 911(a) even though the ultimate "source" of the funds received is foreign. Commissioner v. Mooneyhan, 404 F.2d 522, 527 (6th Cir.1968), cert. denied, 394 U.S. 1001, 89 S.Ct. 1593, 22 L.Ed.2d 778 (1969); Johnson v. United States, 390 F.2d 715, 717 (Ct.Cl.1968); United States v. Johnson, 386 F.2d 824, 825 (5th Cir.1967); Commissioner v. Wolfe, 361 F.2d 62, 67 (D.C.Cir.), cert. denied, 385 U.S. 838, 87 S.Ct. 86, 17 L.Ed.2d 72 (1966).
10
In these cases, the United States government furnished employees of its Bureau of Public Roads to perform services for the government of Iran. Iran was to pay the United States for the salaries of the employees from a fund which was set up before any services were rendered. Like Smith, the employees remained under the authority and supervision of a department of the United States government, were paid by United States Treasury check, and had no separate contract with the third party who was obligated to pay the United States for their services. The courts reasoned that the Bureau of Roads employees remained United States employees and were therefore "paid by" the United States. The fact that a third party was the ultimate source of the funds was irrelevant when that third party had no separate contract with the employees, and no authority to hire, fire or supervise them. Thus, the salaries were not "paid by" the private third party merely because it was liable to reimburse, even in advance, the United States government. The airlines here, like the foreign "source" in the cases above, exercised no control or authority over the United States Customs inspectors.
11
Smith's claim is also inconsistent with the purpose of section 911(a). We examined that purpose in depth in McComish v. Commissioner, 580 F.2d 1323 (9th Cir.1978). The issue in McComish was whether the Trust Territory of the Pacific Islands constituted an "agency" of the United States for purposes of section 911(a). The panel found that the purpose of the exclusion generally was to encourage United States citizens to go abroad to share their technical skills. Id. at 1326. To place those citizens on an equal footing with citizens of the foreign country, the possibility of double taxation was eliminated by allowing exclusion of foreign earned income from gross income for federal taxes. Id. The exception for "amounts paid by the United States government or an agency thereof" was added to prevent a windfall to United States government employees in foreign countries. Because United States employees generally were not subject to foreign income tax, an exclusion from United States taxable income was not necessary or desirable. Id. at 1325-26. See also Mooneyhan, 404 F.2d at 525-27; Wolfe, 361 F.2d at 66-67 (purpose of non-exclusion of amount paid by United States was to prevent extension of exclusion to United States employees such as military and foreign service personnel).
12
Our holding in Erlandson v. Commissioner, 277 F.2d 70 (9th Cir.1960) does not support Smith's position. Although we focused there on the source of the funds, we said that if a taxpayer is a United States employee, "the conclusion necessarily follows that his wages were paid by the United States or an agency thereof." Id. at 72. Smith was compensated at all times as an employee of the United States, so that all of his income came within the ambit of funds which Congress indicated were to be taxed.
13
The judgment is AFFIRMED.
1
26 U.S.C. Sec. 911(a)(1) (1976). The section was amended in 1981. See Pub.L. No. 97-34, Title I, Sec. 111(a), 95 Stat. 190 (1981)
2
The statutes read in relevant part:
The Secretary of the Treasury shall fix a reasonable rate of extra compensation for overtime services of customs officers and employees .... The said extra compensation shall be paid by the master, owner, agent, or consignee of such vessel ... to the appropriate customs officer, who shall pay the same to the several customs officers and employees entitled thereto according to the rates fixed therefor by the Secretary of the Treasury.
19 U.S.C. Sec. 267 (1976).
Before any such special license to unlade shall be granted, the master, owner, or agent of such vessel or vehicle, or the person in charge of such vehicle, shall be required to deposit sufficient money to pay, or to give a bond in an amount to be fixed by the Secretary conditioned to pay, the compensation and expenses of the customs officers and employees assigned to duty in connection with such unlading at night or on Sunday or a holiday, in accordance with the provisions of section 267 of this title.
19 U.S.C. Sec. 1451 (Supp. V 1981).
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893 F.2d 669
UNITED STATES of America, Plaintiff-Appellee,v.Roy Lee PIERCE, James Evans, Defendants-Appellants.
No. 88-2985.
United States Court of Appeals,Fifth Circuit.
Jan. 4, 1990.Rehearing and Rehearing En Banc Denied Feb. 14, 1990.
Ardon E. Moore, Jr., Tyler, Tex., (Court-appointed), for Pierce.
Roy Merrell, Dallas, Tex., for Evans.
Joseph Douglas Wilson, U.S. Dept. of Justice, Washington, D.C., Bob Wortham, U.S. Atty., Ronald J. Sievert, Asst. U.S. Atty., Tyler, Tex., Mervyn Hamburg, U.S. Atty., Dept. of Justice, Washington, D.C., for plaintiff-appellee.
Appeals from the United States District Court for the Eastern District of Texas.
AMENDED OPINION
Before GOLDBERG, POLITZ and JONES, Circuit Judges.
EDITH H. JONES, Circuit Judge:
1
Appellants Roy Lee Pierce and James Evans were convicted in the district court on drug trafficking charges arising from a conspiracy to ship cocaine from Los Angeles, California for distribution in Tyler, Texas. A jury found Pierce guilty of conspiring to distribute cocaine in violation of 21 U.S.C. Sec. 846 and possessing cocaine with intent to distribute in violation of 21 U.S.C. Sec. 841(a)(1). Evans pled guilty to a conspiracy charge during trial. Both Pierce and Evans raise numerous challenges to their convictions and sentences. Finding no merit in his contentions, we affirm Pierce's conviction and sentence. Having determined that Evans's guilty plea was accepted in violation of Rule 11, we reverse his conviction.
I.
BACKGROUND
2
On December 12, 1987, Angela Evans, James Evans's wife and Pierce's sister-in-law, attempted to ship a Christmas-wrapped package from Los Angeles to Tyler via American Airlines. Mrs. Evans first arrived at the American Airlines terminal to pick up a package that had been sent to her from Tyler. After obtaining this package, she left briefly and returned with the package she intended to send. She presented the package to American employee James McAdam, who inquired about its contents. Mrs. Evans replied that the package contained an iron. After Mrs. Evans left, McAdam became suspicious because he believed the package was not heavy enough to be an iron. In an effort to identify the contents, McAdam x-rayed the package. The x-ray revealed not an iron, but an opaque mass. McAdam alerted his supervisor, Eloise Ferguson, and pursuant to airline policy they opened the package. Inside was a large quantity of rock cocaine.
3
DEA agents arrived shortly after the package was opened. They conducted a field test which identified the substance as cocaine. A small portion was removed and sent for further testing at the Los Angeles County Sheriff's Department, then a controlled delivery was made by forwarding the package to its intended destination.
4
After setting up surveillance at the Tyler airport, agents observed Pierce drive up in a vehicle with Hazel Crumpton, to whom the package was addressed. While Pierce waited in the car, Crumpton went into the terminal and picked up the package. She was arrested as she attempted to leave. Pierce made a futile attempt to escape in his car, but his path was blocked by a DEA vehicle. Meanwhile, James and Angela Evans were arrested by officers executing a warrant to search their Los Angeles apartment.
5
Pierce and James Evans were indicted with their two co-defendants in January, 1988. Crumpton and Angela Evans pled guilty and testified on behalf of the government. After one aborted attempt to plead guilty, James Evans eventually changed his plea to guilty during trial. The jury subsequently found Pierce guilty on both the conspiracy and possession counts. The district court, applying the sentencing guidelines, sentenced Pierce to 262 months in prison and a three year term of supervised release. Evans was sentenced to 360 months in prison and an eight year term of supervised release. Pierce and Evans now bring this appeal, challenging the validity of their convictions and sentences. We address each in turn.
II.
ANALYSIS
A. PIERCE
1. Motion to Suppress
6
Before trial Pierce moved to suppress the evidence obtained when the package was searched at the American Airlines terminal in Los Angeles, on the grounds that the warrantless search violated his Fourth Amendment rights. After an evidentiary hearing the court denied the motion, ruling that there was no Fourth Amendment violation because the initial search was conducted by a private party. In reviewing a district court's ruling on a motion to suppress based on live testimony at a suppression hearing, we must accept the district court's factual findings as true unless they are clearly erroneous. United States v. Fernandez, 887 F.2d 564, 567 (5th Cir.1989).
7
Pierce first argues that the court's finding that the package was initially searched by airline employees is clearly erroneous. He contends that the package was actually opened by the DEA. This contention is meritless. The sole basis for Pierce's argument is the so-called "tell-tale affidavit" of Agent Paul Black, which indicates that the DEA did open the package first. However, Agent Black testified at the suppression hearing that he subsequently learned that his affidavit was based on second-hand reports which were either incorrect or misinterpreted. On the other hand, the court's finding is amply supported by the evidence. Airline employees and DEA agents unanimously testified that the package was opened by Ferguson and McAdam. The court's finding is not clearly erroneous.
8
Pierce next alleges that the airline employees were acting as instruments or agents of the government when they opened the package. Pierce is correct in asserting that the Fourth Amendment can be violated by a search conducted by a private party acting as an agent or instrument of the government. See Coolidge v. New Hampshire, 403 U.S. 443, 487, 91 S.Ct. 2022, 2048, 29 L.Ed.2d 564 (1971). However, the airline employees were not acting in such a capacity in this case. Pierce largely bases his argument on a Ninth Circuit test for determining whether a private party has acted as an agent of the government. That circuit has held that the two critical factors in an "instrument or agent" analysis are: (1) whether the government knew of and acquiesced in the intrusive conduct, and (2) whether the party performing the search intended to assist law enforcement efforts or to further his own ends. United States v. Miller, 688 F.2d 652, 657 (9th Cir.1982); United States v. Walther, 652 F.2d 788, 792 (9th Cir.1981). We previously applied this test in United States v. Bazan, 807 F.2d 1200 (5th Cir.1986). For purposes of reviewing Pierce's argument we will once again assume the adequacy of this formulation. See id. at 1203.
9
Pierce is unable to satisfy the second prong of the Walther test. Following the suppression hearing the district court dictated its findings and conclusions into the record. The court first found that American Airlines, like other airlines, has a "valid reasonable policy" of exercising caution with and opening suspicious packages. The court further found that McAdam and Ferguson had opened the package pursuant to that policy. Both of these findings are supported by the evidence. There is no evidence that the package was opened at the direction, or even the suggestion, of the DEA. We conclude that the airline employees opened the package to further the airline's own ends, not solely to assist law enforcement officers. See United States v. Koenig, 856 F.2d 843, 849 (7th Cir.1988) (holding that Federal Express employees were acting in furtherance of the company's own ends when they opened a package pursuant to company policy). Thus, Pierce's argument fails the Walther test. Accordingly, we hold that the airline employees were not acting as instruments or agents of the government when they opened the package.
10
Once it is established that airline employees, acting privately, opened the package, this case is governed by United States v. Jacobsen, 466 U.S. 109, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984). In Jacobsen, the employees of a private freight carrier opened a damaged package and discovered a plastic bag containing white powder inside. The DEA was called. Upon arrival, agents reopened the package, examined the contents, and conducted a chemical field test which identified the substance as cocaine. Reversing the holding of the court of appeals that the Fourth Amendment had been violated, the Supreme Court first reiterated the rule that the Fourth Amendment proscribes only governmental action. Jacobsen, 466 U.S. at 113, 104 S.Ct. at 1656. The Court then held that where a package containing narcotics is originally opened by a private carrier, the Fourth Amendment is not violated by a subsequent search by government agents that does not exceed the scope of the private search. Jacobsen, 466 U.S. at 115-121, 104 S.Ct. at 1657-1660. The court additionally held that the chemical field test, which could disclose only whether or not the substance was cocaine, did not compromise any legitimate interest in privacy.1 Jacobsen, 466 U.S. at 122-126, 104 S.Ct. at 1661-1663.
11
Applying Jacobsen to the present case, we conclude that neither the initial search by airline employees, nor the subsequent search by DEA, nor the chemical field test violated Pierce's Fourth Amendment rights. Accordingly, the district court did not err in denying Pierce's motion to suppress.2
2. Jencks Act
12
Angela Evans was interviewed before trial by Assistant U.S. Attorney Ronald Sievert, who took notes during their conversation. At trial, after Evans testified on behalf of the government, Pierce moved for production of these notes under the Jencks Act. He now alleges that the failure of the government to turn over Evans's pretrial "statement" violates the Jencks Act. We disagree. The Jencks Act provides that upon a defendant's motion the court shall:order the United States to produce any statement (as hereinafter defined) of the witness in the possession of the United States which relates to the subject matter as to which the witness has testified.
13
18 U.S.C. Sec. 3500(b) (emphasis added). Pierce was not entitled to view Sievert's notes because they do not constitute a "statement" of the witness.
The Jencks Act defines a statement as:
14
(1) a written statement made by said witness and signed or otherwise adopted or approved by him;
15
(2) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness and recorded contemporaneously with the making of such statement....
16
18 U.S.C. Sec. 3500(e). This court has previously held that an agent's interview notes are not "statements" of the witness under Sec. 3500(e) unless the witness "signed or otherwise adopted or approved the report," 18 U.S.C. Sec. 3500(e)(1), or the notes were "substantially verbatim reports" of the witness interview, 18 U.S.C. Sec. 3500(e)(2). United States v. Welch, 810 F.2d 485, 490 (5th Cir.), cert. denied, 484 U.S. 955, 108 S.Ct. 350, 98 L.Ed.2d 376 (1987). Neither is the case here. In order for interview notes to qualify as a statement under Sec. 3500(e)(1) the witness must have signed, read, or heard the entire document read. United States v. Hogan, 763 F.2d 697, 704 (5th Cir.1985). Although Pierce's counsel thoroughly cross-examined Angela Evans, he was unable to produce any evidence that one of these three conditions was met. Similarly, there is no evidence that any portion of Sievert's notes was a substantially verbatim transcription of Evans's statement.
17
Pierce further argues that the district court erred by not conducting an in camera inspection of the notes to determine whether they qualify as Jencks material. The district court has a duty to inspect documents in camera if a timely request is made by the defense and some indication exists in the record that the notes meet the Jencks Act's definition of a statement. United States v. Hogan, 763 F.2d at 704; United States v. Edwards, 702 F.2d 529, 531 (5th Cir.1983). Pierce made a timely request that the court review the documents, but he failed to make any showing that the notes qualified as Jencks material. As mentioned above, Angela Evans was thoroughly cross-examined by Pierce's counsel, who could easily have asked her whether Sievert wrote passages down verbatim or read her the document in its entirety. In United States v. Hogan, supra, such testimony was elicited from a government witness. In that case the witness testified that the interviewing agent wrote down "many of his statements verbatim...." Id. at 701. Accordingly, we remanded that case for an in camera inspection to determine whether the notes qualified as a statement under Sec. 3500(e)(2). Id. at 704. However, where, as here, there has been no showing by the defendant that a document will qualify as Jencks material, the district court is not obligated to inspect the documents in camera, and the court in this case did not err in refusing to do so.
3. Sufficiency of Evidence
18
Pierce contends that the evidence is insufficient to sustain his conviction for possession with intent to distribute because he never had possession of the cocaine. In evaluating such a claim we examine the evidence and all reasonable inferences that may be drawn from it in the light most favorable to the jury verdict. U.S. v. Lindell, 881 F.2d 1313, 1322 (5th Cir.1989). The evidence is sufficient to sustain the jury's verdict if a rational trier of fact could have found all essential elements of the offense in question beyond a reasonable doubt. U.S. v. Ayala, 887 F.2d 62, 67 (5th Cir.1989). In this case, the jury could properly have found Pierce guilty of possession under the vicarious liability doctrine of Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946). Under the theory of Pinkerton, a conspirator can be found guilty of a substantive offense committed by a coconspirator and in furtherance of the conspiracy, so long as the conspirator's acts are within the reasonably foreseeable scope of the conspiracy. Id. We have previously applied this doctrine to possession offenses. United States v. Hodges, 606 F.2d 520, 523 (5th Cir.1979), cert. denied, 444 U.S. 1035, 100 S.Ct. 708, 62 L.Ed.2d 671 (1980). Pierce was convicted of conspiracy to distribute cocaine, and the evidence is clear that at least two of his co-conspirators had possession of the cocaine in furtherance of that goal. Since the jury was given a proper Pinkerton instruction, the evidence is sufficient to sustain Pierce's possession conviction on this basis. See United States v. Acosta, 763 F.2d 671, 681 (5th Cir.), cert. denied, 474 U.S. 863, 106 S.Ct. 179, 88 L.Ed.2d 148 (1985).
4. Variance
19
Pierce claims that there is a fatal variance between the allegations in the indictment and the government's proof at trial. The indictment, he points out, charges him with possessing and conspiring to distribute "cocaine", while the evidence shows that the substance involved was "cocaine base". Pierce is not entitled to relief on this ground. Cocaine base is merely an isomer of cocaine. Therefore we doubt that a variance exists at all. However, even if we assume there is a variance, it would not be fatal. In order for a variance to require reversal it must "affect the substantial rights of the accused either (1) by insufficiently informing him of the charges against him such that he is taken by surprise and prevented from presenting a proper defense, or (2) by affording him insufficient protection against reprosecution for the same offense." United States v. Sheikh, 654 F.2d 1057, 1066 (5th Cir. Unit A Sept. 1981), cert. denied, 455 U.S. 991, 102 S.Ct. 1617, 71 L.Ed.2d 852 (1982). A variance between cocaine and cocaine base is plainly harmless under this test. See United States v. Kramer, 711 F.2d 789, 797 (7th Cir.), cert. denied, 464 U.S. 962, 104 S.Ct. 397, 78 L.Ed.2d 339 (1983) (holding that variance between "amphetamines" and "methamphetamines" was "plainly harmless").
5. Sentencing Guidelines
20
a. Pierce's Role in the Offense
21
Pierce contends that the district court erred by increasing his base offense level because of his role in the offense. Section 3B1.1(b) of the Sentencing Guidelines directs the sentencing court to increase the offense level by three "[i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive...." We find no error in the court's application of Sec. 3B1.1(b).
22
The district court's determination that Pierce was a manager or supervisor is a finding of fact reviewable under the clearly erroneous standard. U.S. v. Mejia-Orosco, 867 F.2d 216, 221 (5th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 3257, 106 L.Ed.2d 602 (1989). The testimony of co-conspirators Hazel Crumpton and Angela Evans provide ample support for this finding. Crumpton testified that Pierce recruited her into the conspiracy by explaining to her how he could get cocaine from California to people in Tyler. She testified that Pierce had already worked out things such as prices and manner of transportation. Mrs. Evans's testimony made it clear that it was Pierce who arranged for each shipment. It was Pierce, for example, who instructed her to send the December 12, 1987 package to Hazel Crumpton, whom she had never met. The court's finding that Pierce was a manager or supervisor is not clearly erroneous.
23
Likewise, the court's determination that the activity was "otherwise extensive" is not clearly erroneous.3 Pierce was involved in a conspiracy to ship cocaine halfway across the country for distribution. Hazel Crumpton and Angela Evans both testified about previous shipments made pursuant to the conspiracy, at least some of which were larger than the one seized at the Tyler airport. There was also testimony concerning additional persons whose services were indispensable to commission of the offense. For example, Angela Evans named at least two suppliers in California from whom she obtained cocaine to be shipped to Tyler, and Hazel Crumpton testified that a man named "Geno" had accompanied James Evans on at least one trip to Tyler.4 We conclude that the district court could properly have found that Pierce was a manager or supervisor of criminal activity that was "otherwise extensive." Accordingly, Pierce is not entitled to relief on this ground.
24
b. Obstruction of Justice
25
Sec. 3C1.1 of the sentencing guidelines provides that the court is to increase the offense level by two:
26
If the defendant willfully impeded or obstructed or attempted to impede or obstruct the administration of justice during the investigation or prosecution of the instant offense....
27
U.S.S.G. Sec. 3C1.1. Pierce contends that the court erred by increasing his offense level under this section. We disagree.
28
The court's finding that Pierce obstructed justice is reviewed under the clearly erroneous standard. United States v. Franco-Torres, 869 F.2d 797, 800 (5th Cir.1989). Our only inquiry is whether there was sufficient evidence in the record to permit the sentencing judge to conclude that Pierce had obstructed justice. Id. We conclude that there was. The evidence reveals that at the time of his arrest Pierce attempted to flee in his car. Pierce argues that flight alone is not sufficient to constitute obstruction of justice. We need not answer that question, however, because the evidence also reveals that Pierce attempted to influence the testimony of Angela Evans. Mrs. Evans testified that after the indictment was returned Pierce approached her and asked how much money it would take for Evans to testify that the shipment was Hazel Crumpton's doing and that he was not involved. Pierce points out that Mrs. Evans also stated that she didn't know how serious Pierce was when he made his proposal. However, the pre-sentence report relies on this incident to establish that Pierce obstructed justice, and Mrs. Evans's testimony is sufficient evidence to permit the district court to conclude that Pierce attempted to influence her testimony. Since attempting to influence a witness's testimony is one of the examples of conduct that constitutes obstruction of justice listed in application note 1 to Sec. 3C1.1, the court did not err in increasing Pierce's offense level under that section.
29
c. Base Offense Level
30
Pierce next contends that the district court erred by calculating his base offense level as if the offense involved more than 500 grams of cocaine base. He correctly points out that the cocaine in the package seized at the Tyler airport weighed only 493 grams. However, Pierce's argument is nullified by the commentary to Section 2D1.4 of the Sentencing Guidelines. Section 2D1.4 sets out the general rule that in calculating the base offense level for a defendant convicted of conspiracy, the offense level shall be the same as if the object of the conspiracy had been completed. Application Note 1 to the section provides that:If the defendant is convicted of a conspiracy that includes transactions in controlled substances in addition to those that are the subject of substantive counts of conviction, each conspiracy transaction shall be included with those of the substantive counts of conviction to determine scale.
31
U.S.S.G. Sec. 2D1.4, comment (n. 1) Co-conspirator Hazel Crumpton testified that previous shipments had been made pursuant to the conspiracy, and that these other shipments were generally larger than the one intercepted on December 12, 1987. The district court properly sentenced Pierce according to the total amount of all the shipments involved in the conspiracy without being limited to the amount seized at the Tyler airport or alleged in the indictment. See United States v. Sarasti, 869 F.2d 805, 806-807 (5th Cir.1989).
32
The district court's findings about the quantity of drugs to be used in setting the base offense level are factual findings protected by the clearly erroneous rule. United States v. Thomas, 870 F.2d 174, 176 (5th Cir.1989). Application Note 2 to Sec. 2D1.4 provides that where "there is no drug seizure ... the sentencing judge shall approximate the quantity of the controlled substance." In making such a determination the court may consider, among other things, "similar transactions in controlled substances by the defendant...." U.S.S.G. Sec. 2D1.4, comment (n. 2). In this case, 493 grams were seized on December 12, 1987, and Hazel Crumpton testified that other, larger shipments had also been made. In light of such evidence, the court's finding that the conspiracy involved more than 500 grams was not clearly erroneous. Accordingly, the district court correctly calculated Pierce's base offense level using that amount.
33
d. Downward Departure
34
Pierce alleges that the district court erred in failing to depart downward from the sentence mandated by the guidelines. We will uphold a district court's failure to depart from the guidelines unless the refusal was in violation of law. United States v. Buenrostro, 868 F.2d 135, 139 (5th Cir.1989). Pierce does not suggest any law that has been violated by the failure to depart. Indeed, the gist of Pierce's claim is that the court gave him precisely the sentence required by law. "A claim that the district court refused to depart from the guidelines and imposed a lawful sentence provides no grounds for relief." Id. Accordingly, Pierce is not entitled to relief on this basis.
35
e. Unequal Sentences
36
Pierce's final contention is that he was treated differently by the sentencing judge than co-defendant Hazel Crumpton was. This argument provides no grounds for relief. Pierce does not argue that his sentence exceeded that mandated by the sentencing guidelines, and we have already determined that the court correctly applied the sentencing guidelines. Under such circumstances, a defendant cannot base a challenge to his sentence "solely on the lesser sentence given by the district court to his co-defendant." United States v. Boyd, 885 F.2d 246, 249 (5th Cir.1989).
B. EVANS
37
Evans challenges his conviction and sentence on several grounds. Among these he contends that his guilty plea was taken in violation of Rule 11, Fed.R.Crim.P., because the district court failed to inform him of the possible maximum and mandatory minimum penalty provided by law for his offense. Because we have determined that Evans's conviction must be reversed on this ground, we limit our analysis to this issue.
38
Rule 11 requires that before accepting a guilty plea the district court shall address the defendant in open court and inform him of, and determine that he understands "the mandatory minimum penalty provided by law, if any, and the maximum possible penalty provided by law...." Fed.R.Crim.P. 11(c)(1). The government concedes that the district court wholly failed to comply with this provision. The government argues, however, that the court's failure was harmless error because the indictment informed Evans of the minimum and maximum penalties. We disagree.
39
Rule 11(h), the harmless error provision of Rule 11, provides that "[a]ny variance from the procedures required by this rule which does not affect substantial rights shall be disregarded." However, we have previously held that a complete failure of the district court to address one or more of the core requirements of Rule 11 ordinarily requires reversal and will not be treated as harmless error. United States v. Dayton, 604 F.2d 931, 939 (5th Cir.1979) (en banc), cert. denied, 445 U.S. 904, 100 S.Ct. 1080, 63 L.Ed.2d 320 (1980). Rule 11(h) does not change this analysis. United States v. Bernal, 861 F.2d 434, 437 (5th Cir.1988), cert. denied, --- U.S. ----, 110 S.Ct. 203, 107 L.Ed.2d 156 (1989). In this case there has been a complete failure to address Rule 11's core requirement that the defendant be informed of and understand the direct consequences of his plea. United States v. Dayton, 604 F.2d at 939. The court's failure to address Evans in open court and inform him of the possible maximum and mandatory minimum sentence provided by law went to the heart of this requirement. See id. at 937; Fed.R.Crim.P. 11 Advisory Committee's Note to 1974 Amendments. This case stands alongside United States v. Molina-Uribe, 853 F.2d 1193, 1199-1200 (5th Cir.1988), in which we vacated a guilty plea because the trial court did not advise the defendant of the statutory special parole term, which like the mandatory minimum and maximum sentences, is specifically covered by Rule 11(c)(1). Accordingly, the harmless error analysis of Rule 11(h) does not apply in this case, and the district court's failure to comply with Rule 11(c)(1) requires that Evans's conviction be reversed.
III.
CONCLUSION
40
Having found no error with regard to Pierce, we affirm both his sentence and conviction. However, since Evans's guilty plea was accepted in violation of Rule 11, we must reverse his conviction and remand to the district court to permit Evans to plead anew.
41
The judgment of the district court is, therefore AFFIRMED as to Pierce. As to Evans the judgment is REVERSED and REMANDED for further proceedings.
