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154 F.Supp. 454 (1957)
UNITED STATES of America, Plaintiff,
v.
Edward J. LAWRENCE, Defendant.
Civ. A. No. 1853.
United States District Court, D. Montana, Havre Division.
September 5, 1957.
*455 Krest Cyr, U. S. Atty., Butte, and Dale F. Galles, Asst. U. S. Atty., Billings, Mont., for the United States.
Dignan & Gallagher, Glasgow, Mont., for Edward J. Lawrence.
JAMESON, District Judge.
This is an action to recover payments of a subsistence allowance made to the defendant under the Servicemen's Readjustment Act for education and vocational training to veterans, as set out in Title 38 U.S.C.A. § 701(f) and more particularly under Vet.Reg. No. 1(a), as amended, Part VIII, subds. 9, 9, par. A, 11(c), and 11(c), par. 1 of Title 38.
It is alleged in the complaint that for the period January 1, 1950 through December 31, 1950, there was an overpayment of $67.50 per month, for the reason that the report of defendant's income covering institutional on-the-farm training reflected a net income in excess of the statutory limitation. It is pleaded as an affirmative defense in defendant's answer that plaintiff erroneously determined defendant's net income, in that defendant's inventory of sheep at the close of the year was computed at $16,454, whereas in fact the inventory did not exceed $10,300.
The report submitted by defendant included as Item 9 "Inventory at End of Year, $16,454.00", and as Item 11, "Inventory at Beginning of Year, $10,300.00". In an appeal to the Administrator of Veterans' Affairs, defendant contended that the increase in inventory value during the year in question resulted from an increase in the market value of sheep, and that aside from this increase in inventory, his actual net income was only $635.70 and that accordingly he was entitled to the subsistence payments. The appeal was denied by the Board of Veterans Appeals of the Veterans' Administration, the order of the Board recognizing that the controlling regulations provide for determination of the rate of subsistence allowance based upon an annual report of income reflecting sound and accepted principles of accounting. The Board found that "an actual increase in the value of inventory must be included in farm income in order to represent an accurate statement of capital assets," and that "the method of computing this veteran's income is in accordance with accepted accounting principles."
In support of a motion for summary judgment, plaintiff contends that this court has no jurisdiction to review or determine the merits of the Veterans Administration decision finding the defendant ineligible to receive subsistence allowance during the calendar year 1950, relying upon 38 U.S.C.A. § 705, which provides that, "All decisions by the Administrator of Veterans' Affairs under the provisions of sections 701 * * * of this title or the regulations issued pursuant thereto, shall be final and conclusive on all questions of law and fact, and no other official or court of the United States shall have jurisdiction to review by mandamus or otherwise any such decision." See also 38 U.S.C.A. § 11a-2. Defendant contends that this section is not applicable in an action by the Government to recover an alleged overpayment of benefits, and that the method used by the Veterans Administration in valuing inventory was erroneous and contrary to accepted accounting principles.
In support of its contention that this court has no jurisdiction to review the decision of the Veterans' Administration, plaintiff relies upon Van Horne v. Hines, 1941, 74 App.D.C. 214, 122 F.2d 207, certiorari denied 314 U.S. 689, 62 S. Ct. 360, 86 L.Ed. 552, and Slocumb v. Gray, 1949, 86 U.S.App.D.C. 5, 179 F.2d *456 31, 34. Van Horne v. Hines was an action by a veteran to enforce World War One benefit payments which had been cut off by the administrator for an alleged false affidavit. Slocumb v. Gray was an action by a veteran attacking a regulation under which he was denied permission to take a course of flight training, the court holding that, "Veterans' benefits are mere gratuities and `the grant of them creates no vested right'" and that "the United States is not, by the creation of claims against itself, bound to provide a remedy in the courts." These cases support the rule for which plaintiff contends where the veteran brings an action against the Government to enforce benefits.
Does the same rule obtain with respect to an action by the Government against a veteran to recover erroneous payments? On this question there is a conflict in the authorities. The position of the plaintiff finds support in United States v. Gudewicz, D.C.E.D.N.Y.1942, 45 F.Supp. 787, and United States v. Mroch, 6 Cir., 1937, 88 F.2d 888.
United States v. Gibson, 9 Cir., 1953, 207 F.2d 161, 163, was an action against the estate of a deceased veteran to recover overpayments of disability compensation due to alleged erroneous approval by the Veterans Administration of a pension award instead of an amendment to the original disability compensation award, resulting in the veteran receiving two checks each month. The plaintiff's appeal was based upon the contention, as stated by the court, "that the trial court was in error in arriving at this manifestly correct evaluation of the facts, which led it to hold that `the plaintiff has failed to carry its burden of proof', because, says appellant, sections 705 and 11a-2 of Title 38 U.S.C.A., provide that `All decisions rendered by the Administrator * * * shall be final and conclusive' and no court shall have jurisdiction to review any such decision. It is thus the appellant's theory that if the Administrator makes a finding that a certain sum, naming it, has been paid by mistake, then the court must, without further inquiry, enter a judgment upon the basis of that finding." The court continued: "We do not think that the facts of this case bring it within the provisions of either section 705 or 11a-2 * * * 11a-2 refers to decisions on a question of law or fact `concerning a claim for benefits or payments', etc. This section was enacted out of consideration of the fact that such a claim by a veteran is one for a mere gratuity. Hahn v. Gray, 92 U.S.App.D.C. 188, 203 F.2d 625. But this claim against the administratrix of the veteran's estate is not `a claim for benefits' under the act."
The opinion in United States v. Gibson was subsequently withdrawn and the judgment reversed in a per curiam opinion on the basis of regulations called to the court's attention under which the court found that "the Government has made sufficient proof of payment by mistake and that it was entitled to recover those payments from the decedent." 225 F.2d 807, 808. This would not, however, affect the court's conclusion that decisions of the Veterans' Administration are not conclusive when made the basis of an affirmative claim for relief by the Government.
In Hormel v. United States, D.C.S.D. N.Y.1954, 123 F.Supp. 806, 810, in holding that "a debt asserted by the Government is not a `claim for benefits or payments' within the meaning of section 11a-2, Title 38", the court said:
"The Government's construction as applied to this case raises the serious question whether the Fifth Amendment would not invalidate a law which would permit the Government to recover a judgment against a citizen without giving him an opportunity to challenge the bare assertion of an administrative officer that money was due and owing. * * * Where there are two reasonably possible constructions of a federal statute, it is the duty of a federal judge to choose the one which does not raise constitutional doubts."
*457 The recent case of United States v. Owens, D.C.E.D.Ark.1957, 147 F.Supp. 309, 313, is directly in point. This was an action against a veteran to recover a sum paid to him as unemployment readjustment allowance, the plaintiff alleging that the defendant knowingly received benefits to which he was not entitled because of erroneous income statements, namely, the failure to include credit sales made in the period covered by the report. The Government's theory was that by virtue of the provisions of 38 U.S.C.A. § 705, the administrative determination that the defendant had knowingly received benefits to which he was not entitled, was, in all events final and binding upon the court. The court concluded that 38 U.S.C.A. § 705 did not apply retroactively so as to make the determination of the Veterans' Administration conclusive and did not of itself establish the plaintiff's claim. Of the plaintiff's contention, the court said: "Obviously, such a construction would make the courts but rubber stamps for administrative action in cases of this kind, serving no function but to render judgments preliminary to the issuance of execution thereon."
The court referred to the cases of United States v. Gudewicz and United States v. Mroch, supra, in support of the Government's contention, and the cases of United States v. Gibson and Hormel v. United States, supra, in support of the position that "decisions of the Veterans' Administration do not enjoy finality when made the basis of an affirmative claim for relief by the Government." The court agreed with the latter cases and continued: "We, of course, do not question that if the Government makes a proper evidentiary showing, a veteran who has received payments improperly is liable to make restitution thereof; but we do not think that the Government can use an administrative determination of the Veterans' Administration as a substitute for evidence, thus raising itself, so to speak, by its own boot straps."
While the courts are divided, I prefer to follow what appears to me the sounder and more equitable rule that the decisions of the Veterans' Administration are subject to review in an action by the Government for affirmative relief.
In defendant's brief it is urged that judgment should be entered for defendant for the relief demanded in his answer. While I am of the opinion that this court has jurisdiction to review the determination by the Veterans' Administration, it cannot be said as a matter of law that the accounting principles used by the Veterans' Administration are erroneous, and those urged by the defendant are correct. That is a question of evidence to be determined at a trial upon the merits.
Plaintiff's motion for summary judgment is denied, and the case will be set for trial on its merits.
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Illinois Official Reports
Appellate Court
Trygg v. Illinois Labor Relations Board, State Panel,
2014 IL App (4th) 130505
Appellate Court BRIAN TRYGG, Petitioner, v. THE ILLINOIS LABOR
Caption RELATIONS BOARD, STATE PANEL; and THE DEPARTMENT
OF CENTRAL MANAGEMENT SEVICES/DEPARTMENT OF
TRANSPORTATION, REGION 3, DISTRICT 5, Respondents.–
BRIAN TRYGG, Petitioner, v. THE ILLINOIS LABOR
RELATIONS BOARD, STATE PANEL; and THE GENERAL
TEAMSTERS PROFESSIONAL AND TECHNICAL EMPLOYEES
UNION, LOCAL 916, Respondents.
District & No. Fourth District
Docket Nos. 4-13-0505, 4-13-0506 cons.
Filed May 6, 2014
Held Where the collective bargaining agreement between respondent union
(Note: This syllabus and respondent Department of Central Management Services (CMS)
constitutes no part of the on behalf of petitioner’s employer, the Department of Transportation,
opinion of the court but failed to protect petitioner’s right of nonassociation under section 6(g)
has been prepared by the of the Illinois Public Labor Relations Act and the record was
Reporter of Decisions insufficient to allow the appellate court to properly address
for the convenience of petitioner’s claims that both the union and CMS violated the
the reader.) provisions of the Act regarding petitioner’s right to nonassociation,
the dismissal of petitioner’s claims by the Illinois Labor Relations
Board, State Panel, was reversed and the cause was remanded for the
issuance of complaints and hearings under section 11 of the Act on the
issues of whether unfair labor practices were engaged in by CMS and
the union when they entered into an agreement that did not guard
petitioner’s right of nonassociation.
Decision Under Petition for review of order of Illinois Labor Relations Board, State
Review Panel, Nos. S-CA-10-092, S-CB-10-024.
Judgment Reversed and remanded with directions.
Counsel on Brian Trygg, of Paris, petitioner pro se.
Appeal
Michael W. O’Hara, of Cavanagh & O’Hara, and Stephanie L. Barton,
of City of Springfield, both of Springfield, for respondent General
Teamsters Professional and Technical Employees Union.
Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
Solicitor General, and Clifford W. Berlow and Laura M. Wunder,
Assistant Attorneys General, of counsel), for other respondents.
Panel JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
Justices Knecht and Holder White concurred in the judgment and
opinion.
OPINION
¶1 These consolidated appeals involve section 6(g) of the Illinois Public Labor Relations Act
(the Act) (5 ILCS 315/6(g) (West 2008)), which allows public employees who desire
nonassociation with a labor union “based upon bona fide religious tenets or teachings of a
church or religious body of which such employees are members” to pay an amount equal to
their “fair share” dues to a nonreligious charity instead of to the union. The proper
interpretation of section 6(g) of the Act presents an issue of first impression.
¶2 In December 2009, petitioner, Brian Trygg, a civil engineer employed by the Illinois
Department of Transportation (IDOT), received a notification from the General Teamsters
Professional and Technical Employees Union, Local 916 (Teamsters) that the Illinois Labor
Relations Board (Board) had certified his employment position for inclusion in the existing
collective-bargaining agreement between the Teamsters, IDOT, and the Department of Central
Management Services (CMS). Shortly thereafter, petitioner informed both his employer and
the Teamsters via e-mail that he did not want to join the Teamsters and, instead, (1) wished to
claim the right of nonassociation under section 6(g) of the Act and (2) requested that his
fair-share dues to be withheld from the Teamsters until his section 6(g) claim was resolved.
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Later, in response to the Teamsters’ request, petitioner attempted to explain in an e-mail why
his religious beliefs brought him under the protection of section 6(g) of the Act. The Teamsters
never responded to that e-mail. CMS, acting on behalf of IDOT, subsequently deducted
fair-share dues from petitioner’s pay.
¶3 Later in December 2009, petitioner filed separate charges with the Board, alleging that
CMS and the Teamsters committed unfair labor practices under section 10 of the Act (5 ILCS
315/10 (West 2008)). In December 2012, following investigations pursuant to section 11 of the
Act (5 ILCS 315/11 (West 2008)), the Executive Director of the Board dismissed both of
petitioner’s charges. Petitioner appealed to the Board pursuant to section 1200.135 of Title 80
of the Illinois Administrative Code (Administrative Code) (80 Ill. Adm. Code 1200.135
(2003)). In May 2013, the Board affirmed the Executive Director’s dismissal of the charges.
¶4 Petitioner pro se appeals from both dismissals, arguing that CMS and the Teamsters
committed unfair labor practices under section 10 of the Act by entering into a
collective-bargaining agreement that failed to safeguard the right of nonassociation under
section 6(g) of the Act. We consolidated the appeals on our own motion. For the reasons that
follow, we reverse the Board’s dismissal of petitioner’s charges against CMS and the
Teamsters and remand for the issuance of complaints and hearings pursuant to section 11 of the
Act.
¶5 I. BACKGROUND
¶6 The following facts were gleaned from the records of administrative proceedings on
petitioner’s unfair labor practice charges.
¶7 A. Events Preceding Petitioner’s Charges
¶8 In January 2009, CMS, IDOT, and the Department of Natural Resources (DNR) entered
into a collective-bargaining agreement with the Teamsters, which recognized the Teamsters as
the exclusive bargaining representative for certain classes of technical employees employed by
IDOT and DNR. (DNR is not a party to these appeals. Because CMS administers petitioner’s
compensation, we refer to CMS as petitioner’s employer throughout this opinion.) The
collective-bargaining agreement included a fair-share agreement, which required CMS to
deduct from the paychecks of employees who did not join the Teamsters an amount equal to
the dues paid by member employees. The agreement required CMS to then remit those
fair-share deductions to the Teamsters.
¶9 The collective-bargaining agreement contained no mention of section 6(g) of the Act,
which requires that nonmember employees be allowed to have their fair-share deductions
remitted to a nonreligious charity instead of to a union, provided that such an exemption be
“based upon bona fide religious tenets or teachings of a church or religious body of which such
employee[ ] [is a member].” 5 ILCS 315/6(g) (West 2008).
¶ 10 In late November 2009, the Board certified petitioner’s employment classification at IDOT
(civil engineer V) for inclusion in the collective-bargaining agreement.
¶ 11 On December 2, 2009, one of petitioner’s colleagues sent an e-mail to petitioner and other
IDOT employees informing them of their inclusion in the collective-bargaining agreement.
Ninety minutes later, petitioner sent an e-mail to his supervisor, Lugene Joines, informing him
that he (1) did not wish to join the Teamsters and (2) wished to take advantage of section 6(g)
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of the Act by having his fair-share deductions remitted to a nonreligious charity instead of the
Teamsters. Petitioner explained in his e-mail that he was a member of the Gideons
International, a Christian professional and businessmen’s association, and that membership in
the Teamsters was contrary to his beliefs and degrading to his standing as a professional. That
same day, Joines replied to petitioner’s e-mail and told him to contact either Dan Magee, the
Teamsters’ division representative, or Leo Carroll, the Teamsters’ business agent.
¶ 12 On or around that same day, petitioner received a letter from the Teamsters explaining the
benefits of Teamsters membership and the steps necessary to formally join the Teamsters. The
Teamsters’ letter did not mention petitioner’s option to abstain from joining the Teamsters and
to instead take fair-share deductions, nor did it mention the religious protections of section 6(g)
of the Act.
¶ 13 On December 7, 2009, petitioner sent the following e-mail to Carroll:
“Mr. Carroll,
I have contacted Dan Magee concerning my right to nonassociation of employees.
*** This issue is important to me and I would like to pursue resolving it before monies
are unfairly removed from my paycheck and sent to the [Teamsters] instead of being
nonassociated and provided to a charity.
I tried contacting you by telephone, but you must have been away from your office.
Our Administrative Services Bureau advises the payroll information is due within the
next few days, so time is of the essence.”
¶ 14 On December 8, 2009, petitioner sent a letter to Joseph Crowe, Deputy Director of IDOT
Region 3, informing him that he wished to invoke his rights under section 6(g) of the Act based
upon his religious beliefs. Petitioner requested that his fair-share deductions be immediately
withheld from the Teamsters until a charitable organization could be determined. Petitioner
sent a carbon copy of that letter to the Board and the Teamsters.
¶ 15 On December 9, 2009, Carroll, on behalf of the Teamsters, sent the following e-mail to
petitioner:
“[W]e need to know the following: What established religion do you belong to and
adhere to[?] What tenet or teaching of that religion prohibits payment to a union?
Further[,] we need a list of the charities you wish the monies to go to. Once we have
received this info, we will meet with our attorney and get back to you.”
Three hours later, petitioner responded to Carroll’s e-mail, as follows:
“I have viewed my career as a Professional Engineer with [IDOT] as requiring a
high moral and professional standard, which is rooted in my Christian values. My
membership in the Gideons International is based on my beliefs and values as a
professional man. Including me with the Teamsters diminishes my stature in my
professional career and is contrary to my religious beliefs.
Here is the information that you are requesting:
What established religion do you belong to and adhere to?
Christianity. My background has brought me to learn values from mainly
Presbyterian, Baptist, and Methodist denominations. As an evangelical Christian
currently with membership in a Methodist church, I had the opportunity to become a
member of [the] Gideons International. This is an association of Christian business and
professional men. The membership is based upon the need for men of good [rapport]
-4-
and good standing to participate in the work of spreading God’s word. For this reason,
the standards of membership are made and kept high.
What tenet or teaching of that religion prohibits payment to a union?
I cannot point directly to a teaching of Christianity that prohibits payment to a
union, but the tenets of my belief are rooted in the need for me to be a professional man
of good [rapport] and good standing, with high moral and religious standards. I believe
the Lord has been with me and provided for me, and that I should not bow down to
other gods.”
Petitioner further stated that he wished his fair-share dues to be remitted to the American
Diabetes Association. Neither Carroll nor any representative from the Teamsters responded to
petitioner’s e-mail.
¶ 16 On December 21, 2009, petitioner gained electronic access to his pay stubs for the pay
period ending on December 15, 2009. Those pay stubs showed that CMS had deducted
fair-share dues from petitioner’s pay.
¶ 17 On December 28, 2009, petitioner filed with the Board separate unfair labor practice
charges against CMS and the Teamsters pursuant to section 10 of the Act. (Petitioner filed
those charges by completing standardized charging forms downloaded from the Board’s
website, which he then submitted to the Board.)
¶ 18 B. Board Case Number S-CA-10-092
¶ 19 1. Petitioner’s Charge Against CMS
¶ 20 In his charge against CMS, which the Board docketed as case No. S-CA-10-092 (our case
No. 4-13-0505), petitioner alleged that CMS committed an unfair labor practice under section
10(a) of the Act by failing to safeguard his right of nonassociation under section 6(g) of the
Act. Specifically, petitioner argued that CMS failed to (1) provide notice of the right of
nonassociation, (2) respond to petitioner’s invocation of the right of nonassociation, or (3)
withhold petitioner’s fair-share dues from the Teamsters.
¶ 21 In a section of the charging form titled “relief of remedy sought by charging party,”
petitioner stated the following:
“I ask that disclosure of [section 6(g) of the Act] be supplied to all employees involved
with union representation to eliminate oppression created by the omission in
considering or honoring beliefs. I ask that my religious values be recognized, that an
apology be made in writing, and that documents be provided showing that the monies
are returned from the [Teamsters] so that they can be provided to a nonreligious
charitable organization.”
¶ 22 2. CMS’s Response
¶ 23 On January 22, 2010, CMS filed a three-page response to petitioner’s charge, asserting that
both the collective-bargaining agreement and sections 6(e) and 6(f) of the Act obligated CMS
to deduct fair-share dues from petitioner’s pay and remit those deductions to the Teamsters.
CMS contended that its “obligation ends there,” and that application of the religious exemption
of section 6(g) of the Act–specifically, the process of forwarding petitioner’s fair-share fees to
a nonreligious charitable organization–is a matter to be resolved exclusively between
-5-
petitioner and the Teamsters. CMS further asserted that if it would have withheld petitioner’s
fair-share dues from the Teamsters, that action would have violated the Act.
¶ 24 CMS also claimed that it was not required to provide petitioner with notice of his statutory
rights, including the right of nonassociation under section 6(g) of the Act. Alternatively, CMS
argued that even if notice was required, petitioner was clearly aware of his rights under section
6(g) of the Act, as demonstrated by his ability to invoke those rights in a timely manner, and he
therefore suffered no harm from CMS’s failure to provide notice.
¶ 25 3. Petitioner’s Response to CMS’s Response
¶ 26 On January 25, 2010, petitioner filed a response to CMS’s response. Petitioner asserted
that CMS’s failure to include provisions safeguarding the right of nonassociation in its
collective-bargaining agreement with the Teamsters constituted an unfair labor practice under
section 10(a)(2) of the Act by discriminating in a term or condition of employment in order to
encourage or discourage membership in or other support for any labor organization.
¶ 27 Petitioner conceded that he personally suffered no harm from CMS’s failure to provide him
with notice of his right of nonassociation. Petitioner stated that he fortuitously happened to
learn of his right of nonassociation from a fellow employee, but were it not for that employee,
he would have remained ignorant to his rights under section 6(g) of the Act.
¶ 28 Petitioner also conceded that his eligibility for the religious exemption of section 6(g) of
the Act was a point of debate between him and the Teamsters, and that CMS should not be
involved in that determination. However, petitioner argued that because CMS and the
Teamsters were equal parties to the collective-bargaining agreement, and because section 6(g)
of the Act required the “agreement” to safeguard the right of nonassociation, CMS and the
Teamsters shared the responsibility to ensure that petitioner’s fair-share dues would not go to
the Teamsters. In other words, although petitioner conceded that his eligibility for
nonassociation under section 6(g) of the Act was a point of debate between only him and the
Teamsters, he claimed that section 6(g) of the Act required CMS to safeguard his right of
nonassociation by withholding his fair-share dues from the Teamsters until that debate could
be resolved.
¶ 29 4. Dismissal of Petitioner’s Charge
¶ 30 In December 2012, the Executive Director of the Board, Jerald Post, dismissed petitioner’s
charge against CMS in a written order, concluding that “the charge fails to raise an issue of law
or fact sufficient to warrant a hearing.” Focusing on the relief petitioner requested in his
charge, Post determined that nothing in the Act or the Administrative Code required CMS to
provide employees with notice of their rights under section 6(g) of the Act. Finding no
requirement that CMS provide petitioner with notice of his rights, Post concluded that
petitioner’s charge failed to raise an issue for hearing.
¶ 31 5. Petitioner’s Administrative Appeal
¶ 32 In his appeal pursuant to section 1200.135 of Title 80 of the Administrative Code,
petitioner essentially reasserted his argument that CMS violated its duty to safeguard the right
of nonassociation under section 6(g) of the Act. In May 2013, the Board affirmed Post’s
dismissal of petitioner’s charge.
-6-
¶ 33 C. Board Case Number S-CB-10-024
¶ 34 1. Petitioner’s Charge Against the Teamsters
¶ 35 In his charge against the Teamsters, which the Board docketed as case number
S-CB-10-024 (our case No. 4-13-0506), petitioner alleged that the Teamsters committed an
unfair labor practice under section 10(b) of the Act by failing to safeguard his right of
nonassociation under section 6(g) of the Act. Specifically, petitioner argued that the Teamsters
failed to (1) provide notice of the right of nonassociation, (2) respond to petitioner’s invocation
of the right of nonassociation, or (3) refuse to accept petitioner’s fair-share dues from CMS.
¶ 36 Petitioner’s statement of the relief or remedy he sought was identical to the statement he
included in his charge against CMS.
¶ 37 2. The Teamsters’ Response
¶ 38 On January 7, 2010, the Teamsters, through its attorney, submitted a nine-page response to
petitioner’s unfair labor practice charge, asserting that it did “not believe that [petitioner] has
alleged sufficient facts to warrant issuance of a complaint in conjunction with an unfair labor
practice charge concerning his assertion that he possesses a valid bona fide religious objection
to the payment of union dues and/or fair share payments.” In response to petitioner’s
explanation of his religious beliefs, the Teamsters argued that petitioner’s asserted beliefs were
insufficient under section 6(g) of the Act, in part, because they were inconsistent with
statements of the Pope of the Roman Catholic Church and unsubstantiated by scholarly
evidence.