1
Pierce argues that agents in this case exceeded the scope of the permissible field test because after they identified the substance in the field they took a small sample and sent it for further analysis. Pierce relies on United States v. Mulder, 808 F.2d 1346 (9th Cir.1987). In Mulder, agents, rather than conduct a field test, removed a sample of the substance and sent it for in-depth analysis. The Ninth Circuit refused to expand the Jacobsen field test rule, reasoning that unlike a field test, in-depth chemical analysis can reveal more about a substance than whether or not it is an illegal narcotic. Id. at 1348. Pierce's reliance on Mulder is misplaced. Unlike Mulder, in this case agents had already identified the substance as cocaine. Therefore, Pierce no longer had a protectable privacy interest in the identity of the substance when it was sent for in-depth testing
2
The government also contends on appeal that Pierce lacks standing to challenge the search at the Los Angeles airport. Since we have determined that there has been no Fourth Amendment violation, we need not consider the government's contention
3
We agree with Pierce that his offense did not involve "five or more participants." Application Note 1 to Sec. 3B1.1 defines a participant as a person who is criminally responsible for the commission of the offense, and the evidence indicates that there were only four "participants" in the offense at issue in this case
4
The government also argues that innocent persons whose services are unwittingly used may be considered in determining whether an organization is "otherwise extensive." Application Note 2 to Sec. 3B1.1 provides that, in construing the term "otherwise extensive," "all persons involved during the course of the entire offense are to be considered. Thus, a fraud that involved only three participants but used the unknowing services of many outsiders could be considered extensive." See also United States v. Mejia-Orosco, 867 F.2d 216, 221 (5th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 3257, 106 L.Ed.2d 602 (1989) (innocent or duped participants can be considered within "otherwise extensive"). Under this analysis, the district court could consider the unknowing services of American Airline employees and other carriers in determining whether the activity was otherwise extensive. In this case it was unnecessary for the court to rely on such reasoning. The evidence of the conspiracy's geographic scope, repeated shipments, and assistance from a network of supply and distribution contacts is sufficient to support the court's finding
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825 F.2d 413
Hassain (Abbas)v.Young (Charles H.), Carlson (Norman A.), Fields (Ogis),Eaton (Paul), IDC Committee, Wedding (Harold), Witlock(Warren), Gilda County Jail, Smith (William French),Williams (J.D.), Christianson (R.J.), Kastner (David), Peace(Lyman), Martinez (B.), Hogg, Gula, Hogg, Truchess, FoodAdministrator, USP, Hines, Barnes (Tony), Noojin (Moni), Hall
NO. 86-2110
United States Court of Appeals,Ninth Circuit.
AUG 03, 1987
1
Appeal From: D.Ariz.
2
AFFIRMED.
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} |
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 12-2165
_____________
ALEJANDRO BONTIA,
Appellant
v.
UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES,
_______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2-11-cv-01739)
District Judge: Honorable Dennis M. Cavanaugh
_______________
Submitted Under Third Circuit LAR 34.1(a)
May 31, 2013
Before: JORDAN and VANASKIE, Circuit Judges, and
RAKOFF*, Senior District Judge.
(Filed: June 20, 2013)
_______________
_______________
* The Honorable Jed S. Rakoff, United States Senior District Judge for the United
States District Court for the Southern District of New York, sitting by designation.
OPINION OF THE COURT
_______________
JORDAN, Circuit Judge.
Alejandro Bontia appeals an order of the United States District Court for the
District of New Jersey dismissing his complaint. He is challenging the denial by the
United States Citizenship and Immigration Service (“USCIS”) of his application for
naturalization. USCIS denied his application because it determined that he lacked good
moral character as a result of his 1992 conviction in New Jersey for criminal sexual
contact with a minor. The District Court granted USCIS‟s motion to dismiss, holding
that Bontia was statutorily ineligible for relief. For the following reasons, we will affirm.
I. Background
Bontia, a citizen and native of the Philippines, is a lawful permanent resident of
the United States living in New Jersey. In 1992, he pled guilty to a charge of “criminal
sexual contact” with a minor, in violation of N.J. Stat. Ann. § 2C:14-3b. The charging
instrument stated that Bontia “intentionally caus[ed] the victim,” who was the thirteen-
year-old daughter of Bontia‟s landlady, to “touch [his] penis …, for the purpose of
degrading or humiliating the victim or to sexually arouse or sexually gratify the actor
… .” (App. at 30.) In his plea colloquy, Bontia, who was twenty-five years old at the
time, admitted that he allowed the victim to touch his “crotch area.” (App. at 40.) He
stated that, although he did not “instruct” the victim to touch him, he was sexually
aroused by her, he returned her kisses, and he did nothing to stop her touching. (App. at
39-40.)
2
In December 2009, Bontia filed an application for naturalization. USCIS denied
the application because it concluded that Bontia‟s 1992 conviction constituted an
aggravated felony, rendering him statutorily unable to demonstrate that he is a person of
“good moral character,” a prerequisite for naturalization under 8 U.S.C. § 1427(a).
Bontia then requested a hearing before an immigration officer. After conducting a review
hearing, the officer affirmed the denial of Bontia‟s application.
Thereafter, Bontia filed a complaint in the District Court, pursuant to 8 U.S.C.
§ 1421(c), seeking de novo review of the denial of his application for naturalization.
USCIS moved for dismissal of the complaint or, alternatively, for summary judgment.
Bontia then filed an amended complaint and a cross-motion for summary judgment. The
District Court denied leave to file an amended complaint, denied Bontia‟s motion for
summary judgment, and granted USCIS‟s motion to dismiss. The Court determined that
the complaint failed to state a claim for relief because Bontia, given his conviction for
criminal sexual contact, is statutorily ineligible for naturalization, and it held that the
proposed amendments to the complaint would be futile because they failed to overcome
Bontia‟s statutory ineligibility.
Bontia then filed this timely appeal.
3
II. Discussion1
In order to qualify for naturalization, an applicant must demonstrate that he,
among other things, “has been and still is a person of good moral character.” 8 U.S.C.
§ 1427(a)(3). “No person shall be regarded as, or found to be, a person of good moral
character” if he “at any time has been convicted of an aggravated felony.” Id.
§ 1101(f)(8). “The term „aggravated felony,‟ applies not only to federal offenses, but
also to violations of state law.” Restrepo v. Att’y Gen., 617 F.3d 787, 791 (3d Cir. 2010).
“[S]exual abuse of a minor” is an “aggravated felony.” 8 U.S.C. § 1101(a)(43)(A). The
question we must answer is whether Bontia‟s 1992 conviction for “criminal sexual
contact” under § 2C:14-3b constitutes sexual abuse of a minor.
To determine whether a state conviction constitutes “sexual abuse of a minor,” we
employ the two-step “categorical approach” set forth in Taylor v. United States, 495 U.S.
575 (1990). First, “we must ascertain the definition for sexual abuse of a minor.”
Restrepo, 617 F.3d at 791. Second, “we must compare this „federal‟ definition to the
state statutory offense in question.” Id. Ordinarily, the categorical approach “prohibits
1
The District Court had jurisdiction under 8 U.S.C. § 1421(c), and we have
jurisdiction under 28 U.S.C. § 1291. “Our review of a district court‟s decision to grant a
motion to dismiss … is plenary.” Gallo v. City of Phila., 161 F.3d 217, 221 (3d Cir.
1998). “We must accept as true all allegations in the complaint and all reasonable
inferences that can be drawn therefrom, and view them in the light most favorable to the
non-moving party.” DeBenedictis v. Merrill Lynch & Co., 492 F.3d 209, 215 (3d Cir.
2007) (internal quotation marks omitted). “The dismissal must be upheld if it appears to
a certainty that no relief could be granted under any set of facts which could be proved.”
Id. (internal quotation marks omitted). In addition, “[w]e review a district court‟s refusal
to allow a plaintiff to amend his complaint” pursuant to Rule 15(a) for “abuse of
discretion.” Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267, 272 (3d Cir. 2001).
4
consideration of evidence other than the statutory definition of the offense, thus
precluding review of the particular facts underlying a conviction.” Stubbs v. Att’y Gen.,
452 F.3d 251, 253-54 (3d Cir. 2006). If, however, the statute of conviction criminalizes a
range of conduct, some of which qualifies as an aggravated felony and some of which
does not, we “must apply a modified categorical approach by which [we] may look
beyond the statutory elements to determine the particular part of the statute under which
the defendant was actually convicted.” United States v. Stinson, 592 F.3d 460, 462 (3d
Cir. 2010). “Such an examination ... is „only to determine which part of the statute the
defendant violated.‟” United States v. Smith, 544 F.3d 781, 786 (7th Cir. 2008) (quoting
United States v. Howell, 531 F.3d 621, 622-23 (8th Cir. 2008)). In the context of a guilty
plea, we “examin[e] the plea agreement, plea colloquy, or some comparable judicial
record of the factual basis for the plea” to determine which variation of the offense was
actually committed. Nijhawan v. Holder, 557 U.S. 29, 35 (2009) (internal quotation
marks omitted). “If conduct that meets the federal definition of sexual abuse of a minor
is necessary for a conviction” under the state statutory provision in question, then a
conviction under that statute “qualifies as a conviction for sexual abuse of a minor and,
by extension, an aggravated felony.” Restrepo, 617 F.3d at 791. If, on the other hand,
“the offense prohibited by” the state statute “is categorically broader than the federal
definition of sexual abuse of a minor,” then the conviction does not constitute an
aggravated felony. Id.
We have previously undertaken step one. In Restrepo, we determined that the
definition of sexual abuse of a minor “is … not clear and unambiguous,” id. at 793, and
5
we accordingly applied Chevron deference to the definition of that phrase given by the
Board of Immigration Appeals (“BIA”) in In re Rodriguez-Rodriguez, 22 I. & N. Dec.
991 (BIA 1999) (en banc). The BIA in Rodriguez-Rodriguez concluded that “sexual
abuse of a minor” was most appropriately defined by 18 U.S.C. 3509(a)(8), a code
section relating to the rights of child victims and witnesses in federal criminal cases. Id.
at 995-96. That section defines “sexual abuse” as “the employment, use, persuasion,
inducement, enticement, or coercion of a child to engage in, or assist another person to
engage in, sexually explicit conduct or the rape, molestation, prostitution, or other form
of sexual exploitation of children, or incest with children … .” 18 U.S.C. § 3509(a)(8).
In addition, “„sexually explicit conduct‟” includes “sexual contact,” which refers to “the
intentional touching, either directly or through clothing, of the genitalia, anus, groin,
breast, inner thigh, or buttocks of any person with an intent to abuse, humiliate, harass,
degrade, or arouse or gratify sexual desire of any person … .” Id. § 3509(a)(9).
Concluding that “the BIA‟s definition of sexual abuse of a minor is a reasonable one and
that it is appropriate to exercise Chevron deference,” we elected in Restrepo to “define
sexual abuse of a minor by reference to § 3509(a).” Restrepo, 617 F.3d at 796.
Thus, our remaining task is to compare that definition of “sexual abuse of a
minor” to § 2C:14-3b, the statute under which Bontia was convicted. Section 2C:14-3b
criminalizes sexual contact if committed under any of several circumstances.2 Because
2
At the time of conviction, those circumstances were that:
(1) The actor uses physical force or coercion, but the victim
does not sustain severe personal injury;
6
some of those circumstances require the victim to be a minor while others do not, we will
apply the modified categorical approach. Based on the charging document and the
transcript of the plea colloquy, we conclude that Bontia‟s conviction under § 2C:14-3b
was based on committing an act of sexual contact under the circumstances described in
§ 2C:14-2c(5) of the 1991 version of the statute, see supra note 2, because the victim was
thirteen years old at the time and Bontia was twenty-five years old.
That provision falls squarely within the definition of sexual abuse of a minor set
forth in §§ 3509(a)(8) and (9). Like the definition of sexual abuse of a minor in those
provisions, the specific provision under which Bontia was convicted criminalizes sexual
contact with a minor (specifically, a minor between the ages of thirteen and sixteen).
And “[s]exual contact” under New Jersey law, similar to its federal counterpart, is “an
intentional touching by the victim or actor, either directly or through clothing, of the
(2) The victim is one whom the actor knew or should have
known was physically helpless, mentally defective or
mentally incapacitated;
(3) The victim is on probation or parole, or is detained in a
hospital, prison or other institution and the actor has
supervisory or disciplinary power over the victim by virtue of
the actor‟s legal, professional or occupational status;
(4) The victim is at least 16 but less than 18 years old and: (a)
The actor is related to the victim by blood or affinity to the
third degree; or (b) The actor has supervisory or disciplinary
power over the victim; or (c) The actor is a foster parent, a
guardian, or stands in loco parentis within the household; or
(5) The victim is at least 13 but less than 16 years old and the
actor is at least 4 years older than the victim.
N.J. Stat. Ann. § 2C:14-2c(1)-(5) (1991).
7
victim‟s or actor‟s intimate parts[3] for the purpose of degrading or humiliating the victim
or sexually arousing or sexually gratifying the actor.” N.J. Stat. Ann. § 2C:14-1d. When
compared side by side with the federal definition of “sexual abuse of a minor,” there is no
aspect of Bontia‟s statute of conviction that is broader than the federal definition. In
other words, the “conduct that meets the federal definition of sexual abuse of a minor is
necessary for a conviction under” § 2C:14-3b, and Bontia‟s conviction under that statute
therefore “qualifies as a conviction for sexual abuse of a minor and, by extension, an
aggravated felony,” Restrepo, 617 F.3d at 791, rendering him ineligible for
naturalization.4
3
“Intimate parts” include the “sexual organs, genital area, anal area, inner thigh,
groin, buttock or breast of a person.” N.J. Stat. Ann. § 2C:14-1e.
4
Based on a misreading of § 3509(a)(9)(A), Bontia argues that his convicted
conduct does not fall within the definition of “sexual abuse” provided by § 3509(a)(8)
because it did not involve “genital-genital, oral-genital, anal-genital, or oral-anal
contact.” (Appellant‟s Br. at 14.) Section 3509(a)(9)(A) provides in full:
the term “sexually explicit conduct” means actual or
simulated – (A) sexual intercourse, including sexual contact
in the manner of genital-genital, oral-genital, anal-genital, or
oral-anal contact, whether between persons of the same or of
opposite sex; sexual contact means the intentional touching,
either directly or through clothing, of the genitalia, anus,
groin, breast, inner thigh, or buttocks of any person with an
intent to abuse, humiliate, harass, degrade, or arouse or
gratify sexual desire of any person[.]
18 U.S.C. § 3509(a)(9)(A). Although the phrasing of that subsection is compact, it
defines two distinct categories of sexually explicit conduct: (1) “sexual intercourse,”
which is defined as “sexual contact in the manner of genital-genital, oral-genital, anal-
genital, or oral-anal contact,” and (2) “sexual contact,” which is defined as “the
intentional touching, either directly or through clothing, of the genitalia, anus, groin,
breast, inner thigh, or buttocks of any person with an intent to abuse, humiliate, harass,
degrade, or arouse or gratify sexual desire of any person.” Id. Bontia‟s argument is that
the definition of “sexually explicit conduct” is limited to § 3509(a)(9)(A)‟s definition of
8
We accordingly affirm the District Court‟s granting of USCIS‟s motion to dismiss
for failure to state a claim.5
the term “sexual intercourse.” We reject that reading because it fails to give meaning to
anything after the semicolon, including the intentional touching of a breast or buttocks,
and it excludes a number of serious crimes commonly prosecuted as sexual abuse. See
e.g., Restrepo, 617 F.3d at 800 (affirming conviction for abusive sexual contact with
hands).
Bontia also argues that § 2C:14-3b is broader than § 3509(a)(8)‟s definition of
“sexual abuse” because it does not require coercion. This is important, Bontia insists,
because he did not coerce his victim, but simply allowed her to touch him in a sexual way
without putting up any resistance. But § 3509(a)(8) does not require coercion in every
case. Rather, in addition to “coercion,” § 3509(a)(8) criminalizes the “employment” or
“use” of a child to engage in sexually explicit conduct. 18 U.S.C. § 3509(a)(8). By
allowing the victim, who as a child was not capable of consenting to sexual contact, to
engage in sexual contact with him, Bontia employed or used her to satisfy his sexual
desires. Cf. Oouch v. U.S. Dep’t of Homeland Sec., 633 F.3d 119, 124 (2d Cir. 2011)
(“[T]o „authorize‟ a child to engage in a sexual performance has the same effect as
„employing‟ or „inducing‟ the child to perform because the law does not view minors as
autonomous actors.”). Thus, § 3509(a)(8)‟s definition entirely encompasses the statute of
conviction, and Bontia‟s argument that he did not coerce his victim allows him no relief.
Finally, Bontia asserts that 8 U.S.C. § 1101(a)(43)‟s inclusion of sexual abuse of a
minor as part of the definition of an aggravated felony cannot be applied to his 1992
conviction, because that provision was not enacted until 1996. The amended definition
“applies regardless of whether the conviction was entered before, on, or after September
30, 1996,” however, id. § 1101(a)(43), and although the amended definition applies only
to “actions taken on or after the date of the enactment,” it applies “regardless of when the
conviction occurred.” Illegal Immigration Reform and Immigrant Responsibility Act of
1996 § 321(c), Pub. L. No. 104-208, 110 Stat. 3009-628; see also Maldonado v. Att’y
Gen., 664 F.3d 1369, 1378 (11th Cir. 2011) (noting that Congress expressed a “clear
intention that the expanded definition of aggravated felony should be applied
retroactively”). Given that Bontia did not apply for naturalized status until 2009, all of
the immigration decisions at issue in this case were made after 1996. The amended
definition of the term aggravated felony therefore encompasses Bontia‟s 1992 conviction.
5
Bontia also argues that the District Court erred in denying him leave to amend
his complaint. For the reasons provided above, however, the amended complaint fails to
state a claim upon which relief may be granted because Bontia has a conviction for an
aggravated felony and he therefore cannot show that he is eligible for naturalization.
9
III. Conclusion
For the foregoing reasons, we will affirm the District Court‟s order granting
USCIS‟s motion to dismiss and denying Bontia‟s motion for leave to amend his
complaint.
10
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In the Supreme Court of Georgia
Decided: October 5, 2015
S15A0965. MERMANN v. TILLITSKI.
MELTON, Justice.
Sanna Mermann, formerly known as Sanna Tillitski (Wife), and
Christopher Tillitski (Husband) were divorced in Bibb County pursuant to a
decree signed on February 24 and filed on February 26, 2009. The divorce
decree incorporated a settlement agreement that stated, in relevant part:
[W]ife shall receive 50% of the Husband’s SEP IRA[1] as of the
date of this agreement and shall have her pro rata share of all
investment experience, including earnings and losses. . . . Wife shall
be responsible for the preparation of a Qualified Domestic Relations
Order (QDRO) incorporating the terms of all paragraphs in Item 14
said QDRO to be prepared within thirty (30) days of the signing of
this Agreement.[2] Said QDRO shall be subject to approval of
Husband’s attorney and the Court of proper jurisdiction in this case,
as well as the Administrator(s) of the aforementioned Plan.
1
The parties and the trial court appear to agree that there are actually
multiple SEP IRAs at issue.
2
The settlement agreement attached to the divorce decree is not dated, but
the parties agreed that the signing date should be deemed to be the date the
decree was signed, February 24, 2009.
More than four years later, Wife submitted a QDRO to the trial court,
which signed it on November 29, 2012. Wife claimed the long delay was caused
by Husband’s failure to give her necessary information and documents. On July
19, 2013, after realizing that Husband had not seen the QDRO, Wife filed a
motion asking the court to vacate the QDRO and enter one approved by
Husband. Husband agreed that the QDRO should be vacated, asserting that
some of the information in it was incorrect.
At the hearing on Wife’s motion held on July 9, 2014, Husband argued
that Wife should not receive any earnings on her portion of the IRAs that
accrued after March 26, 2009 — the date 30 days after the settlement agreement
was signed by which she was supposed to have prepared the QDRO. Husband
claimed that the 30-day deadline imposed on Wife was meant to limit her ability
to benefit from the accounts’ investments and that she should not be allowed to
profit from her failure to comply with the divorce decree. The trial court agreed
with Husband, and on August 25, 2014, entered an order vacating the QDRO,
setting March 31, 2009 as the “date of calculating gains and losses to the total
value of the SEP IRAs as of February 24, 2009,” and requesting that the parties
2
submit an amended QDRO within 30 days that “calculat[ed] [new] figures in
accordance with [the trial court’s] Order.” Wife appeals from this ruling,3 and,
for the reasons that follow, we reverse the trial court’s determination that March
31, 2009 is the proper “date [for] calculating gains and losses to the total value
of the SEP IRAs as of February 24, 2009,” and remand the case for a more
proper consideration of the parameters of any new QDRO to be submitted by the
parties.
“The controlling principle to be applied when interpreting a divorce
decree which incorporates the parties' settlement agreement is to find the intent
of the parties by looking to the ‘four corners’ of the agreement and in the light
of circumstances as they existed at the time the agreement was made.” (Citations
3
Wife filed a timely discretionary application seeking to appeal the trial
court’s order, which this Court granted on October 15, 2014. Husband contends
that Wife’s discretionary application was “improvidently granted” because the
trial court’s August 25, 2014 order was not yet final, in that the parties must still
draft and submit an amended QDRO to the trial court. For this reason, Husband
believes that Wife was required to follow the interlocutory appeal provisions of
OCGA § 5-6-34 (b) and seek a certificate of immediate review, which she did
not. However, Husband is incorrect, as the finality of a divorce decree is not
affected by the presence or absence of a QDRO. The divorce decree here is final,
and the absence of a QDRO to be entered at a later date does not make the order
interlocutory.
3
and punctuation omitted.) Doritis v. Doritis, 294 Ga. 421, 423 (3) (754 SE2d 53)
(2014). Further, just as it is in the case of an equitable allocation of property by
a trial court, where, as here, the division of property has been “determined by
settlement [agreement] . . ., the division of the parties' marital property and the
identification of the parties' separate property set forth in a divorce decree is
fixed, and the trial court does not have the power to modify those terms of the
judgment even if the circumstances of the parties change.” (Footnote omitted;
emphasis supplied.) White v. Howard, 295 Ga. 210, 211-212 (2) (758 SE2d
824) (2014).
With these principles in mind, the plain language of the parties’ settlement
agreement makes clear that Wife was entitled to “receive 50% of the Husband’s
SEP IRA as of the date of th[e] agreement and shall have her pro rata share of
all investment experience, including earnings and losses.” Although the
agreement also states that Wife was tasked with preparing a QDRO within thirty
days, there is nothing in the agreement to suggest that if Wife did not prepare
a QDRO within that time frame that she would not receive any earnings on her
portion of the IRAs that accrued after 30 days from the date of the agreement.
Indeed, there is no language in the settlement agreement indicating that Wife’s
4
failure to prepare a QDRO would affect her right to “have her pro rata share of
all investment experience” in the SEP IRAs in any way. By holding otherwise
and imposing an artificial 30-day window for Wife to “calculat[e] gains and
losses to the total value of the SEP IRAs as of February 24, 2009,” the trial court
improperly modified a fixed division of property as set forth in the parties’
settlement agreement.4 See id. We must therefore reverse the trial court’s
decision and remand this case with the direction that the trial court reconsider
its ruling in light of the plain language of the parties settlement agreement as
outlined above.
Judgment reversed and case remanded with direction. All the Justices
concur.
4
We note that, in this regard, if Husband were concerned that Wife had
violated the divorce decree by having failed to timely submit a QDRO, his
remedy would be to pursue an action for contempt. See generally, e.g., Millner
v. Millner, 260 Ga. 495 (397 SE2d 289) (1990). However, even if Husband
were to succeed in a contempt proceeding, (and we make no ruling on the
potential merits of any such action here), the trial court still would not be
authorized to modify the terms of divorce decree as a remedy for Wife’s alleged
contempt. See, e.g., Ziyad v. El-Amin, 293 Ga. 871 (750 SE2d 337) (2013) (“It
is settled law, of course, that a court cannot modify a final decree of divorce on
a motion for contempt”) (citation omitted).
5
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-6485
DERRY LORENZO WILLIAMS,
Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Frederic N. Smalkin, District Judge. (CR-
92-126, CA-96-199-S)
Submitted: September 23, 1997 Decided: November 4, 1997
Before HALL, WILKINS, and HAMILTON, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Derry Lorenzo Williams, Appellant Pro Se. Richard Douglas Bennett,
MILES & STOCKBRIDGE, Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Appellant appeals the district court's orders denying his
motion filed under 28 U.S.C. § 2255 (1994) (current version at 28
U.S.C.A. § 2255 (West 1994 & Supp. 1997)) and his motion for recon-
sideration. We have reviewed the record and the district court's
opinion and find no reversible error. Accordingly, we affirm. See
United States v. Williams, Nos. CR-92-126; CA-96-199-S (D. Md. Mar.
1 & 27, 1996); Lindh v. Murphy, 117 S. Ct. 2059 (1997). We dis-
pense with oral argument because the facts and legal contentions
are adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED
2
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64 So.3d 1158 (2009)
WILLIAM MITCHELL
v.
STATE.
No. CR-08-1427.
Court of Criminal Appeals of Alabama.
October 30, 2009.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 15, 2007
Charles R. Fulbruge III
Clerk
No. 05-11166
Summary Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RAMIRO PACHECO, also known as Ramiro Pacheco, Jr.,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:05-CR-84-ALL
--------------------
Before DeMOSS, STEWART, and PRADO, Circuit Judges.
PER CURIAM:*
Ramiro Pacheco appeals his illegal reentry conviction and
sentence. Pacheco’s constitutional challenge to 8 U.S.C.
§ 1326(b) is foreclosed by Almendarez-Torres v. United States,
523 U.S. 224, 235 (1998). Although Pacheco contends that
Almendarez-Torres was incorrectly decided and that a majority of
the Supreme Court would overrule Almendarez-Torres in light of
Apprendi v. New Jersey, 530 U.S. 466 (2000), we have repeatedly
rejected such arguments on the basis that Almendarez-Torres
remains binding. See United States v. Garza-Lopez, 410 F.3d 268,
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 05-11166
-2-
276 (5th Cir.), cert. denied, 126 S. Ct. 298 (2005). Pacheco
properly concedes that his argument is foreclosed in light of
Almendarez-Torres and circuit precedent, but he raises it here to
preserve it for further review.
Pacheco’s argument that the sentencing disparities created
by U.S.S.G. § 5K3.1’s fast-track sentencing program rendered his
sentence unreasonable is foreclosed by United States v. Aguirre-
Villa, 460 F.3d 681, 682 (5th Cir.), pet. for cert. filed (Nov.
13, 2006) (06-7792). Finally, Pacheco has not established under
plain error review that restricting the fast-track program to
only certain geographic locations results in due process and
equal protection violations.
AFFIRMED.
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405 F.Supp.2d 587 (2005)
MONTROSE PARKWAY ALTERNATIVES COALITION, et al., Plaintiffs,
v.
U.S. ARMY CORPS OF ENGINEERS, et al., Defendants.
No. CIV.A. AW-05-3096.
United States District Court, D. Maryland, Southern Division.
December 16, 2005.
*588 *589 Andrea Carol Ferster, Law Office of Andrea C. Ferster, Washington, DC, Jeffrey M. Mervis, Mervis and Associates LLC, Rockville, MD, for Plaintiffs.
Kent E. Hanson, Sara E. Culley, United States Department of Justice, Washington, DC, Kristine L. Sendek Smith, Office of the United States Attorney, Baltimore, MD, for Defendants.
MEMORANDUM OPINION
WILLIAMS, District Judge.
This case stems from the construction of the Montrose Parkway, a proposed fourlane highway that will cross Montgomery County, Maryland. Plaintiffs in the case are Montrose Parkway Alternatives Coalition, a Maryland nonprofit organization established to educate residents of Montgomery County about the environmental and quality of life issues surrounding the planned Montrose Parkway, as well as Steve Goldstein, Manuel and Nancy Zymelman, residents of the Montrose Woods development and Steve Epstein, a resident of Luxmanor (collectively, "Plaintiffs"). Defendants are the United States Army Corps of Engineers (the "Corps"), a federal *590 agency responsible for regulating all dredging and filling activities in United States waters, Col. Robert Davis, Baltimore District Commander of the U.S. Army Corps, and Lt. General Carl A. Strock, Chief Engineer of the United States Army Corps of Engineers (collectively, "Defendants"). Montgomery County has intervened as a Defendant. Plaintiffs' Complaint alleges that Defendants violated the National Environmental Policy Act and the Clean Water Act. Currently pending before the Court is Plaintiffs' Motion for a Preliminary Injunction [2]. On December 12, 2005, the Court held a hearing concerning the motion and heard from all the parties. In addition, the Court heard from Montgomery County's expert witness, Jeffrey Lindsey, who gave testimony regarding the possible financial harm to the County if this Court were to enter a preliminary injunction in this case. Having considered this testimony as well as the arguments of Plaintiffs, Defendants and Montgomery County, this Court will deny Plaintiffs' Motion for Preliminary Injunction for the reasons set forth more fully below.
FACTUAL AND PROCEDURAL BACKGROUND
Montrose Parkway is a proposed four-lane divided highway to connect I-270 and Veirs Mill Road. As planned, the Montrose Parkway would be constructed in three phases. The first segment, referred to as Montrose Parkway West, would consist of a new four-lane divided highway between Tildenwood Drive and Old Old Georgetown Road. The second segment, referred to as the Maryland Route 355/Montrose Interchange would connect Montrose Parkway West to Randolph Road. Finally, the third segment, referred to as Montrose Parkway East, would consist of a new four-lane divided highway between Randolph Road and Veirs Mill Road.
The Montrose Parkway project is set to be funded and constructed entirely by Montgomery County. Montgomery County has only sought approval from the federal government for the .94 acres of wetlands impacted by the construction of Montrose Parkway West.
On March 22, 2004, the Montgomery County Department of Public Works and Transportation ("Montgomery County") submitted an application to the Maryland Department of the Environment and the Corps to proceed with Montrose Parkway West. This application sought a Nontidal Wetlands permit from the Maryland Department of the Environment and a Clean Water Act Section 404 permit from the Corps under the terms of the Maryland State Programmatic General Permit, which allows projects that have a minimal impact on the environment and impact less than one acre of wetlands to proceed without further review under the National Environment Policy Act ("NEPA").
The Corps held a public hearing regarding Montgomery County's application for a Maryland Department of the Environment and Corps permit for the Montrose Parkway West project. The Corps used the public comments from the hearing in the preparation of an Environmental Assessment for Montrose Parkway West.
On September 7, 2005, the Army Corps of Engineers issued a Section 404 permit that authorized Montgomery County to discharge fill materials into .94 acres of jurisdictional waters of the United States to construct a crossing of a perennial tributary to Old Farm Creek and a crossing of an unnamed intermittent tributary.[1] The *591 permit included an Environmental Assessment, Statement of Findings, and a review and compliance determination under the Army Corp of Engineers' Section 404(b) Guidelines. The Environmental Assessment confined its analysis to the crossings of jurisdictional streams and wetlands, including aquatic resources, and a limited amount of roadway approaching the two crossings. (Compl. ¶ 25.) In addition, the Army Corps of Engineers' Environmental Assessment only considered the impact of the construction of Montrose Parkway West, not the larger Montrose Parkway project.
Plaintiffs moved for a temporary stay of construction activity, which the Maryland Office of Administrative Hearings denied on October 17, 2005. As of the present date, construction of Montrose Parkway West has commenced.
Montgomery County has stated that Montrose Parkway West will "significantly relieve congestion on existing Montrose Road and provide access to North Bethesda." In addition, the State of Maryland has approved a "separate grade separated interchange project" for Maryland 355, a state road, that would require the State to tear out a portion of Montrose Parkway West from Old Old Georgetown Road to Randolph Road. "Rather than expend funds for work that would be torn out for another project, Montgomery County has elected to phase the Montrose Parkway West project so that it terminates at its intersection with Old Old Georgetown Road." Although the State has received approval for the interchange project, Montgomery County plans to build between Montrose West Parkway from Old Old Georgetown Road to Randolph Road if the State chooses not to proceed with the Maryland 355 grade separation.
On November 15, 2005, Plaintiffs filed a Complaint and Motion for Temporary Restraining Order and Preliminary Injunction. In the Complaint, Plaintiffs allege that the Corps violated the National Environmental Policy Act and the Clean Air Act by: (1) failing to consider the impact of the construction of the Montrose Parkway West as a whole and the cumulative impact of the proposed new interchange between Montrose Parkway and Maryland Route 355 and (2) failing to provide the public either with notice or an opportunity to comment on its Environmental Assessment prior to its Finding of No Significant Impact ("FONSI"). The Complaint requests that this Court grant declaratory relief under NEPA and the Clean Water Act, invalidating the Section 404 permit the Corps issued on September 7, 2005. The Complaint also requests that this Court remand the case for further administrative action to officially suspend or revoke the September 7, 2005 permit. Finally, the Complaint seeks injunctive relief and asks the Court to preliminarily and permanently enjoin Defendants from issuing or reissuing any permits relating to the Montrose Parkway West project until Defendants can demonstrate compliance with NEPA, the Clean Water Act, and the applicable implementing regulations. Plaintiffs' Motion also alleges that "[o]n information and belief, the County is now poised to construct a bridge over Old Farm Creek . . . which will result in the *592 irreparable destruction of federally-protected wetlands."
This Court denied Plaintiffs' request for a Temporary Restraining Order on November 17, 2005, but ordered the parties to submit a briefing schedule for a hearing on the Preliminary Injunction. While Plaintiffs' Complaint avers that Defendants violated NEPA and the Clean Water Act, the Motion for Preliminary Injunction focuses solely on the likelihood of success of the NEPA claims.
STANDARD OF REVIEW
To determine the appropriateness of a preliminary injunction, the four-part test established in Blackwelder Furniture Co. v. Seilig Mfg. Co., Inc., 550 F.2d 189 (4th Cir.1977) requires courts in this Circuit to weigh:
(1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied;
(2) the likelihood of harm to the defendant if the requested relief is granted;
(3) the likelihood that the plaintiff will succeed on the merits; and
(4) the public interest.
Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 811-12 (4th Cir.1991) (internal quotations and citations omitted); see also Blackwelder, 550 F.2d at 193-95.
The balance of harm analysis should precede any inquiry into the likelihood of success on the merits. Direx, 952 F.2d at 813. Therefore, as a initial matter, the Court must determine whether the plaintiff has demonstrated irreparable harm by "clear and convincing evidence" in order to obtain relief. Id. at 818. If the plaintiff makes such a showing, the court must then balance the likelihood of harm to the plaintiff against the likelihood of harm to the defendant. See Scotts Co. v. United Industries Corp., 315 F.3d 264, 271 (4th Cir.2002); Direx, 952 F.2d at 812. Weighing the relative harm to the defendant against the harm to the plaintiff:
If the balance of the hardships tips decidedly in favor of the plaintiff, then typically it will be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult and doubtful, as to make them fair ground for litigation and thus for more deliberate investigation. But if the balance of hardships is substantially equal as between the plaintiff and defendant, then the probability of success begins to assume real significance, and interim relief is more likely to require a clear showing of a likelihood of success.
Scotts, 315 F.3d at 271 (internal citations and quotations omitted). Where the balance of hardships does not tip decidedly or significantly in favor of the plaintiff, the plaintiff must prove "a probability (not mere possibility) of success of the ultimate trial on the merits. `Probability of success' implies that the plaintiff must have a very clear and strong case." Direx, 952 F.2d at 813 (internal quotations omitted).
After balancing the harms and determining the likelihood of success on the merits, the court must analyze the final factor, the public interest. Direx, 952 F.2d at 814.
DISCUSSION
I. National Environmental Protection Act of 1969
The National Environmental Protection Act, enacted in 1969, represents the culmination of efforts, beginning in the late 1950s, to protect our natural environment. See Matthew J. Lindstrom, Procedures Without Purpose: The Withering Away of the National Environmental Policy Act's Substantive Law, 20 J. Land. Resources & Envtl. L. 245, 248 (2000). NEPA enjoyed *593 widespread support, and President Nixon signed NEPA into law on January 1, 1970 on national television. See Lindstrom, supra, at 245. Indeed, one commentator has described NEPA as the "Magna Carta" of environmental law. See Daniel R. Mandelker, NEPA Law and Litigation: The National Environmental Policy Act § 1:01 (2d ed.1984).
NEPA reflects our national commitment to curbing unfettered "growth" and mandates that agencies examine the environmental consequences of federal actions. To this end, the statute provides that:
[t]he Congress authorizes and directs that, to the fullest extent possible: (1) the policies, regulations, and public laws of the United States shall be interpreted and administered in accordance with the policies set forth in this chapter, and (2) all agencies of the Federal Government shall
. . . . .
(C) include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on
(i) the environmental impact of the proposed action,
(ii) any adverse environmental effects which cannot be avoided should the proposal be implemented,
(iii) alternatives to the proposed action,
(iv) the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and
(v) any irreversible and irretrievable commitments of resources which would be involved in the proposed action should it be implemented.
. . . . .
The procedures in this subparagraph shall not relieve the Federal official of his responsibilities for the scope, objectivity, and content of the entire statement or of any other responsibility under this chapter; and further, this subparagraph does not affect the legal sufficiency of statements prepared by State agencies with less than statewide jurisdiction
(E) study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources
. . . .
42 U.S.C. § 4332 (2005).
While NEPA establishes "significant substantive goals for the Nation," the Supreme Court has reiterated that NEPA imposes procedural duties on agencies, designed "to insure a fully informed and well-considered decision." See Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). NEPA does not compel a court to invalidate an agency decision that differs from "the decision this Court would have reached . . . [as a] member[] of the decisionmaking unit of the agency." Id.; see also Strycker's Bay Neighborhood Council, Inc. v. City of New York, 444 U.S. 223, 227-28, 100 S.Ct. 497, 62 L.Ed.2d 433 (1980).
It is against this background that the Court considers Plaintiffs' claims that Defendants violated NEPA's public participation requirements and impermissibly limited the scope of its Environmental Assessment.
II. Plaintiffs' Likelihood of Success on the Merits
The extent and nature of Plaintiffs' harm is inextricably linked to the merits of Plaintiffs' suit. Plaintiffs have alleged that *594 they suffered a harm when the Corps approved the permit in violation of NEPA's provisions. As the violation constitutes Plaintiffs' purported harm, this Court must begin its analysis with the likelihood that Plaintiffs will succeed on the merits of the case.
Because NEPA does not have a civil enforcement provision, this Court may only issue a preliminary injunction if the Corps' actions violated the Administrative Procedure Act, 5 U.S.C. §§ 701 to 706. Thus, to prevail, Plaintiffs must show that the agency's action was "arbitrary and capricious, an abuse of discretion, or contrary to law." 5 U.S.C. § 706(2)(A).
A.
Plaintiffs first argue that the Corps acted arbitrarily and capriciously, alleging that the Corps failed to take the requisite "hard look" at the full scope of the environmental impact of the Montrose Parkway West project. Cf. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989) ("The sweeping policy goals announced in § 101 of NEPA are thus realized through a set of `action-forcing' procedures that require that agencies take a `hard look' at environmental consequences . . . and that provide for broad dissemination of relevant environmental information. Although these procedures are almost certain to affect the agency's substantive decision, it is now well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process." (internal citations and quotations omitted)). Pursuant to NEPA's implementing regulations, the Corps may demonstrate its compliance with the statute by issuing an Environmental Assessment ("EA")[2] if the Corps makes a Finding of No Significant Impact ("FONSI")[3] on the environment or issuing a more detailed Environmental Impact Statement ("EIS").
The Corps' regulations provide that:
FONSI shall be prepared for a proposed action, not categorically excluded, for which an EIS will not be prepared. The FONSI will be a brief summary document. . . . In the case of operation and maintenance activities involving the discharge of dredged or fill material requiring *595 a public notice, the notice will indicate the availability of the EA/FONSI.
33 C.F.R. § 230.11. The Corps procedures also make clear that most permits "normally require only an EA." 33 C.F.R. § 230.7(a). In interpreting these regulations, in light of the overarching purpose of NEPA, the Fourth Circuit has explained that an agency takes a "hard look" "when it obtains opinions from its own experts, obtains opinions from experts outside the agency, gives careful scientific scrutiny and responds to all legitimate concerns that are raised." Hughes River Watershed Conservancy v. Johnson, 165 F.3d 283, 288 (4th Cir.1999) (citing Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 378-85, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989)). "As long as the adverse environmental effects of a proposed action are sufficiently identified and evaluated, an agency is vested with discretion to determine under NEPA that other values outweigh the environmental costs." Id. (internal citations omitted). In addition, a court must defer to an agency's decision to rely on an EA instead of preparing an EIS. See Mt. Lookout-Mt. Nebo Property Protection Ass'n v. FERC, 143 F.3d 165, 172 (4th Cir.1998).
The record reflects that the Corps took a "hard look" at the environmental impact of the Montrose Parkway West. In the EA, the Corps stated that it received comments not only from its own experts, but from the United States Fish and Wildlife Service, the State Historic Preservation Officer, the National Capital Park and Planning Commission, as well as from Plaintiffs. In addition, the Corps' EA included an analysis of many of the concerns Plaintiffs have raised. Specifically, the EA weighed the project's impact on wildlife, wetlands and streams, land use, safety, and secondary and cumulative impacts. After considering these and other factors, the Corps concluded that:
Impacts to wetlands have been minimized through the use of bridging, retaining walls, and underground stormwater management control. The .14 acre of temporarily disturbed wetlands would be restored upon completion of construction. The .2 acres of permanently destroyed wetlands would be replaced with created wetlands at a 1:1 ratio. In addition, a bioretention facility would be constructed to treat the runoff from a parking lot near Tilden Lane, and 1200 feet of Booze Creek would be restored to stabilize the banks and protect exposed sanitary sewers in the stream bed.
Corps 404 Permit, at 23.
Plaintiffs believe that the holding in Arlington Coalition on Transportation v. Volpe, 458 F.2d 1323 (4th Cir.1972) provides support for their position that a preliminary injunction should issue. This Court disagrees. The dispute in Arlington Coalition arose out of the construction of portions of Interstate I-66, a six-lane highway; the I-66 project was part of the Federal Interstate Highway System and funded almost exclusively by the federal government. Id. at 1328. In addition, in Arlington Coalition, Defendants had not assessed any of the environmental impacts of the proposed highway before proceeding with the highway project. Id. at 1330 ("It is undisputed that prior to the filing of this suit no Section 102(C) statement had been prepared for the project in question. It is also uncontested that this six-to-eight-lane highway is a `major Federal action significantly affecting the quality of the human environment'"). In sum, Arlington Coalition stands for the proposition that the federal government cannot fund and build a major interstate highway without complying with NEPA and preparing an EIS. *596 This case, however, does not hold that a federal agency must prepare an EIS for all state-funded projects that require federal approval.
Nor does this Court adopt the view advanced by Plaintiffs that Montgomery County's authorization of construction shortly after receiving the Corps' permit indicates that Defendants did not comply with NEPA. Plaintiffs contend that the case of Maryland Conservation Council v. Gilchrist, 808 F.2d 1039 (4th Cir.1986) counsels in favor of granting their request for a preliminary injunction. The Gilchrist court looked at a myriad of factors to determine that the highway designed to pass through a state park qualified as a major "federal action" within the meaning of NEPA. In Gilchrist, Montgomery County sought to build the Great Seneca Highway through a state park and had used federal funds to purchase much of the park land. Id. at 1040-41, 1042. To complete the highway, the County needed federal approval from the Secretary of the Interior to convert park land to another outdoor recreation use and from the Secretary of the Army to dredge wetlands. Id. at 1042. In addition, in Gilchrist, the County anticipated that it might seek additional federal funds, and the Transportation Act would require the Secretary of Transportation to approve the use of park land for a transportation program. Id. After analyzing all of these facts, the Fourth Circuit reasonably concluded that the construction of the Great Seneca Highway constituted a "major federal action" that required the preparation of an EIS before any construction on the highway would begin. Id. at 1042.
Yet, the factual differences between that case and the current dispute render Gilchrist inapposite. In Gilchrist, unlike here, the County needed to seek approval from multiple federal agencies to build the Great Seneca Highway and sought federal funds for the project. These facts transformed a local highway project into "a major federal action." In this case, the Corps was not involved in the planning or construction of the proposed roadway. Also, in Gilchrist, the County planned to proceed with construction before the Secretary of Transportation completed an EIS. Here, the Corps completed an EA after deciding an EIS was not necessary, and Montgomery County issued the notice to proceed once the Corps approved the County's request for a 404 permit. Nothing in the record suggests that Montgomery County began construction of the project before the issuance of the Corps' EA.
Although the Corps did not prepare the type of detailed environmental statement that the Plaintiffs would have liked, the facts in the record do not substantiate Plaintiffs' claim that the Corps violated NEPA.
B.
Plaintiffs also contend that the Corps did not comply with NEPA's public participation requirements. In support of this argument, Plaintiffs cite Council on Environmental Quality ("CEQ") guidance, which suggests that an EA should be made available for public review in advance of an agency's decision whether to issue an EIS. See Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 Fed.Reg. 18,026 (1981). However, as both Defendants and Intervenor have pointed out, this guidance does not apply to the Corps. The relevant regulations only require that the Corps involve the public "to the extent practicable." See 40 C.F.R. § 1501.4(b). Moreover, the vast majority of circuits addressing this issue have found that the regulations do not require an agency to circulate an EA for public comment. See, e.g., Alliance to Protect Nantucket *597 Sound v. United States Dept. of Army, 398 F.3d 105, 115 (1st Cir.2005) (no requirement to circulate a draft EA); Greater Yellowstone Coalition v. Flowers, 359 F.3d 1257, 1279 (10th Cir.2004) (same); see also Pogliani v. United States Army Corps of Eng'rs, 306 F.3d 1235, 1238-39 (2d Cir.2002); Como-Falcon Cmty. Coalition v. U.S. Dep't of Labor, 609 F.2d 342, 345 (8th Cir.1979).
As one case cited by Plaintiffs explains:
[A]lthough the [NEPA] regulations do not require circulation of a draft EA, they do require that the public be given as much environmental information as is practicable, prior to completion of the EA, so that the public has a sufficient basis to address those subject areas that the agency must consider in preparing the EA. . . . The way in which the information is provided is less important than that a sufficient amount of environmental information as much as practicable be provided so that a member of the public can weigh in on the significant decisions that the agency will make in preparing the EA.
Sierra Nevada Forest Protection Campaign v. Weingardt, 376 F.Supp.2d 984, 991 (E.D.Cal.2005) (emphasis added).
In fact, the Corps did provide an opportunity for Plaintiffs to comment on Montgomery County's permit application. Plaintiffs contend that the Public Notice provided only generalized information, but the notice gave details about the expected impacts to aquatic resources and was accompanied by maps of the proposed areas of construction. That the notice did not contain specific facts about the proposed EA does not make Montgomery County's Public Notice per se defective under NEPA. See, e.g., Providence Road Community Ass'n. v. EPA, 683 F.2d 80, 82 (4th Cir.1982) (holding that notice of a hearing that included planning documents and did not disclose location of proposed project complied with NEPA's requirements). Plaintiffs have described this notice as pro forma and lacking, but the notice described the full extent of the work as well as the Maryland 355 project. Furthermore, Plaintiffs have not stated what additional relevant information they would have presented during the notice period had the Public Notice contained more environmental information about the Montrose Parkway West project. Under these circumstances, this Court cannot agree with Plaintiffs that the Public Notice was deficient as a matter of law.
C.
Finally, Plaintiffs claim that the Army Corps erroneously refused to consider the impact of the entire Montrose Parkway project rather than the two crossings in its jurisdiction. In essence, Plaintiffs claim that Defendants segmented the project to minimize its environmental impact.
By its own terms, NEPA only governs major federal actions. See 42 U.S.C. § 4332. As previously discussed, courts have recognized that federal participation may federalize the entire project. See, e.g., Gilchrist, 808 F.2d 1039 (holding federal involvement in construction of state roadway made project major federal action); Arlington Coalition on Transportation v. Volpe, 458 F.2d 1323 (holding construction of interstate highway with federal funds through state was a federal action); see also Mandelker, supra, § 8:19.
While a non-federal project may be transformed into a federal action, it does not follow that all construction that requires federal approval becomes "federalized." Winnebago Tribe of Nebraska v. Ray, 621 F.2d 269 (8th Cir.1980), represents a leading case on this issue. In Winnebago Tribe, the appellees, Nebraska *598 Public Power District, planned to construct a transmission line and applied to the Corps for a permit for a portion of the project that would cross the Missouri River. Id. at 270. Granting the permit, the Corps prepared an environmental effect assessment that only examined the environmental effects on the river-crossing portion of the line, or approximately 1.25 miles out of a 67 mile project. Id. The Eighth Circuit upheld the Corps' decision to confine the scope of its environmental review, reasoning that "Corps did not have sufficient control and responsibility to require it to study the entire project." Id. at 272; see also Wetlands Action Network v. United States Army Corps of Eng'rs, 222 F.3d 1105, 1115 (9th Cir.2000) (holding that the Corps did not have to evaluate environmental impact of all three phases of a project when it issued a permit to fill over 16.1 acres wetlands); Save the Bay, Inc. v. United States Corps of Eng'rs, 610 F.2d 322 (5th Cir.1980) (holding that the Corps' decision to issue pollution permit to discharge effluents was not enough to "federalize" private construction); Mandelker, supra, § 8:19.
In response to these cases and the confusion over this precise issue, the Corps revised its regulations to define the scope of the Corps' NEPA review of regulatory actions. See 53 Fed.Reg. 3,120-01. These regulations prove instructive and state that:
For those regulated activities that comprise merely a link in a transportation .. project, the scope of analysis should address the Federal action, i.e., the specific activity requiring a DA permit and any other portion of the project that is within the control or responsibility of the Corps of Engineers (or other Federal agencies).
For example, a 50-mile electrical transmission cable crossing a 1¼ mile wide river that is a navigable water of the United States requires a DA permit. Neither the origin and destination of the cable nor its route to and from the navigable water, except as the route applies to the location and configuration of the crossing, are within the control or responsibility of the Corps of Engineers. Those matters would not be included in the scope of analysis which, in this case, would address the impacts of the specific cable crossing.
Conversely, for those activities that require a DA permit for a major portion of a transportation or utility transmission project, so that the Corps permit bears upon the origin and destination as well as the route of the project outside the Corps regulatory boundaries, the scope of analysis should include those portions of the project outside the boundaries of the Corps section 10/404 regulatory jurisdiction. To use the same example, if 30 miles of the 50-mile transmission line crossed wetlands or other "waters of the United States," the scope of analysis should reflect impacts of the whole 50-mile transmission line.
33 C.F.R. Part 325, App. B, § 7(b)(3). Both the caselaw and the Corps regulations make clear that the Corps has an obligation to assess non-jurisdictional aspects of a project only if the Corps has significant "control and responsibility" over those portions of the project.
Plaintiffs do not ask this Court to invalidate the Corps' regulations, and the Corps' determination of the proper scope of the environmental review is entitled to deference. See Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 375-76, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989) (holding that courts should defer the Corps' decision not to issue a second supplemental EIS); see also Wetlands Action Network, 222 F.3d at 1115 (9th Cir.2000) *599 (stating that the Corps' decision to limit scope of environmental review is accorded deference). This case closely resembles the first example in the Corps' NEPA regulations. The Corps lacks control over the entire Montrose Parkway West project. Rather, its jurisdiction extends only to the navigable waters, or the project's crossing with Old Farm Creek and the unnamed intermittent tributary. The wet-lands are not interspersed throughout, but only intersect with a small area of the proposed roadway. Cf. Save Our Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1121-24 (9th Cir.2005) (upholding a district court ruling that the Corps improperly confined its NEPA analysis where federal waters ran throughout the proposed site and where two federal agencies objected to the Corps' acreage limitations). Also, it appears significant that the Environmental Protection Agency, United States Fish and Wildlife Services, National Marine Fisheries Service, and the State Historic Preservation Officer did not object to the Corps' decision to limit its analysis to the two jurisdictional crossings. Corps 404 Permit, at 5. The Corps' regulations expressly contemplate the appropriate scope of the Corps' environmental review for this type of construction and state that projects such as Montrose Parkway West are not federalized. Therefore, the Corps' decision to examine the jurisdictional crossings was not arbitrary and capricious.
Although Plaintiffs argue that the Corps did not comply with NEPA's procedural requirements, environmental jurisprudence simply does not provide a firm basis for this assertion. The Corps gave Plaintiffs an opportunity to voice their concerns about the Montrose Parkway West proposal and even incorporated some of these comments into the EA. All this evidence indicates that the Corps seriously considered the environmental impact of issuing the permit, and, as such, Plaintiffs have not demonstrated a strong likelihood of success on the merits of this case. Cf. Strycker's Bay Neighborhood Council, 444 U.S. at 227, 100 S.Ct. 497 ("[O]nce an agency has made a decision subject to NEPA's procedural requirements, the only role for a court is to insure that the agency has considered the environmental consequences; it cannot interject itself within the area of discretion of the executive."); see also Fund For Animals, Inc. v. Rice, 85 F.3d 535, 545-46 (11th Cir.1996) (same).
III. Plaintiffs' Alleged Harm
Plaintiffs have alleged that injunctive relief is needed to prevent Montgomery County from "irreparably harming the environment." In particular, Plaintiffs assert that construction of the Montrose Parkway West would irreparably harm the natural character and aquatic resources of Old Farm Creek and the upland forests and habitat. (Pl.Mtn.Prelim.16.)
In a suit brought to enforce NEPA, failure of appropriate federal decision-makers to take environmental harm into account constitutes irreparable harm. See Jones v. D.C. Redevelopment Land Agency, 499 F.2d 502, 512 (D.C.Cir.1974). Though an environmental injury often times is irreparable, presuming irreparable harm in all environmental cases would contravene traditional equitable principles. See Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 544-45, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987). Even in an environmental case, the party seeking the injunction still bears the burden of showing that the balance of harms favors granting the requested relief.
This Court has found that Plaintiffs have not made a strong showing that a NEPA violation has occurred. This Court, however, does acknowledge that the construction of Montrose Parkway West will result *600 in some harm to the environment. Therefore, this Court finds that Plaintiffs have presented evidence of the likelihood of irreparable injury, absent this Court granting injunctive relief.[4]
IV. Harm to Defendants
Plaintiffs have argued that this Court should discount Defendants' harm because this harm was "self-inflicted" and caused by Defendants' haste. Specifically, Plaintiffs claim that Defendants "jumped the gun" and therefore their harm is not entitled to any equitable consideration. This statement, however, minimizes the harm that Defendants might suffer if this Court entered a preliminary injunction.
Because Montgomery County has initiated construction already, the County would incur substantial costs if this Court enjoins the construction. Halting construction on the Montrose Parkway West would force the County to abandon the site. At first, Montgomery County estimated that it would cost $500,000 for demobilization, another $500,000 for remobilization, and $36,000 for stabilization of the area, with a total cost of $1,061,000 plus $16,700 each day the contractor sits idle. At the hearing, however, Montgomery County's expert, Jeffrey Lindsey ("Mr.Lindsey") testified that any delay in construction may cost the County more than originally thought. In particular, when asked about the effect of halting construction, he stated that stopping construction at this phase would be disastrous. Using the critical path method project management technique, Mr. Lindsey estimated that a thirty-day delay could extend the duration of the Montrose Parkway West project by one year.[5] He also testified that the cost of demobilization, stabilization, remobilization, and overhead could reach as much as $100,000 per day.
Montgomery County also has stated that Montrose Parkway West will relieve substandard and congested conditions and has averred that the stretch of road affected by construction of the Montrose Parkway has at least five failing intersections. As a result, the County believes that "[e]ach day that this important project is delayed, the public, businesses, residences and institutions in the area will be subject to the higher incidence of accidents with the accompanying personal injury and property damages and escalating congestion."
Furthermore, Defendants and Intervenor contend that the entry of a preliminary injunction would result in continuing harm to the environment. In the Section 404 permit, the Corps observed that the Montrose Parkway West project may have a beneficial impact on existing degraded and *601 sensitive areas. Montgomery County plans to build a bio-retention facility along Old Farm Creek, south of Tilden Lane, "to treat runoff from 22,500 square feet of impervious surface that currently flows untreated into Old Farm Creek." (Emphasis added). The project would also restore a 1200-foot reach of Booze Creek, located in the watershed of Cabin John Creek, to control bank erosion.
Considering the potential negative impact to Defendants and Intervenor Montgomery County and based on this Court's determination that the Defendants have presented evidence of compliance with NEPA, this Court cannot ignore Defendants' harm.
V. The Public Interest
While Plaintiffs assert that granting their motion would protect the environment, wetlands, and various wildlife, Defendants have a countervailing interest in completing this project to relieve traffic and congestion in Montgomery County and to remedy current environmental harms. At best, either side could argue that the public interest favors their position.