¶ 39 3. The Robert Gierut E-mail
¶ 40 On September 20, 2012, Board representative Robert Gierut sent an e-mail to petitioner,
informing him that the Board was in the process of clearing a backlog of cases, including
petitioner’s charges against CMS and the Teamsters. Gierut asked petitioner for additional
information, including whether the Teamsters had honored his request to have his fair-share
assessment forwarded to the American Diabetes Association.
¶ 41 In response, petitioner stated that although he had not received any communication from
the Teamsters, 67 deductions totaling $3,623.78 had been taken from his pay to date, and he
had received no information indicating that the deductions had been placed in escrow pending
resolution of his charges.
¶ 42 4. Dismissal of Petitioner’s Charge
¶ 43 In December 2012, Post dismissed petitioner’s charge in a written order, concluding that
“the charge fails to raise an issue of law or fact sufficient to warrant a hearing.” Regarding
petitioner’s claim that the Teamsters failed to provide him with notice of his rights under
section 6(g) of the Act, Post asserted that the Act contains no such notice requirement. Even if
the Teamsters should have provided petitioner with some kind of notice, Post concluded, the
evidence showed that petitioner was nonetheless fully aware of his rights and able to assert
them in a timely fashion.
¶ 44 As to petitioner’s claim that the Teamsters committed an unfair labor practice by failing to
honor his request for exemption under section 6(g) of the Act, Post found that petitioner’s
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asserted beliefs were no more than a personal predisposition, and therefore insufficient under
section 6(g) of the Act.
¶ 45 5. Petitioner’s Administrative Appeal
¶ 46 In his appeal pursuant to section 1200.135 of Title 80 of the Administrative Code,
petitioner reasserted his argument that the Teamsters violated its duty to safeguard the right of
nonassociation under section 6(g) of the Act. Quoting biblical scripture and further elaborating
on his beliefs, petitioner also argued that his religious beliefs were sufficient under section 6(g)
of the Act. In May 2013, the Board affirmed Post’s dismissal of petitioner’s charge against the
Teamsters.
¶ 47 These appeals followed the Board’s May 2013 dismissals of petitioner’s charges against
CMS and the Teamsters. As previously stated, we consolidated the appeals on our own motion.
¶ 48 II. ANALYSIS
¶ 49 In his pro se appeals, petitioner essentially contends that CMS and the Teamsters
committed unfair labor practices under section 10 of the Act by entering into a
collective-bargaining agreement that failed to safeguard the right of nonassociation under
section 6(g) of the Act. Specifically, petitioner contends that the agreement failed to (1)
disclose or provide notice to employees of the right of nonassociation or (2) set out procedures
through which CMS and the Teamsters would address employees’ claims for nonassociation
under section 6(g) of the Act. Petitioner further asserts that the Teamsters committed an unfair
labor practice by failing to honor his invocation of the right of nonassociation under section
6(g) of the Act. We address petitioner’s claims in turn. Before doing so, however, we briefly
review the applicable statutes governing unfair labor practice procedures to place the Board’s
dismissals into context.
¶ 50 A. Section 11(a) of the Act and the Standard of Review
¶ 51 Section 11(a) of the Act governs unfair labor practice procedures. That section provides
that when a party files an unfair labor practice charge, the Board or its designated agent shall
conduct an investigation of the charge. 5 ILCS 315/11(a) (West 2008). Section 11(a) further
provides that “[i]f after such investigation[,] the Board finds that the charge involves a
dispositive issue of law or fact[,] the Board shall issue a complaint and cause to be served upon
the [charged party] a complaint stating the charges, accompanied by a notice of hearing before
the Board or a member thereof designated by the Board, or before a qualified hearing officer
designated by the Board.” 5 ILCS 315/11(a) (West 2008).
¶ 52 Upon petitioner’s filing of his charges against CMS and the Teamsters, the Board
designated Post to investigate the charges pursuant to section 11(a) of the Act. This court
recently stated the purpose of such an investigation and the standard of review applicable to the
Board’s dismissal of a charge at the investigation stage, as follows:
“When investigating such a charge, the Board is analogous to a grand jury. [Citation.]
Like a grand jury, the Board assesses the credibility of witnesses; draws inferences
from the facts; and, in general, decides whether there is enough evidence to support the
charge. [Citation.] If the Board finds an issue of law or fact sufficient to warrant a
hearing, the Board will issue a complaint setting forth the issues that warrant a hearing.
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5 ILCS 315/11(a) (West 2008); 80 Ill. Adm. Code 1220.40(a)(3) (2012). However, the
Board will dismiss the charge if the charge fails to state a claim on its face or the
investigation reveals no issue of law or fact sufficient to warrant a hearing. 80 Ill. Adm.
Code 1220.40(a)(4) (2012).” Michels v. Illinois Labor Relations Board, 2012 IL App
(4th) 110612, ¶ 44, 969 N.E.2d 996.
¶ 53 Judicial review of the Board’s dismissal of a charge lies directly in the appellate court. 5
ILCS 315/11(e) (West 2008). We apply a deferential standard of review to the Board’s
dismissal of a charge:
“When deciding whether there is enough evidence to justify a hearing, the Board
must exercise its discretion or judgment. It is within the sound discretion of the Board
to dismiss an unfair labor practice charge. [Citations.] Thus, if the Board decides there
is not enough evidence and dismisses the charge, we ask whether it abused its
discretion. [Citations.] The Board abuses its discretion only where its decision to
dismiss the charge is clearly illogical. [Citation.] The fact we may have reached a
different decision than the Board is not, by itself, sufficient to justify reversing the
Board’s decision.” Michels, 2012 IL App (4th) 110612, ¶ 45, 969 N.E.2d 996.
¶ 54 In this case, petitioner filed separate unfair labor practice charges against CMS and the
Teamsters relating to the collective-bargaining agreement that those parties entered into.
Petitioner charged CMS with committing unfair labor practices under the following provisions
of section 10(a) of the Act:
“It shall be an unfair labor practice for an employer or its agents:
(1) to interfere with, restrain or coerce public employees in the exercise of the
rights guaranteed in this Act ***;
(2) to discriminate in regard to hire or tenure of employment or any term or
condition of employment in order to encourage or discourage membership in or
other support for any labor organization. Nothing in this Act or any other law
precludes a public employer from making an agreement with a labor organization
to require as a condition of employment the payment of a fair share under
paragraph (e) of Section 6[.]” 5 ILCS 315/10(a)(1)-(2) (West 2008).
¶ 55 Petitioner charged the Teamsters with committing an unfair labor practice under the
following provision of section 10(b)(1) of the Act:
“It shall be an unfair labor practice for a labor organization or its agents:
(1) to restrain or coerce public employees in the exercise of the rights
guaranteed in this Act ***[.]” 5 ILCS 315/10(b)(1) (West 2008).
¶ 56 Following his investigations, Post dismissed petitioner’s charges against CMS and the
Teamsters, finding that neither charge raised issues of law or fact sufficient to warrant a
hearing. Following petitioner’s administrative appeal, the Board upheld that dismissal.
Accordingly, the ultimate question before us is whether the Board abused its discretion by
dismissing petitioner’s charges. As discussed in further detail below, we conclude, and the
Board concedes before this court, that neither of petitioner’s charges should have been
dismissed.
-9-
¶ 57 B. The Duty To Safeguard the Right of Nonassociation
¶ 58 Section 6(g) of the Act provides, in pertinent part, as follows:
“Agreements containing a fair share agreement must safeguard the right of
nonassociation of employees based upon bona fide religious tenets or teachings of a
church or religious body of which such employees are members. Such employees may
be required to pay an amount equal to their fair share, determined under a lawful fair
share agreement, to a nonreligious charitable organization mutually agreed upon by the
employees affected and the exclusive bargaining representative to which such
employees would otherwise pay such service fee.” 5 ILCS 315/6(g) (West 2008).
¶ 59 Petitioner asserts that because section 6(g) of the Act provides that the agreement must
safeguard the right of nonassociation, the written collective-bargaining agreement itself must
set out the procedures through which the parties to the agreement will safeguard the right of
nonassociation under section 6(g) of the Act. Petitioner essentially argues that CMS and the
Teamsters committed unfair labor practices under section 10 of the Act by entering into a
collective-bargaining agreement that failed to include provisions designed to implement
section 6(g) of the Act. Petitioner asserts that among the necessary safeguard provisions were
(1) notice to employees of their rights under section 6(g) of the Act and (2) formal procedures
for handling employees’ claims for nonassociation under section 6(g) of the Act, including
escrow of fair-share dues while an employee’s claim was pending. We agree that the
collective-bargaining agreement between CMS and the Teamsters failed to safeguard the right
of nonassociation under section 6(g) of the Act.
¶ 60 The parties do not dispute that the collective-bargaining agreement included no mention of
the right of nonassociation under section 6(g) of the Act, nor procedures designed to carry out
the requirements of that section, as the facts of this case clearly demonstrated. After petitioner
unambiguously stated to his supervisor that he intended to claim the right of nonassociation
under section 6(g) of the Act, his supervisor told him to take up his claim with the Teamsters.
After petitioner claimed the right of nonassociation with the Teamsters, the Teamsters sent
petitioner an e-mail asking him to explain (1) “what established religion” he belonged to and
(2) what “tenet or teaching of that religion prohibit[ed] payment to a union.” When petitioner
attempted to answer those questions, his e-mail went ignored. Shortly thereafter, despite
having knowledge of petitioner’s invocation of the statutory right of nonassociation, the
Teamsters apparently took receipt of petitioner’s fair-share dues without placing them into
escrow or forwarding them to the American Diabetes Association, which petitioner had clearly
designated as the nonreligious charity he wished to receive his fair-share dues.
¶ 61 The fact that petitioner was forced to file an unfair labor practice charge with the Board
before the Teamsters or CMS formally addressed the merits of his claim for nonassociation
under section 6(g) of the Act demonstrates that the collective-bargaining agreement utterly
failed to safeguard the right of nonassociation. Petitioner associated with the Teamsters against
his will when his fair-share dues went into the Teamster’s coffers. Section 6(g) of the Act
requires that the right of nonassociation be safeguarded by more than the type of unwritten,
improvised procedures on display in this case.
¶ 62 In the 1986 administrative case of Navratil & American Federation of State, County &
Municipal Employees, Council 31, 2 PERI ¶ 2044 (ISLRB 1986), the Board addressed the
issue of procedural safeguards under section 6(g) of the Act and noted that although the statute
“does not expressly define [the] procedural safeguards” necessary to protect the right of
- 10 -
nonassociation, the United States Supreme Court’s decision in Chicago Teachers Union, Local
No. 1 v. Hudson, 475 U.S. 292 (1986), entitled the employee in Navratil to constitutional due
process. Navratil, 2 PERI ¶ 2044. In Navratil, 2 PERI ¶ 2044, the Board concluded that the
employee received adequate due process because (1) he received notice and an explanation of
the religious exemption; (2) he received a reasonably prompt and impartial hearing on his
claim for nonassociation, albeit through the unfair labor practice procedures; and (3) his
fair-share dues were placed in escrow pending resolution of his claim for nonassociation.
¶ 63 We note that the procedural safeguards set forth in Hudson were those minimally required
under the constitution for fair-share agreements in general. The Supreme Court did not hold
that such procedural safeguards were constitutionally required when an employee invoked a
statutory exemption to an otherwise valid fair-share agreement, such as the exemption created
by section 6(g) of the Act. Nonetheless, the Board in Navratil appeared to interpret section 6(g)
of the Act as requiring procedural safeguards akin to those enunciated in Hudson. We give
deference to the Board’s interpretation of the Act, which it was created to enforce and in which
it has experience and expertise. Illinois Council of Police v. Illinois Labor Relations Board,
Local Panel, 387 Ill. App. 3d 641, 660, 899 N.E.2d 1199, 1215 (2008).
¶ 64 In Hudson, 475 U.S. at 310, the Supreme Court held that “the constitutional requirements
for the Union’s collection of agency fees [(also known as fair-share dues)] include [1] an
adequate explanation of the basis for the fee, [2] a reasonably prompt opportunity to challenge
the amount of the fee before an impartial decisionmaker, and [3] an escrow for the amounts
reasonably in dispute while such challenges are pending.” Citing Hudson, the Board and the
Teamsters concede that because petitioner’s fair-share dues should have been placed in escrow
pending the resolution of his section 6(g) claim, the Board should not have dismissed
petitioner’s charges. We need not decide whether the statutory right of nonassociation under
section 6(g) of the Act is also constitutional in dimension, thus implicating the constitutional
requirements of Hudson, because we conclude that safeguarding the right of nonassociation
under section 6(g) of the Act necessarily requires escrow of fair-share dues pending resolution
of an employee’s claim under that section. Preventing the union from receiving an objecting
employee’s fair-share dues is the only means by which nonassociation is accomplished under
section 6(g) of the Act. It is therefore evident that the General Assembly intended an objecting
employee’s dues to be placed in escrow pending resolution of his claim under section 6(g) of
the Act.
¶ 65 CMS argues that even if petitioner’s fair-share dues should have been placed in escrow, the
Board nonetheless properly dismissed petitioner’s charge against CMS because the
responsibility to escrow fell entirely upon the Teamsters. However, CMS overlooks the
command of section 6(g) of the Act that the agreement safeguard the right of nonassociation.
Because escrow of fair-share dues is required to safeguard the right of nonassociation, both
parties to the agreement are responsible for ensuring that the agreement spells out procedures
for escrowing the fair-share dues of employees who invoke their right of nonassociation.
CMS’s argument would require us to conclude that the duty to safeguard under section 6(g) of
the Act can be satisfied through procedures that exist entirely outside of the actual
collective-bargaining agreement. Because section 6(g) of the Act explicitly requires the
agreement to safeguard the right of nonassociation, both parties to the agreement are
responsible for ensuring that it does so. Likewise, when an agreement fails to comply with
section 6(g) of the Act, both parties share equal culpability.
- 11 -
¶ 66 However, the fact that the collective-bargaining agreement between CMS and the
Teamsters violates section 6(g) of the Act does not automatically mean that either CMS or the
Teamsters are guilty of an unfair labor practice under section 10 of the Act. Questions of law
and fact remain over whether the agreement’s failure to safeguard the right of
nonassociation–for which CMS and the Teamsters are equally culpable–constituted, or
resulted in, unfair labor practices under section 10 of the Act. Because of these unresolved
issues of law and fact, the Board abused its discretion by dismissing petitioner’s charges
against CMS and the Teamsters. As previously stated, the Board concedes that the charges
should not have been dismissed.
¶ 67 Because the collective-bargaining agreement failed to safeguard the right of
nonassociation under section 6(g) of the Act, the fact-finding procedures used in this case
failed to provide us with a sufficiently complete record from which to address the merits of
petitioner’s claim for nonassociation. Accordingly, we decline to address whether petitioner
qualifies for the right of nonassociation under section 6(g) of the Act. Until formal procedures
are in place to appropriately address petitioner’s claim for nonassociation, petitioner’s right of
nonassociation can be adequately protected through escrow of his fair-share dues.
¶ 68 III. CONCLUSION
¶ 69 For the foregoing reasons, we reverse the Board’s dismissal of petitioner’s charges against
CMS and the Teamsters and remand for the issuance of complaints and hearings pursuant to
section 11 of the Act to determine whether CMS and the Teamsters engaged in unfair labor
practices by entering into a collective-bargaining agreement that failed to safeguard the right of
nonassociation under section 6(g) of the Act. Consistent with the Board and Teamsters’
concessions, we further direct that the sum of petitioner’s fair-share dues to date and future
payments be placed in escrow pending a final decision on his claim for nonassociation under
section 6(g) of the Act.
¶ 70 Reversed and remanded with directions.
- 12 -
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80 So.2d 662 (1955)
Virgil BRADDOCK, Appellant,
v.
SEABOARD AIR LINE RAILROAD COMPANY, Appellee.
James M. BRADDOCK, Appellant,
v.
SEABOARD AIR LINE RAILROAD COMPANY, Appellee.
Supreme Court of Florida. Special Division B.
May 11, 1955.
Rehearing Denied June 20, 1955.
*663 Nichols, Gaither, Green, Frates & Beckham and Wm. S. Frates, Walter H. Beckham, Jr., and Sam Daniels, Miami, for appellant.
Smathers, Thompson, Maxwell & Dyer, Miami, and Fleming, Jones, Scott & Boots and Charles R. Scott, Jacksonville, for appellee.
PATTERSON, Associate Justice.
On the afternoon of March 25, 1953, James M. Braddock, an eight year old schoolboy, was riding his bicycle home *664 from school in the city of Miami. As he crossed defendants' tracks near his school he was run over by one of defendants' locomotives, suffering the loss of his left leg.
The injured youth and his father, Virgil Braddock, each brought an action against the defendant and in a consolidated trial the jury returned verdicts of $248,439.00 for the son and $6,500.00 for the father. The trial judge set both verdicts aside and ordered new trials because of the refusals of the plaintiffs to enter remittiturs of $123,431.05 and $4,349.80, respectively.
The verdicts were filed on June 26, 1953. After hearing argument on motions for new trial the trial judge entered an order of remittitur in each case on October 7, 1953. The James M. Braddock order read:
"1. That the jury, in its verdict, allowed the exact amount claimed by the plaintiff in the argument. Those figures for pain and suffering, inability to lead a normal life, humiliation and embarrassment and future medical, I find a little high, but the Court is loath to substitute its judgment for that of the jury.
"2. The items for future pain and suffering, humiliation and embarrassment, inability to lead a normal life and loss of earning capacity were apparently in the exact figures claimed in the argument by plaintiff. This shows clearly that the jury did not take into account the Court's instruction as to reducing this to present worth. The statutes do not give a table for the present worth from age eight on, the age of this boy at the time of trial, but the Court secured from an actuary the figures of the present worth of $1.00 per annum. Annuity at age eight is 23.55. Multiplying that by $1,825.00 per year gives the present worth of the sums allowed for pain and suffering, humiliation and embarrassment and inability to lead a normal life in the sum of $42,978.75 as the present worth, $1,825.00 being the total amount divided by fifty-six years. The jury apparently allowed $121,000.00 for loss of earning capacity. While this is problematical and there may be no diminution of earning capacity, and, in fact, it could be increased by change of occupation yet the jury so found. Since the plaintiff should begin to earn at twenty-one years of age, according to the figures of the plaintiff's attorney, his loss should be $2,650.00 per year. Multiplying that by the present worth at age twenty-one of $21,808, we find the figure of $56,790.20. Adding all of these figures together, we reach the sum of $123,431.05. Subtracting the sum of $125,007.95 leaves a difference of $123,431.05.
"If the plaintiff will enter a remittitur in the sum of $123,431.05, a new trial will be denied. Otherwise, a new trial will be granted."
The Virgil Braddock order read:
"The jury in this cause rendered a verdict of $6,500.00. In their verdict for the plaintiff, James M. Braddock, in case No. 28,126, which was tried simultaneously with this cause, the jury allowed for all future medical expenses, and naturally this item should not be allowed twice.
"The difference between the medical expenses to date and the future medical expenses is $4,349.80. If the plaintiff will enter a remittitur in the sum of $4,349.80, a new trial will be denied. Otherwise, a new trial will be granted."
The plaintiff in each case having declined to enter remittitur pursuant to the orders of October 7, the matter was heard on motion of defendant on October 15 and orders granting a new trial in each case were entered. In the James M. Braddock case the order read:
"This cause came on before me upon the Defendants' Motion for Order Granting Motion for New Trial, and it appearing to the court that on the 7th day of October, 1953, the court entered an order stating, `If the Plaintiff will enter a remittitur in the sum of $123,431.05, a new trial will be denied. Otherwise, a new trial will be granted'; and it further appearing to the court that no such remittitur has been entered by the Plaintiff, and the matter having been argued by counsel for the respective *665 parties, and the court being fully advised in the premises, it is thereupon,
"Ordered and Adjudged that a new trial be and it hereby is granted."
In the Virgil Braddock case the order read:
"This cause came on before me upon the Defendants' Motion for Order granting Motion for New Trial, and it appearing to the court that on the 7th day of October, 1953, the court entered an order stating, `If the Plaintiff will enter a remittitur in the sum of $4,349.80, a new trial will be denied. Otherwise, a new trial will be granted'; and it further appearing to the court that no such remittitur has been entered by the Plaintiff, and the matter having been argued by counsel for the respective parties, the court being fully advised in the premises, it is, thereupon,
"Ordered and Adjudged that a new trial be and it hereby is granted."
Each case is here on appeal by the plaintiff below, taken from the order of October 15, under provisions of Secs. 59.04, 59.06 and 59.07(4), Florida Statutes, F.S.A.
It must be noted that the James Braddock case is unique in that the jury awarded damages in the exact amount argued and requested by plaintiff's counsel based upon a detailed itemized breakdown of the various elements of damages demanded, which itemized breakdown was graphically displayed to the jury on a large placard during counsel's summation. And so it was in the Virgil Braddock case, except that the jury returned an even $6,500 rather than $6,570 demanded. Upon this unusual aspect of the verdicts, both counsel, as well as the trial judge, have proceeded under the assumption that the aggregate verdict in each case constitutes an award of each particular item of damage as contended for and calculated by plaintiff's counsel. We think such an assumption as realistic and reasonable and affords a proper basis for an analysis of the verdicts, both in the court below and on appeal here.
At the outset we examine the orders appealed from in the light of Sec. 59.07(4) and the contention of defendant that inasmuch as only the orders of October 15 are appealed from, no errors or defects in the amount of remittiturs fixed by the orders of October 7 may be considered. We are mindful that no ground will be considered on an appeal from an order granting a new trial except that designated in such order by the trial court as the ground upon which the motion was granted. However, reading the two orders in each case together, we think that each complements the other and together constitute the court's action on defendant's motion. The orders of October 7 did not dispose of the motion, and by reference to them in the orders of October 15 the court has specifically designated the precise ground on which the later orders rest, as required by the statute. We are left in no doubt of his grounds thus expressed, and the two orders together fix the limits of inquiry on review.
We first, then, consider the orders in the Virgil Braddock case. Admittedly the father's verdict of $6,500 is composed entirely of medical expenses to the date of the trial plus future medical expenses until the son reaches majority. None of the items is charged to be excessive, nor is it contended that they are improper as elements of damage to be allowed the father. The only ground for the order for remittitur of the future medical expenses was that such expenses to the son's majority had also been allowed in the son's verdict, and constitute an unauthorized double recovery against defendant. Plaintiff contends no such allowance was made to the son; hence the order for remittitur by the father was erroneous. Our study of the calculation of the son's verdict leads us to the same conclusion. For the reason mentioned earlier, the record reveals the precise calculation of future medical expenses of the son. The record reveals without dispute that the son's life expectancy at the date of trial was fifty-six years, and his life expectancy beyond majority was 44 years. *666 Each item of future medical expenses allowed the son was calculated on the basis of 44 years duration, a fact conceded by defendant. One item, bi-weekly visits for limb adjustment, calculated on 56 years' duration, is shown by the record to be an allowance, not for the expense, but for the inconvenience and annoyance involved. No corresponding item appears in the calculation of the father's damages. We must therefore conclude that such future medical expenses as were allowed the son were medical expenses to be incurred after the son's majority. We think the record makes it clearly apparent that the trial court was mistaken in the impression that future medical expenses allowed the father were duplicated in the son's verdict. No other reason having been designated in the order granting new trial, such order is therefore erroneous and must be reversed for entry of an order denying new trial in the Virgil Braddock case.
We next consider the order granting a new trial in the James M. Braddock case. Reading together the orders of October 7 and October 15 it is manifest that the trial court approved the verdict against every ground of the motion for new trial except the failure of the jury to reduce future damages to a present money value. His calculation of the remittitur was intended to rectify that omission. The order itself reveals the basis for the calculation. Plaintiff concedes that the allowance of $121,000 for loss of future earning capacity should properly be reduced to present value but finds in the trial court's calculation an error of $3,181.20 by reason of the court's use of the amount of $2,650 as the future yearly loss rather than a loss of $2,750 per year "according to the figures of the plaintiff's attorney" and actually found by the jury, based on the assumption we have previously mentioned. We agree with plaintiff that the court did so err and that his error was one of mathematical miscalculation clearly revealed in the record. The aggregate loss of future earnings of $121,000, which the trial court accepted, was based upon 50% loss of annual earnings of $5,500 beginning at age twenty-one. It is obvious the court accepted and intended to use those findings rather than to substitute an earning figure of his own. Carrying out the court's own calculation from there, we find the present value of loss of future earning capacity to be $59,972.00 rather than $56,790.20 used in the order. The miscalculation produces the error of $3,181.20.
The Court's calculation of the remittitur is further challenged on the ground that it applies the present worth rule to damages for future pain and suffering, humiliation and embarrassment and inability to lead a normal life. Of the total remittitur, the amount of $59,221.25 represents the reduction of such damages, designated as the "pain and suffering" items, to the present money value of an annuity aggregating, over the life expectance of the plaintiff, the amount awarded in the verdict. The substantial question thus presented is whether the present worth rule, admittedly applicable to future pecuniary loss, is applicable also to future pain, suffering and inconvenience.