CONCLUSION
This Court remains sensitive to NEPA's charge to "foster and promote the general welfare [and] to create and maintain conditions under which man and nature can exist in productive harmony." 42 U.S.C. § 4331(a). As Judge Skelly Wright so aptly stated:
Several recently enacted statutes attest to the commitment of the Government to control, at long last, the destructive engine of material "progress." But it remains to be seen whether the promise of this legislation will become a reality. Therein lies the judicial role. In these cases, we must for the first time interpret the broadest and perhaps most important of the recent statutes: the National Environmental Policy Act of 1969 (NEPA). We must assess claims that one of the agencies charged with its administration has failed to live up to the congressional mandate. Our duty, in short, is to see that important legislative purposes, heralded in the halls of Congress, are not lost or misdirected in the vast hallways of the federal bureaucracy
Calvert Cliffs' Coordinating Comm., Inc. v. U.S. Atomic Energy Comm'n, 449 F.2d 1109, 1111 (D.C.Cir.1971). Yet, even when acting in furtherance of this important role, this Court must remain equally mindful of the risk of juriscentrism. Congress enacted NEPA to ensure that our government weighs the environmental effects of its decisions, but the statute does not specify the precise means to achieve this goal, giving federal and local governments some flexibility. Where no clear violation of the statute has occurred and where, as here, local and federal officials have followed the letter of the statute, this Court cannot and should not invalidate this process and substitute its own opinion for that of agency experts. It is this belief that leads this Court to conclude that the Blackwelder factors tip decidedly in favor of Defendants and that Plaintiffs' Motion for a Preliminary Injunction should be denied.
As such, the Court will DENY Plaintiffs' Motion for a Preliminary Injunction [2]. An Order consistent with this Opinion will follow.
ORDER
For the reasons stated in the accompanying Memorandum Opinion, dated December 16, 2005, IT IS this 16th day of December, 2005, by the United States District Court for the District of Maryland, hereby ORDERED:
*602 1. That Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction [2] BE, and hereby IS, DENIED;
2. That once all Defendants file an answer or otherwise responsive pleading, if they have not already, this Court will consider issues related to scheduling; AND
3. That the Clerk of the Court mail a copy of this Order to counsel of record.
NOTES
[1] By statute, the Corps may issue permits pursuant to its authority under 33 U.S.C. § 1344, which states:
The Secretary may issue permits, after notice and opportunity for public hearings for the discharge of dredged or fill material into the navigable waters at specified disposal sites. Not later than the fifteenth day after the date an applicant submits all the information required to complete an application for a permit under this subsection, the Secretary shall publish the notice required by this subsection.
33 U.S.C. § 1344 (2005).
[2] The implementing regulations to the National Environmental Policy Act define an Environmental Assessment and state:
"Environmental Assessment":
(a) Means a concise public document for which a Federal agency is responsible that serves to:
(1) Briefly provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact.
(2) Aid an agency's compliance with the Act when no environmental impact statement is necessary.
(3) Facilitate preparation of a statement when one is necessary.
(b) Shall include brief discussions of the need for the proposal, of alternatives as required by sec. 102(2)(E), of the environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted.
40 C.F.R. § 1508.9.
[3] The regulations also define "Finding of No Significant Impact" or FONSI as:
a document by a Federal agency briefly presenting the reasons why an action, not otherwise excluded (§ 1508.4), will not have a significant effect on the human environment and for which an environmental impact statement therefore will not be prepared. It shall include the environmental assessment or a summary of it and shall note any other environmental documents related to it (§ 1501.7(a)(5)). If the assessment is included, the finding need not repeat any of the discussion in the assessment but may incorporate it by reference.
40 C.F.R. § 1508.13.
[4] Although this Court does not hold that Plaintiffs are barred by the doctrine of laches, this Court must note that Plaintiffs' delay in bringing this action seems to undermine their claim of irreparable harm. Plaintiffs' learned about the denial of their motion to stay construction on October 17, 2005, yet did not file this suit until November 15, 2005, nearly one month after the alleged irreparable harm occurred.
As a practical matter, it also appears unclear whether the desired relief would prevent some of the possible harms that Plaintiffs assert. Plaintiffs have expressed solicitude for the welfare of the animals in the upland area, but, as Montgomery County has stated, the land next to the proposed roadway is a reserved right of way and would be developed if not otherwise used for road purposes.
[5] Mr. Lindsey explained that there are several reason why a short delay could translate into a substantial impact on the completion time of the project. For example, Article 16 of Maryland's Non-Tidal Wetlands and Waterway Permit prohibits the County from performing construction work within Old Farm Creek and its tributaries between March 1 and June 15. Therefore, any work in those waterways not completed by March 15, 2006 would not resume until after June 15, 2006.
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197 P.3d 1151 (2008)
221 Or. App. 177
STATE
v.
HARRIS.
Court of Appeals of Oregon.
November 19, 2008.
Affirmed without opinion.
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24 F.Supp. 524 (1938)
BRUSSELBACK et al. (Alig et al., Interveners)
v.
CAGO CORPORATION et al.
District Court, S. D. New York.
August 11, 1938.
*525 *526 Root, Clark, Buckner & Ballantine, of New York City (John M. Harlan, Leslie H. Arps, and Emory T. Nunneley, Jr., all of New York City, of counsel), for plaintiffs.
Henry Woog, of New York City, for plaintiffs-interveners.
Holm, Whitlock & Scarff, of New York City (Joseph Fischer, of New York City, of counsel), for defendant Agnes O'Brien.
Sackett, Chapman, Brown & Cross, of New York City (E. Douglas Hamilton, of New York City, of counsel), for defendant Tribune Fresh Air Fund.
Gibbs, Hand & McCabe, of New York City (Joseph V. McCabe, of New York City, of counsel), for defendant William F. Greegan.
Benjamin Sholemson, of New York City, for defendant Arthur Vare.
Clark, Carr & Ellis, of New York City (Paul A. Crouch, of New York City, of counsel), for defendant Gladys Patterson.
Gifford, Woody, Carter & Hays, of New York City (Charles L. Woody, of New York City, of counsel), for defendants Charles E. Roehl and C. Melville Haight, Jr.
Mack, McCauley, Spiegelberg & Gallagher, of New York City (Paul J. McCauley and George A. Spiegelberg, both of New York City, of counsel), for defendants Cago Corporation, Paul Fox, John H. Gertler, and George A. Spiegelberg.
LeRoy Danziger, of New York City (David Klein, of New York City, of counsel), for defendant Arthur P. Wollheim.
Proskauer, Rose & Paskus, of New York City (Charles Looker, of New York City, of counsel), for defendant Silas M. Moorman.
Louis Scadron, of New York City, for defendant estate of William H. Gleitzman.
Wilson, Wager & Cornell, of New York City (George W. Cornell, of New York City, of counsel), for defendant Mary B. Chamberlaine.
John G. Jackson, of New York City (John G. Jackson, Jr., and Raymond M. Tierney, both of New York City, of counsel), for defendant Battelle, Ludwig & Co.
Wickes & Neilson, of New York City (Joseph F. Regan, of New York City, of counsel), for defendant H. Elbert Foster.
Chadbourne, Wallace, Parke & Whiteside, of New York City, for defendant Elia G. Riggio.
James S. Lawler, of New York City, for defendant Edward W. Banta.
William T. Van Alstyne, of New York City, for defendant Charity Alker.
Coudert Bros., of New York City (Frederick C. Bellinger, of New York City, of counsel), for defendant Joseph P. Bartram.
Jack Fogelson, of New York City, for defendants Sirma and Michael J. Devlet.
WOOLSEY, District Judge.
My decision is:
1. That this suit be dismissed as against defendant Spiegelberg without costs for the reason that he was made a party hereto solely for the purpose of discovery, and has complied with the prayer of the complaint in that respect, leaving no residuum of relief due from him to the plaintiffs.
2. That the suit be dismissed as against Sirma Devlet without costs.
3. That the complainants have, with costs, a decree, as hereinafter indicated in the following memorandum opinion, as against all the other defendants herein who have been served with process and still remain parties because they have not settled with the plaintiffs, or already had the complaint dismissed as against them for other reasons than settlement.
I. My subject matter jurisdiction in this cause is based on the fact that the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and arises under the laws of the United States. Title 28 United States Code, Section 41 (1) (a), 28 U.S.C.A. § 41 (1) (a).
*527 Subject matter jurisdiction herein on this basis has been sustained, and a remedy in equity for the relief herein sought has been approved by the Circuit Court of Appeals of this Circuit. Brusselback et al. v. Cago Corporation et al., 2 Cir., 85 F.2d 20.
II. The following defendants have been served with process and have appeared and answered: Cago Corporation; Luberta Realty Corporation; Edward W. Banta; Isabel Burgheim; Mary B. Chamberlaine; Michael J. Devlet; Sirma Devlet; John F. Devlin; John H. Gertler; Louis H. Gleitzman and William Gleitzman, as executors of Isaac Gleitzman, now deceased; C. Melville Haight, Jr.; Silas M. Moorman; Agnes O'Brien; Ella G. Riggio; Norman Schloss; William Greegan; Gladys M. Patterson; Miriam B. Kohn; Albert P. Wollheim; Paul Fox; George A. Spiegelberg; Seavey Battelle, Frederick W. Ludwig, Charles Gilbert Miller and Stanley L. Roggenburg, formerly doing business as co-partners under the firm name and style of Battelle, Ludwig & Co.; H. Elbert Foster, Jr., formerly one of the co-partners of Foster-McConnell & Co.; Mary B. Chamberlaine as executrix and Robert L. Chamberlaine as executor of the estate of Rebecca C. Fabens.
III. The following defendants have been served with process and have defaulted, and in respect of them the trial herein constituted an inquest: Florence F. Clifford; R. Earl Merrifield; Mary Z. Shapiro; Anna J. Sullivan; Ray Weinberg; Jacob Zeller; Mary T. Earle; Lucy G. Hesselman; Thomas J. Shanley; Charles S. Irish; Emil H. Sparfeld; Frank R. Swift; Ruth M. Tallman; Robert A. Wallace; Grace B. Whall; John Wilson Cutler and Junius A. Richards, formerly two of the co-partners of Edward B. Smith & Co., and Glee Jamison Smith, as executrix of Albert L. Smith, deceased, formerly one of the partners of Edward B. Smith & Co.
IV. The following defendants have settled with the plaintiffs, and the suit has been dismissed as to them: Charity Alker; Wilbur L. Ball; Condict W. Cutler, Jr.; Charles B. Drake; George E. Hall; David L. Hodgens; Emil Joseph; Edwin H. Kreig; Jessie McHugh; Marie E. Rohn; Michael L. Sinsheimer; S. B. Searing; Helen O. W. Nesmith; Alvano T. Nickerson; Charles E. Roehl; Stuyvesant Fish, Samuel T. Callaway, Trowbridge Callaway, Robert H. Cox, Walter Merrill Hall, Herman N. Rosenwald, William A. Tall, Willard S. Simpkins, and Frank L. Scheffey, formerly co-partners doing business under the firm name and style of Callaway, Fish & Co.; Jansen Noyes, Leo M. Blancke, Clifford Hemphill, Walter T. Collins, Stanton Griffis, Charles L. Morse, Jr., Harold C. Strong and Kenneth K. Ward, co-partners doing business under the firm name and style of Hemphill, Noyes & Co.; Russell Merrick doing business under the firm name and style of Merrick & Co.; Joseph P. Bartram, as trustee for Daisy D. Bartram.
V. The following defendants were served but as to them the suit was dismissed for various reasons other than settlement: Arthur A. Marshall; Arthur Vare; Walter Hewett; Henry Gee; Meyer Salzman; Tribune Fresh Air Fund.
VI. The following defendants named herein have not been served with process and, therefore, they are not parties to this cause: Jeanne Gertler; Combined Industries, Inc.; J. D. Andrews; Charles Armbrecht; M. T. Arnold; Charles S. Bartow, Jr.; Anita D. Brown; Andrew Casazza; Louis T. Chiavelli; James T. Dean; Ida B. Evans; Anne Dalzell Harris; Joseph Kahn; Pauline Lettermen; Cecelia Livingston; W. McClure Locher; Thomas McKnight; Katherine Schuman; Robert Scoville; William L. Trumble; Frieda Bernstein; Anna Frost; R. R. Koeser; Carrie Meyer; Mildred Zaretzby; Freeman G. Allen; Judith Eve Cowen; Margaret J. Sylvester Cowles; Elizabeth F. Ellis; Amy E. Haviland; Arthur Oakly; Charles J. Russ; Doris Goldstandt; Frieda Brand; Radcliffe Cheston, Jr.; Charles S. Cheston; Reginald G. Coombe; Edward C. Sayers; Rodney W. Brown; Harold G. Hathaway; Robert F. Whitmer, Jr.; Harcourt Amory, Reginald E. Heard, Walter C. Boothroyd and Edward B. Smith, Jr., together with Albert L. Smith, now deceased, formerly some of the co-partners doing business under the firm name and style of Edward B. Smith & Co.; Girard Trust Co., Geoffrey S. Smith and Charles S. Cheston, as executors of Albert L. Smith; Lorenzo Semple; Robert E. McConnell, Walter S. Marvin, Harvey S. Mudd and Seeley G. Mudd, formerly some of the copartners doing business under the firm name and style of Foster, McConnell & Co.
VII. Inasmuch as under the decision of the United States Supreme Court on April *528 25, 1938, in Interstate Circuit, Inc., v. United States, 304 U.S. 55, 57, 58 S.Ct. 768, 769, 82 L.Ed. 1146, it is indicated that formal findings of fact and conclusions of law separately stated under Equity Rule 70½, Title 28 United States Code Annotated following Section 723, must supersede any opinion in an equity case, I shall content myself with indicating generally my findings of fact and reasons therefor and my conclusions of law herein, without attempting to write a considered opinion such as the interesting questions of law herein raised by the defendants tempt me to do.
VIII. The Question of Insolvency and Quantum of Assessment
I hold that the original receivership set up by the Federal Farm Loan Board on October 1st, 1932, is a matter with which this Court cannot properly deal. That was an act of an executive administrative board, and I think, whilst there may be some question as to whether the bank was insolvent at the time on October 1st, when the receiver was originally appointed there is not any question whatever that it would have been insolvent on November 1st, 1932, and therefore the directors were merely forestalling by one month, at most, the situation which they had to meet. And I think that there is nothing which I can possibly do about the original receivership, so we have to take that as it stands.
Now, how does it stand? I was thoroughly satisfied by the evidence of the five farm experts called herein, Arnold, Cochrane, Kahlert, Brown and Wahler for I thought they knew their job most extraordinarily well. They all had seen all the farms as to which they were testifying, and they seemed to know, even by name, every tract; they had it all absolutely letter perfect and they were marvelous, it seemed to me, as experts, so it is abundantly safe for me to say that they knew what they were testifying about, and to adopt what they testified to as correct, namely, that the present deficit of the Chicago Joint Stock Land Bank is in excess of $13,500,000.
We know that the deficit by the receiver's books on December 31, 1937, was $12,831,214.22, and we also know that the only substantial asset items as to which there could be room for argument are the real estate owned and the sheriff's certificates, or master's certificates, as I think they are called in one of the states, and as to those two items, the real estate owned and the sheriff's certificates, these experts testified, as I have stated, most clearly and I adopt the values they fixed without going into the detail of all the multitudinous exhibits which are part of this branch of the case.
I think that we can look at the matter thus:
1. The real estate owned by the receiver was carried at the unpaid balance of the original mortgage loan except that, in cases where title had been acquired by the bank one year prior to the receivership, the property was carried at the amount of the unpaid balance of the loan or the re-appraised value of the property, whichever was less.
2. The real estate represented by sheriff's certificates or master's certificates was carried at the unpaid balance of the original unpaid loan.
The testimony of the expert witnesses on that shows:
1. That the present reasonable market value of the real estate owned by the receiver is upwards of $585,000 less than its carrying value on the receiver's books as shown on December 31, 1937.
2. That the total market value of the real estate represented by the sheriff's certificates or master's certificates is less by upwards of $89,759 than their carrying value on the receiver's books.
So if we take this and do a sum with it, we have:
Total real estate owned at carrying value is $3,242,558.20.
Total real estate owned at the expert valuation is $2,657,125.64 as here found.
By way of parenthesis, I should, perhaps, say here that this includes the carrying value of 50 farms at $446,173.17 in Southeastern Iowa, which had been serviced up to his death by Field Agent Tuttle who died in January, 1938, and so was not available as a witness. But the witness Wahler testified that the same class of farms located in the same territory which he himself serviced in Iowa, would clearly not be worth a greater amount than their carrying value. So we get a maximum value on that.
This, therefore, shows that the carrying value of real estate owned exceeds the experts' valuation, which I have adopted, by $585,432.56.
*529 The total of the sheriff's and master's certificates at carrying value was $582,599.80 and, at experts' valuation, was $493,039.96. Thus the carrying value thereof exceeds the experts' valuation by $89,559.84.
The total deficit of the bank, therefore, as shown by the evidence in this case, is greater than that carrying value on December 31, 1937, by $674,992.40.
Assuming my figuring is correct, if you add to the deficit by the receiver's books based on the carrying value of $12,831,214.22, the sum just mentioned of $674,992.40, you have a total deficit of $13,506,206.62 as of the present time. That is the deficit which I find.
The total outstanding stock of the bank at the date of the receivership was 40,000 shares. And that had a total par value of $4,000,000.
Since the deficit of the bank exceeds $13,500,000, the maximum liability of the stockholders evidently is for the total of the par value of their stock. In other words a 100 per cent assessment is necessary.
IX. The Status of the Cago Corporation
The only really seriously disputed question of fact is whether defendants John H. Gertler and Michael J. Devlet are jointly and severally liable for an assessment on the 10,533 shares of stock registered in the name of Cago Corporation or held in its portfolio.
The master facts involved in this controversy either admitted or proved beyond peradventure are as follows:
1. Paul Fox was the accountant for Gertler, Devlet & Co. at a salary of $3,000 a year, and in 1931 and 1932, the crucial periods herein, did not possess any assets of consequence other than this salary.
2. Gertler, Devlet & Co. had specialized in joint stock land bank securities for many years, and in January, 1931, in a proxy fight carried on in an attempt to secure the election of one Guy Huston as President of the Chicago Joint Stock Land Bank, had, as a firm, accumulated a large block of the stock thereof.
3. Cago Corporation was formed on June 30, 1931, confessedly to create a shield for the real owners of Chicago Bank Stock, against double liability under Title 12, United States Code, Section 812, 12 U.S.C.A. § 812.
4. Paul Fox admits that the three stockholders his brother and two stenographers in his office were dummies, and claims that he was the beneficial owner of all the stock of the Cago Corporation and formed it to speculate in the stock of the Chicago Joint Stock Land Bank and the stock of other joint stock land banks.
5. The Cago Corporation did not keep books of account contemporaneously in the regular course of business, but Fox wrote up the books in 1935 or 1936 to give the transactions of the Cago Corporation a semblance of historical reality.
6. The Cago Corporation did not hold regular meetings either of its stockholders or directors. In fact it was merely a protective coloring for Paul Fox.
7. The Chicago Land Bank Stock purchased by Cago Corporation was all purchased from or through Gertler, Devlet & Co.
8. The money paid for all such stock was turned over in cash to John H. Gertler or Michael J. Devlet, and, so far as this record shows, came to rest in their hands.
9. Cago Corporation was Gertler, Devlet & Co.'s only customer to whom the firm gave credit.
10. The firm of Gertler, Devlet & Co. advanced some money to Cago Corporation through Fox on May 26, 1931, as Fox reluctantly admitted.
11. Material books and papers of Gertler, Devlet & Co. covering the crucial periods herein have disappeared.
12. On March 10, 1931, about three months before the Cago Corporation was formed, the firm of Gertler, Devlet & Co. distributed its holdings of Chicago Land Bank stock to its several partners in proportion to their respective interests therein.
13. Then, almost immediately, Fox tried to get all the stock of the partners into Cago Corporation by purchase at nominal sums, and succeeded, except in the case of one partner, Carter, who refused to join what he regarded as a Gertler, Devlet & Co. venture.
14. The firm of Gertler, Devlet & Co. in August, 1933, put forward a reorganization plan of the Chicago Joint Stock *530 Land Bank, under which, inter alia, stockholders were to exchange their stock for stock of a state corporation with the usual limited liability, and thus escape the double liability involved in stock ownership of the bank under Title 12, United States Code Section 812, 12 U.S.C.A. § 812.
15. At that time, August, 1933, the Cago Corporation was registered owner of, or had endorsed in blank in its portfolio, more than 25% of the shares of stock of the Chicago Joint Stock Land Bank.
It has always seemed to me that so-called circumstantial evidence tends to be far stronger than any direct evidence short of an admission. For the trier of the facts can never tell except by his own impressions why a witness testifies thus or thus. Circumstances, on the other hand, have not any prejudices or grudges, or any interests or vanities to serve. Consequently, they make, I think, much the best bases on which to reconstruct the past.
When, therefore, all the sign posts of the circumstances, developed from different angles of approach to a situation, point to the same spot, truth usually will be found to dwell there.
In the present case many, if not most, of the circumstances, enumerated above as master facts, were wrung from the mouths of unwilling witnesses, who disclaimed the apparent significance of such facts. I refer especially to Paul Fox, John H. Gertler and Frederick F. Carr, but I did not believe these three witnesses except insofar as their evidence was confirmed by writings of various kinds. Indeed, I think that Fox repeatedly testified falsely. For example: his contention that he received from his father most of the money to purchase the capital stock of Cago Corporation and the money to buy shares of the Chicago Joint Stock Land Bank was shown to be entirely incredible, for reasons unnecessary here to detail, and I so find.
Paul Fox was what I call a very "technical" witness, and, I find, never told the whole truth, as he swore to do when he took the stand. This is notably shown by his evidence about the $200 cheque of Gertler, Devlet & Co. Because that firm had given it to him and he had deposited it in his bank account and then had paid it, at once, over to Cago Corporation, he testified, until broken down by the records that it was his own money he was giving to Cago.
I suspect although there is no basis for a finding to this effect that Gertler, Devlet & Co. gave to Bernard Fox, deceased father of Paul Fox, the money Paul Fox used in setting up the Cago Corporation and in purchasing shares of the Chicago Joint Stock Land Bank therefor, that Paul Fox knew this, but still was willing to testify that the money came from his dead father as technically it may be said to have done. Indeed the use of cash instead of cheques in all the Cago Corporation's dealings shows them to have had clandestine objectives.
The evidence of Carr, a clerk in the employ of Gertler, Devlet & Co. with a salary of $100 a week, that, circa August 11, 1932, he had received a "bonus" of $4,500, but could not remember for what he had paid out $3,000 on August 16, 1932, and $1,000 on September 17, 1932, was astounding. The reason for such loss of memory appears, however, when it is found that $3,000 in cash was deposited in the Cago Corporation's account on August 17, 1932, and $1,000 in cash on September 19, 1932.
These instances I have mentioned were only the most flagrant among many instances of disregard of their oath by the witnesses on the Cago Corporation situation.
The whole situation, however, is in my opinion clinched as against the defendants Cago Corporation, Gertler and Devlet by Devlet's failure to be present at the trial of this cause, wherein upwards of a million dollars was being claimed against him, and by his consistent and successful avoidance of the service on him by the plaintiff's attorneys in spite of every effort on their part of any subpoena to secure him as a witness herein. Such an attitude under all the circumstances of this cause has an effect on the trier of the facts similar to the effect which would be produced by a defendant's flight in a criminal case i. e., that absence was, in the fugitive's opinion, the part of wisdom. Cf. Mammoth Oil Co. v. United States, 275 U.S. 13, 51-53, 48 S.Ct. 1, 9, 10, 72 L.Ed. 137.
Therefore, I find, on the facts, that the Cago Corporation was a mere shell the creature of John H. Gertler and Michael I. Devlet and did not constitute an insulating device for them as beneficial *531 owners of the stock of the Chicago Joint Stock Land Bank registered in the name of Cago Corporation or for the stock found in its portfolio endorsed in blank a total of 10,533 shares. I find that Cago Corporation was a joint venture of John H. Gertler and Michael J. Devlet by which they hoped, awaiting eventualities, to maintain, without risk, their position in its stock although they knew of the bank's precarious condition, and consequently that John H. Gertler and Michael J. Devlet were and are the beneficial owners of said stock and are jointly and severally liable for the assessment on stockholders herein found necessary.
The decree as to this stock will provide primary recovery against John H. Gertler and Michael J. Devlet, jointly and severally, as the actual joint and several beneficial owners thereof, and secondary recovery against Cago Corporation as registered owner thereof.
In this finding as to the Cago Corporation I have not attempted to do much more than summarize my views, and when formal findings of fact are submitted by counsel for the plaintiff, they may propose findings dealing in such detail as they may be advised with the evidence of Fox, Gertler, Carr and any other witness, who may have touched on the position of the Cago Corporation herein.
X. I find that the defendants John H. Gertler and Michael J. Devlet are the beneficial owners of, and, therefore, are jointly and severally liable for the assessment on the said bank stock still registered in the names of J. A. Andrews, Andrew Casazza, Louis T. Chiavelli and Thomas McKnight, aggregating 780 shares.
XI. Conclusions of Law
A. I rule against the defendants on the question of segregation of the security underlying the bonds.
It seems to me that there is no provision in the law, that has been called to my attention, explicit enough to earmark the bonds deposited with the Farm Loan Registrar as deposited for particular bonds that were issued after the deposit of such securities. Cf. Title 12 United States Code Sections 855, 856, 895, 897, 12 U.S.C.A. §§ 855, 856, 895, 897.
It is agreed, that as a matter of administrative interpretation of the Act by the Farm Loan Board, there never was such a segregation. It seems to me, therefore, that the decision in McLucas v. Langworthy, D.C., 7 F.Supp. 457, which so holds, is right.
Therefore, I hold that the successive groups of mortgages that were deposited with the Registrar must be regarded as fungibles which were all behind all the bonds which the Chicago Joint Stock Land Bank had issued, and therefore they must all be considered as security for all those bonds.
B. On the question of fixing the par value of the stock of the bank at $100, which the defendants claim should be fixed at $5, under the statute, I do not agree with the defendants.
I agree with Judge Patterson's decision in Todd v. Russell, D.C., 1 F.Supp. 788, 789, 790. I might add that as he is one of my colleagues in this court, proper judicial comity would require me to follow his ruling, even if I did not agree with it.
In addition I should like to remark that I cannot see how it makes a whit of difference to a defendant stockholder in a case of this kind whether the amount of the par value is fixed at $100 or at $5. It does not affect the quantum of his liability as a stockholder, for if he owned, we will say, X dollars worth of stock, the amount of his liability is the same whether the said X dollars worth of stock be divided by 100 or by 5.
C. The defendants have raised the point that such of the plaintiffs in this cause, as were also plaintiffs in the case of Brusselback et al. v. Chicago Joint Stock Land Bank et al., 7 Cir., 85 F.2d 617, have lost their locus standi herein, because their motion in the Illinois case that John B. Gallagher should be appointed as receiver with power to prosecute their actions outside Illinois was granted and an order entered thereon which stands unreversed.
I do not agree.
In the first place, I think the receiver appointed by the Illinois court would, no matter what the terms of the order, not have had any power to bring suit outside of the territorial jurisdiction of the court which appointed him.
Then, on the precise point of an assignment which counsel for the defendant argues, created by reason of the prayer of *532 the plaintiff plus the order of the court I hold that the only way in which the assignment could have been made complete by court action in Illinois would have been if the court in Illinois had ordered the plaintiffs to execute assignments to Mr. Gallagher and they had done so; in that event Mr. Gallagher would have become an actual assignee, and not a quasi-assignee as the defendant's counsel calls him. Therefore, I overrule this defence.
D. The Defence of Laches
The receivership occurred October 1, 1932, and this suit was brought August 8, 1935, so it was brought within two years and ten months after the cause of action could be considered to have accrued, if it be supposed to have accrued at the time of the receivership.
The date this suit was commenced is within the three year limitation in New York State, which of course in Federal equity is taken only as a general standard.
But it is certainly true that an equity court will never sustain a defense of laches when the suit is brought within the period of a state court statute of limitations, unless a very much clearer showing is made of reasons why the defence should be sustained than I have heard herein during the trial at any time.
It seems to me that the fact that some of the defendants saw fit to destroy their records before the three years had elapsed is a wholly inconceivable ground for considering that the plaintiffs were guilty of laches.
I hold therefore that there is not any ground whatever for attributing to the plaintiffs any affirmative negligence in not earlier commencing this cause, and that, accordingly, the plaintiffs were not guilty of laches herein.
E. The Question of Ultra Vires
1. In the desire to tap for the benefit of farmers all the sources of funds, public and private, two kinds of banks were made possible by the Federal Farm Loan Act of July 17, 1916, Title 12 United States Code, Section 641 et seq., 12 U.S.C.A. § 641 et seq., namely, Federal Land Banks and Joint Stock Land Banks.
Federal Land Banks were supposed to become cooperative banks by a kind of statutory evolution due to the requirement that borrowers from such banks should buy stock in them.
Joint Stock Land Banks, however, were created as private institutions for the purpose of making profit.
The Federal Farm Land Banks were limited to making their loans through Farm Loan Associations, the formation of which is described in the statute, or through certain prescribed and designated agents. The Joint Stock Land Banks, however, loaned direct to the farmers. Cf. O'Connell v. St. Louis Joint Stock Land Bank, 170 Ark. 778, 281 S.W. 385, 388, and also The Federal Farm Loan Bureau, Its History, Activities and Organization, by W. Stull Holt, being Publication No. 54 of the Institute of Government Research, published 1924, through the Johns Hopkins Press.
2. Section 811 of Title 12 United States Code, 12 U.S.C.A. § 811, provides for the creation of joint stock land banks "for carrying on the business of lending on farm mortgage security and issuing farm loan bonds."
Section 791 of the same statute, Title 12 United States Code, 12 U.S.C.A. § 791, provides that "no Federal land bank shall have power * * * to loan on first mortgage except through national farm loan associations * * * or through agents."
Section 823 of Title 12 of the United States Code, 12 U.S.C.A. § 823, provides italics mine that "any Federal land bank * * * may, with the approval of the Farm Credit Administration, acquire the assets and assume the liabilities of any joint stock land bank, and in such transaction any Federal land bank may waive the provisions of this chapter requiring such bank to acquire its loans only through national farm loan associations or agents, and those relating to status of borrower, purpose of loan, and also the limitation as to the amount of individual loans."
It seems to me that this is an express recognition that joint stock land banks are not limited, as Federal Land Banks are, to making loans only through Farm Loan Associations or through certain named types of agents.
That portion of Section 823 was not affected by the subsequent amendment of March 4, 1925.
Furthermore, national farm loan associations have not any power to take loans from joint stock land banks. If, therefore, joint stock land banks were in the position *533 of only being able to make loans through national farm loan associations we should have the curious situation of having the business of joint stock land banks limited to borrowers who were not authorized to borrow from them, which would be an obvious absurdity. Cf. also Sections 720, 721, 761, with regard to the constitution of national farm loan associations.
It is abundantly clear to my mind, therefore, that joint stock land banks had not any connection whatever with the national farm loan associations.
The administrative interpretation of the Act has recognized this. Cf. Annual Report of Federal Farm Loan Board, December 31, 1932; and House Document 346, 2nd Session of 72nd Congress at pages 20, 22, 23, wherein the distinction between the two forms of lending agencies are succinctly stated, and see Treasury Department's Statement of Conditions of Federal Land Banks and Joint Stock Land Banks as of June 30, 1932, at page 10.
With all due deference, it seems to me quite clear that the dictum of Mr. Justice Holmes in Wheeler v. Greene, 280 U.S. 49, 50 S.Ct. 21, 74 L.Ed. 160, wherein, comparing joint stock land banks with national banks, and not with Federal land banks, he said at page 51, 50 S.Ct. at page 21, that they were (italics mine) "created to make loans of farm mortgages to members of an association in a territorially limited district, and are relatively local affairs", does not find any support in the Federal Farm Loan Act. This dictum has been one of the main reliances of counsel for defendants in their defence of ultra vires, but, it seems to me, cannot avail them in the absence of any statutory ground on which to base it.
It is clear, in my opinion, that as joint stock land banks are not limited to loans made through national farm loan associations, or a named type of agent, the only question that remains now is whether the present suit is an attempt to saddle on stockholders a liability for an act outside of the purpose of the joint stock land bank, which, as above stated, was "for carrying on the business of lending on farm mortgage security and issuing farm loan bonds," or whether the method followed throughout the whole life of this bank merely involved carelessness or irregularity of some kind in the way in which farm mortgage loans were made.
3. Section 812 of Title 12 United States Code, 12 U.S.C.A. § 812, deals with the liability of shareholders and makes each shareholder individually responsible "for all contracts, debts, and engagements" of a joint stock land bank up to the par value of the amount of stock which each stockholder owned in addition to the amount which he might have paid in for it.
Section 771, subsection 11, Title 12 United States Code, 12 U.S.C.A. § 771, subsec. 11, is made applicable to joint stock land banks by Section 818 of the same Act, 12 U.S.C.A. § 818, and that Section 771, subdivision 11, under the caption "Loans not invalidated by unauthorized acts by banks or associations" reads as follows: "No loan or the mortgage securing the same shall be impaired or invalidated by reason of the exercise of any power by any Federal land bank or national farm loan association in excess of the powers herein granted or any limitations thereon."
It is further provided in Section 871 of Title 12 United States Code, 12 U.S.C.A. § 871, under the caption, "Land banks as bound by acts of officers and Credit Administration issue of bonds", as follows: "Each land bank shall be bound in all respects by the acts of its officers in signing and issuing farm loan bonds and by the acts of the Farm Credit Administration in authorizing their issue."
It seems to me that, by reason of these three sections, as the business of loaning on farm mortgages as followed by the bank in this case was the business for which it was specially created, if there were any irregularity in the method by which the loans were made on the mortgages, it did not impair or invalidate the mortgage or the bonds that were issued by the bank.
Furthermore, as all the issues of the farm loan bonds of the bank were duly approved by the farm credit administration they were cured of any irregularity and the bank issuing them was bound by them.
Consequently it seems to me the case of Ward v. Joslin, 186 U.S. 142, 22 S.Ct. 807, 46 L.Ed. 1093, is not controlling, because it involved an excursion by a bank into a realm wholly outside of the powers conferred on it, and not merely an irregularity of procedure within the powers conferred on it.
Also in connection with the doctrine of Ward v. Joslin, it must be remembered that there was not any such provision in the Kansas constitution or statutes there involved, *534 validating irregularities, as we have here in Section 771, subsection 11, and in section 871.
4. As a matter of fact, this is a case in which stockholders have received the benefit of the moneys which the bondholders now seek to recover, and after having acquiesced for a long time in the procedure by which the bank made its loans, the stockholders are not able to assert, as a defence to their liability on their stock, the claim that they were not liable for any obligations to the bondholders. In this connection the following cases are of interest: Lamb v. Abendroth et al., 268 Mich. 73, 255 N.W. 447, 448; Kipp v. Miller, 47 Colo. 598, 108 P. 164, 167, 135 Am.St.Rep. 236, and Kent v. Quicksilver Mining Co., 78 N. Y. 159, 187.
5. It must be remembered in approaching the matter, as a practical question, that when the bondholders bought farm loan bonds issued by the bank they relied (a) on the credit of the bank itself, (b) on the security afforded by all the mortgages which lay behind the bonds, and (c) on the statutory liability of the stockholders for the amount equivalent to the par value of the stock.
Certainly the directors of the bank, chosen by the stockholders, could not by interstitial irregularities in their methods of making loans on mortgages, or by bad management owing to which the bank became insolvent, deprive the creditors of the bank of their statutory right against stockholders which was a part of the security on which they bought their bonds. Cf. Van Tuyl v. Robin, 80 Misc. 360, 368, 142 N.Y. S. 535, affirmed in 160 App.Div. 41, 145 N. Y.S. 121, and in 211 N.Y. 540, 105 N.E. 1101.
The defence of ultra vires, the burden of establishing which falls on the defendants, must for the reasons above stated fail.
F. This suit has been dismissed as against the defendant Arthur Vare, as he was an infant when the stock was put in his name, and disaffirmed his liability thereon as soon as he learned about it after attaining his majority. As to all other registered owners of stock on the books of the bank at the time of the receivership, I hold that they are liable, even though they may not have been also beneficial owners of the stock. Cf. Kenyon v. Fowler, 2 Cir. 1907, 155 F. 107 affirmed, 215 U.S. 593, 30 S.Ct. 409, 54 L.Ed. 341.
But if they are not beneficial owners and the beneficial owners are also parties hereto, then the primary liability shall be that of the beneficial owners, and the registered owners shall be secondarily liable only to the extent that the beneficial owner does not or cannot satisfy the decree.
G. The decree as against Paul Fox cannot be the same as against Mr. Spiegelberg for I am not satisfied that he has made such full and true discovery as was within his power. The plaintiff's attorneys may propose in respect of him such decree as they consider meets the situation herein found.
XII. As to Costs and Disbursements
As the amount recoverable against each defendant is fixed by the 100% assessment multiplied by the number of shares owned by him, I shall not attempt to state the amount due from each defendant, but shall leave that to the plaintiff's attorneys to include in the final decree which they may have, with costs, as against each defendant.
As to the disbursements for the trial minutes I find that about one third of the minutes involved the insolvency issue and the expense of that third i. e., taxable travel expenses, lodging, board and incidentals should be taxed equally against all the defendants.
The expense of the two thirds of the minutes which were involved in the Cago Corporation issue must be borne primarily by defendants Gertler and Devlet jointly and severally and secondarily by the Cago Corporation.
XIII. As to Formal Findings of Fact and Conclusions of Law
Before the final decree is presented for settlement the plaintiffs must prepare findings of fact and conclusions of law consistent with the foregoing memorandum opinion but further developed as they are advised, and serve them on the attorneys for the defendants, whom they seek to include in the final decree with ten days notice of settlement.
The defendants' attorneys may then serve suggestions as to changes in the findings so proposed.
In order to facilitate any changes which I may deem appropriate, I suggest that the *535 findings and the conclusions submitted by the plaintiffs' attorneys be typed with triple spacing.
Only the findings approved by me will be filed as part of the record herein.
XIV. After costs are taxed and the findings of fact and conclusions of law are signed by me, a final decree may be noticed for settlement and submitted to me through the Clerk's office.
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390 N.W.2d 48 (1986)
STATE of North Dakota, Plaintiff and Appellee,
v.
Eugene KURLE, Defendant and Appellant.
Crim. No. 1162.
Supreme Court of North Dakota.
July 16, 1986.
Walter M. Lipp, State's Atty., McClusky, on brief, for plaintiff and appellee.
A. William Lucas, of Lundberg, Nodland, Lucas & Schulz, Bismarck, for defendant and appellant.
VANDE WALLE, Justice.
Eugene Kurle appealed from a judgment of conviction of the Sheridan County Court for menacing. Kurle argues that the evidence is insufficient to support the trial court's finding of guilt.[1] We reverse.
When a defendant alleges on appeal that the evidence is insufficient to sustain a conviction, "`we do not weigh conflicting evidence, nor do we judge the credibility of witnesses; instead, we look only to the evidence most favorable to the verdict and the reasonable inferences therefrom to see if there is substantial evidence to warrant a conviction.'" State v. Mertz, 362 N.W.2d 410, 414 (N.D.1985), quoting State v. Manke, 328 N.W.2d 799, 805 (N.D.1982).
The facts generally are not in dispute, and where there is a relevant difference of opinion Kurle accepts the prosecution's version for the purpose of this appeal. The actions upon which the charge is based are derived from a long-standing family dispute between Kurle and his sisters involving, at least at first, their parents' division of property among the children. The differences between Kurle and his sisters have expanded to include the sisters' husbands.
As Kurle was checking his fields on November 10, 1985, he noticed a parked vehicle next to one of his sunflower fields. He discovered, upon investigation, that his brother-in-law, Jim Ehler, and one of Ehler's friends, Bob Gabel, were hunting deer on Kurle's property; Gabel explained that they were looking for a deer which may have been wounded and escaped into Kurle's field. An argument ensued as to whether Ehler and Gabel could be on Kurle's property, and blows were exchanged between Ehler and Kurle as well *49 as between Gabel and Kurle. At the end of the fight, Kurleas he was leavingallegedly said, "You have people here now, but when you are up here alone, we will get you."
Kurle was charged with menacing under Section 12.1-17-05, N.D.C.C., which states:
"A person is guilty of a class A misdemeanor if he knowingly places or attempts to place another human being in fear by menacing him with imminent serious bodily injury." [Emphasis added.]
Kurle argues that, among other things, the facts do not demonstrate an imminent threat of serious bodily injury. We agree.
According to Black's Law Dictionary, "imminent" means "[n]ear at hand; mediate rather than immediate; close rather than touching; impending; on the point of happening; threatening; menacing; perilous." "Imminent" has also been defined as:
"dangerous and close at hand, impending, and liable to, or threatening to, happen at once, as some calamity; that which denotes that something is ready to fall or happen on the instant. The word `imminent' conveys usually some idea of `immediate,' of something to happen `upon the instant;' but conceding this to be so in a general sense, yet it does not mean an instant consummation." 42 C.J.S. Imminent. [Footnotes deleted.]
As the Court of Appeals of Tennessee recently stated, "Imminent means close in point of time, but closeness is likewise a term of many degrees, according to the circumstances." State Dept. of Hum. Serv. v. Northern, 563 S.W.2d 197 (Tenn. App.), appeal dismissed as moot, 436 U.S. 923, 98 S.Ct. 2816, 56 L.Ed.2d 767 (1978). See also, e.g., Continental Illinois Nat. Bank & Trust Co. of Chicago v. United States, 504 F.2d 586 (7th Cir.1974); People v. Victor, 62 Cal.2d 280, 42 Cal.Rptr. 199, 398 P.2d 391 (1965); Wilson v. Eagle, 120 So.2d 207 (Fla.App.1960).
Because the State is required to prove each of the elements of the offense charged beyond a reasonable doubt [State v. Hatch, 346 N.W.2d 268 (N.D.1984) ], we must necessarily determine if the record contains competent and substantial evidence upon which the trial court could have reasonably concluded that each of the essential elements of the offense had been met. See, e.g., State v. Olson, 290 N.W.2d 664 (N.D.1980). In this case, Kurle's words"when you are up here alone, we will get you"speak to the future and do not denote sufficient immediacy.[2] And, taken in context, no aspect of immediacy may be inferred: Kurle made the statement as he was leaving the scene; in addition, Kurle, unlike one of his antagonists, was unarmed.
Under our construction of the word "imminent," it is apparent that the set of facts, about which neither party has serious disagreement, does not support the conclusion that the threat of serious bodily injury was imminent. Although each of the individuals involved in this dispute may be guilty of another offense,[3] the record fails to exhibit even the possibility of imminent serious bodily injury and therefore cannot support the conviction for menacing under Section 12.1-17-05.[4]
The judgment of conviction is reversed and we remand the case to the trial court with instructions to vacate the judgment and enter judgment of acquittal. State v. Oasheim, 353 N.W.2d 291 (N.D.1984); *50 State v. McMorrow, 286 N.W.2d 284 (N.D. 1979).
ERICKSTAD, C.J., and LEVINE, MESCHKE and GIERKE, JJ., concur.
NOTES
[1] Due to our resolution of this case, it is unnecessary to consider the issue of whether the complaint was defective.
[2] See Justice Field's definition of "imminent danger" in United States v. Outerbridge, 27 Fed. Cas. No. 15,978 (C.C.Cal.1868): "By imminent danger is meant immediate dangerone that must be instantly met; one that can not be guarded against by calling on the assistance of others or the protection of the law."
[3] See, e.g., N.D.C.C. Sections 12.1-17-01 (simple assault), 12.1-17-01.1 (assault), 12.1-17-02 (aggravated assault), and 12.1-17-04 (terrorizing). We were informed at oral argument that various charges now are pending in relation to this matter.
[4] For a case that exhibits sufficient conduct to constitute menacing, see Biddle v. District Court in & for Fifteenth Jud. Dist., 183 Colo. 281, 516 P.2d 645 (1973).
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21 Cal.App.4th 1 (1993)
25 Cal. Rptr.2d 747
THE PEOPLE, Plaintiff and Respondent,
v.
ROBERT FERRO, Defendant and Appellant.
Docket No. B070286.
Court of Appeals of California, Second District, Division One.
December 20, 1993.
*2 COUNSEL
Hector C. Perez for Defendant and Appellant.
Daniel E. Lungren, Attorney General, George H. Williamson, Chief Assistant Attorney General, Carol Wendelin Pollack, Assistant Attorney General, David F. Glassman and Jaime L. Fuster, Deputy Attorneys General, for Plaintiff and Respondent.
[Opinion certified for partial publication.[*]]
*3 OPINION
ORTEGA, J.
We affirm defendant's conviction of a violation of Penal Code section 12303.2, prohibiting possession of "any explosive on a public street or highway, in or near any theater, hall, school, college, church, hotel, other public building, or private habitation, in, on, or near any aircraft, railway passenger train, car, cable road or cable car, vessel engaged in carrying passengers for hire, or other public place ordinarily passed by human beings...."
BACKGROUND
Jamie Wolden was found in possession of a small amount of explosive known as C-4, arrested, and taken to the Baldwin Park Police station. Sheriff's deputies responded and, after further investigation, secured search warrants for defendant Robert Ferro's home and an abandoned chicken processing plant owned by him. Deputies found five pounds of C-4 in a cabinet in an office in the chicken plant. At the same time, other deputies served the search warrant at defendant's home, where he was detained during the search. After being notified that C-4 was found at the chicken plant, deputies at the home arrested defendant.
The defense attempted to pin possession of the chicken plant C-4 on Wolden. Defendant denied it was his.
Charged with three separate counts involving possession of prohibited materials, defendant secured pretrial dismissal of one count and successfully moved to suppress the results of the search of a pickup truck in which prohibited materials were found. The jury acquitted him of another count and convicted him of a single count of possession of an explosive under Penal Code section 12303.2.
On appeal, defendant presents several claims, including error during jury selection, improper exclusion of defense evidence, insufficiency of evidence, and ineffective assistance of counsel.
DISCUSSION
I
During jury selection, defense counsel raised the point of systematic exclusion and concluded his remarks thus: "... it would appear as though at least the court could inquire as to [the prosecutor's] motivation, perhaps *4 her reasons, at least. The threshold requirement I feel has been made for a Wheeler type of objection. So we would log it and ask for a mistrial." (Italics added.) The trial court asked the prosecutor, "Do you wish to be heard, counsel?" She replied, "Just briefly, your honor. [¶] I don't believe, first of all, that counsel has made a suspect class. He has two women of two Hispanic women, one old, one young, one Black woman who appears to be middle aged and one man who is White. I don't see a group there by any stretch of the imagination that can be called a suspect group. It is not one particular minority, it is not one particular sex. It is nothing. It is not one particular age. I don't think age or sex is a suspect class, anyway. I think the only suspect class is minority grouping and I think we have two Hispanics, one Black and one White." The trial court replied, "I think there is a recent case that has come down involving gender, but I concur with the People at this point. There doesn't appear to be a pattern of a systematic exclusion."
(1a) The question is whether the above means the trial court made a prima facie finding of systematic exclusion. If it did, the conviction must be reversed. (2) "Once a prima facie case has been shown, the burden shifts to the prosecutor to show that the jurors in question were legitimately excused. [Citations.]" (People v. Gonzalez (1989) 211 Cal. App.3d 1186, 1192 [259 Cal. Rptr. 870].) Here, the prosecutor offered no justification for the peremptory challenges, but addressed only the question of whether a prima facie showing had been made.
"In the absence of an express prima facie finding, reviewing courts have implied this initial finding through the actions of the trial court." (People v. Gonzalez, supra, 211 Cal. App.3d at p. 1196.)
(1b) In Gonzalez, the trial court's response to the Wheeler motion (People v. Wheeler (1978) 22 Cal.3d 258 [148 Cal. Rptr. 890, 583 P.2d 748]) was, "`All right. I'll ask the District attorney to give me reasons for the exclusion of those two prospective jurors, Miss M[]?[']" (People v. Gonzalez, supra, 211 Cal. App.3d at p. 1195.) The prosecutor replied with a somewhat detailed, but insufficient, justification of her exercise of peremptory challenges. The appellate court found the trial "court's request for reasons of exclusion presupposed an implied finding that the prima facie evidence existed. Otherwise, there was no reason to request explanations. The prosecution should not be obligated to justify peremptory challenges unless the court has found that prima facie evidence of improper exclusion exists. By asking the prosecutor to give reasons for her challenges, the court impliedly made the requisite prima facie finding of systematic exclusion, thus shifting the burden to the prosecutor to justify the challenges." (Id. at p. 1198.)
In People v. Turner (1986) 42 Cal.3d 711 [230 Cal. Rptr. 656, 726 P.2d 102], the trial court responded to the defense Wheeler motion by asking the *5 prosecutor, "`Mr. Martin, would you like to explain?' [The prosecutor offered reasons.] ... [¶] ... It follows that unless the trial court ... had made at least an implied finding of group discrimination, it would have had no basis for asking the prosecutor to `explain' the reasons for his peremptory challenges.... Indeed, after Wheeler it is disingenuous to treat such inquiries as anything else." (Id. at pp. 718-719; see also People v. Trevino (1985) 39 Cal.3d 667 [217 Cal. Rptr. 652, 704 P.2d 719], and People v. Hall (1983) 35 Cal.3d 161 [197 Cal. Rptr. 71, 672 P.2d 854].)
"In People v. Granillo [(1987)] 197 Cal. App.3d 110 [242 Cal. Rptr. 639], the trial court `invited the prosecutor to respond' to the defense's Wheeler motion. (Id. at p. 117.) [The prosecutor attempted to justify the peremptory challenges.] `This invitation arguably constituted an implied finding of a prima facie showing.' (Ibid.) Granillo held that if the justifications `are heard at this early stage in the process an undoubtedly unintended implication arises that a prima facie showing has been made to the satisfaction of the court.' (Id. at p. 122.) Granillo also explained that such an implication was unnecessary since the court later made an express prima facie finding." (People v. Gonzalez, supra, 211 Cal. App.3d at p. 1197.)
In People v. Cervantes (1991) 233 Cal. App.3d 323 [284 Cal. Rptr. 410], a spousal abuse case, the defense accused the prosecution of systematically excluding White men from the jury. The trial court asked the prosecutor to respond and he argued that White men were not a cognizable group. After further colloquy, the prosecutor denied he was systematically excluding anyone. The court invited him to state his reasons for dismissing the individual jurors involved. The prosecutor objected, but said he would if so ordered. The trial court replied, "`Well, I think I am not granting his motion, but I think for the record it would be beneficial to have that on there.[']" (Id. at p. 328.) The prosecutor then "fell into the common trap of responding with specific reasons for exercise of his peremptories in response to the trial court's request that he do so without the court making a finding that a prima facie showing of discrimination has been established." (Id. at p. 335.)
Under the circumstances, the Cervantes appellate court concluded the trial court had impliedly made the prima facie finding and the prosecutor had failed to adequately explain. The problem "could have been avoided had the district attorney demanded a specific finding of the trial judge. Although not an excuse, we understand that trial lawyers, including deputy district attorneys, often are reluctant to make demands of the trial judge for such things as specific findings, etc. However, at least as to Wheeler motions, the district attorney need never be put in this position. When defense counsel makes a *6 Wheeler motion and states his reasons for the motion, if the trial judge, after weighing and evaluating these reasons, concludes a prima facie showing of discriminatory exclusion of a cognizable group has not been made, then the judge must clearly and succinctly say so, state his or her reasons, and make the necessary finding of no prima facie showing. On the other hand, if the court concludes a prima facie showing has been made, then it must state that finding. Either way, the district attorney knows where he or she stands and what must be done, i.e., either respond or not, depending on the court's specific finding. And, of course, had the above-described scenario been followed here, then Wheeler error may have been avoided." (People v. Cervantes, supra, 233 Cal. App.3d at pp. 336-337, fn. omitted.)
In People v. McCaskey (1989) 207 Cal. App.3d 248 [254 Cal. Rptr. 742], the trial court's invitation to the prosecutor was simply, "`Ms. Begen?[']" (Id. at p. 255.) She delivered a detailed explanation as to each juror. The trial court's ensuing comments agreed with the prosecutor and concluded with, "`I don't find that there has been a systematic exclusion of Mexican-Americans from this jury. And the motion under Wheeler is denied.'" (Id. at p. 256.) Rejecting the claim that the trial court made an implied prima facie finding, the appellate court concluded the "court did not call upon the prosecutor to explain, but simply provided her an opportunity to respond to defendant's motion." (Id. at p. 254.) "By finding no systematic exclusion, it appears clear that the court not only did not impliedly find a prima facie case had been made, but to the contrary, it expressly found that no prima facie showing had been made. [Citation.] The fact that the prosecutor tried to justify her challenges even though the court did not call upon her to do so did not preclude the court's finding that there was in fact no prima facie showing in the first instance." (Id. at p. 256.)
Defendant says McCaskey is inconsistent in one aspect with People v. Granillo (1987) 197 Cal. App.3d 110 [242 Cal. Rptr. 639], which, according to defendant, implies that a trial court's subsequent statements cannot be used to determine that the trial court's initial invitation to the prosecutor did not constitute a prima facie finding. "Once the court rules a prima facie showing has been made, the `peremptory' attribute of the challenges is lost and the focus turns to justifying the excuses on some acceptable specific basis. No longer is the court `screening' out frivolous objections. Although the court may have second thoughts concerning whether a prima facie showing has been made, it may not return to the screening process. The sole issue then pending is the adequacy of the justifications." (Id. at p. 122.)
But in Granillo, the trial court's invitation to the prosecutor to respond was later confirmed as a prima facie finding when the trial court specifically *7 found systematic exclusion. We have no quarrel with the proposition that second thoughts under the circumstances would have improperly put the court back into a screening mode. We do not read Granillo as holding that subsequent events cannot shed light on whether a vague initial invitation by the trial court to the prosecutor was intended as a prima facie finding or was merely a seeking of input as to whether a prima facie showing has been made by the defense.
In People v. Johnson (1989) 47 Cal.3d 1194, 1217 [255 Cal. Rptr. 659, 767 P.2d 1047], the trial court reacted to the Wheeler motion by asking the prosecutor, "`Do you wish to respond ... ?' It then proceeded to hear the prosecutor's explanations for the use of the peremptory challenges. In People v. Turner[, supra,] 42 Cal.3d 711 at pages 718-719 ... we concluded that such an inquiry by the trial court constituted `at least an implied finding' of a prima facie showing." Johnson did not consider the question of whether the totality of circumstances can show lack of a prima facie finding when the trial court has invited the prosecutor to "respond" or "be heard" as opposed to "explain" or "give reasons."
McCaskey held that a "reviewing court must look carefully at the circumstances faced by the trial court whenever it is asked to decide whether the trial court intended to make an implied finding that a prima facie case was established under Wheeler. It is clear that not every request for input from the prosecutor is intended by a trial court as a prima facie finding. The trial court may simply want input on the very question of whether a prima facie case has been established. For example, in this case the Wheeler motion raised the question of whether one of the challenged jurors ... was a member of a cognizable class. It would have been imprudent, and maybe unfair, for the trial court to decide this question without providing the prosecutor an opportunity to state her observations or opinion. The trial court must be given some latitude to make inquiries to more preparedly deal with the situation before it. Granillo does not hold to the contrary." (People v. McCaskey, supra, 207 Cal. App.3d at p. 257.)
Johnson was filed by the Supreme Court on February 23, 1989. The Supreme Court denied review in McCaskey on April 19, 1989.
The instant matter goes McCaskey one better. The trial court did not ask for reasons or explanations. It merely asked the prosecutor if she wished to be heard. The prosecutor, wisely or fortuitously, gave not one word of excuse or explanation, but attacked the preliminary question of systematic exclusion, after which the trial court specifically found no pattern of systematic exclusion. In the cases surveyed above, including McCaskey, the prosecutors, some eagerly, some reluctantly, gave reasons for excluding the jurors *8 in question. It is easier to conclude that a trial court has impliedly made the prima facie finding when it takes the next step and listens to the justifications offered.