There is conflict on the question in other jurisdictions. The cases are collected in annotations in 28 A.L.R. 1177, 77 A.L.R. 1451 and 154 A.L.R. 801, from which it appears that the weight of authority is against the reduction of damages for future pain, suffering and inconveniences. The reasoning against such reduction has been variously expressed, but we think it was aptly stated in Chicago & N.W.R. Co. v. Candler, 8 Cir., 283 F. 881, 884, 28 A.L.R. 1174: "Neither the plaintiff in the case nor any one else in the world has ever established a standard of value for these ills. The only proof ever received to guide the jury in determining the amount of the allowance they should make is, broadly stated, the nature and extent of the injury, its effect and results. They are instructed to allow a reasonable sum as compensation, and determining what is reasonable under the evidence to be guided by their observation, experience and sense of fairness and right. At the best the allowance is an estimated sum determined by the intelligence and conscience of the jury, and we are convinced that a jury would be much more likely to return a just verdict, considering the estimated *667 life as one single period, than if it should attempt to reach a verdict by dividing the life into yearly periods, setting down yearly estimates, and then reducing the estimates to their present value. The arbitrariness and artificiality of such a method is so apparent that to require a jury to apply it would, we think, be an absurdity." On the other hand, those states requiring reduction hold that reasonable compensation cannot mean anything else than present cash value.
The question has not been directly decided in this state. In Florida Dairies Co. v. Rogers, 119 Fla. 451, 161 So. 85, this Court pondered but did not decide the question in relation to statutory damages for wrongful death of a minor child. Subsequently, in Toll v. Waters, 138 Fla. 349, 189 So. 393, 395, objection was made by the defendant to a charge of the Court directing the jury: "`* * * and if, in considering the case, you reach the conclusion that the plaintiff, Lucile S. Waters, is entitled to damages for future pain and suffering, in fixing the amount thereof you would bear in mind and give consideration to the fact that the plaintiff is receiving a present cash consideration for damages not yet sustained'", on the ground that such charge failed to instruct the jury to reduce such future damages to their present value. The charge was approved over the objection raised, the Court being of the view that the language quoted did in effect charge that such damages should be reduced to present value. It is urged by appellees here that Toll v. Waters, supra, finally resolved the question left undecided in Florida Dairies Co. v. Rogers, supra. We do not think so. The Court was not required to consider the question in Toll v. Waters inasmuch as no objection was raised to the charge by the plaintiff, the only party who could be heard to complain on that ground. In the still later case of Renuart Lumber Yards v. Levine, Fla., 49 So.2d 97, this Court had under consideration a verdict of $75,000 on the question whether it was excessive under the facts supporting it. Plaintiff in that case had suffered substantial loss of future earning capacity as well as substantial future pain and suffering, embarrassment, humiliation and inconveniences. Unlike in the case before us now, the Court in that case could only apply its reasonable deduction as to the amount awarded for the various elements aggregating the total verdict. The case is of value to us here only for the reason that, in its analysis of the verdict, the Court reconstructed the award for future loss of earnings by mathematical reduction of future annual earnings at 3% discount, and considered the balance of the verdict to be an unreduced award for future pain and suffering. Discussion of the proper rate of discount was obviously confined to the calculation of loss of future earnings. Thus, although the question before us was not expressly ruled upon, the suggestion is strong that the problem of mathematical reduction to present value does not attend the determination of damages for future pain, suffering and inconveniences. And we think such suggestion is consistent with our considered view of the question presented here, and accords with the weight of authority in this country.
The rule for measuring damages for pain and suffering, past, present and future, has been often stated, and always in substantial conformity with the charge given in Toll v. Waters, supra, which we set out here in full: "`As to pain and suffering the law declares that there is no standard by which to measure it except the enlightened conscience of impartial jurors, the enlightened conscience of each of you. It would be your duty to determine from the evidence what sort of injuries the plaintiff received, if any, their character as producing or not producing pain, the mildness or intensity of the pain; its probable duration, and allow such sum as would fairly compensate her for her pain and suffering, if any, such sum as would receive the approval of the enlightened conscience of each of you, and if, in considering the case, you reach the conclusion that the plaintiff, Lucile S. Waters, is entitled to damages for future pain and suffering, in fixing the amount thereof you would bear in mind and give consideration to the fact that the plaintiff is receiving a present *668 cash consideration for damages not yet sustained.'"
The rule does not seek to instruct the jury in the process by which they shall determine the amount of damages for pain and suffering. Jurors know the nature of pain, embarrassment and inconvenience, and they also know the nature of money. Their problem of equating the two to afford reasonable and just compensation calls for a high order of human judgment, and the law has provided no better yardstick for their guidance than their enlightened conscience. Their problem is not one of mathematical calculation but involves an exercise of their sound judgment of what is fair and right. The problem is often further complicated by the fact that the pain and suffering are yet to be suffered and thus even further removed from exact calculation and certain measurement. But such further uncertainty does not change the problem from one of judgment to one of calculation. It still rests within the enlightened conscience of the jury. We think, therefore, that the aspect of present compensation for future pain is merely one of the subjective elements of the problem, and is not a process of mathematical calculation of present value, such as must be applied to periodic future pecuniary losses. We think, as has been said by others, that to treat future pain and suffering as the loss of an annuity is an absurdity. Viewing the trial court's reduction in the light of our view of the rule, we are persuaded that the reduction is erroneous and should be restored. We note here that the Court considered and expressly rejected the contention that the verdict is excessive. It thus appears that the reduction was not intended as an exercise of the Court's discretion to reduce an excessive verdict, but was instead an intention of the Court to carry out what the Court perceived to be an omission by the jury to perform a mandatory requirement of a mathematical reduction of future worth of prospective pain and suffering to a present value. This we think the Court cannot properly do for the reasons we have already indicated. Since the element of present recompense for future damages is only one subjective element in the determination of these items of damages by the jury, to superimpose the reduction upon the jury's idea of just compensation, which is expressly found not to be excessive, merely in obedience to a rule of damages we find not to be applicable, is patently not an exercise of discretion in granting a new trial, but a clear misapplication of law.
In this connection we are constrained to note, however, that the trial Court was in all likelihood strongly persuaded by the unusual fact in this case that it conclusively appears that the total figure for future pain, suffering and inconveniences was arrived at by an assessment of five dollars per day for the duration of plaintiff's expectancy. The method of counsel's argument to the jury by which the damages are broken down into per diem assessment was neither challenged nor disapproved in the court below, and we are not required to pass upon it here. If it be considered to be deceptive and to produce an excessive verdict, the court, in a proper case, and in the exercise of sound discretion to prevent injustice by excessive verdicts, may so find and order an appropriate remittitur. But we think that neither counsel's summation nor the jury's method of assessment will justify the application of the present worth rule to future pain and suffering.
We think therefore that the remittitur ordered by the trial Court was erroneous in the particulars mentioned and that the errors arise from miscalculation and misapplication of law rather than an exercise of judicial discretion. Under such circumstances we feel obliged to correct the remittitur on this appeal and thus afford the plaintiff his election to enter a correct remittitur or to accept a retrial.
In view of the limited scope of review of orders granting new trials, the question of the excessiveness of the verdicts is neither decided nor precluded by this appeal.
The order granting a new trial in the Virgil Braddock case is reversed and the Circuit Court is hereby directed to enter a final judgment in the sum of $6500 in favor *669 of Virgil Braddock bearing interest from June 20, 1955, the date of the former mandate in this cause. The order granting new trial in the James M. Braddock case is reversed with directions to enter a remittitur in the sum of $61,028.00, and thereupon enter a final judgment in the sum of $187,411 in favor of James M. Braddock, bearing interest from July 6, 1955, the date of the appellant's entry of remittitur herein.
TERRELL, Acting C.J., and SEBRING and HOBSON, JJ., concur.
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284 F.2d 91
Joseph CARROLL, Charles Peterson and Charles Turecamo, asTreasurer, Orchestra Leaders of Greater New York,Plaintiffs-Appellees,v.ASSOCIATED MUSICIANS OF GREATER NEW YORK and AL Manuti, asPresident, Max L. Arons, as Secretary and Hi Jaffee, asTreasurer of Local 802, Associated Musicians of Greater NewYork, Defendants-Appellants.
No. 34, Docket 26278.
United States Court of Appeals Second Circuit.
Argued Sept. 28, 1960.Decided Nov. 17, 1960.
Ashe & Rifkin, New York City (George Rifkin, New York City, on the brief), for defendants-appellants.
Before LUMBARD, Chief Judge, and TUTTLE1 and FRIENDLY, Circuit judges.
TUTTLE, Circuit Judge.
1
Associated Musicians of Greater New York and its officers appeal from the grant of a temporary injunction forbidding them to put into effect a 'single engagement welfare plan' which concededly involved payments which would be violative of Section 302(a) of the Labor Management Relations Act as Amended, 29 U.S.C.A 186, assuming the correctness of the facts found by the trial court. The provisions of the Labor Management Relations Act here invoked are:
2
186 '(a) It shall be unlawful for any employer to pay or deliver, or to agree to pay or deliver, any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce.
3
'(c) The provisions of this section shall not be applicable * * * (5) with respect to money or other thing of value paid to a trust fund established by such representative, for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents): Provided, That * * * (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund * * *.'
4
The plaintiffs are members of the defendant Union, Local 802, which has some 30,000 members. They are also members of a smaller Union, Orchestra Leaders of Greater New York, all of whose members are also in Local 802, but who have the further identifying characteristic of being band or orchestra leaders in addition to, or rather than, plain musicians or sidemen. The executive Board of Local 802 put into effect a plan to provide welfare benefits for its members engaged in the single engagement field. This activity involves the selection by a leader of individuals to play at single engagements. A band leader may use the same musicians or sidemen repeatedly or he may engage different musicians from time to time. The plan thus sought to be enforced by the defendants required that the leader charge the purchaser of the music, i.e., the father of the debutante or of the bride, or the college fraternity, etc., an amount above the regular charge for the band which would give him one dollar per musician per performance. This sum he would then be required to pay over to the officers of Local 802, as trustees.
5
The trial court held that the leaders were, on the proof before him, the employers of the sidemen; that the musicians were 'employed in an industry affecting commerce'; that the welfare fund was to be administered only by the defendant union officers; that, as an interlocutory finding, therefore, the plaintiffs, as leaders, could not legally pay this money over to the individual defendants as officials of the Union, which was the representative of the sidemen employed by the leaders.
6
Having in mind the very limited scope of review of Courts of Appeals in such an interlocutory order as a preliminary injunction, Joshua Meier Co. v. Albany Novelty Mfg. Co., 2 Cir., 236 F.2d 144; American Vasuals Corp. v. Holland, 2 Cir., 219 F.2d 223; Mansfield Hardwood Lumber Company v. Johnson, 5 Cir., 242 F.2d 45, we are constrained to affirm the order of the trial court.
7
The degree to which the sidemen employees of the leaders were 'employed in an industry affecting commerce' (the main point of appellants' attack on the order below), is an issue which can be more satisfactorily resolved on a full trial of the case. The degree of such effect found by the trial court here, while perhaps more restricted than justified on the proof, was nevertheless sufficient to support his grant of the preliminary injunction.
8
Substantially all other facts are without dispute. The judgment is affirmed.
1
Of the Fifth Circuit, sitting by designation
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752 F.Supp. 1231 (1990)
Kenneth J. ROSA, et al., Plaintiffs,
v.
RESOLUTION TRUST CORPORATION, et al., Defendants.
Civ. No. 90-4559 (CSF).
United States District Court, D. New Jersey.
December 5, 1990.
*1232 Roger B. Kaplan, Laura Studwell, Richard Robins, Wilentz, Goldman & Spitzer, Woodbridge, N.J., for plaintiffs.
Arthur Meisel, Ann. F. Kiernan, on the brief, Jamieson, Moore, Peskin & Spicer, Princeton, N.J., Dennis S. Klein, Robert P. Fletcher, Hopkins & Sutter, Washington, D.C., for defendant Resolution Trust Corp.
Sara L. Reid, Kelley, Drye & Warren, Parsippany, N.J., for Manufacturer's Hanover.
OPINION
CLARKSON S. FISHER, District Judge.
Before the court is a motion for a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure. A class of employees seeks to enjoin defendants Resolution Trust Corporation ("RTC"), City Federal Savings Bank, City Savings Bank, F.S.B., and City Savings F.S.B. from resolving an employee pension plan in violation of the terms of the Plan and Agreement of Trust, and the applicable sections of the Employee Retirement Income Security Act of 1974 ("ERISA"). In addition, the plaintiffs wish to force defendants to continue funding the Plan as required by the Plan documents. For the following reasons, this preliminary injunction is granted.
FINDINGS OF FACT
The facts below are undisputed. On December 31, 1985, City Federal Savings Bank (then known as "City Federal Savings and Loan Association") adopted the Minimum Benefit Retirement Plan ("Plan"). The express purpose of the Plan was to provide:
retirement benefits and certain other benefits to eligible employees of the Bank and its participating subsidiaries and other participating companies, or to the beneficiaries of such employees, and thereby to encourage employees to make and continue careers with the Bank, all as set forth herein and in the Trust Agreement adopted as part of this Plan.[1]
*1233 Ver. Compl. Exh. A at 2.[2]
Section 12 of the Plan sets forth the "Minimum Funding and Contribution" requirements, as follows:
[T]he Company shall contribute to the Trust, not less frequently than once a year, in accordance with the Code and Regulations, the amounts recommended by the Actuary to the Committee as necessary to maintain the Plan on a sound actuarial basis, consistent with [ERISA], the Code and Regulations after taking into account the retirement benefits to be provided to Participants under the ESOP and retirement benefits previously provided under the Prior Plan. The Committee shall arrange for the establishment and maintenance by the Actuary, or in accordance with his recommendations, of such funding accounts as required by [ERISA].
Id. at 62, § 12.1.
On December 7, 1989, the Director of the Office of Thrift Supervision ("OTS"), Department of the Treasury, ordered that City Federal be closed, and the RTC be appointed Receiver and take possession of City Federal. On that same day, OTS created City Savings Bank, F.S.B. ("City Savings Bank") which assumed certain assets and liabilities of City Federal pursuant to a Purchase and Assumption Agreement dated December 8, 1989. In addition, the employees of City Federal became the employees of City Savings Bank.
On December 9, 1989, Jack P. Shinn, RTC's Managing Agent, met with Jeffrey J. Kaplowitz, City Federal's Executive Vice President in charge of Human Resources, to discuss the various plans in effect and the plans RTC would assume. On December 11, 1989, Shinn distributed a Memorandum which stated: "Employees are the essence of our business. We need you to continue our operations. City Savings [Bank] is maintaining all of City Federal's benefits programs, except for the Employee Stock Ownership Plan." Ver. Compl. Exh. C.
Shortly thereafter, at the behest of Shinn, Kaplowitz distributed a December 21, 1989 Benefits Memorandum to all employees which specifically stated that the Plan at issue would "continue[] unchanged with service from City Federal bridged to City Savings. The eligibility requirements remain the same." Ver. Compl. Exh. D at 2; Kaplowitz Dep. at 21-24.
In a December 26, 1989 memorandum, Thomas W. Meagher (City Savings Bank's in-house attorney responsible for ERISA matters) advised Kaplowitz that in order to effect the assumption of the Plan, City Savings Bank, F.S.B.'s Board of Directors or the RTC (until a board could be elected), had to expressly amend the plan to provide for its assumption and continuation by City Savings Bank, F.S.B. The memorandum further stated that proposed amendments to the Plan for the assumption would be drafted and forwarded to Kaplowitz's attention for appropriate adoption. Exh. D-1.
After reviewing this Memorandum in detail, on January 8, 1990, Shinn forwarded a "Notice of Reportable Event" (Exh. P-9) to the Pension Benefit Guaranty Corporation ("PBGC") which expressly provided that the Plan had been assumed by City Savings Bank, effective December 8, 1989. In addition, Shinn appointed Kaplowitz as Plan Administrator and told him to take the necessary steps of notification to comply with ERISA. Kaplowitz Dep. at 31-32.
Various memoranda and talks were had as to the funding and contribution requirements for the Plan. The demise of the ESOP plan had provided a need for additional funding obligations for the Plan beyond the $1 million contribution previously scheduled for 1989. Shinn was fully apprised of this fact and of the revised quarterly contributions the actuaries had provided by memorandum of January 26, 1990. Kaplowitz Dep. at 29.
*1234 A meeting was held on January 30, 1990, specifically to discuss the new, revised "Expense" and "Funding" Requirements of the Plan. The meeting was attended by Shinn (RTC's Managing Agent), Maron (RTC's Assistant Managing Agent), Robertson (RTC's Pension Expert assigned to City Savings Bank by RTC-Atlanta), Kaplowitz (City Savings Bank's Executive Vice President in charge of Human Resources), O'Connor (City Savings Bank's Vice President in charge of Employee Compensation and Benefits, reporting to Kaplowitz), Elinor Hauer (City Savings Banks's Assistant Vice President, reporting to O'Connor), and David Zulauf (City Savings Bank's Assistant Comptroller). The meeting analyzed and discussed the revised "Expense" number of approximately $2,718,957.00 and the revised "Funding" schedule for the Pension Plan totalling $3,212,678.00 as set forth in the Memorandum of January 22, 1990 (Exh. D-2) and in the actuaries' letter report of January 26, 1990 (Exh. P-2).
The next day, Shinn sent Robertson's memorandum and Kaplowitz's reply about the Plan to Sandra A. Waldrop, RTC-Atlanta. Shinn was then transferred back to Atlanta and was succeeded by Brian H. McClelland as RTC's Managing Agent. McClelland was advised as to the results of the Pension Plan meeting of January 30. Although McClelland denies remembering, Kaplowitz testified in detail that he had met with and apprised McClelland of everything, and although McClelland did not agree with Shinn's actions in every regard, he nonetheless went forward with the assumption of the Plan as evidenced by his request to prepare the necessary IRS documents (Kaplowitz Dep. at 54-58), the execution of a Trust Amendment on February 9, 1990 (Ver. Compl. Exh. F), and the Plan Amendments on February 12, 1990 and March 1, 1990 (Ver. Compl. Exhs. G and H) pursuant to which the Pension Trust and Plan were formally adopted and assumed by RTC for City Savings Bank.
In a March 1990 "Notice To Interested Parties," distributed to all employees of City Savings Bank, the employees were again informed that the Plan was taken over by City Savings Bank, and that City Savings Bank was the Sponsor and Administrator. Ver. Compl. Exh. I.
On March 19, 1990, City Savings Bank sent the revised funding contribution schedule to the PBGC (Exh. P-11) (setting forth the $3.213 million funding schedule). Pursuant to that schedule, in January 1990, City Savings Bank made the Fourth Quarterly Contribution for the 1989 Plan Year; and in April 1990 made the First Quarterly contribution of $271,672 for the 1990 Plan year. However, at the direction of the RTC (Ver. Compl. Exh. J), City Savings Bank has failed to make the Second and Third Quarterly contributions for 1990 (totalling $552,344) and the final payment for 1989 (Kaplowitz Dep. at 111-12). On July 17, 1990, City Savings Bank acknowledged that the failure to submit the Second Quarterly Plan contribution (due on July 15, 1990) was not in compliance with ERISA. Ver. Compl. Exh. K.
On July 19, 1990, the RTC published a "Notice to all Participants and Beneficiaries of the City Federal Savings Bank Minimum Benefit Retirement Plan." Ver. Compl. Exh. L. Through this Notice, the RTC informed the participants and beneficiaries that it was seeking to terminate the Plan. The RTC further stated that it was "aware that [the employees] were previously informed that the Plan would be assumed by City Savings and that [they] would continue to accrue benefits under the Plan for [their] service with City Savings." Id.
Further, the Notice manifested RTC's intent to terminate the Plan retroactively, effective December 7, 1989, despite the express Plan amendments which prohibited such retroactive action. On that same date, July 19, 1990, the RTC issued a "Notice of Intent to Terminate the City Federal Savings Bank Minimum Benefit Retirement Plan." Ver. Compl. Exh. M.
Thereafter, on or about September 11, 1990, the RTC prepared a purported "Second Amendment" to the Plan which contradicted the earlier Plan and Trust Amendments, the earlier memoranda and oral representations, and which contained the following *1235 provision: "[City Federal] has determined that the Plan continues to remain a Plan of [City Federal] and is not to be treated as assumed by City Savings Bank, F.S.B." Ver. Compl. Exh. O. This Second Amendment designated the Plan as the "City Federal Savings Bank Minimum Benefit Retirement Plan," and referred to City Federal's alleged determination with regard to the Planeven though City Federal no longer existed, and even though the RTC and City Savings had changed the Plan's name to the "City Savings Bank, F.S.B." Plan.
On September 17, 1990, the Managing Agent of City Savings Bank, an RTC employee, prepared and signed a Form 5500 ("Annual Return/Report of Employee Benefit Plan") which stated that there was a change in the Plan status since benefits ceased to accrue after 12/7/89 due to the 9/20/90 termination of the Plan. Ver. Compl. Exh. P. In that same form the RTC set forth the name of the Plan as the "City Federal Savings Bank Minimum Benefit Retirement Plan," despite the fact that City Savings Bank, under the direction of the RTC, had assumed the Plan, and changed the name of the Plan to the "City Savings Bank, F.S.B. Minimum Benefit Retirement Plan." Ver. Compl. Exh. G. In addition, RTC sent a "Notice of Reportable Event" on September 19, 1990 (dated August 24, 1990) to counsel of the PBGC, which failed to mention that City Savings Bank had assumed the Plan and changed the Plan's name. Ver. Compl. Exh. Q. Finally, on September 21, 1990, the RTC closed City Savings Bank, F.S.B., placed it in Receivership, and transferred certain assets and liabilities to the new entity, City Savings, F.S.B. Plaintiffs assert that these actions were designed, in part, to avoid the legal obligations to City Savings Bank by circumventing the Requirements of FIRREA through an unauthorized and "sham" second receivership, and conservatorship entity.
As a result of the above actions plaintiffs ask this court to enjoin and restrain the RTC, City Federal, City Savings, and their officers and agents from taking any further action to terminate the Plan. They further request an order requiring the defendants to pay and deliver to the Plan (to the Master Trustee): (1) the Second and Third Quarterly Contribution for the 1990 Plan Year in the amount of $542,344 and, (2) the balance of the Minimum Funding Contribution for the 1989 Plan Year in an amount to be determined by this court at a proof hearing after actuarial depositions (it is estimated at over $2 million). In addition, this injunction would force defendants to make all future contributions to the Plan as required by the Minimum Funding Requirements of the Plan.
I.
This court will first address the various procedural defenses raised by the defendants.
A. 12 U.S.C. § 1821(j).
The first such defense is that this court is barred from enjoining the RTC pursuant to 12 U.S.C. § 1821(j),[3] which provides:
Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation of order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or receiver.
However, plaintiffs claim that § 1821(j) is inapplicable to this case because although RTC has the power to revoke a contract, nothing in FIRREA gives it this power as to a contract it has already assumed. Accordingly, once the RTC had assumed the contract in question, its actions were outside the Section 1821's "functions or powers of the corporation as conservator or receiver."
In addition, even if this court were to find the RTC's actions within its conservatory powers, plaintiffs claim that FIRREA does not prevent them from commencing *1236 an action to compel defendants to do that which they are statutorily obligated to do under ERISA and pursuant to the terms of the Plan. In support of this contention, plaintiffs point to The Rechler Partnership v. The Resolution Trust Corporation, No. 90 Civ. 3091 (D.N.J. Sept. 4, 1990), which involved a declaratory judgment action by plaintiffs to determine whether the RTC had exceeded a "reasonable time" under FIRREA in assuming a lease. The court held that plaintiffs had not asked the court to restrain the RTC but rather sought the interpretation of a federal statute, and proceeded to extend the time RTC had to repudiate or assume the lease for six days. The court found that although its interpretation would bind the RTC and thus "in a colloquial sense restrain it," this was not an extraordinary result but a necessary one to further the separation of powers. Id. at 4.9-4.10. The court concluded:
FIRREA did not, and Constitutionally could not, divest an aggrieved plaintiff of the right to seek legal redress when the very subject of the grievance is agency action that is allegedly arbitrary and statutorily impermissible.
Id. at 4.9.
Defendants, at oral argument, claimed that 29 U.S.C. § 1144(d) prevented ERISA from being used in this way to supersede another United States law. That section provides:
Nothing in this subchapter should be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States ... or any rules or regulations issued under any such law.
Defendants specifically relied upon Calhoun v. FDIC, 653 F.Supp. 1288 (N.D.Tex. 1987), for the proposition that the Federal Banking Agency laws supersede ERISA. In that case, however, the court did not hold that the FDIC is immune from ERISA regulations once it acts as an ERISA fiduciary. Rather, it held that plaintiff could not establish ERISA jurisdiction because: (1) the Plan was terminated before the FDIC became a receiver; and (2) the FDIC did not act as a fiduciary in the first place.
This case differs from Calhoun in two ways. First, unlike the Calhoun plan, the Plan here was terminated after RTC became receiver. Second, this court finds that the RTC acted as a fiduciary, unlike the FDIC in Calhoun. ERISA defines a person as a fiduciary to the extent that he exercises any discretionary authority or control respecting management of such plan, or exercises any authority or control respecting management or disposition of its assets. 29 U.S.C. § 1002(21)(A)(i). In Calhoun, the FDIC did not act as a fiduciary as it merely held onto the deposits already there. RTC, on the other hand, became a fiduciary when it directed that the bank assume the plan and further directed that it be retroactively terminated. As a fiduciary, it was thus subject to the ERISA regulations.
Further, the Calhoun court correctly stated in its analysis that when there is an apparent conflict in the operation of two statutes affecting the same subject matter, the statutes are to be given effect consistent with each other whenever possible. Accord Columbia Gas Dev. Corp. v. Federal Energy Regulatory Comm'n, 651 F.2d 1146, 1158 (5th Cir.1981). Although Calhoun correctly considered ERISA's specific provision that it would not supersede other federal laws, that case involved a specific statute authorizing specific powers seemingly in contravention of ERISA. Here, however, nothing in FIRREA expressly allows the RTC to retroactively reject a fully assumed pension plan. Once the RTC has assumed a Plan, it must be subject to the laws that control that contractual obligation, namely ERISA. To find otherwise would make the RTC completely immune from any judicial review and arbiter of its own actions.
In sum, the RTC should not be permitted to be "the judge of the propriety of its own conduct" and Congress "did not create a fourth branch of government beyond the scrutiny of the law" when it vested certain discretionary powers in the RTC to "wind up the affairs of the various institutions under its aegis." Rechler, at 4.8. Accordingly, defendants' attempt to frame *1237 the issue in this case as one of "restraint" of the powers of the RTC must fail. Such powers are not at issue when plaintiffs seek an adjudication that defendants have failed to comply with their statutory obligations under ERISA, and an injunction compelling them to comply with same.
B. The Administrative Claims Procedure
Defendants next argue that this court lacks jurisdiction over this action because plaintiffs are obligated to exhaust their administrative remedies under FIRREA before the commencement of a legal action. See 12 U.S.C. §§ 1821(d)(3)-(13) (1990). However, as this court recently held in Rechler in a similar context, that argument is without merit:
[T]he language of the administrative claims procedure explicitly indicates that it was designed to address pre-Receiver claims against the failed depository institution and not post-Receiver [claims] against RTC.
Opinion, at 4.5.
Rechler recognized that the claims procedure was designed to allow the RTC to approve or disapprove asserted claims against the "failed institution" which arose prior to RTC's intervention and takeover of the failed institution; therefore, it was inapplicable to the RTC's failure to assume a lease after the RTC had taken over the failed institution. Similarly, this case involves RTC's actions after it took over the bank; therefore, the claims procedure is also inapplicable here. Application of the claims procedure in this case would allow the RTC to adjudicate claims against itself for its own conduct occurring after the takeover of City Federal.
In addition, ERISA, 29 U.S.C. § 1370 (Supp.1990), sets forth specific remedies and "Enforcement Authority Relating To Terminations of Single-Employer Plans." Section 1370(a) states that a party to a plan terminated illegally who is adversely affected may bring an action: "(1) to enjoin such act or practice, or (2) to obtain other appropriate equitable relief (A) to redress such violation or (B) to enforce such provision." Further, § 1370(c) provides that "[t]he district courts of the United States shall have exclusive jurisdiction of civil actions under this section." These sections evidence strong Congressional policy to enjoin, restrain and remedy any acts to terminate a Plan which violate ERISA. Moreover, FIRREA provides no avenue under its administrative procedure for "injunctive" or "other appropriate equitable relief." As such, construing the two statutes together, we must conclude that this action is properly before the court. Consequently, defendants' argument regarding failure to exhaust administrative remedies under FIRREA is rejected.
II.
Now that it has been determined that this court has jurisdiction over this action, I will turn to the substantive issues surrounding the preliminary injunction application.
The Third Circuit has established the following criteria to determine whether a temporary restraining order or preliminary injunction should issue:
1) whether the moving party is reasonably likely to prevail on the merits (reasonable probability of success);
2) whether the movant will be irreparably harmed if injunctive relief is not granted;
3) whether issuance of an injunction will not result in greater harm to the nonmoving party; and
4) whether the public interest would be served by the granting or denial of a preliminary injunction.
Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 197-98 (3d Cir.1990); Colt Industries, Inc. v. Fidelco Pump & Compressor Corp., 844 F.2d 117, 118-19 (3d Cir.1988). In this action, plaintiffs have satisfied all the requirements for the issuance of a preliminary injunction; therefore their application is granted.
A. Likelihood of Success on the Merits
This action centers around defendants' alleged violations of ERISA and the contractual terms of the Plan. ERISA provides *1238 for civil enforcement, including an injunction, of an employer's obligations to make contributions to pension plans. 29 U.S.C. §§ 1132(a)(3), 1145. The RTC and City Savings Bank were required to make contributions to the Plan pursuant to the terms and conditions of the Plan and the 1990 Amendments to the Plan and the Trust. By directing the Plan Administrator to refrain from making the required contributions, RTC and City Savings Bank have clearly violated their fiduciary duties under ERISA. See Gould v. Lambert Excavating, Inc., 870 F.2d 1214, 1217 (7th Cir.1989) (refusal to pay delinquent contributions was a breach of fiduciary duty under ERISA); Laborers Fringe Ben. FundsDetroit & Vicinity v. Northwest Concrete & Constr., Inc., 640 F.2d 1350, 1353 (6th Cir.1981).
In addition, the denial of vested benefits constitutes a breach by the RTC and City Savings Bank of fiduciary duties under ERISA. See Brug v. Pension Plan of Carpenters Pension Trust Fund, 669 F.2d 570 (9th Cir.), cert. denied, 459 U.S. 861, 103 S.Ct. 135, 74 L.Ed.2d 116 (1982) (plan administrators violated fiduciary duties under § 404 by retroactively applying plan provision excluding beneficiary from coverage where beneficiary had been eligible at time she applied for benefits); Swackard v. Commission House Drivers Union Local No. 400, 647 F.2d 712, 713 (6th Cir.), cert. denied, 454 U.S. 1033, 102 S.Ct. 572, 70 L.Ed.2d 477 (1981) (retroactive denial of vested right violated ERISA).
Further, PBGC, the governmental entity in charge of regulating pension plans and plan terminations, in Opinion Letter No. 82-25 (1982), confined retroactive terminations of insufficient employer pension plans to situations where: (a) the participants have "no expectation of continued employment after the proposed date [of termination];" (b) the participants "[are] notified on that date of the contemplated termination;" and (c) "no significant loss to the participants results."
Defendants offer no defense that they complied with ERISA or the PBGC. Instead, they advance the argument that 12 C.F.R. § 563.47 (1989) specifically authorizes the RTC as Receiver for City Federal to terminate the Plan, despite its earlier decision to assume it. Section 563.47 provides that no savings association may sponsor an employee pension plan which, "because of unreasonable costs or any other reason, could lead to material financial loss or damage to the sponsor." On July 5 and 12, 1990, the Managing Agent Committee of City Savings met to determine whether the Plan could cause material loss or damage to City Savings. McClelland Aff., ¶ 2. The Committee concluded that because the Plan was significantly underfunded the perpetuation of the Plan would cause material loss or damage to City Savings Bank, and therefore they would terminate it. Consequently, defendants argue that they had just cause to terminate the Plan.
While this argument has appeal, this court does not agree that this CFR section gives the RTC the unfettered discretion to retroactively terminate a pension plan. As plaintiffs assert, while the regulation allows the RTC in the first instance to decline sponsoring a plan it has determined could cause material loss, the regulation does not allow the RTC to elect to sponsor a plan, with knowledge of the costs and potential gains or losses, to then assure the participants and beneficiaries that the plan will continue, and then retroactively withdraw its sponsorship upon a purported "reassessment" of the financial data. If accepted, any bank could simply announce that it was concerned about potential financial losses arising from a plan it sponsored, and thereafter abandon the plan without regard to ERISA. This would render meaningless the ERISA requirements imposed on all banks, a result Congress could not have intended given ERISA's goal of protecting pension plans and their participants and beneficiaries.
Similarly, defendants' argument that the government cannot be "estopped" or bound by "unauthorized" conduct must fail. All of the evidence demonstrates overwhelmingly that the RTC was fully apprised during the entire assumption process. Consequently, any contention that an agent, acting *1239 for RTC, was not authorized to assume the Plan lacks merit.
For the above reasons, this court finds that the plaintiffs have met the burden of showing a likelihood of success on the merits.
B. The Irreparable Harm Requirement
This is probably the most important requirement in determining whether to grant a preliminary injunction. It is not enough to establish a risk of irreparable harm; a plaintiff must prove a clear showing of immediate irreparable injury. Ecri v. McGraw Hill, Inc., 809 F.2d 223, 225 (3d Cir.1987).
In general, courts have found that an injury must be peculiar, such that money damages do not atone for it. Id. at 226. However, the fact that the payment of money damages is involved does not preclude a finding of irreparable injury. United Steelworkers v. Fort Pitt Steel Casting Div. of Conval-Penn, Inc., 598 F.2d 1273, 1280 (3d Cir.1979). In fact, the Third Circuit allows a preliminary injunction where warranted to preserve the very availability of a damage remedy. See Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 205 (3d Cir.1990), (the possibility of an unsatisfied money judgment, as a matter of law, can constitute irreparable injury for preliminary injunction purposes). Accord Deckert v. Independence Shares Corp., 311 U.S. 282, 290, 61 S.Ct. 229, 234, 85 L.Ed. 189 (1940) ("[t]here were allegations that [the defendant] was insolvent and its assets in danger of dissipation or deletion. This being so, the legal remedy against [the defendant], without recourse to the fund in the hands of [a third party], would be inadequate."); Teradyne, Inc. v. Mostek Corp., 797 F.2d 43 (1st Cir.1986) (upholding a preliminary injunction issued to protect a potential damages remedy); Foltz v. U.S. News & World Report, 760 F.2d 1300, 1307-09 (D.C.Cir.1985) (holding that the irrevocable loss of a cause of action for monetary recovery against an ERISA-covered pension plan would constitute irreparable injury for preliminary injunction purposes).
In this case defendants contend that plaintiffs cannot prove irreparable harm because an adequate money damage is available to them through normal litigation channels. This court cannot agree. First, as the cases above demonstrate, a preliminary injunction is available to preserve the availability of a money damage remedy. Here, RTC's avoidance of its obligations to the Plan participants and beneficiaries and attempts to immunize itself from judicial review by creating City Savings, F.S.B. threatens the plaintiffs' ultimate ability to collect a damage remedy.
Moreover, the ongoing refusal by RTC and City Savings to make the required contributions to the Plan further warrants injunctive relief because such conduct threatens the Plan's actuarial soundness. See Gould, 870 F.2d at 1217 ("ERISA provides for civil enforcement, including an injunction, of an employer's obligations to make contributions to pension plans [and] "failure to make contributions jeopardizes the actuarial soundness of the plaintiff's Funds."); Robbins v. Lynch, 836 F.2d 330, 333 (7th Cir.1988). Defendants argue that failure to make contributions to employee trust funds does not constitute per se irreparable harm and the court must evaluate the particular facts of each case. In this case, however, there are many factors which point to a finding of irreparable harm.
For example, some employees have been paid lump sums from the plan since December 7, 1989, at a level significantly higher than had the plan in fact ended on December 7, 1989. If the plan is retroactively terminated, there will have been undue depletion of the plan by virtue of the past recipients getting more than current recipients. Second, Kenneth Rosa, the named plaintiff, has been retired since December 7, but has been unable to get any benefit payments from the pension for which he is entitled. Lastly, the new entity RTC has created is planned to be resolved and there is no guaranty that money will be available in the Plan to pay subsequent retirees. All of these factors support this *1240 court's finding that plaintiffs have demonstrated that they will be irreparably harmed without preliminary relief.
C. Harm to Defendants
The RTC argues that its Congressional thrift regulation function outweighs the "limited, if any, benefit" plaintiffs will receive if a preliminary injunction should issue. First, plaintiffs will receive more than just a "limited" benefit. They represent innocent participants and beneficiaries who will likely not receive their pensions in full absent a preliminary injunction. Further, the RTC's role in regulating the thrift industry does not give it unbounded license to violate its contractual and federal statutory obligations to the participants and beneficiaries of a pension plan which it knowingly agreed to assume and promised to continue. Accordingly, this court finds that this preliminary injunction will cause no harm to the defendants.
D. The Public Policy
This court's final consideration in weighing the appropriateness of a preliminary injunction is the public interest. ERISA contains express language that evinces a clear national public interest in protecting employees:
Congress finds ... that the continued well-being and security of millions of employees and their dependents are directly affected by these plans; that they are affected with a national public interest.
29 U.S.C. § 1001(a). In fact, the many cases granting preliminary injunctive relief to ERISA plan participants and beneficiaries emphasize the importance of this national public interest. See Gould, 870 F.2d at 1221; Anthony v. Texaco, Inc., 803 F.2d 593, 597 (10th Cir.1986); Van Drivers, 551 F.Supp. at 432 (citations omitted) ("It is clear that stability and protection require assurance of adequate funding and the prevention of arbitrary termination rights."); Security Federal Savings Bank v. OTS, 747 F.Supp. 656 (N.D.Fla.1990). In Security Federal, the court issued a preliminary injunction to prevent the OTS from unilaterally abrogating a contract between FSLBB and plaintiffs. The court stated that "the public interest is best served by requiring the government to honor its obligations." 747 F.Supp. at 660.
Bearing in mind the necessity of enforcement of ERISA's strict fiduciary duties, see Chait v. Bernstein, 835 F.2d 1017, 1027 (3d Cir.1987), and the absence of any compelling interest in giving the RTC unfettered discretion to abrogate pension plans on a whim, this court finds the national public policy of ERISA weighs heavily in favor of granting this preliminary injunction.
In conclusion, for the foregoing reasons, this court grants plaintiff's request for a preliminary injunction. An order accompanies this opinion.
NOTES
[1] City Federal had entered into an Agreement of Trust (the "Trust") with defendant Manufacturers Hanover Trust Company whereby Manufacturers Hanover was designated "Master Trustee" for the Plan.
[2] Ver. Compl. refers to the plaintiffs Verified Complaint. In addition, deposition exhibits are cited as "D-#" (defendants) and "P-#" (plaintiffs).
[3] Plaintiffs raised this defense in their motion for dissolution of the preliminary injunction. For simplicity this court will treat both the motion for dissolution and the preliminary injunction application together.
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575 N.W.2d 527 (1998)
456 Mich. 615
Jimmie COLEMAN and Tammy Coleman, Plaintiffs,
v.
Francis KOOTSILLAS, Defendant, Third-Party Plaintiff-Appellee,
and
Albright Construction Company, Inc., Defendant,
and
City Of Riverview, Defendant, Third-Party Defendant-Appellant.
Docket No. 105721, Calendar No. 1.
Supreme Court of Michigan.
Argued December 9, 1997.
Decided March 24, 1998.
*528 Crystal & Johnson, P.L.C. by Lloyd G. Johnson, Bloomfield Hills, for Kootsillas.
Cummings, McClorey, Davis & Acho, P.C. by Gail P. Massad, Livonia, for City of Riverview.
Granzotto & Nicita, P.C. by Angela J. Nicita, Detroit, amicus curiae for Michigan Trial Lawyers Association.
Opinion
MARILYN J. KELLY, Justice.
We granted leave to determine whether the city of Riverview can be held liable under the proprietary function exception to governmental immunity for injuries that occurred at its landfill. We conclude that operation of the landfill is a proprietary function and that the city is subject to liability.
I
In 1967, city of Riverview voters approved a bond proposal to purchase real property for a landfill. Construction started in the summer of 1968, and by 1969, the landfill was operating. By 1990, it served seventeen municipal customers in the southern Wayne County area. It also accepted commercial waste from numerous sources including the county of Wayne and the province of Ontario, Canada. It bore a type II designation, meaning it accepted general household and nonhazardous waste.
When a hauler delivered waste to the landfill, it stopped at a gatehouse. Its volume of waste was measured and a fee charged.[1] The gate attendant then directed the driver to the active fill area with instructions about where to dump the waste.
On January 17, 1990, Jimmie Coleman drove his garbage truck into the city of Riverview landfill to unload garbage. A second truck, owned by Albright Construction Company, and driven by Francis Kootsillas, was already at the site. Kootsillas was standing near his truck when Coleman backed his vehicle parallel to Kootsillas' truck.
Coleman noticed that two of the tires on Kootsillas' truck were flat. He warned Kootsillas of the problem and the latter acknowledged by nodding his head.
Soon after, as Kootsillas operated the lift on his truck to unload garbage, the truck overturned and fell on Coleman's truck. Coleman was pinned inside, suffering a leg injury.
Coleman and his wife filed suit against the Albright Construction Company, Kootsillas, and the city of Riverview. They asserted that the city was liable because it allowed the road and surrounding areas to become muddy and unmanageable. The conditions allegedly had contributed to the truck's overturning. Purportedly, the city had failed to remedy the hazard or warn drivers of the increased danger of dumping garbage under muddy conditions.
The Colemans agreed to a voluntary dismissal of the city, in the belief that no exception to governmental immunity applied to it. Kootsillas then filed a third-party complaint against the city, raising the same allegations as had the Colemans in their complaint. The Colemans eventually settled with Kootsillas for $350,000 and assigned their rights against the city to Kootsillas.
The city filed a motion for summary disposition pursuant to MCR 2.116(C)(7), arguing that it was immune from tort liability. The trial court granted the motion, finding that *529 the operation of the city's landfill was not a proprietary function.
The Court of Appeals reversed. 214 Mich. App. 570, 543 N.W.2d 356 (1995). It held that the landfill was a proprietary activity, in that it was conducted to produce a pecuniary profit, and its operation was not normally supported by taxes and fees. We granted the city's application for leave to appeal. 454 Mich. 907, 564 N.W.2d 45 (1997).
II
Trial courts' orders granting summary disposition are reviewed de novo on appeal. In this case, the trial court rendered summary disposition pursuant to MCR 2.116(C)(7), on the basis of governmental immunity.
When deciding a motion under MCR 2.116(C)(7), courts must consider the pleadings as well as any affidavits and documentary evidence submitted by the parties. MCR 2.116(C)(5); Patterson v. Kleiman, 447 Mich. 429, 526 N.W.2d 879 (1994).
III
Michigan's governmental immunity statute provides that "all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise or discharge of a governmental function." M.C.L. § 691.1407(1); M.S.A. § 3.996(107)(1). The Legislature has defined "governmental function" as "an activity which is expressly or impliedly mandated or authorized by constitution, statute, local charter or ordinance, or other law." M.C.L. § 691.1401(f); M.S.A. § 3.996(101)(f). In Ross v. Consumers Power Co. (On Rehearing),[2] this Court stated that:
When a governmental agency engages in mandated or authorized activities, it is immune from tort liability, unless the activity is proprietary in nature (as defined in § 13) or falls within one of the other statutory exceptions to the governmental immunity act. Whenever a governmental agency engages in an activity which is not expressly or impliedly mandated or authorized by constitution, statute, or other law (i.e., an ultra vires activity), it is not engaging in the exercise or discharge of a governmental function. The agency is therefore liable for any injuries or damages incurred as a result of its tortious conduct. [Citations omitted.]
Kootsillas argues that the operation of the city's landfill is an ultra vires activity. Therefore, the city is not entitled to immunity. He acknowledges that, with respect to a municipality's collection and disposal of its own garbage, its activities involve a governmental function. Curry v. Highland Park, 242 Mich. 614, 623, 219 N.W. 745 (1928). Cities have a statutory right to own and run facilities to dispose of their own waste and garbage. M.C.L. § 123.241; M.S.A. § 5.2661,[3] M.C.L. § 123.261; M.S.A. § 5.2681.[4] Moreover, they may form agreements jointly to run the facilities. M.C.L. § 123.241; M.S.A. § 5.2661.
IV
The fact that a landfill accepts garbage from outside its borders for a fee does not turn the activity into an ultra vires one. The collection of garbage is a matter of public health. Matters of public health are state concerns, not singularly local ones. Id. When municipalities collect garbage and run disposal sites, they are acting as an arm of the state. Curry, supra. Therefore, a city's disposal of garbage from areas outside its jurisdiction continues to be a matter of public health and a governmental function. Curry, supra at 623, 219 N.W. 745. However, the fact that garbage collection and disposal is a governmental function does not mean that a city cannot be held liable for its employees' tortious conduct. It may be liable if the *530 activity is proprietary in nature. Hyde v. Univ. of Michigan Bd. of Regents, 426 Mich. 223, 254, 393 N.W.2d 847 (1986). The proprietary function exception to governmental immunity provides in pertinent part:
The immunity of the governmental agency shall not apply to actions to recover for bodily injury or property damage arising out of the performance of a proprietary function as defined in this section. Proprietary function shall mean any activity which is conducted primarily for the purpose of producing a pecuniary profit for the governmental agency, excluding, however, any activity normally supported by taxes or fees. [M.C.L. § 691.1413; M.S.A. § 3.996(113).]
We previously held that the definition of proprietary function is clear and unambiguous. Hyde, supra at 257, 393 N.W.2d 847. Two tests must be satisfied: The activity (1) must be conducted primarily for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes and fees. Id. at 258, 393 N.W.2d 847.
In determining whether the agency's primary purpose is to produce a pecuniary profit, we stated that certain considerations should be taken into account. The first is whether a profit is actually generated.
The fact that a governmental agency pursues an activity despite consistent losses may be evidence that the primary purpose is not to make a pecuniary profit, but it is not conclusive evidence. Conversely, the fact that the activity consistently generates a profit may evidence an intent to produce a profit. [Id. at 258, 393 N.W.2d 847 (citations omitted).]
The second consideration is "where the profit generated by the activity is deposited and how it is spent."
If the profit is deposited in the governmental agency's general fund or used to finance unrelated functions, this could indicate that the activity at issue was intended to be a general revenue-raising device. If the revenue is used only to pay current and long-range expenses involved in operating the activity, this could indicate that the primary purpose of the activity was not to produce a pecuniary profit. [Id. at 259, 393 N.W.2d 847 (citations omitted).]
It is clear that the primary purpose of the city of Riverview landfill was to produce a pecuniary profit.[5] The city's financial records establish that, from 1982 through 1990, the landfill consistently generated a substantial profit, ultimately exceeding 7 million dollars.
Moreover, the profit generated was used to fund other city projects. Landfill profits were spent on the expansion of the fire hall and the purchase and modification of a building to house city hall. The profits also helped fund city operations, such as the police and fire departments, the city library, the city ski hill, and the department of public services.[6]
Finally, the city's millage rate has steadily declined, dipping from 18.38 mills in the early 1980s to 13.88 mills in the early 1990s. The drop is due, in part, to the availability of landfill revenue that was transferred to the general fund.[7]
Next, it must be determined whether the activity is one "normally supported by taxes or fees." M.C.L. § 691.1413; M.S.A. § 3.996(113).[8] When deciding whether an activity satisfies the second part of the proprietary function test, it is important to consider the type of activity under examination. In this case, it is more than the operation of a municipal landfill. It is the operation of a commercial landfill that accepts garbage, not merely from the city of Riverview, but from communities as distant *531 as Ontario, Canada. An enterprise of such vast and lucrative scope is simply not normally supported by a community the size of the city of Riverview either through taxes or fees.[9]
The fact that the city charges fees to garbage haulers unloading refuse into its landfill does not alter this conclusion. Any governmental activity must exact a fee if it is to produce a pecuniary profit. If imposition of a use fee like Riverview's would suffice to defeat the proprietary function exception to governmental immunity, almost no city activity would subject a city to liability. That could not have been the intention of the Legislature.[10]
The city of Riverview is engaging in a proprietary function, entering the business of waste disposal for the purpose of raising funds and making a profit. The Legislature has decided that a municipality should not be allowed to escape liability for its negligence when participating in a proprietary function. Under the circumstances present in this case, the government should be held to the same standard as any other business venture.[11]
V
Under the facts presented in this case, we conclude that the landfill is a proprietary function. Therefore, we affirm the Court of Appeals decision remanding the matter to the trial court for further proceedings.
MALLETT, C.J., and BRICKLEY, MICHAEL F. CAVANAGH, BOYLE, WEAVER, and TAYLOR, JJ., concurred with MARILYN J. KELLY, J.
NOTES
[1] If the hauler had an account with the city, the account was credited.
[2] 420 Mich. 567, 620, 363 N.W.2d 641 (1984).
[3] This statute was repealed by 1994 P.A. 451. It is now M.C.L. § 324.4301; M.S.A. § 13A.4301.