In People v. Bittaker (1989) 48 Cal.3d 1046 [259 Cal. Rptr. 630, 774 P.2d 659], after the defense accused the prosecutor of violating Wheeler, the trial "court afforded the prosecutor a chance to respond the prosecutor denied the charge and then denied defendant's motion. [¶] Defendant argue[d] that by offering the prosecutor a chance to respond to the motion, the court in effect found that defense counsel had made a prima facie showing of group bias, thus shifting to the prosecutor the burden to justify his challenges. We do not so interpret the judge's ruling. He did not call upon the prosecutor to explain his challenges, but to respond to the defense motion. When the judge then denied the motion, he did so on the ground that the defense had not made out a prima facie showing of group bias, not that the prosecutor had rebutted such a showing." (Id. at pp. 1091-1092.)
"In determining whether to infer a trial court's finding of a prima facie case under Wheeler, we look to the whole record, examining the court's remarks in context." (People v. Hayes (1990) 52 Cal.3d 577, 605, fn. 2 [276 Cal. Rptr. 874, 802 P.2d 376].)
We are persuaded by McCaskey, fortified by Bittaker and Hayes. In context, the trial court merely gave the prosecutor the chance to be heard. She attacked only the prima facie question and the trial court then found no systematic exclusion. The only conclusion we can draw is that the trial court did not impliedly make a prima facie finding.
Some of the cases summarized above turn on exceedingly fine points of the peculiar phrasing of the trial court's invitation and the nature of the prosecutor's response. The sad lesson is that when the trial court responds with "do you want to be heard" or "would you like to respond," the ball is in the air and can land anywhere. Here, it happens to have landed on the prosecution's side. Next time it may just as well require an automatic reversal. Such unpredictability is anything but desirable, but when vague records come to us, leaving us to in effect try to read the trial judge's mind, an unintended twist of phrase can end up the deciding factor. Strange though it seems, the case law requires us to pick at microscopic distinctions and make a call that may or may not resemble what the trial judge had in mind. It's much easier for the trial court to just say whether it is making the prima facie finding before it asks the prosecutor to respond, or if limiting the inquiry to whether a prima facie showing has been made, to say so. Any prosecutor who fails to inquire and gushes explanations when the trial court has failed to specify is unwittingly jeopardizing his or her case.
*9 II-V[*]
.... .... .... .... .... .... .... .
DISPOSITION
The judgment is affirmed.
Spencer, P.J., and Masterson, J., concurred.
A petition for a rehearing was denied January 19, 1994, and the opinion was modified to read as printed above. Appellant's petition for review by the Supreme Court was denied March 23, 1994. Mosk, J., was of the opinion that the petition should be granted.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts II through V.
[*] See footnote, ante, page 1.
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58 Cal.2d 848 (1962)
In re DONERAL PATTERSON, a Minor. DONERAL PATTERSON, Appellant,
v.
THE PEOPLE, Respondent.
Sac. No. 7429.
Supreme Court of California. In Bank.
Dec. 13, 1962.
S. Carter McMorris for Appellant.
Stanley Mosk, Attorney General, Doris H. Maier, Assistant Attorney General, and Raymond M. Momboisse, Deputy Attorney General, for Respondent.
McCOMB, J.
Doneral Patterson, a minor aged 17, appeals from a judgment of the Superior Court of Sacramento County sitting as a juvenile court, declaring him a ward thereof and committing him to the care and custody of the Youth Authority.
Facts: The minor was charged with entering a residence "with the intent to commit the crime of theft, thereby violating Section 459 of the Penal Code California."
He was taken into custody on November 30, 1961. His mother and only available parent, Opal Patterson, was given telephonic notice of the detention hearing before the juvenile court referee, set for December 1, 1961.
Following the detention hearing, the court by order adopted the referee's recommendation that the minor be committed to the custody of the county probation officer, to be detained in the Juvenile Hall pending hearing of a petition that he be declared a ward of the court.
Written notice of the hearing on the petition, set for December 18, 1961, was personally served on the minor's mother. After the hearing, the juvenile court declared the minor a ward of the court.
These questions are presented for determination:
[1] First. Was insufficient notice of the detention hearing given to the minor's mother, resulting in a lack of jurisdiction in the juvenile court?
No. Section 630 of the Welfare and Institutions Code expressly provides that notice of a detention hearing may be given to a parent orally. Notice by telephone satisfies this requirement and constitutes due process of law. (Drummey *851 v. State Board of Funeral Directors, 13 Cal.2d 75, 80 [2] [87 P.2d 848]; Litchfield v. County of Marin, 130 Cal.App.2d 806, 813 [7] et seq. [280 P.2d 117].)
It is conceded that notice of the detention hearing was personally served on the mother of the minor by telephone. Under the foregoing rules, this constituted sufficient notice.
[2] Second. Were the minor and his parent adequately apprised of the right to counsel?
Yes. Section 633 of the Welfare and Institutions Code requires that when a minor appears at a detention hearing he, and his parent or guardian if present, be "informed of the reasons why the minor was taken into custody, the nature of the juvenile court proceedings, and the right of such minor and his parent or guardian to be represented at every stage of the proceedings by counsel."
An affidavit of Walter A. Schmidt, the referee of the juvenile court, established that the minor was advised at the detention hearing of the right to counsel. The minor's mother did not attend that hearing.
Section 658 of the Welfare and Institutions Code requires that notice of the hearing on a petition to declare a minor a ward of the court be served upon all the minor's parents and guardians whose residence addresses are known. Section 659 requires that such notice contain a "statement that the minor, or his parent or guardian, is entitled to have his attorney present at the hearing on the petition, and that, if the parent or guardian is indigent and cannot afford an attorney, and the minor or his parent or guardian desires to be represented by an attorney, such parent or guardian shall promptly notify the clerk of the juvenile court."
The mother of the minor was personally served with notice of the hearing on the petition, which notice contained the statement required by section 659.
Section 700 of the Welfare and Institutions Code provides, among other things, that at the beginning of the hearing on a petition to declare one a ward of the juvenile court the "judge shall ascertain whether the minor or his parent or guardian has been informed of the right of the minor to be represented by counsel, and if not, the judge shall advise the minor and the parent or guardian, if present, of the right to have counsel present. If the parent or guardian is indigent and desires to have the minor represented by counsel, the court may appoint counsel to represent the minor, and in *852 such case the court must appoint counsel if the minor is charged with misconduct which would constitute a felony if committed by an adult."
Accordingly, the judge is required to ascertain at the beginning of the hearing whether the parent or the minor has been informed of the right to counsel and is then required to advise them of such right only if he has ascertained that they have not previously been informed thereof.
The records before the court at the commencement of the hearing reflected that the minor had been advised at the detention hearing of the right to counsel and that his mother, who was present at the hearing on the petition, had been advised of the right to counsel in the notice of hearing personally served upon her.
Once the judge had ascertained from the records then before him that the minor and his parent had been informed of the right to counsel and that no request had been made for the appointment of counsel, he was justified in proceeding without again advising the minor or his parent of the right to counsel. That duty would have evolved upon him only if it had appeared that they had not previously been advised of such right.
[3] The minor further contends that section 700 of the Welfare and Institutions Code requires that counsel be appointed in every case where the parent or guardian is indigent if the minor is charged with misconduct which would constitute a felony if committed by an adult.
This contention overlooks the further requirement in the section that such an appointment is mandatory only if the parent or guardian desires the appointment of counsel. The record is devoid of any evidence which would indicate such a desire on the part of the minor's parent. If, as here, the parent has not indicated any desire for counsel, the court has no obligation to appoint counsel, and its failure to do so did not vitiate the judgment entered.
[4] Third. Was the minor's admission of the charges against him the equivalent of a plea of guilty and, as such, sufficient to support the judgment?
Yes. The minor argues that there was insufficient evidence to support the judgment and that the probation officer's report was improperly admitted and considered by the court, since the report contained conclusions and hearsay. This contention has been held to be without merit. (In re Garcia, 201 *853 Cal.App.2d 662, 664 [2] [20 Cal.Rptr. 313]; In re Halamuda, 85 Cal.App.2d 219, 223 [192 P.2d 781].)
In addition to the report that was received in evidence when the minor appeared before the court, the charges were read, and he admitted their truth in open court. [5] The testimony of an accused at his trial not only establishes the corpus delicti of the offense but is sufficient to justify a judgment. (People v. Hill, 2 Cal.App.2d 141, 155 [37 P.2d 849] [hearing denied by the Supreme Court]; People v. Hudson, 139 Cal.App. 543, 544 [2] [34 P.2d 741].)
[6] It is likewise settled that the admission by a minor of the charges against him in open court is the equivalent of a plea of guilty and therefore raises no issue of fact and precludes the necessity for the presentation of evidence in support of the allegations contained in the petition. (In re Dargo, 81 Cal.App.2d 205, 208 [4] et seq. [183 P.2d 282] [hearing denied by the Supreme Court]; cf. People v. Johns, 173 Cal.App.2d 38, 42 [2, 3] [343 P.2d 92].)
[7] Fourth. Did the trial judge properly review the report of the probation officer and the other records before him at the time of the hearing?
Yes. It must be presumed, in the absence of a showing to the contrary, that the statutory requirements were followed by the trial judge. (Code Civ. Proc., 1963, subd. 15; People v. Downer, 57 Cal.2d 800, 817 [22 Cal.Rptr. 347, 372 P.2d 107]; People v. Citrino, 46 Cal.2d 284, 287 [2] [294 P.2d 32]; In re Smith, 33 Cal.2d 797, 801 [2] [205 P.2d 662]; 28 Cal.Jur.2d (1956) 5, p. 618. No showing to the contrary was made in the present case. Therefore, the presumption is here applicable.
The judgment is affirmed.
Gibson, C. J., Schauer, J., and White, J., [fn. *] concurred.
TRAYNOR, J.,
Dissenting.
I dissent. In my opinion the decision herein renders superfluous and unenforceable the provisions of section 700 of the Welfare and Institutions Code [fn. 1] relating to the right to counsel and thus frustrates the *854 purpose of the Legislature to safeguard that right in the juvenile court.
A judge can now "ascertain" whether the minor and his parents have been informed of the minor's right to be represented by counsel simply by examining the records to note whether the notices required by sections 633 [fn. 2] and 659 [fn. 3] were given. He need not place anything on record to indicate that he has even made that examination. He need not undertake any investigation to determine that the records before him are correct. He need not determine whether the absence of counsel at the hearing is the result of an intelligent and understanding waiver of the right to counsel.
Section 700, so interpreted, becomes superfluous for no statute is necessary to impose a duty upon the juvenile court judge to determine whether the requirements of sections 633 and 659 have been met. A judge necessarily has a duty in every case, particularly when a party is not represented by counsel (see In re Masching, 41 Cal.2d 530, 534 [261 P.2d 251]), to determine that the proceedings in the case accord with statutory requirements. (See Code Civ. Proc., 128.)
Section 700, so interpreted, becomes unenforceable, for if the judge fails to examine the records to determine whether sections 633 and 659 were complied with and remains silent as to such failure, the minor and his parents are without a remedy. It will be presumed that the examination was made, *855 absent an affirmative showing to the contrary, which the minor and his parents will ordinarily be unable to make. [fn. 4]
The California Juvenile Court Law of 1961 was the product of years of extensive study and criticism of juvenile court procedures. The charge that in their informal procedures juvenile courts were sacrificing fundamental procedural rights of the offender was a matter of national concern. [fn. 5] Extensive studies of the California juvenile courts were undertaken by a special commission appointed by the Governor, and a more limited study of wardship and the right to counsel by the California Law Revision Commission. These studies found that many judges believed that attorneys had no place in juvenile court proceedings [fn. 6] and that a majority of judges did not inform the minor or his parents of their right to representation by counsel. [fn. 7] They concluded that legislation was necessary to compel judges to inform the minor and his parents of this important right. [fn. 8] Many of the provisions enacted by the Legislature, including those before us in this case, were taken verbatim from the recommendations of the Governor's Commission. Section 700 is thus part of a comprehensive plan of remedial legislation, enacted after careful study and drafting. Under these circumstances, it is evident that it was the Legislature's purpose to make section 700 a *856 significant one and that an interpretation that renders it unnecessary and unenforceable frustrates that purpose.
The Governor's Commission, which drafted the exact wording of section 700, stated that "in our opinion, all judges should be required to inform the minor and his parents of this right [to counsel] as a routine part of the juvenile court procedure." (Part I, p. 26; accord, 3 Calif. L. Revision Com. Report (1960), p. E6.) Although the minor may be personally informed of the right to counsel at the detention hearing and a parent may be given written notice of the right, they are not informed of that right by the judge at the hearing to determine wardship when the judge does not utter a word about it. Indeed, a parent would not be informed of the right by any judge unless the parent had been present earlier at the detention hearing.
In part II of its report (page 14), the Governor's Commission quotes with approval from Shioutakon v. District of Columbia (D.C.Cir. 1956.) 236 F.2d 666, 670: "[W]here that right [to counsel] exists, the court must be assured that any waiver of it is intelligent and competent." (Accord, People v. Chesser, 29 Cal.2d 815 [178 P.2d 76, 170 A.L.R. 246].) Obviously the court cannot be assured of that fact simply by noting that the form notice delivered to the parent contains a statement that the juvenile has a right to be represented by counsel. There is no assurance that the notice was read, that the parent was able to read, or if he could read that he understood what representation by counsel meant. Even if the minor was personally informed at the detention hearing of his right to counsel, there is no assurance that any waiver, whether express or inferred, as in this case, from his appearance at the hearing unaccompanied by counsel, was "intelligent and competent." The Governor's Commission noted the irony of regarding minors as incompetent in financial matters and yet assuming their competence to make important legal decisions "which may involve a drastic curtailment of the minor's freedom and liberty." (Part I, p. 27.) Only by carefully questioning the minor could a judge ascertain that the minor's waiver of counsel was intelligent and competent. (See Williams v. Huff (D.C.Cir. 1944) 142 F.2d 91.)
"Ascertain" means "to find out with certainty." (Webster's New World Dictionary of the American Language.) What can the judge find out with certainty if he need only examine the recitals in the records before him? Even if the *857 recitals in the records are correct, he can only discover that a written notice was given the parents and that a statement was made to the minor. There is no meaningful sense in which it can be said that someone is informed "of the right to representation by counsel" unless he understands the meaning and significance of that right. To "ascertain" if he has been so "informed" the judge must "find out with certainty" whether he has an intelligent comprehension of the right.
In my opinion the purpose of the Legislature in enacting section 700 and the language it used to express that purpose require the judge at the outset of the hearing personally to find out by examining the minor and his parents or guardian, if present, whether they have been informed of the minor's right to representation by counsel and whether they wish the aid of counsel. In performing that duty the judge must also make certain that they understand the nature of the charge and its possible consequences and that if they cannot afford to employ counsel, the court can appoint counsel, if the charge is of felony proportions.
The judge's duty to protect the rights and interests of the minor is particularly significant when a right as vitally important as the right to representation by counsel is at stake. That duty is not discharged when the judge does not even mention that right or show enough interest to question the juvenile or his parent or guardian to ascertain whether the right to counsel is understood and has not been waived through ignorance or misunderstanding. The burden such inquiries place on the judge is minimal when compared with the risk of misinformed waiver and the consequent loss to both the minor and the judge of the aid that counsel can give them in the discovery of the truth and if necessary the formulation of plans of rehabilitation.
Peters, J., and Tobriner, J., concurred.
NOTES
[fn. *] *. Assigned by Chairman of Judicial Council.
[fn. 1] 1. "At the beginning of the hearing on a petition filed pursuant to Article 7 (commencing with section 650), the judge or clerk shall first read the petition to those present and upon request of the minor upon whose behalf the petition has been brought or upon the request of any parent, relative or guardian, the judge shall explain any term or allegation contained therein and the nature of the hearing, its procedures, and possible consequences. The judge shall ascertain whether the minor or his parent or guardian has been informed of the right of the minor to be represented by counsel, and if not, the judge shall advise the minor and the parent or guardian, if present, of the right to have counsel present. If the parent or guardian is indigent and desires to have the minor represented by counsel, the court may appoint counsel to represent the minor, and in such case the court must appoint counsel if the minor is charged with misconduct which would constitute a felony if committed by an adult. The court may continue the hearing for not to exceed seven days, as necessary to make an appointment of counsel, or to enable counsel to acquaint himself with the case, or to determine whether the parent or guardian is indigent and unable to afford counsel at his own expense."
[fn. 2] 2. Section 633 provides that upon his appearance at the detention hearing the minor and his parent or guardian, if present, "shall first be informed of ... the right of such minor and his parent or guardian to be represented at every stage of the proceedings by counsel."
[fn. 3] 3. Section 659 provides that the notice to the parent or guardian of the court hearing to determine wardship must contain "a statement that the minor, or his parent or guardian, is entitled to have his attorney present at the hearing. ..."
[fn. 4] 4. The Report of the Governor's Special Study Commission on Juvenile Justice (1960) part II, pages 12-14, and a Stanford Law Review study (see Note, The California Juvenile Court (1958) 10 Stan. L. Rev. 471, 500- 501) noted the extreme hostility of some judges to the participation of attorneys in juvenile court proceedings. The statute before us was enacted because of the undesirable results of that hostility. In the light of this background, it cannot be assumed that appellate court supervision will not be necessary to ensure that the purpose of section 700 is fully accomplished. Under today's decision, however, such supervision is impossible.
[fn. 5] 5. See e.g., Senate Com. on the Judiciary, Juvenile Delinquency, S. Rep. No. 430, 85th Cong., 1st Sess. (1957); United States Dept. of Health, Education & Welfare, Standards for Specialized Courts Dealing with Children (1954); Ellrod & Melany, Juvenile Justice: Treatment or Travesty? (1950) 11 U.Pitt. L. Rev. 277; O'Neil, Criminal Law (1951) Mercer L. Rev. 46; Paulsen, Fairness to the Juvenile Offender (1957) 41 Minn. L. Rev. 547; Note, Due Process in the Juvenile Courts (1952) 2 Catholic U. L. Rev. 90.
[fn. 6] 6. Report of the Governor's Special Study Commission on Juvenile Justice (1960) part I, p. 13; Note, The California Juvenile Court, supra, 10 Stan. L. Rev. at p. 500.
[fn. 7] 7. Report of the Governor's Special Study Commission on Juvenile Justice (1960) part I, p. 26; Id part II, p. 12.
[fn. 8] 8. Report of the Governor's Special Study Commission on Juvenile Justice (1960) part I, p. 26, 72-73; 3 Calif. L. Revision Com'n Reports (1960), p. E6.
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180 F.3d 264
Wilsonv.Reeves*
NO. 97-40836
United States Court of Appeals,Fifth Circuit.
April 30, 1999
Appeal From: E.D.Tex. , No.6:96CV1100
Vacated.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34-2
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208 Ga. App. 728 (1993)
431 S.E.2d 727
TURNER
v.
THE STATE.
A93A0873.
Court of Appeals of Georgia.
Decided May 25, 1993.
Paul S. Han, for appellant.
J. Tom Morgan III, District Attorney, Barbara B. Conroy, Gregory A. Adams, Stacy Y. Cole, Assistant District Attorneys, for appellee.
BLACKBURN, Judge.
The appellant, Kathy Jo Turner, was convicted by a jury of aggravated assault and sentenced to five years' imprisonment. The appellant subsequently filed a motion for new trial and the motion was denied by the trial court. On appeal, the appellant contends that the trial court erred in allowing the victim to place appellant's character in issue in response to a question asked by the appellant's counsel and a mistrial was warranted.
At trial, the 17-year-old victim testified that on the morning in question, she saw the appellant at a teen nightclub. The appellant and the victim had met approximately four years earlier and had established a friendship. The appellant and another individual walked past the victim while the victim was talking to a friend, and the appellant turned around toward the victim. Thereafter, the appellant hit the victim and told the victim to leave the nightclub. The victim subsequently hit the appellant and after a few of their friends interrupted the scuffle that followed, the appellant walked away. Another fight ensued between the appellant and the victim and as a result of this second encounter, the victim was cut by the appellant with a razor from the middle of her left ear down to her throat. The victim later saw the appellant outside of the nightclub and identified the appellant as her assailant.
In response to defense counsel's question on cross-examination concerning inconsistencies made in her statement to the police, the victim indicated that at the time of the statement, she did not know who had cut her, "but [she] was pretty sure [that the appellant] did because she's cut all kind of people. She's cut someone before. She's assaulted someone with a knife, and then she's been bragging about it." The trial court sustained the defense counsel's general objection to the victim's answer because the answer was not responsive to the question. However, the trial court did not provide curative instructions to the jury and the appellant's counsel did not ask for these instructions. In addition, the appellant's counsel did not move for a mistrial after the victim responded.
Assuming arguendo that the victim's response incidentally placed the appellant's character in issue, the appellant did not object to the victim's response to the question based upon that ground. "The trial court was not asked to rule on (this) ground and thus there is nothing to review. It is well established that appellate courts may not consider *729 objections to evidence not raised at trial.' (Citations and punctuation omitted.) [Cit.]" Sales v. State, 199 Ga. App. 791, 792 (406 SE2d 131) (1991). By failing to object on the basis that the victim's response placed the appellant's character in issue, the appellant waived any objection that she might have had on that issue. Favors v. State, 145 Ga. App. 864 (244 SE2d 902) (1978). In addition, the appellant's attorney did not move for a mistrial after the victim responded to the question, and as this court has held in Garner v. State, 180 Ga. App. 146 (348 SE2d 690) (1986), a mistrial will not be granted where a motion for mistrial is not made contemporaneously with the alleged misconduct. "`A party can not during the trial ignore what he thinks to be an injustice, take his chance on a favorable verdict, and complain later.' [Cit.]" Favors, supra at 866. Accordingly, the appellant's enumeration is without merit.
Judgment affirmed. Johnson and Smith, JJ., concur.
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698 F.2d 1234
U. S.v.Meraz
82-1159
UNITED STATES COURT OF APPEALS Ninth Circuit
12/27/82
1
C.D.Cal.
AFFIRMED
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520 S.W.2d 304 (1975)
THRIFTY RENT-A-CAR, a/k/a Commercial Leasing Systems, Inc., Appellant,
v.
Charles Ricky JEFFREY, Appellee.
No. 74-319.
Supreme Court of Arkansas.
March 31, 1975.
*305 Stubblefield & Matthews, Little Rock, for appellant.
Richard J. Orintas, Little Rock, for appellee.
HOLT, Justice.
Appellant's manager caused appellee to be arrested for larceny by a bailee pursuant to Ark. Stat.Ann. § 41-3929 (Repl. 1964). The prosecutor later dismissed the charge. Appellee thereafter brought suit for malicious prosecution. A jury awarded appellee $1,500 compensatory and $1 punitive damages. Appellant was awarded $1,225 on its cross-complaint against appellee for damages to its automobile during the bailment. Appellant first asserts for reversal that the trial court erred in denying its motion for a directed verdict and argues there was insufficient evidence that the criminal action was instituted without probable cause.
In determining the sufficiency of the evidence on appeal, we review the evidence and all reasonable inferences deducible therefrom in the light most favorable to the appellee and affirm if there is any substantial evidence to support the finding of the jury. Green v. Harrington, 253 Ark. 496, 487 S.W.2d 612 (1972). There we said that upon appellate review it must appear "there is no reasonable probability that the incident occurred as found" by the factfinder. Furthermore, it is well established that upon appeal we consider only the evidence of the appellee or that portion of all the evidence which is most favorable to him. Baldwin v. Wingfield, 191 Ark. 129, 85 S.W.2d 689 (1935); and Washington Natl. Ins. v. Meeks, 252 Ark. 1178, 482 S.W.2d 618 (1972).
The appellee was employed at a place of business near that of the appellant. The appellee became acquainted with appellant's manager and expressed an interest in buying one of their rental cars. Appellee's version of the bailment, which was contradicted by appellant, was that appellant permitted him, by a verbal agreement, to have the car on a Friday afternoon with the understanding that he would return or purchase the car on the following Monday. Appellee expressed a desire to show it to his wife, his insurance adjuster to determine the insurance rates, and have a mechanic inspect the brakes and front end alignment. He was told there was no restriction as to the mileage he could put on the car and neither was he limited to keeping it in Little Rock. It was appellee's understanding that he "could drive it wherever [he] pleased". He drove the car to Batesville where he spent Friday night and showed the car to his and his wife's families. Saturday morning they went fishing. That evening they attended a show and then after putting the children to bed, he and his wife went "riding around in the car." He accidentally lodged the car on an asphalt ramp at a dam site causing the damages. He was unable to locate appellant's manager on Sunday and drove the car back to Little Rock. On Monday morning (not having seen his insurance agent or mechanic) he called appellant's manager and advised him about the damaged car. As requested, appellee returned the car.
Appellant's manager denied that the bailment existed longer than Friday or one day. He and appellee discussed settlement of the damages to the car. Appellee said that he would "try to work something out with him" and "give me a little time." Several days later, appellee moved from Little Rock to Memphis to other employment. A few days later the appellant contacted the prosecuting attorney and had a warrant issued for the appellee upon a charge of larceny by a bailee. Appellee testified that appellant's manager knew that he was in the process of moving. The manager did not secure a written estimate of the cost of the damages to the car until after the criminal action had been dismissed in criminal court. He acknowledged that he could have filed a civil suit. However, he thought the appellee was "judgment proof." Also that he considered the appellee had "broken the law" and "should be punished."
*306 In an action for malicious prosecution, the burden is on the plaintiff to show that the defendant acted maliciously and without probable cause. Malvern Brick and Tile Co. v. Hill, 232 Ark. 1000, 342 S.W.2d 305 (1961). Only when the facts relied upon as constituting probable cause are undisputed, then the question becomes one of law and should not be submitted to the jury. Gazzola v. New, 191 Ark. 724, 87 S.W.2d 68 (1935) and Whipple v. Gorsuch, 82 Ark. 252, 101 S.W. 735 (1907). However, appellant recognizes that where a factual dispute exists "it is generally for the jury to determine the truth and whether a justification is established" for prosecution.
The crux of § 41-3929 is not the existence of an intent to convert the property to the use of the bailee but the use of the property contrary to the agreement. Sullivant v. Pennsylvania Fire Ins. Co., 223 Ark. 721, 268 S.W.2d 372 (1954). In the case at bar, the conditions of the verbal bailment are in dispute. As indicated, the appellee took the car to show to his insurance agent and mechanic and "try the automobile out and show it to my wife." It is true that he did not confer with his insurance agent or mechanic about the car. However, there was no particular time agreed upon as to when appellee would return the car on Monday. The car, having been damaged on Saturday, was returned, as requested, Monday morning. According to appellee, appellant did not limit the mileage and he could drive the car wherever he pleased. In the circumstances, the question as to whether appellee had deviated from the agreement was properly submitted to the jury.
Appellant next argues that the court erred in refusing to direct a verdict on the ground that appellant acted upon the advice of counsel in prosecuting this case. Appellant recognizes our well established rule that matters raised for the first time on appeal will not be considered. Even if we agree with the appellant that its motion was sufficiently presented to the trial court, we cannot agree with its contention. This is so because, as appellant recognizes, a full and complete disclosure of the facts must be made. Hall v. Adams, 128 Ark. 116, 193 S.W. 520 (1917). As indicated, there was a factual issue between appellant's and appellee's version of the bailment.
Appellant finally asserts that appellee failed to prove that appellant acted with malice, which is a necessary element in a malicious prosecution cause of action. We have held that ".... malice may be inferred when there is lack of probable cause, even though there was no express showing of malice." Malvern Brick and Tile Co. v. Hill, supra. Furthermore, as previously stated, in determining the sufficiency of the evidence, we must view the evidence in the light most favorable to appellee. Appellee testified that when appellant's manager learned about the damaged car, the manager expressed a fear of losing his job. Then he attempted to get appellee to sign a postdated rental agreement in order to have appellant's insurer pay for the damage. According to appellee, appellant's manager knew that appellee was moving to Memphis and he contacted appellee only once before appellee moved. During that last conversation in Little Rock, the parties talked about the damage to the car and appellant again asked appellee to sign the postdated rental agreement. When asked why the criminal action was instituted, appellant's manager answered "[B]ecause he had broken the law and as far as I could see he should be punished." Appellant's manager did not think that it was "in the best interest of the company" to file a civil suit because he thought "the man was judgment proof." Appellee testified that appellant's manager told him the charges would be dismissed if appellee would pay the damages. Certainly, there is substantial evidence from which the jury could find the necessary element of malice.