[4] The city council of a city, whether organized under the general law or special charter, or the president and board of trustees of a village may establish and maintain garbage systems or plants for the collection and disposal of garbage in the city or village, and may levy a tax not to exceed 3 mills on the dollar on all taxable property in the city or village according to the valuation of the same, as made for the purpose of state and county taxation by the last assessment in the city or village for these purposes.
[5] The city conceded this point for purposes of summary disposition.
[6] Deposition testimony indicates that, without the income from the landfill, the city would be obligated either to reduce general operations or increase revenue through other means, such as raising taxes.
[7] According to Mayor Peter Rotteveel, landfill revenue transferred to the general fund to maintain or lower property taxes has ranged from $86,000 in 1986 to $1.3 million in 1991. The savings to the taxpayer amounts to between four and six mills.
[8] As we noted in Hyde, it does not matter if the landfill is actually supported by taxes or fees. Id. at 260, n. 32, 393 N.W.2d 847.
[9] The city of Riverview had approximately 14,000 residents at the time in question.
[10] In Hyde, we held, without explanation, that financial fees charged for medical services and taxes levied by participating communities financed the operation of the hospitals under consideration. Therefore, the second part of the proprietary function test was not satisfied. Id. at 259-260, 393 N.W.2d 847. Because we had already concluded that part one of the test had not been satisfied, the holding regarding part two is dicta.
[11] This opinion should not be read to change the way courts should interpret the exceptions to governmental immunity. They are to be narrowly construed. This is an unusual case, one in which the government has chosen to run a commercial enterprise for the purpose of reaping a pecuniary profit. Because the breadth of the enterprise, this case is of the type that the proprietary function statute intended to address, even when the exception is given a narrow construction.
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794 F.Supp. 1161 (1992)
MINEBEA CO., LTD. and NMB Corporation, Plaintiffs,
v.
UNITED STATES, Defendant,
The Torrington Company, Defendant-Intervenor.
Court No. 89-06-00344S.
United States Court of International Trade.
July 6, 1992.
*1162 Tanaka Ritger & Middleton, H. William Tanaka, Michele N. Tanaka and Michael J. Brown, Washington, D.C., for plaintiffs.
James A. Toupin, Asst. Gen. Counsel, Stephen A. McLaughlin and Francis Marshall, Atty.-Advisors, U.S. Intern. Trade Com'n, Washington, D.C., for defendant.
Stewart & Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr. and David Scott Nance, Washington, D.C., for defendant-intervenor.
OPINION
TSOUCALAS, Judge:
Plaintiffs, Minebea Co., Ltd. and NMB Corporation ("Minebea"), move pursuant to Rule 56.1 of the rules of this Court for judgment on the agency record in regard to the United States International Trade Commission's ("ITC") final determination that the U.S. spherical plain bearings industry has been injured by less than fair value ("LTFV") imports of bearings from Japan. Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From The Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom, 54 Fed.Reg. 21,488 (1989); Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From The Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom ("ITC Final Determination"), Inv. Nos. 303-TA-19-20 (Final), Inv. Nos. 731-TA-391-399 (Final), USITC Pub. 2185 (May 1989).
Minebea alleges that defendant-intervenor The Torrington Company ("Torrington"), petitioner in the underlying antidumping duty proceeding, did not have the support of the major portion of the U.S. *1163 spherical plain bearings industry. Therefore, Minebea alleges that Torrington had no standing to file an antidumping duty petition "on behalf of an industry" as required by 19 U.S.C. § 1673a(b) (1988) which states in pertinent part:
(b) Initiation by petition
(1) Petition requirements
An antidumping proceeding shall be commenced whenever an interested party ... files a petition with the administering authority, on behalf of an industry, which alleges the elements necessary for the imposition of the duty imposed by section 1673 of this title, ...
(2) Simultaneous filing with Commission
The petitioner shall file a copy of the petition with the Commission on the same day as it is filed with the administering authority.
Minebea argues that the ITC has authority to terminate an antidumping duty investigation on the ground that the petitioner has no standing to file a petition and that its failure to do so is reversible error. Memorandum on behalf of the Minebea Companies in support of motion for judgment upon the agency record ("Minebea Memorandum") at 14-30. Alternatively, Minebea argues that the ITC's determination that the U.S. spherical plain bearings industry was injured by reason of LTFV imports from Japan was not in accordance with law because a majority of the U.S. spherical plain bearings industry opposed the investigation and attributed any injury suffered by themselves to factors other than imports from Japan. Minebea Memorandum at 30-31.
The Court's jurisdiction is based on 28 U.S.C. § 1581(c) (1988).
Background
On March 31, 1988, Torrington filed an antidumping duty petition with the Department of Commerce, International Trade Administration ("ITA"), and with the ITC alleging that it was an interested party[1] and that the petition was filed on behalf of the U.S. domestic antifriction bearings industry.[2] Administrative Record ("AR") Pub.Doc. 1. Torrington alleged in its petition that there was one antifriction bearings industry and one class or kind of merchandise covered by its petition. Id. On July 13, 1988, the ITA determined that antifriction bearings comprise five classes or kinds of merchandise, one of which was spherical plain bearings.[3]
Domestic producers of the five classes or kinds of antifriction bearings emerged to either support or oppose the petition. In regard to spherical plain bearings, New Hampshire Ball Bearings, Inc. ("NHBB"), a subsidiary of Minebea, was found to be the only U.S. producer other than Torrington and opposed Torrington's petition. AR Pub.Doc. 656.
In its final determination, the ITA found that opponents of the petition did not represent a majority of any of the domestic industries, that Torrington had filed a facially sufficient petition, and that therefore Torrington had standing to file an antidumping duty petition with respect to each of the five classes or kinds of antifriction *1164 bearings, including spherical plain bearings. Final Determinations of Sales at Less than Fair Value: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, 54 Fed.Reg. 18,992, 19,006 (1989). This Court explicitly affirmed the ITA's standing determination in regard to the U.S. spherical plain bearings industry in Minebea Co. v. United States, 16 CIT ___, ___, 782 F.Supp. 117, 119-20 (1992).
Although requested to do so, the ITC refused to terminate its investigation due to a lack of standing by Torrington to file a petition in regard to spherical plain bearings. Vice Chairman Ronald A. Cass was the only Commissioner to address the standing issue stating that "[i]n the interests of comity, I have concluded that it may be inappropriate for the Commission to pass on standing issues in investigations where Commerce has already considered and resolved the question." ITC Final Determination at 123.
Upon considering the administrative record before it, the ITC determined that LTFV imports of spherical plain bearings from Japan were causing material injury to the U.S. industry. ITC Final Determination at 4.
Discussion
A determination by the ITC will be affirmed unless that determination is not supported by substantial evidence or is otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence is relevant evidence that "a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); Alhambra Foundry Co. v. United States, 12 CIT 343, 345, 685 F.Supp. 1252, 1255 (1988) (citations omitted).
1. Standing
This Court has affirmed Torrington's standing to file an antidumping duty petition in regard to antifriction bearings on numerous occasions. NTN Bearing Corp. of America v. United States, 15 CIT ___, ___, 757 F.Supp. 1425, 1427-31 (1991); SKF USA, Inc. v. United States Dep't of Commerce, 15 CIT ___, ___, 762 F.Supp. 344, 346-48 (1991); Koyo Seiko Co. v. United States, 15 CIT ___, ___, 768 F.Supp. 832, 836-37 (1991). In addition, this Court has explicitly affirmed Torrington's standing to file an antidumping duty petition on behalf of the U.S. spherical plain bearings industry. Minebea Co. v. United States, 16 CIT ___, ___, 782 F.Supp. 117, 119-20 (1992).
This Court stated in NTN that "[i]t is the function of the ITA to determine standing and no statute or regulation requires the ITA to defer to data used by the ITC." NTN, 15 CIT at ___, 757 F.Supp. at 1430 (emphasis in original); see also Minebea, 16 CIT at ___, 782 F.Supp. at 120.
The ITC itself has taken the position that it does not have statutory authority to determine a petitioner's standing. Grey Portland Cement And Cement Clinker From Japan, Inv. No. 731-TA-461 (Final), USITC Pub. 2376 at 3-13, 45-46 (April 1991); Silicon Metal From The People's Republic Of China, Inv. No. 731-TA-472 (Final), USITC Pub. 2385 at 5 n. 1 (June 1991).
Recently the United States Court of Appeals for the Federal Circuit addressed the issue of the standing of a petitioner in an antidumping duty investigation to file on behalf of an industry. Suramerica de Aleaciones Laminadas, C.A. v. United States, 966 F.2d 660 (Fed.Cir.1992). In its opinion the Court lends support for the proposition that questions of the standing of a petitioner to file an antidumping duty petition are to be decided by the ITA alone stating that:
Although both Commerce and the ITC are "charged" with administering different parts of the Act, it is Commerce who determines that a petition is sufficient to cause the initiation of investigations that the statutory requirements are satisfied. The ITC's position in its brief is that it defers to Commerce's initial determination, and that only Commerce can review that determination. This is *1165 a reasonable and permissible interpretation of the Act's delineation of respective responsibilities.
Id. at 665 n. 6 (emphasis added).
Therefore, this Court finds that it is the ITA's sole responsibility to determine the standing of a petitioner to file a petition requesting the imposition of antidumping duties "on behalf of an industry." The ITC correctly defers to the ITA's decision on this issue. The Court adheres to its opinion in Minebea and finds that Torrington had standing to file an antidumping duty petition on behalf of the U.S. spherical plain bearings industry. Minebea, 16 CIT at ___, 782 F.Supp. at 120.
2. ITC's Injury Determination
Minebea argues that NHBB accounted for more than half of the U.S. spherical plain bearings industry during the period of investigation and that NHBB took the position that any injury or difficulty it was experiencing was not a result of LTFV imports. Therefore, Minebea argues that the ITC's finding that LTFV imports have caused injury to the U.S. spherical plain bearings industry was not in accordance with law. Minebea 16 CIT at ___-___, 782 F.Supp. at 119. Minebea does not challenge the ITC's determination on the basis that it is not supported by substantial evidence.
Minebea cites no statute or cases which support its position that there can be no finding of material injury if a majority of the U.S. industry believes that its problems are not caused by LTFV imports. In fact, when the ITC is determining whether LTFV imports are a cause of material injury suffered by a U.S. industry, the position of any segment of the U.S. industry as to the cause of its difficulties is not something which the ITC is required to consider. 19 U.S.C. § 1677(7) (1988). The ITC is required to evaluate the condition of the industry as a whole when determining whether LTFV imports are a cause of material injury to the U.S. industry. Calabrain Corp. v. United States Int'l Trade Comm'n, 16 CIT ___, ___, 794 F.Supp. 377, 385 (1992) (quoting Copperweld Corp. v. United States, 12 CIT 148, 165-66, 682 F.Supp. 552, 569 (1988)); Metallverken Nederland B.V. v. United States, 13 CIT 1013, 1020, 728 F.Supp. 730, 736 (1989); Sandvik AB v. United States, 13 CIT 738, 745-46, 721 F.Supp. 1322, 1330 (1989), aff'd, 904 F.2d 46 (Fed.Cir.1990). That is precisely what it did here. ITC Final Determination at 57-58, 71-72.
Conclusion
This Court finds that it is the responsibility of the ITA to determine the standing of a petitioner to file a petition "on behalf of an industry" requesting the imposition of antidumping duties. The ITC's decision to defer to the ITA's decision on this issue was in accordance with law and is affirmed. The Court also finds that the ITC's determination that the U.S. spherical plain bearings industry was materially injured by LTFV imports from Japan was in accordance with law and is affirmed. Therefore, this case is dismissed.
NOTES
[1] The term interested party is defined at 19 U.S.C. § 1677(9) (1988) which states in pertinent part:
(9) Interested Party
The term "interested party" means
. . . . .
(C) a manufacturer, producer, or wholesaler in the United States of a like product,
....
The term like product is defined at 19 U.S.C. § 1677(10) (1988):
(10) Like Product
The term "like product" means a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this subtitle.
[2] Industry is defined at 19 U.S.C. § 1677(4) (1988):
(4) Industry
(A) In General
The term "industry" means the domestic producers as a whole of a like product....
[3] The ITA's determination that antifriction bearings comprise five classes or kinds of merchandise was affirmed by this Court in The Torrington Co. v. United States, 14 CIT ___, 745 F.Supp. 718 (1990), aff'd, 938 F.2d 1276 (Fed.Cir.1991).
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52 F.3d 312
Saidv.INS
NO. 94-4177
United States Court of Appeals,Second Circuit.
Mar 31, 1995
Appeal From: I.N.S. Aef-avv-ato
1
AFFIRMED.
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U.S. Bank N.A. v Martinez (2016 NY Slip Op 03981)
U.S. Bank N.A. v Martinez
2016 NY Slip Op 03981
Decided on May 19, 2016
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 May 19, 2016
Tom, J.P., Saxe, Richter, Gische, Webber, JJ.
1215N 380626/12
[*1] U.S. Bank National Association as Trustee for WAMU Mortgage Pass Through Certificate for Wmalt Series 2007-2 Trust, Plaintiff-Respondent,
vJacobo Martinez, et al., Defendants, Wanys Martinez, Defendant-Appellant.
McCallion & Associates LLP, New York (Kenneth F. McCallion of counsel), for appellant.
Fein, Such & Crane, LLP, Syracuse (John A. Cirando of counsel), for respondent.
Order, Supreme Court, Bronx County (Sharon A. M. Aarons, J.), entered January 28, 2015, which denied defendant Wanys Martinez's motion to vacate her default in answering the complaint and for leave to extend her time to file an answer to the complaint, unanimously affirmed, with costs.
The motion court properly found that jurisdiction, in this mortgage foreclosure action, had been obtained over defendant Wanys Martinez and thus she had not established entitlement to vacatur pursuant to CPLR 5015(a)(4). Defendant's conclusory denial of service failed to rebut the presumption of service created by the process server's properly executed affidavit (see Matter of de Sanchez, 57 AD3d 452, 454 [1st Dept 2008]), which reflects that service was effectuated by delivering the summons and complaint "to a person of suitable age and discretion at [defendant's] actual ... dwelling place or usual place of abode," followed by the requisite mailing (CPLR 308[2]). Defendant admitted that, at the time of service, the subject property was still her "legal address" and that she had only "taken up temporary residence elsewhere," at an unspecified location, which claim was not substantiated with any documentary evidence. As defendant "never established a permanent alternative actual dwelling' or usual place of abode'" and admitted that she still received mail at the property, service was properly made thereat (CC Home Lenders v Cioffi, 294 AD2d 325 [2d Dept 2002]). Indeed, defendant identified no other address at which she could have been served.
Defendant's belief that her then estranged husband would not have accepted service of process on her behalf is insufficient to rebut the presumption of service created by the process server's claim as to what her husband actually did (see Granite Mgt. & Disposition v Sun, 221 AD2d 186 [1st Dept 1995]).
The motion court did not improvidently exercise its discretion in finding that defendant did not establish a reasonable excuse for delay and meritorious defense to this action (see CPLR 5015(a)(1); Carroll v Nostra Realty Corp., 54 AD3d 623 [1st Dept 2008] [citation omitted], lv dismissed 12 NY3d 792 [2009]). Defendant's unsuccessful claim that she was not properly served with process and conclusory denial of receipt of certain mailings are insufficient to overcome the presumption of delivery created by the affidavits of service reflecting such mailings and do not constitute a reasonable excuse for delay or a meritorious defense (see 60 E. 9th St. Owners Corp. v Zihenni, 111 AD3d 511, 512 [1st Dept 2013]; Burr v Eveready Ins. Co., 253 AD2d 650, 651 [1st Dept 1998], appeal dismissed 92 NY2d 1041 [1999]; Citimortgage, Inc. v Bustamante, 107 AD3d 752, 753 [2d Dept 2013]).
We have considered defendant's remaining arguments and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MAY 19, 2016
CLERK
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45 F.3d 423NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished opinions may be cited only in related cases.
Dr. Nelson Abreu GONZALEZ, et al., Plaintiffs, Appellants,v.Angel Luis Medina ARANA, et al., Defendants, Appellees.
No. 94-2059.
United States Court of Appeals,First Circuit.
Jan. 30, 1995.
Appeal from the United States District Court for the District of Puerto Rico [Hon. Hector M. Laffitte, U.S. District Judge ]
Nydia Maria Diaz-Buxo on brief for appellants.
Manuel A. Segarra-Vazquez on brief for appellees.
D.Puerto Rico
AFFIRMED.
Before TORRUELLA, Chief Judge, CYR and STAHL, Circuit Judges.
PER CURIAM.
1
Defendants-appellees move for summary affirmance of the district court's dismissal of this suit for lack of subject matter jurisdiction. The complaint alleges that jurisdiction exists under 28 U.S.C. Sec. 1331, because it "arises under" federal law. The sole claim pleaded, however, is a cause of action in tort for legal malpractice.
2
It appears that defendants once served as plaintiffs' counsel in an unsuccessful adversary action initiated by plaintiffs as chapter 13 debtors. Plaintiffs' appeal from the bankruptcy court judgment was dismissed for failure to timely perfect the appeal. Allegations of attorney misfeasance made at that time to explain the appellate processing delay, were referred to the bankruptcy court for investigation. In this separate lawsuit, begun in the district court some months later, plaintiffs seek $600,000 in damages allegedly sustained as a result of the malpractice. The district court granted defendants' unopposed motion to dismiss because the tort of attorney malpractice is a state-created claim and there is no diversity of citizenship between the parties.
3
Without explaining their lack of opposition below, plaintiffs here insist that their complaint "arises under" federal law because the legal malpractice is alleged to have occurred in the context of a federal proceeding and included a disregard of a federally-created procedural rule.
4
There is no general federal common law of torts, however. See O'Melveny & Myers v. FDIC, 114 S. Ct. 2048, 2052 (1994); Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938). In the absence of a specific statute creating a federal cause of action, the traditional right to relief for legal malpractice is rooted in state law. See O'Melveny & Myers, 114 S. Ct. at 2055. While federal courts have the inherent power to regulate the conduct of attorneys appearing before them, plaintiffs' assumption that violation of a federal rule or ethical norm automatically creates a federal cause of action for damages is inconsistent with the provisions of the Rules Enabling Act. See 28 U.S.C. Sec. 2075 (bankruptcy rules shall not "abridge, modify or enlarge any substantive right"). This is not an extraordinary case in which reliance on state tort law as the rule of decision might create a conflict with a substantial federal policy. See generally O'Melveny & Myers, 114 S. Ct. at 2053-55; Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). Any federal question in this suit would likely emerge only as an intermediate step in resolving the pivotal tort questions of duty, breach, causation and damages.
5
Plaintiffs do not predicate jurisdiction on the authority of 28 U.S.C. Sec. 1334, and the abbreviated record before us reveals no reason to require an exercise of jurisdiction under that statute. No substantial issue appearing, appellees' motion is granted, and the judgment of the district court dismissing the complaint without prejudice is affirmed.
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In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-14-00117-CR
JOSEPH JOHN GRUBBS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 354th District Court
Hunt County, Texas
Trial Court No. 29,725
Before Morriss, C.J., Moseley and Burgess, JJ.
Memorandum Opinion by Chief Justice Morriss
MEMORANDUM OPINION
Hunt County sheriff’s deputies found, in the general vicinity of Joseph John Grubbs and
under a truck later identified as belonging to Grubbs, a handgun and debit or credit cards1 bearing
the names of five different individuals. From that, Grubbs was convicted by a Hunt County jury
in this case of fraudulent possession of identifying information 2 and in a companion case, cause
number 06-14-00116-CR, of the charge of unlawful possession of a firearm by a felon. In this
case, after punishment was enhanced by two prior felony convictions,3 Grubbs was sentenced by
the trial court to five years’ confinement. Grubbs filed a single, consolidated brief covering both
appeals in which he contends that there is insufficient evidence to support his convictions. In this
case, we find there was sufficient evidence to support the conviction and affirm the judgment of
the trial court.
In reviewing the legal sufficiency of the evidence, we review all the evidence in the light
most favorable to the verdict to determine whether any rational jury could have found the essential
elements of the offense beyond a reasonable doubt. Brooks v. State, 323 S.W.3d 893, 912 (Tex.
Crim. App. 2010) (citing Jackson v. Virginia, 443 U.S. 307, 319 (1979)); Hartsfield v. State, 305
S.W.3d 859, 863 (Tex. App.—Texarkana 2010, pet. ref’d) (citing Clayton v. State, 235 S.W.3d
772, 778 (Tex. Crim. App. 2007)). In doing so, we give deference to the responsibility of the trier
1
There were three debit cards and two credit cards. For convenience, they will be referred to collectively as “the
cards.”
2
See TEX. PENAL CODE ANN. § 32.51(b)(1), (c) (West Supp. 2014).
3
See TEX. PENAL CODE ANN. § 12.425(b) (West Supp. 2014).
2
of fact “to fairly resolve conflicts in testimony, to weigh the evidence, and to draw reasonable
inferences from basic facts to ultimate facts.” Hooper v. State, 214 S.W.3d 9, 13 (Tex. Crim. App.
2007) (citing Jackson, 443 U.S. at 318–19).
Legal sufficiency of the evidence is measured by the elements of the offense as defined by
a hypothetically correct jury charge. Malik v. State, 953 S.W.2d 234, 240 (Tex. Crim. App. 1997);
Horton v. State, 394 S.W.3d 589, 592 (Tex. App.—Dallas 2012, no pet.). The hypothetically
correct jury charge “sets out the law, is authorized by the indictment, does not unnecessarily
increase the State’s burden of proof or unnecessarily restrict the State’s theories of liability, and
adequately describes the particular offense for which the defendant was tried.” Malik, 953 S.W.2d
at 240.
“A person commits an offense if the person, with the intent to harm or defraud another,
obtains, possesses, transfers, or uses an item of: (1) identifying information of another person
without the other person’s consent.” TEX. PENAL CODE ANN. § 32.51(b)(1). “Identifying
information” is “information that alone or in conjunction with other information identifies a
person, including a person’s . . . unique electronic identification number, address, routing code, or
financial institution account number.” TEX. PENAL CODE ANN. § 32.51(a)(1)(C) (West Supp.
2014). Thus, Section 32.51 “proscribes the unauthorized appropriation or use of another living
human being’s[4] identity—in the form of information that identifies that individual—for the
4
The Texas Penal Code defines “person” as “an individual, corporation, or association.” TEX. PENAL CODE ANN.
§ 1.07(a)(38) (West Supp. 2014). Further, an “individual” is “a human being who is alive, including an unborn child
at every stage of gestation from fertilization until birth.” TEX. PENAL CODE ANN. § 1.07(a)(26) (West Supp. 2014).
3
purpose of defrauding or otherwise harming either the person whose identity is stolen or some
other person.” Ford v. State, 282 S.W.3d 256, 264–65 (Tex. App.—Austin 2009, no pet.).
In this case, the indictment alleged that, on or about August 12, 2013, Grubbs
[d]id then and there possess less than five items of indentifying [sic] information,
namely: AMERICAN NATIONAL BANK VISA belonging to Amanda Young,
CHASE VISA belonging to Laura Richardson, SIGNATURE VISA belonging to
Thomas Pressly, CAPITAL ONE MASTERCARD belonging to Danny Cox,
WELLS FARGO VISA belonging to Cheryl Parker, without the consent of the
named individuals, with the intent to harm or defraud another.
Since the State alleged Grubbs possessed less than five items of identifying information of another
person, to obtain a conviction it was required to prove beyond a reasonable doubt that Grubbs
possessed at least one of the items of identifying information without the consent of the named
individual, who was a living human being, and that he did so with the intent to harm or defraud
either that named individual or some other person.5
As he did in the companion case, Grubbs argues only that, since the cards were not found
in his actual possession, the State had the burden to present evidence that linked him to the cards.
He contends that there is insufficient evidence to establish such a link between him and the cards
found on the scene. The facts of this case, as well as the non-exclusive list of factors we consider
in determining whether a link has been established, are discussed in detail in Grubbs’ companion
5
We emphasize that Grubbs asserts only insufficient evidence to show possession, not that the evidence is insufficient
to establish the element of intent to harm or defraud or to support a presumption of intent to harm or defraud. Although
we have discretion to address unassigned error, we may not address unassigned error that is not preserved in the trial
court. Sanchez v. State, 209 S.W.3d 117, 120–21 (Tex. Crim. App. 2006). Section 32.51(b-1) provides that “the actor
is presumed to have the intent to harm or defraud another if the actor possesses: (1) the identifying information of
three or more other persons.” TEX. PENAL CODE ANN. § 32.51(b-1)(1) (West Supp. 2014). This presumption was
included in the jury charge and was not challenged in the trial court.
4
case, cause number 06-14-00116-CR, in which he appeals his conviction for unlawful possession
of a firearm by a felon. Therefore, we discuss only those facts relevant to the determination of
whether he possessed the identifying information of at least one of the named individuals.
At trial, Deputy Jay Swallow testified that he found the firearm and the cards on the ground
beside and slightly underneath a pickup. In cause number 06-14-00116-CR, we detailed the
evidence that established a link between Grubbs and the firearm. One of the factors we consider
when determining whether there is a link between the accused and the contraband is the accused’s
possession of other contraband when arrested. Richardson v. State, 328 S.W.3d 61, 66 (Tex.
App.—Fort Worth 2010, pet. ref’d). Since the cards were found with the firearm, which in the
companion case we have determined was possessed by Grubbs, this is sufficient evidence to
establish a link between Grubbs and the cards. Further, Amanda Young, one of the individuals
named in the indictment, testified that she was the owner of the American National Bank Visa
debit card found under Grubbs’ truck. She also testified that she had lost the card and had not
given Grubbs permission to possess it. We conclude this evidence is sufficient to link Grubbs to
the identifying information, i.e., the cards, of another person. We overrule Grubbs’ sole point of
error in this cause.
5
We affirm the judgment of the trial court.
Josh R. Morriss III
Chief Justice
Date Submitted: June 30, 2015
Date Decided: July 8, 2015
Do Not Publish
6
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96 S.E.2d 422 (1957)
245 N.C. 421
W. H. WYNNE, Jr.
v.
F. W. ALLEN and Leland T. Clarke, Partners, t/a Met-L-Vent Awning Company.
No. 240.
Supreme Court of North Carolina.
February 1, 1957.
*426 Craighill, Rendleman & Kennedy, Charlotte, for plaintiff-appellant.
Taliaferro, Grier, Parker & Poe, C. Sydnor Thompson, Charlotte, for defendants appellees.
RODMAN, Justice.
Experience has demonstrated that respect for and adherence to our statutory methods of procedure facilitates proper disposition of litigation. Our statute provides that the court shall, when a jury trial is waived, make separate findings of fact and conclusions of law. G.S. § 1-185. Findings of *427 fact so made may be challenged by exceptions. When not so challenged or when so challenged and supported by any evidence, they are conclusive on appeal.
The agreement to disregard the statute deprives us of the benefit of specific findings of fact presenting to us instead a verdict.
A general verdict is not a detailed statement of facts on which the law can be pronounced but a factual conclusion based on a previous declaration of the law given by the court to the jury. This factual conclusion must be correctly interpreted before a proper judgment can be entered thereon.
Plaintiff's exceptions and assignments of error only suffice to challenge the correctness of the judgment. They cannot affect the verdict. The motion to set aside the verdict as contrary to the evidence was addressed to the discretion of the court. The sufficiency of the evidence to go to the jury was waived by the failure to renew the motion of nonsuit at the conclusion of the evidence. Debnam v. Rouse, 201 N.C. 459, 160 S.E. 471.
If the answers to the issues, when correctly interpreted, are sufficient in law to support the judgment, plaintiff must fail in his appeal; but if, when so interpreted, they fail to support the judgment, it must be vacated in order that the rights of the parties may be adjusted in accordance with law.
Issues arise on the pleadings. Nebel v. Nebel, 241 N.C. 491, 85 S.E.2d 876; Bowen v. Darden, 233 N.C. 443, 64 S.E.2d 285. To interpret and understand the issues submitted to and answered by a jury, it is proper to examine the pleadings, the evidence, and the charge of the court when there is a charge. Sitterson v. Sitterson, 191 N.C. 319, 131 S.E. 641, 51 A.L.R. 760; Jackson v. Maryland Casualty Co., 212 N.C. 546, 193 S.E. 703; Taylor v. Stewart, 175 N.C. 199, 95 S.E. 167; Jernigan v. Jernigan, 226 N.C. 204, 37 S.E.2d 493; Stewart v. Wyrick, 228 N.C. 429, 45 S.E.2d 764.
It is not sufficient to allege a cause of action to recover. The recovery must be based on the cause of action alleged. It cannot rest on a different legal right. Myers v. Allsbrook, 229 N.C. 786, 51 S.E.2d 629; McCullen v. Durham, 229 N.C. 418, 50 S.E.2d 511; King v. Coley, 229 N.C. 258, 49 S.E.2d 648; Simms v. Sampson, 221 N.C. 379, 20 S.E.2d 554.
With these well-settled legal principles in mind we look to the only sources available, the pleadings and the evidence, to interpret the verdict which the court, acting as a jury, has rendered.
The verdict states that the parties entered into a contract dated 24 August 1946. It is alleged and the evidence shows that the contract is in writing. It authorized the defendants to manufacture and sell in a designated territory for a fixed period a patented article, awnings, under a trade name, Koolvent. For the rights so granted defendants made a cash payment and obligated themselves to make royalty payments based on the sale price of the awnings so manufactured. Defendants were to keep a record of and report the sales made. Each awning manufactured was to bear a tag showing it was manufactured pursuant to the Houseman patent.
The second issue is a finding that defendants were induced to entered into the contract by fraudulent representations of the plaintiff. The issue finds support in the allegations of the complaint.
The third issue and the answer thereto establish the fact that the defendants, with knowledge of the fraud, elected to waive the fraud "by electing to continue under the contract and accepting its benefits." This finding conforms with a fair interpretation of defendants' counterclaim and is established by all of the evidence.
There is no difficulty in interpreting the facts established by the answers to the first three issues. The difficulty arises in understanding what facts the court meant to establish by the affirmative answer to the *428 fourth issue. The court finds there was a failure of consideration to support the contract in that defendants were substantially evicted from its benefits.
Standing alone, the language might justify an interpretation of complete deprivation of any benefit or rights under the contract. Such a meaning would harmonize with the assertion in the answer that there had been a total failure of consideration, but it is manifest that the finding did not have that meaning. Such an interpretation would be in direct conflict with the preceding finding that defendants acted under and enjoyed the benefit of the contract. It is of course impossible for one to be deprived of and to accept the benefits of a contract at the same moment. If the court meant total failure by its response to the fourth issue, why reject the issue tendered by plaintiff? There could be no doubt as to the meaning of that issue.
Turning to the pleadings for help in ascertaining the meaning, it is, we think, significant that defendants do not aver that they ever disavowed the contract or that they were deprived of all benefits under it. To the contrary, they assert that they acted under it with knowledge of the facts and made the payments now sought to be recovered. They allege they were induced to expect greater benefits from the contract than they obtained. Hence they claim they should be refunded all moneys paid, both those paid before the discovery of the diminished benefits as well as those voluntarily paid thereafter. There is no allegation of failure of consideration other than the allegations which charge fraud.
Looking at the evidence, it appears that defendants filed monthly reports with plaintiff showing royalties owing for awnings sold until October 1949 when the contract terminated. In December 1948 defendants, in response to plaintiff's demands for payment of the guaranteed minimum, asserted their nonliability thus: "You had allowed us to run along for more than two years knowing that we had not sold the amount called for in the contract and you had never mentioned to us that you expected us to pay any royalties, except on what we actually sold." When this letter was written the defendants were being sued in the District Court charged with infringement of the Matthews patent. They knew of previous infringement suits.
Defendants do not allege any warranty or duty on the part of plaintiff to protect or indemnify them against claims for infringement. They do allege that they may become liable in damages because of the infringement on the Matthews patent and that the amount of their liability may equal the amount they have paid plaintiff. The absence of any allegation of plaintiff's duty to indemnify defendants for losses sustained by the infringement is significant when viewed in the light of evidence coming from defendants.
We turn to the evidence and events occurring at the trial to see what light may be thrown on the meaning of the fourth issue. It appears that defendants were notified in April 1947 of their asserted infringement on the Matthews patent. The defendant Allen went to Atlanta in May for a conference with plaintiff. Wynne advised Allen he might be forced to pay royalties to Matthews. It was then thought the jammed lug method of construction would defeat any claim of infringement. Negotiations were had with the owners of the Matthews patent for the right to use that patent. On 28 November 1947 Wynne wrote defendants, submitting an offer from the Matthews people to license defendants. He advised defendants they could exercise any of four options: (1) Meet the demands of the owners of the Matthews patent; (2) use the jammed lug method and await the results of litigation then pending on the question of whether that constituted an infringement; (3) fight the asserted infringement; or (4) quit Koolvent. The letter then stated: "Alternative (1) is rough but may offer the best solution * * you will save part of that cost in a 1% reduction *429 in my royalty charges. * * * Alternative (3) may possibly cost more in the long run * * * legal action is expensive and * * * if they should win * * * they can collect on back royalties and for their legal expense. Alternative (4) of course sounds to me like the worst possible solution." Again on 16 December 1948 defendants were given the right to cancel, but they did not exercise the option.
Defendant Allen testified that in January 1948 plaintiff promised "that he would reduce the royalties in the amount that the litigation would cost us." The record is barren of any evidence tending to fix the amount defendants were required to pay as a result of the infringement litigation. The only evidence with respect thereto came from defendant Allen who testified: "Whatever we paid to the owners of the Matthews patent in 1950 was on the basis of an agreement or a consent judgment between us."
Defendants offered in evidence the opinion of the Circuit Court in the infringement suit. Counsel for defendants were called upon to state their purpose in offering the opinion. They replied: "We are not undertaking to recover for our expenses in this litigation, as such, but referring to that litigation for the purpose of showing the want of consideration. I offered it in evidence for the purpose of showing its effect on the contract."
The decree in the infringment suit instituted in Georgia was made final in January 1947. It is apparent that the court meant by its answer to the fourth issue that that decision constituted such impairment of benefits under the contract as not only relieved defendants from any obligation to continue to make royalty payments under their contract, but to permit them to recover the royalties which they had voluntarily paid after said decree was entered and when they had full knowledge of all of the facts.
Appellees in their brief maintain this as a sound principle of law. Hence the question arises: What is the law relating to licensor and licensee of patent rights with respect to moneys paid and liabilities accruing under royalty contracts?
The term royalty, when used in connection with the word patent, means the compensation or rent to be paid for the use of the invention. Hazeltine Corporation v. Zenith Radio Corporation, 7 Cir., 100 F.2d 10. The relationship existing between a licensor and a licensee of a patent has been compared with that of landlord and tenant. Davis Co. v. Burnsville Hosiery Mills, 242 N.C. 718, 89 S.E.2d 410; Barber Asphalt Paving Co. v. Headley Good Roads Co., D.C., 284 F. 177.
There is no implied warranty or covenant of quiet enjoyment in the sale or lease of a patent right. Hiatt v. Twomey, 21 N.C. 315; Cansler v. Eaton, 55 N.C. 499; Barber Asphalt Paving Co. v. Headley Good Roads Co., supra; Standard Button Fastening Co. v. Ellis, 159 Mass. 448, 34 N.E. 682. Hence covenants are frequently inserted in licensing agreements to protect the licensee against claims which may arise because of asserted infringement by licensee's use of the patent or against infringement on his right to use. United States v. Harvey Steel Co., 196 U.S. 310, 25 S.Ct. 240, 49 L.Ed. 492. In this respect the law is different from leases of realty. The tenant is protected by an implied covenant. Poston v. Jones, 37 N.C. 350; Huggins v. Waters, 154 N.C. 443, 70 S.E. 842; 51 C.J.S., Landlord and Tenant, § 323, p. 1005; 32 Am.Jur. 252.
Since royalties are the rents payable for the use or right to use the invention there is no obligation to make payments of rents accruing after the right to use has terminated. Hence an eviction which deprives the licensee of the right to enjoy the license relieves him of the duty to continue making payments under the *430 license. Ross v. Fuller & Warren Co., C.C., 105 F. 510; Drackett Chemical Co. v. Chamberlain Co., 6 Cir., 63 F.2d 853; Patterson-Ballagh Corporation v. Byron Jackson Co., 9 Cir., 145 F.2d 786. But if what remains is of value to and is used by the licensee there has been no such eviction as to completely discharge him from liability to his licensor. So long as one recognizes the right to use a patent and acts thereunder, he is liable for royalties. Hazeltine Research Co. v. Automatic Radio Mfg. Co., D.C., 77 F.Supp. 493; Kinsman v. Parkhurst, 18 How. 289, 15 L.Ed. 385. If he would escape liability for royalties he must disavow the contract and cease to use the right granted. Lathrop v. Rice & Adams Corporation, D.C., 17 F. Supp. 622; Universal Rim Co. v. Scott, D.C., 21 F.2d 346; Frost Ry. Supply Co. v. T. H. Symington & Son, D.C., 24 F.Supp. 20; Macon Knitting Co. v. Leicester Mills Co., 65 N.J.Eq. 138, 55 A. 401; In re Muser's Estate, 122 Misc. 164, 203 N.Y.S. 619; Kaffeman v. Stern, 23 Misc. 599, 53 N.Y.S. 260; Ross v. Dowden Mfg. Co., 147 Iowa 180, 123 N.W. 182; Strong v. Carver Cotton Gin Co., 197 Mass. 53, 83 N.E. 328, 14 L.R.A., N.S., 274.
While an eviction discharges the licensee from any rent thereafter accruing, it does not relieve him from liability for rents which have accrued. "The defense of a licensee in an action for royalties must, to be sufficient, consist of "something corresponding to eviction.' White v. Lee, C.C., 14 F. 789; McKay v. Smith, C.C., 39 F. 556; Holmes, Booth & Haydens v. McGill, 2 Cir., 108 F. 238, 47 C.C.A. 296; Victory Bottle Capping Mach. Co. v. O. & J. Mach. Co., 1 Cir., 280 F. 753; Birdsall v. Perego, 3 Fed.Cas. page 446, No. 1,435. The reason underlying this principle is fully discussed and considered in the cases cited, and need not be here repeated. As an eviction is not a defense in a suit by a landlord against a tenant for rent that became due prior to such eviction (Smith v. Billany, 4 Houst., Del. 113, 118; American Bonding Co. v. Pueblo Inv. Co., 9 Cir., 150 F. 17, 30, 31, 80 C.C.A. 97, 9 L.R.A., N.S., 557, 10 Ann.Cas. 357), so, by analogy and upon authority, an eviction is not a defense to a suit for royalties accruing before the eviction occurred." Barber Asphalt Paving Co. v. Headley Good Roads Co., supra [284 F. 179]; Drackett Chemical Co. v. Chamberlain Co., supra; Metropolitan Trust Co. v. Fishman, 323 Ill.App. 413, 55 N.E.2d 837; Monger v. Lutterloh, 195 N.C. 274, 142 S.E. 12; 52 C.J.S., Landlord and Tenant, § 490, p. 266.
The eviction of a licensee of a patent right occurs when there has been a judicial determination that the patent is invalid or the right has been so circumscribed as to be worthless. Jenkins Petroleum Process Co. v. Eason Oil Co., D.C., 43 F.2d 663; McKay v. Smith, C.C., 39 F. 556; Consumers' Gas Co. of Danville v. American Electric Construction Co., 3 Cir., 50 F. 778. The analogy to landlord and tenant is applicable. Blomberg v. Evans, 194 N.C. 113, 138 S.E. 593, 53 A.L.R. 686; Smith v. Nortz Lumber Co., 72 N.D. 353, 7 N.W.2d 435.
Here the pleadings and the evidence disclose that the asserted eviction took place in January 1947, that is, the adjudication by the Circuit Court of the Fifth Circuit that the Houseman patent in some of its details infringed on the Matthews patent. Defendants were informed of this decision in April 1947. Notwithstanding that knowledge they elected to continue to operate under their contract with plaintiff. They of course had the right to require plaintiff to agree to indemnify and protect them against any losses which they might sustain by so doing. The evidence shows that this indemnity agreement was given. They continued to act under their contract with plaintiff and voluntarily made payments to him with knowledge of all of the facts. When one voluntarily pays money for the privilege of exercising a right claimed by the one to whom payment is made and the payments are made with full knowledge of all facts which may impose a *431 liability to a third person, he cannot, in the absence of an agreement to reimburse, recover the moneys so paid. Wells v. Foreman, 236 N.C. 351, 72 S.E.2d 765; Bank v. Taylor, 122 N.C. 569, 29 S.E. 831; Guerry v. American Trust Co., 234 N.C. 644, 68 S.E.2d 272; Smithwick v. Whitley, 152 N.C. 366, 67 S.E. 914, 28 L.R.A., N.S., 113; Pardue v. Absher, 174 N.C. 676, 94 S.E. 414; Jones v. Provident Sav. Life Assurance Society, 147 N.C. 540, 61 S.E. 388, 25 L.R.A.,N.S., 803; Barber Asphalt Paving Co. v. Headley Good Roads Co., supra; Clifton v. Curry, 30 Ala.App. 584, 10 So.2d 51; Notes, 53 A.L.R. 949. Hence, when a licensee voluntarily pays to his licensor royalties with knowledge that a prior patentee claims an infringement in the exercise of the licensed right, he cannot recover royalties paid if it is subsequently adjudged that the use impinged on the property rights of another unless he is protected by contract of indemnity, and in that event his right to recover will be determined by the provisions of his warranty or indemnity contract.
Defendants have testified to a contract with plaintiff to indemnify them against losses which they might incur by reason of the infringement. They may, of course, by appropriate pleading protect themselves by such contractual rights as they have.
Appellees, in support of their position, cite an opinion rendered by Judge Hayes in June 1952 in the case of Wynne v. Aluminum Awning Products Company, D.C., 148 F.Supp. 212. We have read that opinion with care. Defendant in that action set up and pleaded a contract to indemnify it against losses sustained as a result of asserted infringement on the Matthews patent. As we understand and interpret Judge Hayes' opinion there is nothing in that opinion which is in conflict with the views we have expressed.
We hold there was error in adjudging that defendants could recover the moneys voluntarily paid. The facts have not been sufficiently established to make any adjudication with respect to royalties asserted to be owing but not paid. There is no allegation and no finding of fact with respect to any warranty made by plaintiff to protect or indemnify defendants against loss on account of infringement. Nothing which we have said is intended to affect the rights of the parties on these questions.
New trial.
JOHNSON, J., not sitting.
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299 F.3d 1156
UNITED STATES of America, Plaintiff-Appellee,v.David Francis MARCUCCI, Defendant-Appellant.United States of America, Plaintiff-Appellee,v.Christopher Leyva-Garcia, Defendant-Appellant.United States of America, Plaintiff-Appellee,v.David Gamboa-Aristegui, Defendant-Appellant.
No. 01-50468.
No. 01-50524.
No. 01-50547.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 5, 2002.
Filed August 16, 2002.
Steven F. Hubachek (argued), Office of the Federal Defenders, and David J. Zugman, San Diego, CA, for the defendant-appellant.
Patrick K. O'Toole, United States Attorney, Richard C. Cheng, Assistant United States Attorney, on the Marcucci brief, MiYung Park, Assistant United States Attorney, on the Gamboa-Aristegui brief, Pennie M. Carlos, Assistant United States Attorney, on the Leyva-Garcia brief and argued all cases, United States Attorney's Office, San Diego, CA, for the plaintiff-appellee.
Appeal from the United States District Court for the Southern District of California; Thomas J. Whelan, District Judge, Presiding, Barry T. Moskowitz, District Judge, Presiding, Judith N. Keep, Chief District Judge, Presiding. D.C. Nos. CR-00-0357-TW, CR-01-00742-K, CR-01-01186-BTM.
Before BOOCHEVER and HAWKINS, Circuit Judges, and WEINER,* District Judge.
OPINION
PER CURIAM:
1
Because these cases present the major issue in common, we consolidate them for disposition. The appellants collectively claim that their indictments should have been dismissed because the district court's charge to the grand jury misstated its constitutional role and function. Separately, they raise issues concerning Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), and prosecutorial misconduct. We affirm the convictions for the reasons set out below.
FACTS AND PROCEEDINGS BELOW
2
In 2001, Christopher Leyva-Garcia ("Leyva") conditionally pled guilty to an indictment charging him with possessing and importing just under fifty kilograms of marijuana. His plea permitted appeal on two issues: the grand jury issue identified above, and an Apprendi claim that the statute under which he was charged was facially unconstitutional, or at least, requires reconstruction such that the government must show mens rea as to drug type and quantity.
3
In an unrelated incident in the spring of 2001, David Gamboa-Aristegui ("Gamboa") also conditionally pled guilty to an indictment charging him with importing and possessing over 22 kilograms of marijuana, preserving for appeal the grand jury issue and an Apprendi issue similar to that presented by Leyva's appeal.
4
Finally, David Francis Marcucci ("Marcucci") was convicted by a jury in 2001 on a charge of attempted bank robbery. On appeal, Marcucci alleges the same grand jury violation as Leyva and Gamboa; he also contends the prosecutor made inflammatory comments in his closing argument. Marcucci's grand jury argument stands in a slightly different posture from that of Leyva and Gamboa because he initially was denied the transcript of the charge given to the grand jury. However, the government has conceded that the grand jury charge in Marcucci's case was essentially the same as those given in the proceedings affecting the other appellants.
STANDARD OF REVIEW
5
The denial of a motion to dismiss the indictment is reviewed de novo. United States v. Haynes, 216 F.3d 789, 796 (9th Cir.2000). A challenge to the constitutionality of a statute is reviewed de novo. United States v. Serang, 156 F.3d 910, 913 (9th Cir.1998). When an objection occurs, a prosecutor's allegedly improper closing argument is reviewed under the harmless error standard: the court's task is to determine whether error occurred, and if so, whether it was harmless. United States v. Laurins, 857 F.2d 529, 539 (9th Cir.1988).
THE CONSTITUTIONALITY OF THE GRAND JURY CHARGE
6
Gamboa, Leyva and Marcucci (collectively, "appellants") argue that the district court should have granted their motions to dismiss their indictments, because the charge to the grand jurors in their cases improperly described the grand jury's constitutional role and functions, thus depriving appellants of their right to a grand jury's independent exercise of its discretion. Their specific complaint is that the charge did not tell the grand jury that it could refuse to indict them even if there was probable cause to support an indictment.
7
In each case, the district court gave almost verbatim the model charge that the Administrative Office of the United States Court recommends be given to new grand juries at the beginning of their service,1 which includes the following passages:
8
[I]t is important that you listen very carefully to these instructions at this time ... I think they'll outline for you what your responsibilities are, and they will be of great assistance to you in discharging your duties.
9
The purpose of the Grand Jury is to determine whether there is sufficient evidence to justify a formal accusation against a person.
10
[Y]our task is to determine whether the government's evidence as presented to you is sufficient to cause you to conclude that there is probable cause to believe that the accused is guilty of the offense charged. To put it another way, you should vote to indict where the evidence presented to you is sufficiently strong to warrant a reasonable person's believing that the accused is probably guilty of the offense with which the accused is charged.
11
You cannot judge the wisdom of the criminal laws enacted by Congress, that is, whether or not there should or should not be a federal law designating certain activity as criminal. That is to be determined by Congress and not by you. Furthermore, when deciding whether or not to indict, you should not be concerned about punishment in the event of conviction. Judges alone determine punishment.
12
If past experience is any indication of what to expect in the future, then you can expect candor, honesty and good faith in matters presented by the government attorneys.2
The Propriety of the Charge
13
Appellants claim the model charge is unconstitutional because it does not explain to the grand jurors that they can refuse to indict even if they find probable cause. Whether this standard charge is constitutional is a matter of first impression in this or any other circuit.
14
We note initially that the language of the standard grand jury charge does not state that the jury "shall" or "must" indict, but merely that it "should" indict, in the event that it finds probable cause. The language does not eliminate discretion on the part of the grand jurors. The appellants acknowledge that, but insist the charge must do more, and must specifically tell the grand jury that it has no obligation to charge if it finds probable cause.
15
The grand jury clause of the Fifth Amendment states "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury."3 The Constitution contains no language requiring the grand jury to be told that it can refuse to indict if probable cause is found. Appellants' argument that such language is constitutionally required rests on inapplicable statements in a Supreme Court case and on appellants' mistaken construction of the history of the grand jury.
16
In Vasquez v. Hillery, 474 U.S. 254, 106 S.Ct. 617, 88 L.Ed.2d 598 (1986), a black defendant convicted of first-degree murder filed a petition for habeas corpus, raising an equal protection challenge to the California grand jury that indicted him, because blacks were excluded from the grand jury. Citing "a doctrine of equal protection jurisprudence first announced in 1880... requiring reversal of the conviction of any defendant indicted by a grand jury from which members of his own race were systematically excluded," id. at 255, 106 S.Ct. 617, the Court affirmed the district court's reversal of the defendant's conviction, noting "the need for such a rule is as compelling today as it was at its inception." Id. at 266, 106 S.Ct. 617. In the course of following its longstanding precedent that racial "discrimination in the grand jury undermines the structural integrity of the criminal tribunal itself, and is not amenable to harmless-error review," the Court explained:
17
even if a grand jury's determination of probable cause is confirmed in hindsight by a conviction on the indicted offense, that confirmation in no way suggests that the [racial] discrimination did not impermissibly infect the framing of the indictment and, consequently, the nature or very existence of the proceedings to come.