Affirmed.
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390 So.2d 1070 (1980)
Yvette Rena HOWARD
v.
STATE.
1 Div. 101.
Court of Criminal Appeals of Alabama.
May 27, 1980.
On Rehearing August 19, 1980.
Rehearing Denied October 7, 1980.
*1071 W. Gregory Hughes, Mobile, for appellant.
Charles A. Graddick, Atty. Gen. and Michael E. McMaken, Sp. Asst. Atty. Gen., for appellee.
CLARK, Retired Circuit Judge.
This is an appeal from a judgment of conviction and a sentence to ten years imprisonment for manslaughter in the first degree of Barbara Young upon a trial by a jury on an indictment charging murder in the first degree. The case was consolidated for trial, on motion of defendant, with a case against the same defendant on an indictment for assault with intent to murder Betty Jo Pettaway. The jury found defendant not guilty in the other case.
The undisputed evidence shows that Barbara Young was killed by one or both of two shots of a pistol fired by defendant, that Betty Jo Pettaway was hit by another shot from the pistol fired by defendant, and that the three shots occurred in rapid succession.
The only seriously contested issue in the homicide case was as to the asserted defense of self-defense, or defense of defendant's mother, or both, included within the defendant's plea of not guilty.
There is no claim by either party that there is any repugnancy between the verdict in the instant case and the verdict of not guilty in the other case, but we note, to avoid question, that probably the verdict of the jury in the other case was based upon a finding in effect that defendant did not intentionally shoot Betty Jo Pettaway and that Betty Jo Pettaway was hit by a shot intended for Barbara Young.
The tragedy occurred on a Sunday evening, April 22, 1979, in the backyard of a "hit house," a term employed by the witnesses as a house, a residence, at which liquor was sold without a license and gambling by cards was promoted.
The two alleged victims and defendant and her mother, Rosena Howard, engaged in a game of cards in a back room of the house, at which at the time were approximately twenty-five persons, most of whom *1072 were imbibing freely. At some point in the card game, defendant's mother accused the alleged victim of the homicide of cheating. After the game broke up, defendant's mother and Barbara Young started fighting inside the house. The fight was broken up by the intervention of others; defendant, her mother and a friend then went outside. Betty Jo Pettaway and Barbara Young followed them outside and a fight between defendant and Barbara broke out again. While the fight was going on outside, defendant's mother obtained a pistol from her purse and struck Barbara over her eye with it. The pistol was taken from defendant's mother by a man and given to a female from whom defendant obtained the pistol and fired the three shots while her mother and Barbara Young were fighting and while Barbara had defendant's mother by the hair.
Many details are omitted from this summary of the evidence, which perhaps would be more confusing than helpful. There is no need for them in connection with our consideration and determination of the issues presented on this appeal, other than as they may hereafter be mentioned with reference to some of such issues in particular.
Defendant objected to the introduction in evidence of the pistol, and three empty cartridges therefrom, and accompanying expert testimony to the effect that the pistol was the one fired by defendant and that the empty cartridges had been fired therefrom. Notwithstanding appellant's insistence to the contrary, we find that the evidence well traced the pistol and the three cartridges from the custody of defendant's father, who testified in the case, through the hands of three officers to the witness who testified as a ballistics expert. As defendant contends, there was some discrepancy in the evidence as to who was the person who delivered the gun and empty cartridges to the expert, but there could hardly be any reasonable doubt as to the correct identity of the pistol and the empty cartridges. Furthermore, a determination of guilt or innocence of defendant could not conceivably have turned upon any possible misidentification of the particular pistol fired by defendant or any one of the three particular cartridges fired from the gun. As appellant well argues in other parts of her brief, no other pistol was involved; no cartridge other than the three cartridges was involved. Although evidence as to the identity of the pistol and the three cartridges and the fact that they were fired from the same pistol could have well been left out of the case, appellant's contention with reference to its admission in evidence is without merit.
Contrary to appellant's argument, we find that the statement made to the officers after defendant was taken into custody have all of the pre-Miranda and post-Miranda requirements for the admission in evidence of confessions or other inculpatory statements.
Another insistence of appellant is to the effect that although the body of the deceased was definitely shown by a testifying pathologist, on post-mortem examination, to be the body of Barbara Young there was no evidence to the effect that such Barbara Young was the same Barbara Young that had been killed by defendant. There is no semblance of any reason for believing that the body of the Barbara Young that was killed by defendant could have been misidentified as the body of the Barbara Young whom the pathologist examined. This contention is without merit.
The trial court refused the following written charge requested by defendant:
"44. I charge you, members of the jury, that the law requires the State to prove beyond a reasonable doubt that the Defendant acted in the absence of self-defense."
It should be clear that the burden is not upon the defendant to prove his asserted defense of self-defense. In any homicide case in which there is evidence of self-defense, that is, evidence sufficient to present a jury issue as to self-defense, the burden is upon the State to satisfy the jury by the evidence beyond a reasonable doubt that defendant is guilty, and this burden is not *1073 transferred from the State to defendant by reason of applicability to the particular case of the defense of self-defense or defense of another. Even so, if any virtue is to be found in defendant's requested charge 44, it is an oversimplification of the principles of law pertaining to the subject as comprehensively set forth in Vaughn v. State, 293 Ala. 365, 304 So.2d 6 (1974), on remand, 53 Ala. App. 744, 304 So.2d 12, cert. denied, 423 U.S. 857, 96 S.Ct. 109, 46 L.Ed.2d 83. A similar charge set forth in Wilkins v. State, 57 Ala.App. 55, 325 So.2d 926 (1975):
"The court charges the Jury that where the Defendant introduces evidence of self-defense to justify the killing of deceased, the burden is upon the State to prove beyond a reasonable doubt that the killing was not in self-defense, and unless the State has done so in this case, you must find the defendant not guilty."
was held to be "too broad as to the burden on the State." Charge 44 is subject to the same infirmity. Its refusal was not error.
Appellant urges error by reason of the court's refusal of defendant's requested charge No. 10:
"I charge you, members of the jury, that the Prosecution must prove its charge, and prove it beyond a reasonable doubt, by evidence. The assertions of counsel are not evidence."
Appellant relies upon Morse v. State, 49 Ala.App. 203, 269 So.2d 916 (1972). In Lamar v. State, Ala., 356 So.2d 680, rev'g Ala.Cr.App., 356 So.2d 677, Justice Shores makes it clear that what was held in Lane v. State, 85 Ala. 11, 4 So. 730 (1887), relied upon in Morse v. State, supra, as to a similar charge, should be restricted to the circumstances shown in Lane in which there had been an improper argument by the prosecuting attorney. There is no contention here that there was any improper argument by counsel for the State. The record shows affirmatively that no objection was made as to any argument by counsel for either party. Charge 10 was properly refused. Brown v. State, Ala.Cr.App., 369 So.2d 56 (1979).
A part of the transcript of the court's oral charge is as follows:
"There is one other thing in the oestion [sic except as to the supplied emphasis] of self-defense that the law says a person in self-defense is justified only in using such force as is necessary to repel an attack on him and that in the eyes of the law, if you attacked me with your fist, I don't have the right to shoot you to stop the attack."
The transcript also shows that at the conclusion of the court's oral charge the following occurred:
"... Are there any exceptions to the oral charge?
"MR. COPELAND [State's counsel]: Maybe you could clarify. Since we are dealing with so many, it would be possible to have an assault to murder on the one and a lesser murder on the other. That it can change with the passing of just a few seconds.
"THE COURT: You mean transferring from the one she says she was shooting at to the one she hit?
"MR. HUGHES [Counsel for Defendant]: In addition to those, we would accept [sic] one portion of the Court's charge, and I possibly could have misunderstood it when the Court said that if one were attacked by somebody with fists, that certainly there would be no right to retaliate with a gun or shoot him. I would ask the Court to add to that, that it would depend on the circumstances under which there was an attack by fists or whatever.
"THE COURT: I charge you Ladies and Gentlemen ...."
The transcript shows that in continuing to charge the jury, the court further instructed the jury as to the point mentioned by State's counsel, as quoted above, but did not again discuss the point made by defendant's counsel, as quoted above.
The portion of the court's oral charge quoted above as to the right of a person to shoot another who has attacked him with his fist is not a correct statement of the law, although it can be a very powerful and persuasive statement that the State would have the right to make in argument *1074 to a jury in its plea that a defendant should be found guilty of a homicide notwithstanding the defense of self-defense.
A correct statement of the precise applicable principle is found in the opinion of Chief Justice Stone in Scales v. State, 96 Ala. 69, 76, 11 So. 121 (1891-92):
"... Fisticuff blows do not, as a rule, inflict the grievous bodily harm, which, other means of escape being cut off, will excuse the slaying of the assailant. `When a man is struck with the naked hand, and has no reason to apprehend a design to do him great bodily harm, he must not return the blow with a dangerous weapon.'Shorter v. People, 2 Comstock, N.Y. 193...."
Appellant relies upon George v. State, 145 Ala. 41, 40 So. 961 (1906), which is substantially in point as to what the trial court incorrectly stated in this case, as well as in that case. In George, the trial court had stated "that a blow from the hand or fist never justified the use of a deadly weapon." The Supreme Court said, "The law is that a blow from the hand or fist under ordinary circumstances, neither justifies nor excuses the use of a deadly weapon." (Emphasis supplied) It reversed the trial court for its failure to give defendant's requested charge 1:
"Gentlemen of the jury, I charge you that an assault with the hand or fist never justifies or excuses a homicide under ordinary circumstances, and it is for you to decide whether the facts in this case are within the ordinary reason or not."
It appears from George, supra, that there was no exception to the pertinent part of the court's oral charge but that the erroneous instruction quoted therefrom was a material factor in the reversal by reason of the failure to give defendant's requested charge 1.
As to the question under consideration, Dilburn v. State, 16 Ala.App. 371, 77 So. 983 (1918), is directly in point. It states in less than a one column opinion:
"The trial judge in his oral charge charged the jury:
"`He [the defendant] would not be justified in using a deadly weapon if struck by the fist, or any other assault which would not likely cause serious bodily harm.'
"This was in effect charging the jury that under the evidence the defendant was not justified in using a deadly weapon, and that the blow struck by the fists was not likely to cause serious bodily harm, which was the very question then being submitted to the jury. The rule is that the killing of one who is the assailant must be under a reasonable apprehension of loss of life or of great bodily harm, and the danger must appear to be so imminent at the moment of the assault as to present no alternative of escaping its consequences except by resisting. Scales v. State, 96 Ala. 69, 11 So. 121. It was said in Shorter's case [Shorter v. People] 2 N.Y. (Comstock) 193, 51 Am. Dec. 286, `When a man is struck with the naked hand, and has no reason to apprehend a design to do him great bodily harm, he must not return the blow with a dangerous weapon,' and this expression was quoted with approval in the Scales Case, supra.
"But it is a question for the jury to satisfy itself of all the evidence in the case whether or not the defendant was in imminent and manifest danger either of losing his own life or of suffering grievous bodily harm, or that it appeared so to the mind of a reasonable man. 3 Greenl.Ev. § 116. That part of the oral charge of the court excepted to was in conflict with the foregoing views, and for that error the judgment must be reversed."
The part of the court's oral charge in the instant case to which an exception was taken contains the same vice as that found in the oral charge in Dilburn and requires a like result, a reversal.
There may be ground for misgiving in the conclusion just stated to be found in the action of defendant's counsel, as shown by the transcript, in inviting the attention of the court to its erroneous instruction, but *1075 we think that to say that an exception was not taken properly and sufficiently would be hypercritical. Appellee has not taken any such position and is to be commended therefor, we think. Notwithstanding the language of the transcript stating that defendant said "accept" instead of "except to," we are constrained to note that such reportorial error has occurred much more often in recent years than in preceding decades. We note also a misspelling of "question," which, of course, is not attributable to defendant's counsel. Perhaps, it would have been better for defendant's counsel to have more definitely and positively excepted to the particular language of the court's charge and done nothing more as was the action of defendant's counsel in Dilburn, supra, or if he desired some amelioration of the erroneous instruction, requesting in writing a qualifying or explanatory charge as was done in George, supra. Even so, it is clear to us that defendant made known her exception to the particular erroneous instruction of the court in its oral charge and that he should not be denied the benefit of it. Even if appellee argued strongly to the contrary, our opinion would be the same. Appellee has taken no position to the contrary, and we feel that we are not justified in doing so.
We have considered appellee's counter argument to appellant's last insistence which chiefly is to the effect that defendant "was not entitled to assert the defense of self-defense." We agree with appellee that the circumstances taken as a whole do not compellingly, or even strongly, disclose all of the essential elements of self-defense or the defense of another, but the case was tried almost exclusively on that issue. It was so treated by the parties and by the court. The issue was submitted to the jury. It was recognized by all concerned as the pivotal issue as to defendant's guilt of manslaughter in the first degree. The jury found her guiltless of malice aforethought, as well as of deliberation and premeditation. For us to hold that there was no jury issue as to self-defense or defense of another would be equivalent to saying that it was not within the province of the jury to find that she was lawfully defending herself or her mother at the time she fatally shot the alleged victim. We are unable to say the submission of the issue to the jury was a mere exercise in futility upon full consideration of all the circumstances and the unanimity of view of all concerned, the State, the defendant and the court, as manifested by them or their representatives on the trial. For us to do so would be invasive of the province of the jury, which the trial court did not do except in one particular, in saying that "If you attack me with your fist, I don't have the right to shoot you to stop the attack." By this statement, the court pierced the heart of the only defense asserted by defendant, the only controverted issue in the case. We are not saying that without the giving of the erroneous instruction, the jury could not have well returned the same verdict that it did, but we have no doubt that it could not have found defendant not guilty without disregarding the instruction.
For the error indicated, the judgment of the trial court must be reversed and the cause remanded.
The foregoing opinion was prepared by Retired Circuit Judge Leigh M. Clark, serving as a judge of this Court under the provisions of § 6.10 of the Judicial Article (Constitutional Amendment No. 328); his opinion is hereby adopted as that of the Court. The judgment of the trial court is reversed and the cause is remanded.
REVERSED AND REMANDED.
All the Judges concur.
ON REHEARING
CLARK, Retired Circuit Judge.
Appellee's application for a rehearing is submitted in two parts.
PART ONE
A document filed by appellee on June 9, 1980, consists of an "application for rehearing," a request for the "findings of additional facts" permitted by Rule 39(k), *1076 ARAP and "supportive brief and argument." Eight separate categories of claimed "additional facts" are listed. In our opinion, they do not come within the purview of "additional facts" contemplated by the Rule. To a great extent they constitute conclusions or opinions reached by appellee. Under these circumstances, no attempt to accede to the request is made.
The "supportive brief and argument" accompanying the application for rehearing is little different from that presented in the brief and argument on original submission. But for the matter presented in Part Two, the opinion and judgment on original submission should stand.
PART TWO
Concomitant with the filing of appellee's application for rehearing a motion was presented by appellee under Rule 10(f), ARAP for the certification and transmittal by the Clerk of the Circuit Court to this Court of full, true and correct copy of the trial court's oral charge, which motion was granted on June 10. The Clerk of the Circuit Court promptly complied with the order by transmitting to this Court a certified copy of the "full Oral Charge of the Court as Certified by the Court Reporter and filed in the office of the Clerk of the Circuit Court of Mobile County."
The full oral charge of the trial court as now presented discloses that there was omitted from the transcript of the court's oral charge on original submission the following:
"Now, of course, that could be changed by the fact if a 260 pound football tackle full back was attacking me, then to shoot to stop the attack to help a little 160 pound old man it might be different. But the law as a matter of law says that you are entitled to use only such force to repel an attack on on [sic] yourself, and as I told you just now, on a member of your immediate family."
The part of the instruction quoted above, omitted from the transcript on original submission, is immediately after the following portion of the court's charge furnishing the basis for the reversal on original submission:
"There is one other thing in the question of self-defense that the law says a person in self-defense is justified only in using such force as is necessary to repel an attack on him and that in the eyes of the law, if you attack me with your fist, I don't have the right to shoot you to stop the attack."
On July 7, 1980, appellee filed a supplemental brief in support of its application for rehearing, citing specifically the unfortunate omission on original submission of a material part of the court's oral charge, as quoted above, that qualified what the court had just stated that we found was properly subject to the exception taken at the trial.
Appellee now says:
"The trial court's oral charge was, when viewed in its entirety, and especially including the portion heretofore omitted, proper and correct and did not constitute grounds for reversible error."
We are now presented with a greatly different question from that presented on original submission.
The signification of what the trial court said that formed a basis for our determination on original submission was materially qualified by what we have since learned the court said immediately thereafter. In its completeness on the particular subject, the instruction was not subject to the exception taken by defendant's counsel, which ended by his statement, "I will ask the Court to add to that, that it would depend on the circumstances under which there was an attack by fists or whatever." By the illustration given by the trial court, although a more appropriate one probably could have been given, the court made it clear that the principle of law it had stated was not applicable to all circumstances but that it "would depend on the circumstances under which there was an attack by fists or whatever."
The charge as presented on original submission was offensive to the rationale of Scales v. State, 96 Ala. 69, 11 So. 121 (1891-92); *1077 George v. State, 145 Ala. 41, 40 So. 961 (1906) and Dilburn v. State, 16 Ala.App. 371, 77 So. 983 (1918). The charge in its fullness as now presented is free of such offense.
The application for rehearing should be granted and the judgment of the trial court affirmed.
APPLICATION FOR REHEARING GRANTED.
AFFIRMED.
All the Judges concur.
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286 F.Supp. 956 (1968)
M. F. A. CENTRAL COOPERATIVE, a Missouri Corporation
v.
Edwin O. BOOKWALTER, District Director of Internal Revenue at St. Louis, Missouri.
No. 66 C 124(2).
United States District Court E. D. Missouri, E. D.
June 14, 1968.
*957 Harold S. Cook and D. Jeff Lance, Cook, Murphy, Lance & Mayer, St. Louis, Mo., for plaintiff.
Veryl L. Riddle, U. S. Atty., Jim J. Shoemake, Asst. U. S. Atty., St. Louis, Mo., Elliott H. Kajan, Atty., Dept. of Justice, Washington, D. C., for defendant.
MEMORANDUM
MEREDITH, District Judge.
This action was brought by M.F.A. Central Cooperative against Edwin O. Bookwalter, District Director of the Internal Revenue, seeking a refund in federal income taxes paid in prior years. This Court has jurisdiction under 28 U. S.C. 1346(a) (1). The matter was tried to the Court without a jury.
Plaintiff is a farmers' cooperative organized under the laws of Missouri. Its books are kept on a September 1st to August 31st fiscal year basis. In the fiscal years 1958 and 1959, and since that time, the plaintiff borrowed money from the St. Louis Bank for Cooperatives.
The St. Louis Bank for Cooperatives is one of twelve regional banks for cooperatives originally established as part of the New Deal. The banks for cooperatives are organized and governed by the provisions of Subchapter V of Chapter 7, Title 12, U.S.C. The twelve regional banks for cooperatives and the Central Bank for Cooperatives were organized to extend credit to farmers' marketing, purchasing, and service cooperatives. See Legislative History, Farm Credit Act of 1955, U.S. Code & Adm. News 1955, Vol. 2, pp. 2949-51.
A regional bank for cooperatives has three classes of stock:
Class A stock represents capital contribution by the United States; it is non-voting, does not pay dividends, and is to be retired at par according to a method which depends upon the Class C stock purchased and the net profit of the regional bank.
Class B stock may be sold to any person, is non-voting, but may pay a dividend not to exceed four percent per annum.
Class C stock may be issued only to banks for cooperatives and farmers' cooperative associations. Class C stock may be acquired by a farmers' cooperative in three ways. First, a farmers' cooperative to be eligible to borrow from a bank for cooperatives must purchase one share of Class C stock at its par value of $100. Second, each borrower is required to invest quarterly a specified amount in Class C stock. The amount to be invested each quarter is determined by the board of directors of the regional bank for cooperatives, and is based on a percentage (not less than ten nor more than twenty-five percent) of the interest payable by the individual borrower for that quarter. The third way in which a farmers' cooperative may receive Class C stock is as a result of payment of net profits earned by the regional bank for cooperatives during its fiscal year. These net profits are paid as patronage refunds in the form of Class C stock in proportion to the amount of interest earned on the loans of each borrower as compared to the total interest earned on the loans to all borrowers during that fiscal year. Class C stock may be issued in fractional shares. No dividends are payable on Class C stock. The holders of Class C stock are entitled to vote, but only on the basis of one vote for each stockholder, regardless of the number of shares held. To be eligible to exercise this right to vote, the farmers' cooperative must have been a borrower from *958 the regional bank for cooperatives within the two years preceding the date of voting. See 12 U.S.C. § 1134d(a) and 12 U.S.C. § 1134l.
The controversy in the case presently before the Court is the nature of the payments made by M.F.A. Central Cooperative to the St. Louis Bank for Cooperatives for Class C stock required to be purchased quarterly as set forth above.
M.F.A. Central Cooperative, at the close of its fiscal year on August 31, 1958, was indebted to the St. Louis Bank for Cooperatives in an amount of approximately $3,300,000. During that fiscal year it paid interest to the St. Louis Bank for Cooperatives, which it deducted as an expense on the federal income tax return filed for the fiscal year. It did not deduct as an expense $20,154.32 paid quarterly during that fiscal year for Class C stock in the St. Louis Bank for Cooperatives. This amount was carried on the books of M. F.A. Central Cooperative in an asset account entitled "Class C Stock, St. Louis Bank for Cooperatives". An amended federal income tax return was filed later and the $20,154.32 was deducted as an expense.
At the end of its fiscal year on August 31, 1959, M.F.A. Central Cooperative was indebted to the St. Louis Bank for Cooperatives in an amount of approximately $3,800,000.
The interest paid on this indebtedness during the fiscal year was deducted on the federal income tax return filed for that period. The total quarterly payments of $27,966.97 for Class C stock in the St. Louis Bank for Cooperatives were also deducted as an expense. The $27,966.97 was reflected on the books of M.F.A. Central by crediting to "Class C Stock, St. Louis Bank for Cooperatives" the sum of $23,211.07 (the fiscal year of M.F.A. Central and the quarterly statement periods of the St. Louis Bank did not coincide, so $4,755.90 was entered in "Accrued Interest" account of the plaintiff).
The District Director of the Internal Revenue denied the deductions attributable to purchase of Class C stock and assessed additional tax (including interest) of $751.74 and $6,151.78 for the fiscal years 1958 and 1959, respectively. The assessments were paid, and claims for refund filed and denied. This action was commenced to secure refund of these payments.
The plaintiff contends that to the extent that the payments for Class C stock exceed the fair market value of the stock issued therefor, then such payments are deductible from ordinary income as interest under section 163 of the Internal Revenue Code or as ordinary and necessary business expense under section 162(a) of the Internal Revenue Code. M.F.A. Central states that it is academic under which section the payments fall. The defendant contends that the quarterly payments for Class C stock are capital expenditures and not deductible under either of the above sections. The plaintiff argues that the issue is not whether the expenditures are of a capital nature, but that the issue is the fair market value of the Class C stock. It contends that to the extent of the fair market value of the Class C stock, the expenditure would be of a capital nature, but to the extent that the Class C stock does not have a fair market value, then the payments are deductible. The determination of deductions under the Internal Revenue Code cannot be approached in this manner. Section 63(a) of the Internal Revenue Code provides: "the term `taxable income' means gross income, minus the deductions allowed by this chapter, * * *" Congress thus provides explicitly for the deductions which may be taken by a taxpayer. It is necessary to examine the particular provisions of the Internal Revenue Code to determine whether a given expenditure is deductible.
Whether Deductible as Interest
Interest may be deducted from gross income under section 163(a) of the Internal Revenue Code. This section provides: "[t]here shall be allowed as a *959 deduction all interest paid or accrued within the taxable year on indebtedness." Interest has been defined as that amount which one has contracted to pay for the use of borrowed money. Old Colony Railroad Co. v. Commissioner, 284 U.S. 552, 52 S.Ct. 211, 76 L.Ed. 484 (1932); Deputy v. DuPont, 308 U.S. 488, 60 S.Ct. 363, 84 L.Ed. 416 (1940). A loan agreement, dated July 11, 1958, between the plaintiff and the St. Louis Bank for Cooperatives was introduced into evidence by the plaintiff. It was said to be typical of those used during the relevant period of time. The agreement provided for the payment of interest and the purchase of Class C stock in the following separate paragraphs:
"INTEREST: Each advance made hereunder shall bear interest
at the rate prescribed by the bank in accordance
with law, payable quarterly on the last day of
March, June, September, and December; provided,
however, that if the interest rate charged by
the bank on loans similarly classified is changed
to a higher or lower rate than the rate effective
on the date hereof, the association agrees to pay
such higher rate, and the bank agrees to accept
such lower rate on the unpaid balance hereunder,
from the effective date of such change of interest
rate.
"INVESTMENT IN Advances hereunder shall be subject in all respects
CLASS C STOCK: to the provisions of the Farm Credit Act of
1955 and regulations issued pursuant thereto.
The association shall invest quarterly in Class
C stock of the bank an amount equal to 15% of
the amount of interest payable by the association
to the bank during the calendar quarter. * * *"
The agreement from which the above paragraphs are extracted was signed by a vice president of the St. Louis Bank for Cooperatives and by a vice president of M.F.A. Central Cooperative. Testimony at the trial stated that a separate note and mortgage were executed.
The provisions of the above agreement seem to indicate that the payments for Class C stock were not considered by the parties to be payments for the use of money. The interest and the payments for Class C stock were set forth in separate paragraphs. If this amount spent on Class C stock is to be considered interest, it would seem that it would be in the nature of a bonus paid for the loan. Several cases have held that a bonus paid to induce a loan was interest within the meaning of the Internal Revenue Code. Wiggin Terminals, Inc., 36 F.2d 893 (1st Cir. 1929) (payment of $50,000 cash bonus); L-R Heat Treating Co., 28 T.C. 894 (1957) ($61,200 withheld from amount paid to borrower, "as premium for making loan"); Court Holding Co., 2 T.C. 531 (1943), rev'd on other grounds, 143 F.2d 823 (5th Cir. 1944), aff'd on other grounds, 324 U.S. 331, 65 S.Ct. 707, 89 L.Ed. 567 (1945) (payment of $350 cash bonus). These cases are distinguishable from the present matter, because in each of the cited cases the debtor parted with the additional money and received nothing in return other than the use of the lender's money. In the present situation, M.F.A. Central Cooperative parted with the additional money and received stock in the St. Louis Bank, which had a corresponding face value.
*960 The amount of money spent each quarter to purchase the Class C stock is not interest. The plaintiff by this expenditure purchased something other than the use of money.
Whether Deductible as Ordinary and Necessary Business Expenses
Ordinary and necessary business expenses may be deducted from income under section 162(a) of the Internal Revenue Code. This section provides that "[t]here shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred * * * in carrying on any trade or business * * *" The United States Supreme Court in commenting on this section in Commissioner v. Tellier, 383 U.S. 687, 86 S.Ct. 1118, 16 L.Ed.2d 185 (1966), said:
"The principal function of the term `ordinary' in § 162(a) is to clarify the distinction, often difficult, between those expenses that are currently deductible and those that are in the nature of capital expenditures, which, if deductible at all, must be amortized over the useful life of the asset."
Whether or not the expenditures of the taxpayer for the Class C stock in this case are deductible under section 162(a) turns upon whether they are in the nature of a capital expenditure or a day-to-day business expense.
The cases of Ancel Greene & Co., 38 T.C. 125 (1962), and McMillan Mortgage Co., 36 T.C. 924 (1961), are cited by both parties in support of their positions. The taxpayers in these cases purchased stock in the Federal National Mortgage Association. The Federal National Mortgage Association was established by Congress to provide a "secondary market facility for home mortgages." 12 U.S.C. § 1716. The taxpayers in both of these cases were engaged in the business of buying (or developing), servicing, and selling mortgages on residential property. Some of the mortgages which the taxpayers held they sold to the Federal National Mortgage Association. Congress provided in the enacting legislation that a certain percentage of the price which the Federal National Mortgage Association would pay for a mortgage would be paid in the capital stock of the Association.
The taxpayer in McMillan Mortgage Co., supra, sold mortgages to the Federal National Mortgage Association and received part of the purchase price in the form of capital stock in the Association. It normally sold the stock on the market at a loss. The taxpayer contended that the Federal National Mortgage Association stock which it acquired was not a capital asset under the particular facts of its business, but the expenditure therefor was a deductible business expense under section 162 of the Internal Revenue Code, and that the subsequent disposition of the stock resulted in ordinary gain or loss. The Tax Court agreed. M.F.A. Central Cooperative cites this holding supporting its position in this suit. There is a similarity in that the taxpayer in each situation is required to invest in the capital stock of a corporation created by Congress as a prerequisite to availing itself of the services offered by the corporation. The case does not turn upon the involuntary nature of the purchase, however. In the McMillan case the Tax Court specifically found that the stock was not acquired for investment purposes. The court looked to the particular facts of the taxpayer's business:
"Petitioner's business activity of acquiring and selling FNMA stock was a necessary adjunct to its mortgage business not unlike the situation of a franchise automobile dealer who is in the used car business in acquiring and selling trade-ins. Petitioner acquired and sold the stock as a normal day-to-day business activity of its mortgage business and the stock was not a capital asset in its hands."
There is a more basic distinction between the taxpayers in the McMillan and Ancel Greene cases and M.F.A. Central Cooperative in this action. This distinction is drawn out by examining the Tax Court's holding in Ancel Greene & Co., *961 supra. In this case the taxpayer did not dispose of the Federal National Mortgage Association stock as it received it, but held it for considerable time. The Tax Court found that the stock was held for investment purposes and was a capital asset when sold by the taxpayer. The Court considered the issue of whether the taxpayer must take the face or par value of the stock into income in the year in which it was acquired or only the fair market value. The Court held that the taxpayer was required to report only the fair market value of the securities received. M.F.A. Central Cooperative points out that this has the same economic effect on taxable income as allowing a deduction for the amount of the purchase price above the fair market value. This is the essence of M. F.A. Central Cooperatives' contention in the present action. It contends that it should be allowed a deduction from income for the difference between the amount expended to purchase the Class C stock and the fair market value of the stock which it receives.
Whether or not an expenditure is deductible as an ordinary and necessary business expense depends upon the nature of the expenditure as compared with the nature of the taxpayer's business. It is normally a question of fact. Justice Cardozo remarked in a case involving the issue of what was an "ordinary" expense:
"Here, indeed, as so often in other branches of the law, the decisive distinctions are those of degree and not of kind. One struggles in vain for any verbal formula that will supply a ready touchstone. The standard set up by the statute is not a rule of law; it is rather a way of life. Life in all its fullness must supply the answer to the riddle." Welch v. Helvering, 290 U.S. 111, 114-115, 54 S.Ct. 8, 9, 78 L. Ed. 212 (1933).
When we examine the nature of the taxpayer's business and the expenditure for Class C stock, it becomes apparent that the only reason the stock was purchased was because it was a condition imposed by the bank in making the loan. M.F.A. Central Cooperative would not have purchased the stock otherwise. There was no dividend payable on the stock. Although the stock would be redeemed at par, such redemption was at the option of the bank. The money expended for the stock would be tied up for many years without benefiting the taxpayer in any manner. The Class C stock issued in 1956 was not redeemed until 1967.
This Class C stock could not be disposed of except to another eligible cooperative, and then only with the permission of the bank. In practice the only time a cooperative would acquire Class C stock from another cooperative was as the result of a merger. The rights which a shareholder had as an incident of owning Class C stock did not increase with the purchase of additional shares. The Class C shareholder who owned one share had the same vote as a shareholder who owned one thousand shares. The right to the one vote was an incident of ownership of the first qualifying share purchased.
This Class C stock purchased quarterly was of absolutely no use or benefit to M.F.A. Central Cooperative. It paid no dividend and possessed no rights. The only reason it was purchased was because M.F.A. Central wanted to borrow money from the St. Louis Bank for Cooperatives and the agreement to purchase the Class C stock was imposed as a condition of the loan. It is impossible to separate the loan from the purchase of the stock. One was the motivation for the other.
This situation is similar to the transaction entered into by the taxpayer in Smith & Welton v. United States, 164 F.Supp. 605 (E.D.Va.1958). The taxpayer in that case was a retail clothing store which had been selling garments manufactured by Handmacher-Vogel, Inc. Handmacher, seeking capital to expand its operations, informed the taxpayer that the taxpayer would not be allowed to handle its clothing in the future *962 unless five hundred shares of Handmacher stock at $10 per share were purchased. The taxpayer purchased the stock and later sold it at a loss. The Court found that the stock was not held for investment purposes, but was a business expense, and held that the loss was an ordinary loss and not a capital loss. The Court noted that the stock purchase could not be divorced from the circumstances which surround the acquisition.
Other cases of this nature are discussed in 3B Mertens, § 22.16, under the topic of "Tie-In Purchases". The Government cites a case involving a tie-in purchase as authority for its argument that the Class C stock is a capital investment. In Exposition Souvenir Corp. v. Commissioner of Internal Revenue, 163 F.2d 283 (2d Cir. 1947), as condition precedent to obtaining a concession at the New York World's Fair, the taxpayer was required to purchase debentures issued by the Fair. The debentures were later sold at a loss and the taxpayer sought to deduct the loss as an ordinary loss. The Court held, however, that the debentures were capital assets and the loss was not an ordinary and necessary business expense. This holding has been modified by subsequent holdings of the same Circuit. See Commissioner v. Bagley & Sewall Co., 221 F.2d 944 (2d Cir. 1955). Subsequent cases from other circuits and the Tax Court indicate that the view taken by the Second Circuit in Exposition Souvenir Corp. v. Commissioner of Internal Revenue, supra, is not the accepted view at the present. See Booth Newspapers, Inc. v. United States, 303 F.2d 916 (Ct. Claims 1962); Electrical Fittings Corp., 33 T.C. 1026 (1960); Western Wine & Liquor Co., 18 T.C. 1090 (1952), petition for review dismissed 205 F.2d 420 (8th Cir. 1953).
The Government also raises the issue of the treatment of patronage dividends received in the form of Class C stock in the St. Louis Bank for Cooperatives during the tax years in issue. The taxpayer, M.F.A. Central Cooperative, did not take the par value of the Class C stock received as patronage dividends into income. It entered the entire patronage dividend on its books at the value of $1.00. The Government contends that M. F.A. Central Cooperative should have taken the entire par value of the Class C stock received as patronage dividends into income.
Based upon the nature of the Class C stock as discussed previously, this Court is of the opinion that the Class C stock issued by the St. Louis Bank for Cooperatives did not have a fair market value at the time it was issued, and plaintiff properly did not include it in income.
Accordingly, judgment will be entered for the plaintiff in this cause. This memorandum will be adopted in companion causes Nos. 67 C 352, 67 C 353, and 67 C 354, which involve the same issue, and judgment will be entered for the plaintiffs in those cases.
Plaintiffs shall submit judgments to the Court within 10 days after consultation with defendant.
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620 F.2d 306
U. S.v.Winfield
79-5294
UNITED STATES COURT OF APPEALS Sixth Circuit
4/30/80
1
W.D.Tenn.
APPEAL DISMISSED
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455 F.2d 220
72-1 USTC P 9251
CINCINNATI TRANSIT, INC., Petitioner-Appellant,v.COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
No. 71-1501.
United States Court of Appeals,Sixth Circuit.
Feb. 16, 1972.
Robert S. Brown, Cincinnati, Ohio, for petitioner-appellant; J. W. Brown, Benjamin Gettler, Brown & Gettler, Cincinnati, Ohio, on brief.
Jane M. Edmisten, Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee; Fred B. Ugast, Acting Asst. Atty. Gen., Meyer Rothwacks, Paul M. Ginsburg, Attys., Tax Div., Dept. of Justice, Washington, D. C., on brief.
Before EDWARDS and PECK, Circuit Judges, and McALLISTER, Senior Circuit Judge.
PER CURIAM.
1
The Cincinnati Transit Company filed a timely petition for redetermination of a deficiency proposed by the Commissioner, and it was joined in the petition by Cincinnati Transit, Inc. Cincinnati Transit, Inc. was formed as a whollyowned subsidiary of Cincinnati Transit Company, and both currently have assets and are doing business in Ohio. Pursuant to an agreement required by a Cincinnati ordinance, all obligations and liabilities of the Transit Company were assumed by Transit, Inc., and it is conceded that the latter will be required to pay whatever deficiency in federal tax liability may be determined against the Transit Company in this case.
2
The Tax Court, 55 T.C. 879, granted the Commissioner's motion to dismiss Transit, Inc. for want of jurisdiction, and Transit, Inc. appeals.
3
Section 6213(a), I.R.C.1954, provides that only a taxpayer to whom a notice of deficiency is addressed may file a petition in the Tax Court for a redetermination of the deficiency. The notice of deficiency in this case was not addressed to appellant, but to Cincinnati Transit Company. The dismissal of the petition of Transit, Inc. to join in the petition of Transit Company is, therefore, affirmed.
4
The Tax Court in its opinion remarked that there is a sound distinction between permitting a third party to "intervene" or file an amicus brief to protect its interest, "which would be discretionary at best under these circumstances, and permitting a party to join as a party petitioner in a proceeding to redetermine someone else's tax liability." The Court, on the argument of this case, directed counsel for petitioner to advise the Court whether it would oppose a petition by Transit, Inc. to intervene. Counsel replied that since there has been no showing that Transit's interests in the Tax Court proceeding would not be adequately protected by its corporate parent, he had serious doubts that intervention would be appropriate, but that counsel would not oppose intervention by Cincinnati Transit, assuming a motion to intervene is filed. However, counsel pointed out that it is within the Tax Court's discretion whether intervention would be permitted.
5
An order will be entered affirming the decision of the Tax Court.
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872 F.Supp. 201 (1995)
OMEGA SPORTS, INC., Plaintiff,
v.
SUNKYONG AMERICA, INC., Defendant.
No. 94-CV-6375.
United States District Court, E.D. Pennsylvania.
January 4, 1995.
J. Stephen Woodside, J. Stephen Woodside, P.C., Philadelphia, PA, for plaintiff.
Neal D. Colton, Jeffrey W. Gutchess, Dechert, Price and Rhoads, Philadelphia, PA, for defendant.
MEMORANDUM AND ORDER
JOYNER, District Judge.
This civil matter is before the Court by motion of the plaintiff, Omega Sports, Inc. (Omega), which asks us to remand the case to the Court of Common Pleas for Lancaster County, Pennsylvania and award it sanctions under Fed.R.Civ.P. 11. For the reasons that follow, we will grant Omega's motion to remand, but deny its request for Rule 11 sanctions.
I. BACKGROUND
This action was initiated when Omega filed a Writ of Summons in equity in the Court of Common Pleas naming Sunkyong America, Inc. (Sunkyong) as defendant. On October 12, 1994, Omega served pre-complaint discovery upon Sunkyong, seeking the production of documents relating to a contract entered into between Omega and Sunkyong on July 18, 1989. Pursuant to the contract, Sunkyong had agreed to pay commissions to Omega for the sale of athletic shoes by Sunkyong to Meldisco, Inc. (Meldisco), the footwear *202 division of K-Mart. Omega also sought the production of documents relating to the sale of all footwear, including athletic shoes, by Sunkyong to Meldisco.
Upon review of the request for production of documents, and before a complaint had been filed, Sunkyong reasoned that the lawsuit probably centered on the payment of commissions called for in the contract. Sunkyong applied the commission rate to the volume of all footwear sales by Sunkyong to Meldisco to arrive at an amount in controversy of close to $132,000. Thereafter, on October 21, 1994, Sunkyong filed a notice of removal in this Court pursuant to 28 U.S.C. § 1441,[1] contending that this Court has original jurisdiction over the matter by virtue of our diversity jurisdiction, in that the parties are of diverse citizenship and the amount in controversy exceeds $50,000.[2]
Omega now brings this motion to remand the matter to the Court of Common Pleas for Lancaster County, and argues that the figure calculated by Sunkyong is of little help in determining the true amount in controversy in that it is based upon the total volume of shoe sales between Sunkyong and Meldisco.[3] Omega notes that the contract at the center of the dispute is concerned only with the sale of athletic shoes, and asserts that Sunkyong has been reluctant to provide information concerning the volume of athletic-shoe sales by Sunkyong to Meldisco. Further, Omega seeks Rule 11 sanctions, arguing that Sunkyong's removal of the action was without a basis in either law or fact. These requests will be addressed in turn.
II. ANALYSIS AND CONCLUSION
A. Motion to Remand
The issue for this Court, then, is whether the jurisdictional amount has been satisfied. When presented with this issue, courts have generally held that the amount pleaded by the plaintiff controls as long as it is made in good faith. Thus, dismissal is justified only when it appears "`to a legal certainty that the claim is really for less than the jurisdictional amount.'" Corwin Jeep Sales v. American Motors Sales Corp., 670 F.Supp. 591, 595 (M.D.Pa.1986) (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938)). In cases such as this one, however, where the complaint does not contain a specific disputed amount, and the removability of the case is contested by a timely motion to remand, the court is obliged to make a factual inquiry into the amount in controversy issue. Id. at 596 (citations omitted). Courts approach this issue mindful of the rule that the party alleging the sufficiency of the amount in controversy bears the burden of proving that the jurisdictional minimum has been met. Hunter v. Greenwood Trust Co., 856 F.Supp. 207, 219 (D.N.J.1992); Corwin Jeep Sales, 670 F.Supp. at 595 (quoting United Jersey Bank Southwest v. Keystone Collision, Inc., 482 F.Supp. 71, 72 (E.D.Pa.1979)).
In the present case, we find that Sunkyong has failed to meet its burden of demonstrating that the amount in controversy exceeds $50,000. We first note that since the contract at issue deals only with sales of athletic footwear, Sunkyong's contention that the commission on sales of all footwear by it to Meldisco exceeds the jurisdictional minimum is simply of no help to us in deciding whether an amount in excess of $50,000 is in dispute. We are aware that evidence may arise to show that the amount in controversy does meet the $50,000 threshold. Should such evidence be presented, Sunkyong may properly exercise its right to remove the case *203 to the federal court.[4] In the absence of such information, however, this Court cannot conclude that Sunkyong has proved that a sum in excess of $50,000 is at issue. Accordingly, this Court lacks jurisdiction over the subject matter and must remand the case to the Court of Common Pleas for Lancaster County.
B. Rule 11 Sanctions
Omega has included a request for Rule 11 sanctions along with its motion to remand. Since Omega itself has failed to comply with Rule 11 in seeking these sanctions, however, its request will be denied. The recently amended Rule 11 requires that a motion for sanctions be made by a separate motion and that it be served 21 days before it is filed with the court. Rule 11(c)(1)(A). Omega has failed to comply with these steps, and as a result, any award of sanctions in its favor would be unwarranted. Accordingly, we will deny Omega's request for sanctions pursuant to Rule 11.
NOTES
[1] Section 1441(a) provides as follows:
Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
[2] See 28 U.S.C. § 1332(a)(1) ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000, exclusive of interest and costs, and is between ... citizens of different states.").
[3] We must remand diversity cases if the amount in controversy is less than or equal to $50,000. See 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.").
[4] Sunkyong cites National Media Corp. v. DiGiovanna, Civ.A. No. 94-2078, 1994 WL 268260 (E.D.Pa. June 14, 1994), for the proposition that this Court should not remand the case even if it finds that the case was removed prematurely. In National Media, the court was confronted with a situation in which the defendant removed the case from the state court before the 30 day period in which removal may occur had been triggered. The court concluded that since the case was properly removable, to remand the case on such technical grounds only to see the case removed to the federal court at a later date would result in needless "wheel-spinning and wasted effort." Id. at *1. The court concluded that "there is no provision in the statute, and no case ... which squarely holds, that premature removal of a case which is in fact properly removable should result in remand." Id.
In this case, however, no evidence has been presented to the Court that the case is properly removable. Thus, we remand not on the technical grounds contemplated and rejected by the National Media court, but because we are unconvinced that Sunkyong was entitled to remove the case.
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Case: 15-11158 Document: 00513644446 Page: 1 Date Filed: 08/19/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 15-11158
Fifth Circuit
FILED
Summary Calendar August 19, 2016
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff-Appellee
v.
ABEL ARTURO SEGOVIA-HERNANDEZ,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:15-CR-142-1
Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM: *
Abel Arturo Segovia-Hernandez appeals the sentence imposed following
his conviction for illegal reentry after deportation. Segovia-Hernandez’s
advisory guideline range was 24 to 30 months of imprisonment. However,
relying on U.S.S.G. § 4A1.3, the district court imposed an upward departure
sentence of 72 months of imprisonment. Segovia-Hernandez contends that this
was an abuse of discretion. He also challenges his sentence as violating the
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 15-11158 Document: 00513644446 Page: 2 Date Filed: 08/19/2016
No. 15-11158
Due Process Clause, but, as he concedes, his argument is foreclosed by
Almendarez-Torres v. United States, 523 U.S. 224 (1998).
This court reviews “the substantive reasonableness of the sentence
imposed under an abuse-of-discretion standard.” Gall v. United States, 552
U.S. 38, 51 (2007). In the context of a guidelines departure pursuant to
§ 4A1.3, this court evaluates both “the district court’s decision to depart
upwardly and the extent of that departure for abuse of discretion.” United
States v. Zuniga-Peralta, 442 F.3d 345, 347 (5th Cir. 2006) (internal quotation
marks and citation omitted). There is no abuse of discretion if the district
court’s reasons for departing advance the objectives of 18 U.S.C. § 3553(a)(2)
and are justified by the facts of the case. Zuniga-Peralta, 442 F.3d at 347; see
also United States v. Zelaya-Rosales, 707 F.3d 542, 546 (5th Cir. 2013). The
parties disagree whether error was preserved in the district court. However,
we need not determine the appropriate standard of review because, under
either standard, Segovia-Hernandez’s arguments are unavailing. See United
States v. Rodriguez, 523 F.3d 519, 525 (5th Cir. 2008).
The record reflects that the district court explicitly considered the
breadth and nature of Segovia-Hernandez’s criminal history and his
arguments in mitigation. Moreover, the district court stated for the record that
it considered intermediate adjustments, explained why the criminal history
category as calculated under the guidelines was inappropriate, and why the
sentence it ultimately chose was appropriate. The reasons cited by the district
court made appropriate reference to the § 3553(a) factors. Because the district
court’s reasons for the departure advanced the objectives of § 3553(a)(2) and
were justified by the facts of the case, the district court did not abuse its
discretion in upwardly departing pursuant to § 4A1.3(a)(1). See Zuniga-
Peralta, 442 F.3d at 347-48. Nor was the extent of the departure excessive
2
Case: 15-11158 Document: 00513644446 Page: 3 Date Filed: 08/19/2016
No. 15-11158
under the circumstances. See, e.g., United States v. Jones, 444 F.3d 430, 433,
441-42 (5th Cir. 2006); Zuniga-Peralta, 442 F.3d at 346-48.
AFFIRMED.
3
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104 F.3d 359
NOTICE: Fourth Circuit Local Rule 36(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 Fourth Circuit.Marvin Maurice MUNDY, Petitioner--Appellant,v.E.B. Wright, WARDEN, Respondent--Appellee.
No. 95-7890.
United States Court of Appeals, Fourth Circuit.
Submitted December 17, 1996.Decided December 27, 1996.
Appeal from the United States District Court for the Eastern District of Virginia, at Richmond. Robert E. Payne, District Judge. (CA-94-587)
Steven D. Benjamin, Richmond, Virginia; Patsy Laura Mundy, Richmond, Virginia, for Appellant. Eugene Paul Murphy, Office of the Attorney General of Virginia, Richmond, Virginia, for Appellee.
E.D.Va.
DISMISSED.
Before HALL, MURNAGHAN, and MOTZ, Circuit Judges.
Dismissed by unpublished per curiam opinion.
PER CURIAM:
1
Appellant seeks to appeal the district court's order denying relief on his petition filed under 28 U.S.C. § 2254 (1994), amended by Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132, 110 Stat. 1214. We have reviewed the record and the district court's opinion and find no reversible error. Accordingly, we deny a certificate of probable cause to appeal; to the extent that a certificate of appealability is required, we deny such a certificate. We dismiss the appeal on the reasoning of the district court. Mundy v. Wright, No. CA-94-587 (E.D.Va. Oct. 23, 1995). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.
DISMISSED
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1 Cal.3d 574 (1970)
462 P.2d 993
82 Cal. Rptr. 873
THE PEOPLE, Plaintiff and Respondent,
v.
WILLIAM NEAL SEALS, Defendant and Appellant.
Docket No. Crim. 14041.
Supreme Court of California. In Bank.
January 15, 1970.
COUNSEL
Robert T. Bertholdo, under appointment by the Supreme Court, for Defendant and Appellant.
Thomas C. Lynch, Attorney General, William E. James, Assistant Attorney General, Bruce M. Perlman and Russell Iungerich, Deputy Attorneys General, for Plaintiff and Respondent.
MEMORANDUM CASE
OPINION
THE COURT:
Defendant appeals from a judgment entered after the trial court sitting without a jury found him guilty of two counts of assault by *575 means of force likely to produce great bodily harm. (Pen. Code, § 245, subd. (a).) While in a drunken rage, defendant brutally assaulted the landlady of the rooming house at which he was living and a roomer, who came to the landlady's assistance. The assaults were triggered when the landlady told defendant to stop drinking or move out. Defendant's only contention on appeal is that the trial court failed to consider the fact that he was intoxicated in determining whether he had the requisite criminal intent to commit the assaults. (See Pen. Code, § 22.) We determined this contention adversely to defendant in People v. Hood (1969) ante, pp. 444, 458-459 [82 Cal. Rptr. 618, 462 P.2d 370].
The judgment is affirmed.
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F I L E D
United States Court of Appeals
Tenth Circuit
MAR 5 1997
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT PATRICK FISHER
Clerk
BARTON LEE MURPHY,
Petitioner - Appellant, No. 96-1389
v. D. Colorado
WILLIAM A. PERRILL, Warden, FCI (D.C. No. 96-S-277)
Englewood, individually and in his
official capacity,
Respondent - Appellee.
ORDER AND JUDGMENT*
Before ANDERSON, HENRY, and BRISCOE, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34 (a); 10th Cir. R. 34.1.9. This cause is therefore ordered
submitted without oral argument.
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Barton Lee Murphy appeals the district court’s denial of his pro se petition for a
writ of habeas corpus pursuant to 28 U.S.C. § 2241. He contends that the court erred in
finding that he is not entitled to credit for the time he was an escapee from federal prison.
Murphy also contends that he should have been granted an evidentiary hearing.1 We
affirm.
Murphy is currently incarcerated at the Federal Corrections Institution at
Englewood in Littleton, Colorado. In 1991 he was convicted of various federal drug
crimes and sentenced to ten years’ imprisonment. On December 5, 1992, Murphy
escaped from the Federal Prison Camp in La Tuna, Texas. On January 23, 1993, Fort
Lauderdale, Florida police arrested Murphy on charges related to obtaining false identity
documents. As recounted in his brief, Murphy “gave his name as ‘Murphy,’ and that he
was born in ‘Hillsboro, Oregon.’ Mr. Murphy offered no other information . . . and from
this point on, he remained silent.” Appellant’s Br. at 3-4. However, Murphy concedes
that when he “was arrested and taken into official custody by the State of Florida, he was
Additionally Murphy has filed two motions which we deny. The first motion
1
requests leave to adduce additional evidence. We do not consider evidence which was
not before the district court. John Hancock Mut. Life Ins. Co. v. Weisman, 27 F.3d 500,
506 (10th Cir. 1994). The second motion concerns the depletion of his prison account to
pay filing costs for his various suits. He seeks an order that his mother be allowed to send
money to his commissary account specifically for him to call her at home. Since Murphy
did not raise the issue below, we do not consider it. Walker v. Mather (In re Walker), 959
F.2d 894, 896 (10th Cir. 1992).
-2-
identified through his I.D. Card as Cletis Murphy, his deceased brother,” and he admits
that he continued to use his brother’s name while he remained in state custody. Id. at 4.
Because of a discrepancy between the birth date listed on the Cletis I.D. card and
Murphy’s stated age, the arresting officer ordered an FBI fingerprint check. Id.; R. Vol. I,
Tab 21, Ex. F. Apparently the fingerprint check returned without any outstanding “wants
or warrants.”2 Appellant’s Br. at 5. Thereafter, still using the name “Cletis Murphy,”
Murphy pled guilty to the state charges on February 23, 1993, and he was sentenced to an
eighteen month term of probation and released. Id. at 5-6; R. Vol. I, Tab 21, Ex. H. On
October 20, 1994, federal marshals arrested Murphy in Houston, Texas.
Murphy now contends that he should be given credit for the 574 days during which
he was “erroneously released from official custody by the State of Florida, until his
subsequent arrest by the U.S. Marshals.” Appellant’s Br. at 6.
We review the district court's denial of Murphy’s habeas corpus petition de novo.
Bradshaw v. Story, 86 F.3d 164, 166 (10th Cir. 1996). We have reviewed the record and
have fully considered Murphy’s contentions. Inasmuch as the material facts are
undisputed, and Murphy’s claims can be resolved as a matter of law, an evidentiary
hearing is not required. See Steele v. Young, 11 F.3d 1518, 1524 (10th Cir. 1993).
2
Defendants dispute Murphy’s contention that the fingerprint check was returned
before Murphy was released. For purposes of our review, we accept Murphy’s statement
as true.
-3-
As the magistrate judge correctly noted, “an escaped prisoner cannot be credited
with the time he is at large.” R. Vol. 1, Tab 27 at 3 (citing White v. Pearlman, 42 F.2d
788, 789 (10th Cir. 1930)). A prisoner is not entitled to credit for time he is at liberty
unless he is erroneously discharged “without any contributing fault on his part.” White,
42 F.2d at 789. In this case, Murphy escaped. Thereafter, his use of an alias constituted
contributing fault in his erroneous release from custody in Florida.
For substantially the same reasons stated in the magistrate judge's report which the
district court adopted, we AFFIRM the denial of the petition.
ENTERED FOR THE COURT
Stephen H. Anderson
Circuit Judge
-4-
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People v Wharton (2019 NY Slip Op 05068)
People v Wharton
2019 NY Slip Op 05068
Decided on June 25, 2019
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on June 25, 2019
Renwick, J.P., Manzanet-Daniels, Webber, Oing, JJ.
9697 2252/15
[*1]The People of the State of New York, Respondent,
vTerrence Wharton, Defendant-Appellant.
Robert S. Dean, Center for Appellate Litigation, New York (Megan D. Byrne of counsel), for appellant.
Cyrus R. Vance, Jr., District Attorney, New York (Amanda Katherine Regan of counsel), for respondent.
Judgment, Supreme Court, New York County (Jill Konviser, J.), rendered February 28, 2017, convicting defendant, after a jury trial, of attempted robbery in the first degree, and sentencing him to a term of 4½ years, unanimously affirmed.
The verdict was not against the weight of the evidence (see People v Danielson, 9 NY3d 342, 348—349 [2007]). There is no basis for disturbing the jury's credibility determinations, including its resolution of alleged inconsistencies between the victims' testimony and a surveillance videotape.
The court properly declined to submit attempted robbery in the third degree to the jury, because there was no reasonable view of the evidence, viewed most favorably to defendant, that he attempted to take property by force, but not by displaying what appeared to be a firearm (see generally People v Rivera, 23 NY3d 112, 120 [2014]). Both victims testified that defendant displayed what appeared to be a handgun, and there was no reason for the jury to selectively discredit only that portion of each victim's testimony (see e.g. People v Davis, 47 AD3d 506, 507 [1st Dept 2008], lv denied 10 NY3d 861 [2008]). There was nothing in the videotape, or in the testimony of a witness who saw only part of the incident, to warrant a different conclusion. We perceive no basis for reducing the sentence.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: JUNE 25, 2019
CLERK
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