18
When constitutional error calls into question the objectivity of those charged with bringing a defendant to judgment, a reviewing court can neither indulge a presumption of regularity nor evaluate the resulting harm.
19
Id. at 263-64, 106 S.Ct. 617.
20
Vasquez establishes that racial discrimination in the selection of a grand jury is a "systematic flaw in the charging process," id. at 264, 106 S.Ct. 617, a flaw that undermines the court's confidence in the objectivity — the essential fairness — of the grand jury, even where a subsequent conviction is ample evidence of probable cause. Appellants seek to establish another "systematic flaw in the charging process" justifying automatic reversal: the failure to charge the grand jury that it has the power to refuse to indict when probable cause exists.
21
Appellants base their argument on the following language in Vasquez about the function of the grand jury:
22
The grand jury does not determine only that probable cause exists to believe that a defendant committed a crime, or that it does not. In the hands of the grand jury lies the power to charge a greater offense or a lesser offense; numerous counts or a single count; and perhaps most significant of all, a capital offense or a noncapital offense — all on the basis of the same facts. Moreover, "[t]he grand jury is not bound to indict in every case where a conviction can be obtained." United States v. Ciambrone, 601 F.2d 616, 629 (2d Cir.1979) (Friendly, J., dissenting).
23
Id. at 263, 106 S.Ct. 617 (emphasis added).
24
This language — dictum quoting a dissent in a Second Circuit case — does not establish a constitutional right to have the grand jury charge include a statement that although the grand jury's function is to determine whether probable cause exists, it nevertheless has unlimited discretion to decide whether to indict even when it finds probable cause.4 Instead, the quotation from Vasquez describes powers that grand juries have exercised at certain times in history — powers that are not eliminated by the grand jury charge that appellants challenge, with its statement that the grand jury "should" indict if it finds probable cause.
25
The grand jury was intended to shield individuals against unfounded accusations:
26
Historically, [the grand jury] has been regarded as a primary security to the innocent against hasty, malicious and oppressive persecution; it serves the invaluable function in our society of standing between the accuser and the accused, whether the latter be an individual, minority group, or other, to determine whether a charge is founded upon reason or was dictated by an intimidating power or by malice and personal ill will.
27
Wood v. Georgia, 370 U.S. 375, 390, 82 S.Ct. 1364, 8 L.Ed.2d 569 (1962). The Supreme Court has repeatedly emphasized that the grand jury protects the individual by requiring probable cause to indict. See United States v. Williams, 504 U.S. 36, 47, 51, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992) ("[T]he whole theory of [the grand jury's] function is that it ... serve[s] as a kind of buffer or referee between the government and the people.... to assess whether there is adequate basis for bringing a criminal charge."); United States v. Dionisio, 410 U.S. 1, 16-17, 93 S.Ct. 764, 35 L.Ed.2d 67 (1973) (grand jury's "mission is to clear the innocent, no less than to bring to trial those who may be guilty"); Branzburg v. Hayes, 408 U.S. 665, 686-87, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) ("[t]he ancient role of the grand jury ... has the dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions.").
28
The grand jury originated in England, where it replaced the earlier practice of bringing of criminal charges by private complaint, by calling together sixteen men to decide who should be charged. Accusations were not brought to the grand jury by a prosecutor; the jurors themselves brought with them names of those suspected of violating the law. See Andrew D. Leipold, Why Grand Juries Do Not (And Cannot) Protect the Accused, 80 CORNELL L. REV. 260, 280-81 (1995). English grand juries in 1681 refused to issue treason indictments despite great pressure from the king, although a reconstituted grand jury later returned the indictments sought by the Crown. Id. at 282. When the grand jury system came to America with the colonists, it thus carried at least some reputation for independence, a reputation it seemed to confirm when grand juries refused to indict John Peter Zenger, a newspaper publisher, for libel; although Zenger was eventually prosecuted by government information, he was found not guilty. Id. at 284.
29
Before independence, the grand jury at times stood between the colonies and the Crown by refusing to indict colonists for what the jury considered oppressive rules, such as the tax laws. Id. at 285. The incorporation of the Grand Jury clause into the Fifth Amendment occurred after little debate, and the grand jury did not show significant independence until the years before the Civil War, when Southern grand juries were quick, and Northern juries slow, to indict for crimes related to the abolition of slavery. Id. at 285-86. In almost every case in which a grand jury seemed to show independence by refusing to indict, however, the defendant was eventually indicted by a different grand jury, and in most cases the refusal to indict was based on local political reasons. Id. at 287.
30
The early examples of grand jury independence have not been echoed in present times. Commentators are unanimous that "in modern times the grand jury has lost much of its independent force." 24 MOORE'S FEDERAL PRACTICE § 606.02[1]; see, e.g., Wright and Miller, FEDERAL PRACTICE AND PROCEDURE (2002) § 101, at 298 ("it is ... a mistake to overstate the extent to which a grand jury is independent" from court and prosecutor); Susan W. Brenner, The Voice of the Community: A Case for Grand Jury Independence, 3 VA. J. SOC. POL'Y & LAW 67 (1995) (documenting diminishment of grand jury's investigative powers and arguing Supreme Court should declare procedures open to expose the lack of independence); Roger Roots, If It's Not A Runaway, It's Not a Real Grand Jury, 33 CREIGHTON L. REV. 821 (2000) (grand juries rarely challenge federal prosecutors and "there is no such thing as modern grand jury independence" since Federal Rules of Criminal Procedure were enacted in 1946). The lost independence includes the erosion of the grand jury's early investigative powers, its inability to make its own presentments, and the limited nature of the grand jury's inquiry.5 This lack of autonomy is not due to the charge to the grand jury, and would not be cured by a change in the language.
31
The history of independence of the grand jury as an indicting body is mixed. Refusals to indict have almost always been as much political as principled. While we may want the grand jury to refuse to indict when an oppressive government is unfairly targeting an individual, or when the laws being enforced are clearly (at least in retrospect) unjust, grand juries lose any guarantee of fairness if they have unfettered discretion to decide whether clear evidence of probable cause should be disregarded in each individual case. Grand juries may have any number of motivations not to issue an indictment when there is probable cause, other than the protection of the individual from an overweening government. It would be impossible to tell whether the motivation not to indict was, for example, based on local politics, racial or other discrimination, or anti-government sentiment, because grand juries operate in secret, and a decision not to indict is almost never reviewable. See Gaither, 413 F.2d at 1066; Leipold, 80 CORNELL L. REV. at 309-10.
32
Neither the appellants nor the dissent proposes specific language to replace the current charge. This failure is understandable, because any alternate language is fraught with problems. If, as the dissent first suggests, the grand jury were charged consistent with Vasquez, presumably with the dictum that "the grand jury is not bound to indict in every case where a conviction can be obtained," that raises far more questions than it answers. Any grand jurors listening to the charge would wonder what that means; they have just been told to find probable cause before indicting, and they are then told that they do not have to indict if they find probable cause, without any further guidance. The dissent's second suggestion is that the jurors be told that they must find probable cause before indicting. That is, essentially, what the current charge does. The third suggestion is that the jurors be told that they must find probable cause, but it is not the only consideration. What are the additional considerations? The dissent is silent. The difficulty in finding alternative language that does not do considerable mischief is a sign of the impracticality of giving the grand jury a charge that it has the discretion to decide, willy-nilly, whether or not to indict when there is ample probable cause.6
33
Further, the immediate fallout of declaring the charge unconstitutional would be sweeping. Every indictment issued by a federal grand jury given the standard charge would violate the Constitution. The dissent's conclusion that the charge is structural error would require us to reverse every conviction in an active case reached on any indictment by a grand jury given the standard charge, dismiss the indictments, and require reindictments. This would likely apply to every criminal conviction in this circuit, as we have no indication that the standard charge generally has not been given to federal grand juries here (or across the nation).
34
That extreme result is unnecessary. The current charge to the grand jury informed the grand jurors that they were not merely an arm of the government, but rather an independent body.7 For instance, the grand jurors were told that: As members of the Grand Jury, you in a very real sense stand between the government and the accused. It is your duty to see to it that indictments are returned only against those whom you find probable cause to believe are guilty and to see to it that the innocent are not compelled to go to trial.
35
It is extremely important for you to realize that under the United States Constitution, the Grand Jury is independent of the United States Attorney and is not the arm or agent of ... any governmental agency charged with prosecuting a crime ... you must depend on your own independent judgment, never becoming an arm of the United States Attorney's Office. If the facts suggest that you should not indict, then you should not do so even in the face of the opposition or statements of the United States Attorney.
36
The charge, by telling the jury that it "should" rather than "shall" or "must" indict if it finds probable cause, leaves room — albeit limited room — for a grand jury to reject an indictment that, although supported by probable cause, is based on governmental passion, prejudice, or injustice. The difference between "should" and "shall" is not, as the dissent suggests, a lawyer's distinction, but a commonplace understanding; "shall" is used to "express what is mandatory," "should" to express "what is probable or expected." Webster's Third Int'l Dictionary 2085, 2104 (1986). If a grand jury were to refuse to indict a defendant under those extreme circumstances of governmental overreaching, the charge to the grand jury would not be violated.
37
Meanwhile, this charge to the grand jury is consistent with the historical function of the grand jury — protecting citizens from unfounded accusations not supported by probable cause. As the Supreme Court recently stated, "the Fifth Amendment grand jury right serves a vital function in providing for a body of citizens that acts as a check on prosecutorial power." United States v. Cotton, ___ U.S. ___, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (citing 3 STORY, COMMENTARIES ON THE CONSTITUTION § 1779 (1883), reprinted in 5 THE FOUNDERS' CONSTITUTION 295 (P. Kurland & R. Lerner eds. 1987)). Story described the grand jury's function:
38
[A]n indictment is usually in the first instance framed by the officers of the government, and laid before the grand jury. When the grand jury have heard the evidence, if they are of opinion, that the indictment is groundless, or not supported by evidence, they used formerly to endorse on the back of the bill, "ignoramus" or we know nothing of it, whence the bill was said to be ignored. But now they assert in plain English, "not a true bill," or which is a better way, "not found;" and then the party is entitled to be discharged, if in custody, without further answer. But a fresh bill may be preferred against him by another grand jury. If the grand jury are satisfied of the truth of the accusation, then they write on the back of the bill, "a true bill," (or anciently, "billa vera.") The bill is then said to be found, and is publicly returned into court; the party stands indicted, and may then be required to answer the matters charged against him.
39
From this summary statement it is obvious, that the grand jury perform most important public functions; and are a great security to the citizens against vindictive prosecutions, either by the government, or by political partisans, or by private enemies.
40
We conclude that the charge to the grand jury was not unconstitutional. Because there was no error in the charge, it is unnecessary to inquire further into whether the charge constituted structural or harmless error.
APPRENDI ISSUES IN GAMBOA AND LEYVA
41
Gamboa and Leyva argue that the drug statutes8 under which they were convicted were facially unconstitutional after Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). We have squarely rejected that argument. See United States v. Mendoza-Paz, 286 F.3d 1104, 1110 (9th Cir.2002) (21 U.S.C. § 960); United States v. Varela-Rivera, 279 F.3d 1174, 1175 n. 1 (9th Cir.2002) (21 U.S.C. § 1952). They also argue in the alternative that Apprendi would require a showing of mens rea as to drug type and quantity. We have rejected that argument as well. See United States v. Carranza, 289 F.3d 634, 644 (9th Cir.2002).
PROSECUTORIAL COMMENT IN MARCUCCI
42
Because Marcucci's counsel objected to the prosecutor's closing argument, we review to determine whether there was error, and if such error existed, whether it was harmless.
43
In order to evaluate whether any impropriety occurred in the prosecutor's comments at close, it is worth considering first how Marcucci's lawyer painted his client as too much the naif to be someone who would try to accomplish a bank robbery through intimidation. At closing, the defense argued to the jury:
44
To look at him and to judge him as other bank robbers is insulting to other bank robbers. I mean, this is the man that you're going to categorize with your John Dillingers of the world? This is our sophisticate? This is the person we're worried about? Because if there is something in your mind going, you know what, this isn't what I thought of when I thought of a bank robbery, this isn't what I was expecting when I had to go to federal court, well, then your thought, that little seed in your mind is telling you the truth, which is this is not a bank robber. He did something stupid. And yeah, he would have taken the money. But was he willing to use force and violence? They are not charging him with stealing. They are not charging him with going in the bank and trying to get money that didn't belong to him. They are saying that he did it with force and violence, and that's a radically different thing. He was incapable of getting the money by force and violence — incapable. And the teller knew it. And that's why she said, you know, I need approval.
45
To this "Marcucci does not look like a bank robber" argument, the prosecutor responded in closing by saying that just because someone doesn't look like a threat does not mean that he is not a criminal. The prosecutor addressed the jury:
46
[W]hen you came in here, I suppose you had a pre-conceived notion as to how people should look, how they should behave. When you thought of a person that was shooting up a school, when you thought[of a person] that was bombing a federal building,9 did you have the preconceived notion as to what that person would look like? Sure. Everyone wants to have that. You want to have a person that makes it convenient to comply with this thought, that that person has to be the most evil looking of persons, with horns, with tails, with swastika tattoos, with little teardrops in their eyes, with slicked back hair, with knuckle braces and guns and weapons blazing.... Ladies and gentlemen, those people are not all criminals, as well as those people that are criminals that commit bank robberies, that commit attempted bank robberies, are not always obvious to see.
47
Marcucci argues that the prosecutor committed misconduct by "comparing Mr. Marcucci to mass murderers and other infamous characters." But, as is evident from the excerpt above, at no time did the prosecutor compare Mr. Marcucci to "school shooters and terrorists." Rather, the prosecutor pointed out that people have preconceived notions of what criminals look like and don't look like, and that these notions need to be and are challenged by the realities of the wide cosmetic array of criminals.
48
Further, the prosecutor's "you can't judge a book by its cover" argument falls squarely within the protected "invited reply" rule. See United States v. Young, 470 U.S. 1, 12-13, 105 S.Ct. 1038, 84 L.Ed.2d 1 (1985). While it is true that invited reply does not give a prosecutor carte blanche to engage in improper tactics, see United States v. Sarkisian, 197 F.3d 966, 990 (9th Cir.1999), this qualification does not apply to these facts. Notwithstanding Marcucci's protestations that the prosecutor's comments were "highly inflammatory and prejudicial," there is little evidentiary or legal support for such a finding.
49
We find no evidence of prosecutorial misconduct here, and so we need not address whether such error was harmless.
CONCLUSION
50
The district court's judgment is AFFIRMED.
Notes:
*
Honorable Charles R. Weiner, United States District Judge for the Eastern District of Pennsylvania, sitting by designation
1
See 1 Sara Sun Beale et al., GRAND JURY LAW AND PRACTICE § 4:5 (2d ed.2001).
2
Before Gamboa's and Leyva's grand jury, the two Assistant U.S. Attorneys working with the grand jury were later introduced as "two wonderful public servants [who] are here to assist you in the discharge of your duties." This praise was not mentioned before Marcucci's grand jury panel
3
The full text of the relevant portion of the Fifth Amendment is: "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger ...." U.S. CONST. amend. V. "Infamous" crimes refers to at least all feloniesCf. Stirone v. United States, 361 U.S. 212, 215, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960).
4
None of the additional cases cited by the dissent presented the issue of the grand jury's power to refuse to indict even where probable cause exists. The quoted portions of those cases are weak support for appellants' argument. The quotation fromGaither v. United States, 413 F.2d 1061, 1066 n. 6 (D.C.Cir. 1969), quotes language from a long-superseded 1968 version of Moore's Federal Practice, the current version of which makes no explicit reference to any power to refuse to indict. See 24 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 606.02[1] (3d ed. 2002) ("Still, the grand jury can reflect the conscience of the community in providing relief when strict application of the law would prove unduly harsh."). The dissent also quotes a concurrence in United States v. Cox, 342 F.2d 167, 189-90 (5th Cir.1965), which has no force even as Fifth Circuit precedent. The majority opinion in Cox held that a federal prosecutor could not be compelled to sign a Mississippi grand jury's indictment for perjury against two black men in a voting rights case during the struggle for civil rights. Like Vasquez, Cox contained an inference of racial discrimination by the grand jury, "[t]he only example the Court gave where such a presumption [of fundamental unfairness in the grand jury proceeding] would exist." 24 MOORE'S FEDERAL PRACTICE § 606.05[1].
Finally, none of the cases cited above deals with the charge to the grand jury. There is no indication, and the dissent does not claim, that any charge, standard or otherwise, has ever informed the grand jury that it is free not to indict even if probable cause exists.
5
The Supreme Court has, over time, determined the kind or amount of information required to be disclosed to grand jurorsSee, e.g., Williams, 504 U.S. at 54-55, 112 S.Ct. 1735 (grand jury need not be presented with exculpatory evidence); Costello v. United States, 350 U.S. 359, 363-64, 76 S.Ct. 406, 100 L.Ed. 397 (1956) (hearsay evidence may be sufficient basis for indictment); United States v. Calandra, 414 U.S. 338, 349-52, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974) (grand jury can hear evidence obtained in violation of exclusionary rule).
6
The dissent hypothesizes that in these cases the grand jury might have refused to indict the appellants because Leyva was young, the drug in Leyva's and Gamboa's cases was only marijuana, and Marcucci was a bungling bank robber. First, because the transcripts are secret, there is no way to tell whether the grand jury knew of Leyva's age or Marcucci's ineptness. Second, these factors should not be taken into account in a decision to indict, but at sentencing if the Sentencing Guidelines allow
7
Appellants also complain that the charge impermissibly favors the government. In light of the charge's emphasis on the independence of the grand jury, however, the charge does not unfairly tilt the balance
8
Leyva and Gamboa were each convicted on one count of importation of marijuana under 21 U.S.C. §§ 952 and 960
9
At this point, counsel for Marcucci objected twice and was overruled by the district court. The quotation above omits the interruption of the objection and overruling
51
MICHAEL DALY HAWKINS, Circuit Judge, Dissenting:
52
When Congressman James Madison sat down to write out a series of proposed amendments to the freshly-adopted Constitution, he was painfully aware of the ratification process in which the absence of a Bill of Rights had provoked such strident opposition. Fresh in the minds of the former colonists was their treatment at the hands of the British Crown and those colonial institutions that protected them from what they saw as the arrogant exercise of executive authority. Opponents of the proposed constitution wanted assurances that what they viewed as the best of those protections would continue in the new government.1 On any short list of those protective devices would have been the grand jury. When King George III's colonial appointees sought sedition charges against John Peter Zenger for his editorials critical of the Crown and when participants in the Boston Tea Party faced criminal charges, what stood between them and the dock was a grand jury made up of a group of their fellow citizens free to refuse a prosecutor's entreaties or a king's demands.2
53
The grand jury requirement now lives in the Fifth Amendment. It says that no serious (felony) federal charges may be brought against someone without the approval of a group of citizens, drawn at large from the community, who are entirely free to charge what the government proposes, to charge differently, or to not charge at all. Operating in secret and answerable to no one for its decisions, the grand jury is a truly unique institution. And while subject to the supervision of the judicial branch, it is part of no single branch of government.3 Two hundred fifteen years have brought about some considerable changes in the grand jury. Its use as an investigative tool is more common now, as is criticism for its potential for abuse.
54
But regardless of its apparent virtues and vices, the requirement of the grand jury's independent exercise of its discretion is a fixed star in our constitutional universe. For that reason, it is important to consider whether the way in which our courts today instruct grand jurors comports with the constitutional history of the institution. By my lights, the majority downplays evidence that the grand jurors in these cases were improperly instructed to the effect that their powers were limited to determining probable cause. Furthermore, the majority fails to accord appropriate deference to the elevated status of the grand jury as indicated in the Supreme Court's jurisprudence.4
55
To begin, the majority mistakenly characterizes the appellants' argument by contending that the appellants "insist" that the instructions "specifically tell the grand jury that it has no obligation to charge if it finds probable cause." The appellants make no such demand. Rather, it is a suggestion, merely one of the possible resolutions proposed to cure the unconstitutional instructions. The appellants actually insist only on the following: that the instructions under consideration misleadingly and impermissibly conveyed to the grand jury that their sole function is to determine probable cause.
56
The instructions begin by telling the grand jurors that what would follow would outline their responsibilities. This prefatory emphasis is significant because the instructions go on to explain that "the purpose of the Grand Jury is to determine whether there is sufficient evidence to justify a formal accusation against a person." A grand juror paying close attention would conclude that the purpose of the grand jury is singular and that its discretion is constrained by the instruction.
57
This impression is confirmed again later in the charge: "Your task is to determine whether the government's evidence as presented to you is sufficient to cause you to conclude that there is probable cause." While there is little doubt that this is, standing alone, a proper statement of law, the instruction seems to compel the grand jury to indict as long as probable cause exists:
58
You should vote to indict where the evidence presented to you is sufficiently strong to warrant a reasonable person's believing that the accused is probably guilty of the offense with which the accused is charged.
59
These instructions are at odds with the constitutional history of the grand jury requirement. The grand jury's defining feature is independence. The Fifth Amendment deliberately inserts a group of citizens between the government's desire to bring serious criminal charges and its ability to actually do so. "It is a constitutional fixture in its own right[,] ... [belonging] to no branch of the institutional Government, serving as a kind of buffer or referee between the Government and the people." United States v. Williams, 504 U.S. 36, 47, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992) (internal citations omitted). Indeed, "the Fifth Amendment's `constitutional guarantee presupposes an investigative body acting independently of either [the] prosecuting attorney or judge.'" Id. at 49, 112 S.Ct. 1735 (quoting United States v. Dionisio, 410 U.S. 1, 16, 93 S.Ct. 764, 35 L.Ed.2d 67 (1973)) (emphasis in original; internal quotations omitted).5
60
The history of the adoption of the grand jury requirement in the Bill of Rights underscores its independent role.6 And its independence was noted by courts at the founding of this Republic. See United States v. Smith, 27 F. Cas. 1186, 1188 (C.C.D.N.Y.1806) (No. 16341A) ("Grand juries are the offspring of free government; they are a protection against ill-founded accusations."). This pedigree attests that the grand jury's independence serves not only in the determination of probable cause, as these grand juries were instructed, but also to protect the accused from the other branches of government by acting as the "conscience of the community." Gaither v. United States, 413 F.2d 1061, 1066 n. 6 (D.C.Cir.1969) ("Since it has the power to refuse to indict even where a clear violation of law is shown, the grand jury can reflect the conscience of the community in providing relief where strict application of the law would prove unduly harsh.") (citation, internal quotation omitted). Indeed, even the government acknowledges that the grand jury has a function beyond merely establishing probable cause: quoting United States v. Mechanik, 475 U.S. 66, 74, 106 S.Ct. 938, 89 L.Ed.2d 50 (1986) (O'Connor, J., concurring in the judgment) (quoting Wood v. Georgia, 370 U.S. 375, 390, 82 S.Ct. 1364, 8 L.Ed.2d 569 (1962)), the government avers that the grand jury serves the "invaluable function in our society of standing between the accuser and the accused ... to determine whether a charge is founded upon reason or dictated by an intimidating power or by malice and personal ill will." And yet, the instructions in these cases say nothing about this function.
61
The significance of this second — and potentially protective — role should not be understated. Indeed, the strength of this understanding is emphasized in Vasquez v. Hillery, 474 U.S. 254, 106 S.Ct. 617, 88 L.Ed.2d 598 (1986). There, the Supreme Court said:
62
The grand jury does not determine only that probable cause exists to believe that a defendant committed a crime, or that it does not. In the hands of the grand jury lies the power to charge a greater offense or a lesser offense; numerous counts or a single count; and perhaps most significant of all, a capital offense or a noncapital offense — all on the basis of the same facts. Moreover, "[the] grand jury is not bound to indict in every case where a conviction can be obtained." United States v. Ciambrone, 601 F.2d 616, 629 (1979) (Friendly, J., dissenting).
63
Id. at 263, 106 S.Ct. 617. Judge Friendly's dissent in Ciambrone itself cites powerful language on this protective role from another distinguished jurist, Judge John Minor Wisdom:
64
By refusing to indict, the grand jury has the unchallengeable power to defend the innocent from government oppression by unjust prosecution. And it has the equally unchallengeable power to shield the guilty, should the whims of the jurors or their conscious or subconscious response to community pressures induce twelve or more jurors to give sanctuary to the guilty.
65
United States v. Cox, 342 F.2d 167, 189-90 (5th Cir.1965) (Wisdom, J., concurring specially).
66
Though grand jurors generally possess these acknowledged powers, the jurors in the cases before us were misled by these instructions, told that their powers are restricted to determining probable cause. This necessarily compromises their independence. The instructions admonish grand jurors further:
67
You cannot judge the wisdom of the criminal laws enacted by Congress, that is, whether or not there should or should not be a federal law designating certain activity as criminal. That is to be determined by Congress and not by you. Furthermore, when deciding whether or not to indict, you should not be concerned about punishment in the event of conviction. Judges alone determine punishment.
68
This instruction improperly limits the jurors' discretion regarding the proper scope of application of federal criminal law, as well as matters of sentencing. Both limitations run afoul of traditional understandings of the grand jury. As to questioning the wisdom of a criminal law, consider the language from the Gaither decision: "Since it has the power to refuse to indict even where a clear violation of law is shown, the grand jury can reflect the conscience of the community in providing relief where strict application of the law would prove unduly harsh." Gaither, 413 F.2d at 1066 n. 6 (citation, internal quotation omitted).7 How is it then that the grand jury lacks the power to consider the wisdom of a law applied to a particular case?
69
As to the severity of punishment, the Supreme Court in Vasquez stated that the grand jury has "the power to charge a greater offense or a lesser offense; numerous counts or a single count; and perhaps most significant of all, a capital offense or a non-capital offense[,] all on the basis of the same facts." Vasquez, 474 U.S. at 263, 106 S.Ct. 617. If grand jurors can choose, per Vasquez, between capital and non-capital offenses, how could they not be influencing the determination of punishment?
70
Finally, the grand jury's independence was further undermined when, in at least two of the three cases under consideration, the district court extolled the virtues of the representatives of the United States Attorney's office. This enthusiasm followed only moments after the grand jury was told that they could expect "candor, honesty and good faith" from the prosecutors who would be working with the grand jurors. One can only wonder: how truthful can these declarations be when prosecutors are free to deprive the grand jurors of exculpatory evidence, United States v. Williams, 504 U.S. 36, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992), to provide unconstitutionally seized evidence, United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974), and to present evidence otherwise inadmissible at trial, Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956)? More urgently, how independent can a grand jury be when they are told how wonderful the prosecutors are? The appellants quite properly assert that "a grand jury cannot be `independent' if the prosecutors' virtues are extolled to them without mention of the prosecutors' ability to present to the grand jurors far less than the whole story."
71
I am not persuaded that the grand jurors here were instructed properly on their independent role and function. Certainly, the instructions mention the idea of independence, telling the grand jurors, for example, that they stood between the accused and the government, and that they "should" indict, not that they must or shall indict. Indeed, the word "independent" also appears a couple times in the instructions. But both "reminders" of independence cited by the majority — and they really do take on the appearance of an after-thought — occur in the context of telling the grand jurors that their duty is to determine probable cause.8 The majority doesn't really grapple with the fact that although the grand jury is told it is independent, its independence is narrowly circumscribed. As to the "should" and "shall" distinction, it is a lawyer's distinction — not a difference to which most lay people sitting as grand jurors are likely alert.
72
Moreover, appellants correctly challenge the majority's inference that the relief they seek is necessarily a nullification instruction. A grand jury could be instructed using the language of Vasquez, which does not suggest nullification. Or, it could be told either that a showing of probable cause is a necessary requirement for indictment without saying more, or that probable cause is a necessary consideration, but not the only one. Doubtless, some of these options may be more vexatious than others. My own predilection would offer language instructing the jurors that they are the conscience of the community and are not bound to indict in every case where a conviction can be obtained. This may have the effect of creating more dialogue among grand jurors and prosecutors. Such exchange would be a step in the direction of greater civic participation in the practice of federal criminal justice. Of course, my preferences are immaterial: if the instructions are unconstitutional, it is not the job of this panel to rewrite them here and now. Regardless of how new instructions might turn out, as they stand now they are constitutionally unsound because they actively mislead grand jurors into thinking they lack powers which, as articulated by Vasquez, are clearly vested in them.9
73
Even if there were no liminal space between the instructions given and a nullification instruction, it is worth examining why the arguments against nullification in the petit jury context should not be uncritically applied to the grand jury context. As a preliminary matter, neither the Supreme Court nor the Ninth Circuit has prohibited a nullification — or, as some might call it, a full disclosure — instruction for grand juries. The cases prohibiting such instructions relate only to petit juries, not grand juries.10 Second, there is an important distinction between the two groups: with petit juries, jeopardy attaches, whereas with grand juries, a new prosecution effort can begin. See Williams, 504 U.S. at 49, 112 S.Ct. 1735. Because evidence can always be re-presented to a second grand jury, it is far from inevitable that justice will not be done if grand jurors were given a full disclosure instruction. Third, because the Framers placed a high value on the kinds of powers articulated by Vasquez for grand juries, it would be unjustifiably paternalistic to fail to tell the grand jurors the scope of their constitutional powers over charging decisions specifically entrusted to their judgment. Finally, it is a mistake to conclude that a full disclosure instruction to a grand jury would subvert the rule of law. If our constitutional system permits the grand jury to act either on its "conscience" or its "prejudice,"11 then it hardly makes sense to say that a grand juror who chooses to not indict despite probable cause is acting lawlessly. Rather, that action lies fully within the discretion delegated by the Constitution.12
74
Because the instructions in these cases actively misled the grand jurors into thinking their powers are more constrained than they in fact are, they are unconstitutional. Which raises the next question: if error, is it a structural error, or is it subject to harmless error review?
75
My answer, based on Vasquez, is that it is a structural error. In Vasquez, the Supreme Court presumed prejudice, concluding that the systematic exclusion of blacks from the grand jury pool amounts to structural error, for which prejudice to the defendant need not be shown. This result issued, despite the state's argument that "requiring a State to retry a defendant, sometimes years later, imposes on it an unduly harsh penalty for a constitutional defect bearing no relation to the fundamental fairness of the trial." Vasquez, 474 U.S. at 262, 106 S.Ct. 617. The Vasquez Court rejected this contention, noting that fundamental flaws, such as racial discrimination in the grand jury, "undermine[ ] the structural integrity of the criminal tribunal itself, and [are] not amenable to harmless-error review." Id. at 263-64, 106 S.Ct. 617.
76
To determine whether the presumption of prejudice attaches, the Supreme Court demands that we employ a traditional test: to determine whether "the structural protections of the grand jury have been so compromised as to render the proceedings fundamentally unfair." Bank of Nova Scotia v. United States, 487 U.S. 250, 257, 108 S.Ct. 2369, 101 L.Ed.2d 228 (1988). But the high court also stated that the courts should look to whether any inquiry into harmless error would require unguided speculation. Id.
77
The traditional test is ultimately unhelpful because it is hard to say with authority that the deprivation of an adequately-instructed grand jury is or is not "fundamentally unfair."13 But the latter, and slightly more helpful, test does seem satisfied here, even though at first blush, it appears that the defendants would have been convicted absent the error. Gamboa and Leyva were caught, after all, with massive amounts of drugs in their cars. Marcucci, notwithstanding his drug addictions and mental infirmities, knew what he was doing; in fact, after talking with the police, he admitted committing a "premeditated robbery."
78
Nonetheless, this is an area of "unguided speculation." Perhaps a grand jury would have exercised its discretion in favor of one or all of the defendants here because, among other things, Leyva was young and a first time offender; that marijuana (versus heroin or cocaine) was involved in both Gamboa and Leyva's cases; and Marcucci, who apparently looks patently unthreatening, bungled a rather pathetic and non-intimidating but no less stupid crime.14 Put differently, it's conceivable that a grand jury made aware of its role as "conscience of the community" would have provided "relief where strict application of the law would prove unduly harsh." Gaither, 413 F.2d at 1066 n. 6.
79
As one appellant noted, "a reviewing court can never know whether or not an unbiased and properly constituted grand jury would have simply declined to indict at all or might have charged a lesser offense." Where structural error occurs, it is no adequate reply to point out that the appellants did not demonstrate that "irregularities" existed such that the presumption of regularity should be disturbed. For it is precisely the "regular" and "traditional" functioning of the grand jury — its potential to exercise either justice-guided discretion or compassion-based mercy even against a finding of probable cause — that was hobbled by the instructions of the proceedings in these cases. In short, the appellants were denied the "traditional functioning of the institution that the Fifth Amendment demands." Williams, 504 U.S. at 51, 112 S.Ct. 1735.15
80
Because the defendants here were convicted after a grand jury was erroneously instructed, and because the erroneous instructions constituted a substantial impediment to the regular functioning of the grand jury as envisioned by its constitutional history, I would reverse the convictions, dismiss these indictments, and allow the government to re-present evidence to a grand jury properly instructed as to its independent role.16
Notes:
1
See Drew R. McCoy, The Last of the Fathers: James Madison & the Republican Legacy 89 (1989) ("He never forgot his daunting experience at the 1788 convention in Richmond; the Federalists' razor-thin margin of victory there had reflected the strength, among many delegates whom Madison greatly respected, of the fear that excessive power would accrue to the general government.").
2
See Leroy D. Clark, The Grand Jury: The Use and Abuse of Political Power 18 (1975). For other historical examples, see generally Marvin E. Frankel & Gary Naftalis, The Grand Jury: An Institution on Trial 9 (1977). To be sure, our historical experience also includes instances where the grand jury has acted to protect insiders against outsiders, and majorities against minorities. The grand jury has also been criticized for serving as a modern-day Star Chamber. See generally Michael E. Deutsch, The Improper Use of the Federal Grand Jury: An Instrument for the Internment of Political Activists, 75 J.Crim. L. & Criminology 1159, 1179-83 (1984); David J. Fine, Comment, Federal Grand Jury Investigation of Political Dissidents, 7 Harv. C.R.-C.L. L.Rev. 432 (1972).
3
The Grand Jury Clause of the Fifth Amendment stands in contrast to the Warrant Clause of the Fourth Amendment; the decision whether cause exists to prosecute cannot be made solely by permanent government officialsSee Akhil Reed Amar, The Bill of Rights: Creation and Reconstruction 84-85 (1998).
4
Though I have no quarrel with how this panel addressed theApprendi or prosecutorial misconduct issues, I would not need to reach those issues because of the disposition suggested in this dissent.
5
At least one scholar has suggested that the grand jury's alleged independence of the court makes it difficult for the Supreme Court to exercise its supervisory powers over itSee Susan W. Brenner, The Voice of the Community: A Case for Grand Jury Independence, 3 Va. J. Soc. Pol'y & L. 67, 124-26 (1995). Although Brenner's conclusion rests on a somewhat historically suspect premise — there are some cases that state that the grand jury is an arm of the Court — her claim would nonetheless be consistent with what Williams held, specifically, that prosecutors are not constitutionally required to disclose exculpatory material to the grand jury.
6
See sources cited in notes 1-3 and note 5.
7
See also In re Kittle, 180 F. 946, 947 (S.D.N.Y.1910) (L.Hand, J.) ("One purpose of the secrecy of the grand jury's doings is to insure against this kind of judicial control. They are the voice of the community accusing its members, and the only protection from such accusation is in the conscience of that tribunal.").
8
While this is definitely the case with the first example offered by the majority, one may plausibly ask whether such qualification applies to the second time the instructions stressed the grand jury's independence from the government. My own view is that it does. Consider the instructions there: "You must depend on your own independent judgment, never becoming an arm of the United States Attorney's Office. If the facts suggest that you should not indict, then you should not do so even in the face of the opposition or statements of the United States Attorney." This language undercuts the argument that the instructions impermissibly biased the jury in favor of the U.S. Attorney's Office, but not the general claim that they erroneously limited the grand jury to determining probable cause. As appellant Leyva put it, the grand jury was instructed to act independently as to only a portion of their responsibilities: the probable cause determination
9
The majority suggests that the authorities cited in this dissent are not strictly speaking authorities as they do not compel reversal. This is true. The non-Supreme Court cases are not binding both because they are out of circuit and because they are dicta
As to Vasquez, however, it is not to be lightly disregarded. Though it is dicta, it was the majority opinion and reflected a venerated understanding of the grand jury. Cf. Sherman v. Community Consol. Dist. 21, 980 F.2d 437, 448 (7th Cir.1992) ("Plaintiffs observe that the Court sometimes changes its tune when it confronts a subject directly. True enough, but an inferior court had best respect what the majority says rather than read between the lines. [W]e take [the Court's] assurances seriously. If the Justices are just pulling our leg, let them say so.").
Moreover, the majority itself presents no cases that dictate the result here. Instead, its opinion quotes various commentators noting the diminishing of federal grand jury independence. See ante at 1162. The decline in the grand jury's autonomy, according to the majority, "would not be cured by a change in the language" of the charge. Id. at 1162. But nowhere does the majority explain why a constitutionally kosher instruction would fail to breathe any spirit into the otherwise and increasingly moribund body of the grand jury. What we face is a matter of first-impression, and although we do not write on an entirely blank slate, it is an open-textured issue.
10
See, e.g., United States v. Powell, 955 F.2d 1206, 1213 (9th Cir.1991); United States v. Simpson, 460 F.2d 515, 519-20 (9th Cir. 1972).
11
The difficulty of distinguishing between conscience and prejudice was highlighted long ago, as was one possible solution to the difficultySee Thomas Hobbes, Leviathan 39-40 (Richard Tuck ed., Cambridge Univ. Press 1991) (1651) ("But whatsoever is the object of any man's appetite or desire, that is it which he for his part calleth good; and the object of his hate and aversion, evil; and of his contempt, vile and inconsiderable. For these words of good, evil, and contemptible are ever used with relation to the person that useth them: there being nothing simply and absolutely so; nor any common rule of good and evil to be taken from the nature of the objects themselves; but from the person of the man, where there is no Commonwealth; or, in a Commonwealth, from the person that representeth it; or from an arbitrator or judge, whom men disagreeing shall by consent set up and make his sentence the rule thereof.").
12
The majority seems to suggest,ante at 1163, that the possibility of grand juries refusing to indict "based on local politics, racial or other discrimination, or anti-government sentiment" is an outcome so nefarious that we should prevent it, in part, by misleading the grand jurors about their powers. I agree that the possibility of such outcomes is real, but ours is not to question the choice the Framers appear to have made.
13
See Hobbes, supra note 11. Cf. Brown v. Allen, 344 U.S. 443, 540, 73 S.Ct. 397 (1953) ("We are not final because we are infallible, but we are infallible only because we are final.") (Jackson, J., concurring).
14
As the majority notes, what the grand jury might have done or might have known is speculative. It is a constitutional black box. But that doesn't render less likely the possibility that the grand jury, properly instructed, would provide relief from the strict application of the law in its role as "conscience of the community." Moreover, the majority provides no reason for its assertion that the factors discussed in the text,e.g., youth, ineptitude, or type of drug, should not influence a decision to indict as much as a decision to sentence a particular amount. A particularly merciful conscience of the community might think that it is precisely those factors that should preclude prosecution altogether. One could imagine a grand jury being reluctant to indict a poor mother whose lack of real opportunities forced her to prostitution or delivering drugs in order to pay for her children's food or shoes.
15
If the error here were not structural, but rather merely subject to harmless error review, it would be inappropriate for us to rule because the district court, having determined there was no error on the grand jury question, never ruled on what prejudice, if any, was experienced by any of the defendants
16
While I am mindful that my proposed resolution would impose a burden on the government, the Supreme Court's decisions of late remind us that our obligations under the Constitution are not always measured against the metric of efficiencySee, e.g., Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435, (2000) (O'Connor. J., dissenting) (noting that Apprendi will "unleash a flood of petitions by convicted defendants seeking to invalidate their sentences"); Ring v. Arizona, ___ U.S. ___ at ___-___, 122 S.Ct. 2428, 153 L.Ed.2d 556 at ___-___ (2002) (O'Connor, J., dissenting) (expressing similar fears that Ring will strain judicial resources).
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544 U.S. 1057
TILLMANv.SCHOFIELD, WARDEN,
No. 04-8346.
Supreme Court of United States.
May 23, 2005.
1
Petition for rehearing denied.
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274 S.W.2d 555 (1955)
Calvin Otis GRAVES, Appellant,
v.
The STATE of Texas, Appellee.
No. 27345.
Court of Criminal Appeals of Texas.
January 19, 1955.
C. S. Farmer, David G. Copeland, Waco, for appellant.
Dan Walton, Dist. Atty., Houston, Eugene Brady, Jr., Asst. Dist. Atty., Leon Douglas, State's Atty., of Austin, for the State.
WOODLEY, Judge.
The indictment returned against appellant charged that he made an assault upon and did ravish and have carnal knowledge of a named female under 18 years of age, who was not his wife. Trial resulted in a verdict of guilty, the jury assessing a punishment of five years in the penitentiary. Appellant's application for suspended sentence was not granted.
The evidence is insufficient to sustain conviction for statutory rape for the reason that the prosecutrix was admittedly of unchaste character.
The trial court, in his charge, authorized a conviction upon a finding by the jury that appellant ravished and obtained carnal knowledge of the prosecutrix by threats such as might reasonably create a just fear of death or great bodily harm in view of the relative condition of the parties as to health, strength and other circumstances of the case. No objections were made to the charge.
The question for our determination is therefore whether or not proof of rape by threats will sustain a conviction under indictment which charges only that the accused assaulted, ravished and had carnal knowledge of the named female under 18 years of age, who was not his wife.
*556 Stated in another way, are the allegations of the indictment sufficient to include rape by threats as well as by force?
The State confesses that such manner of commission of the offense of rape is not included in the allegations of the indictment, and that the case should not have been submitted to the jury on the theory of rape by threats. We are inclined to agree.
The judgment is reversed and the cause remanded.
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22 Cal.App.4th 1566 (1994)
28 Cal. Rptr.2d 78
THE PEOPLE, Plaintiff and Respondent,
v.
VICTORIA FLEMING, Defendant and Appellant.
Docket No. B074599.
Court of Appeals of California, Second District, Division Two.
March 1, 1994.
*1567 COUNSEL
Thomas F. Coleman, under appointment by the Court of Appeal, for Defendant and Appellant.
*1568 Daniel E. Lungren, Attorney General, George Williamson, Chief Assistant Attorney General, Carol Wendelin Pollack, Assistant Attorney General, Robert F. Katz and Molly J. Steber, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
NOTT, J.
Among other issues, this case presents the question of whether a trial court may require an applicant for drug diversion to submit to reasonable, but warrantless, searches as a condition of his diversion program. We reluctantly conclude that under the law as currently interpreted, it may not do so.
Appellant Victoria Fleming was charged in count I with possession for sale of a controlled substance (Health & Saf. Code, § 11378) and in count II with possession of a controlled substance (Health & Saf. Code, § 11377, subd. (a)). It was also alleged that she was personally armed with a firearm during the commission of the foregoing violations (Pen. Code, § 12022, subd. (c)). She pled guilty to both counts and no contest to the special allegation.
CONTENTIONS
Appellant contends (1) the trial court erred in denying her motion to suppress on the ground that the arresting officer conducted an invalid, warrantless search, (2) insufficient evidence supported the finding of consent, and (3) the good faith exclusionary rule does not apply to the facts of this case.
FACTS
At appellant's preliminary hearing, Detective Neil Hopkins testified that on March 27, 1992, he went to appellant's residence after receiving complaints that she had been selling drugs. Three or four months earlier, Hopkins had issued appellant a citation for possession of marijuana after receiving similar complaints. From that contact, Hopkins was aware that appellant had become subject to a search and seizure condition, though he apparently did not know in what context this requirement had been imposed.
Wearing a police "raid" jacket, Hopkins knocked on appellant's door and identified himself as a police officer to Jeffrey Holder, the man who answered. Holder advised that appellant still lived there and allowed the *1569 officer to enter. Inside they found appellant, and Hopkins inquired if she was still "on probation" and subject to "search and seizure." When appellant replied in the affirmative, Hopkins told her he had received several anonymous phone tips that she was dealing drugs. He then asked her to empty her pockets onto the coffee table.
Appellant removed a plastic pill bottle which contained a small plastic box. Inside the box were 20 pills and 7 bindles which contained between .05 grams and 2.20 grams of methamphetamine. In response to Hopkins's question whether she had any other drugs in the house, appellant took him upstairs and from a desk drawer gave him another bindle of methamphetamine, $200, and a loaded automatic pistol.
At her preliminary hearing, appellant's motion to suppress the narcotics and the gun was denied. The magistrate took judicial notice that on June 8, 1990, as a condition of a grant of diversion, appellant had agreed that she would "submit her person and property to search and seizure at any time of day or night by any law enforcement officer or by the probation officer with or without a warrant." He also determined that appellant consented to the search.
The motion to suppress was renewed in superior court and again denied. As noted, appellant then withdrew her not guilty plea, pled guilty to both counts, and admitted the special allegation. She was placed on probation for three years with the condition that she spend three hundred sixty-five days in county jail. She was further required not to use or possess any restricted drugs, to cooperate with her probation officer in a drug rehabilitation program, to submit to drug testing, and to submit her person and property to search or seizure.
DISCUSSION
I. Search and Seizure Condition
(1) With considerable misgivings, we agree with appellant's assertion that under long-standing case law her waiver of search and seizure protections as a condition of a grant of diversion was improper.
Under Penal Code section 1000 et seq., eligible drug offenders may be considered for a diversion program in lieu of criminal prosecution. (Morse v. Municipal Court (1974) 13 Cal.3d 149, 153 [118 Cal. Rptr. 14, 529 P.2d 46].) The statutory objective of diversion is to permit "the courts to identify the experimental or tentative user before he becomes deeply involved with *1570 drugs, to show him the error of his ways by prompt exposure to educational and counseling programs in his own community, and to restore him to productive citizenship without the lasting stigma of a criminal conviction" and to reduce "the clogging of the criminal justice system." (People v. Superior Court (On Tai Ho) (1974) 11 Cal.3d 59, 61-62 [113 Cal. Rptr. 21, 520 P.2d 405].) The court must find that the defendant would be benefited by diversion and the defendant must consent to the diversion proceedings, waiving his right to a speedy trial. (Pen. Code, §§ 1000.1-1000.2.)
In Morse v. Municipal Court, supra, 13 Cal.3d 149, rather than initially consenting to diversion, the petitioner pled not guilty to charges of possession of marijuana and made a motion to suppress certain evidence, which was denied. Only after failing in this effort did petitioner advise the court that he would be amenable to diversion, which request was rejected on the basis that he theretofore had elected to proceed through the criminal justice system.
Primarily focusing on the narrow question of "how far into the criminal process a defendant may go before he can no longer be afforded the right to consent to consideration for diversion under section 1000.1" (Morse v. Municipal Court, supra, 13 Cal.3d at p. 155, italics omitted), the majority of our Supreme Court ascribed to the diversion statute the broad aim of facilitating rehabilitation, a goal it felt would not be accomplished should the defendant be required to forfeit his ability "to test the strength of the evidence against him at the outset of the case." (Id., at p. 158, italics omitted.) It therefore held that such a precondition, not being expressly set forth in the statute, could not be imposed. (Id., at p. 159.)
A similar result was reached in Parra v. Municipal Court (1978) 83 Cal. App.3d 690, 694 [148 Cal. Rptr. 203], which held that a court may not require an express admission of guilt as a precondition to diversion.
Frederick v. Justice Court (1975) 47 Cal. App.3d 687 [121 Cal. Rptr. 118], however, expanded the Morse holding regarding preconditions to include and prohibit a search condition being imposed after diversion had been granted and during the course thereof. It concluded there was no compelling necessity to require the divertee to forego his or her constitutional right to be subjected to a search only after an appropriate warrant has issued or in an emergency situation.
Were we writing upon a clean slate we would reach a different conclusion. In light of the fact that the person eligible for the diversion program has identified himself or herself as, at a minimum, an experimental or tentative *1571 narcotic user in need of assistance, it would not seem unreasonable to strengthen his or her resolve in the same manner utilized for those on formal probation. That is, with knowledge he or she may be subject to a reasonably conducted search at any time, a divertee, like a probationer, would be less inclined to have narcotics or dangerous drugs in his or her possession. (Cf. People v. Mason (1971) 5 Cal.3d 759, 763 [97 Cal. Rptr. 302, 488 P.2d 630], overruled on other grounds in People v. Lent (1975) 15 Cal.3d 481, 486, fn. 1 [124 Cal. Rptr. 905, 541 P.2d 545].) Similar constructive restrictions may be imposed upon narcotics addicts, who also have not been found guilty of a crime. (People v. Myers (1972) 6 Cal.3d 811, 819, and fn. 4 [100 Cal. Rptr. 612, 494 P.2d 684].)
However, the court in Frederick v. Justice Court, supra, 47 Cal. App.3d 687 reasoned that since a search and seizure condition was not expressly authorized by statute as in the case of a narcotic addict and probationer, its exclusion was to be negatively implied.[1]
Nonetheless, the commonality of drug use and the incredibly far-reaching and deleterious effect it has upon our community may not have been fully comprehended in our society of 20 years ago, though even then the extreme recidivism rate was recognized. (People v. Mason, supra, 5 Cal.3d at p. 764, fn. 2.) Defendants who accept a grant of diversion will not always succeed in transforming themselves into drug free, law abiding citizens. In the present instance, while appellant was able to convince the court she was a viable candidate for diversion, upon receiving such a grant she was soon back on the street, engaged in the sale of narcotics.
Regrettably, this scenario occurs only too frequently since it is not uncommon for someone who is a confirmed narcotic user or seller to be granted diversion. In addition, even the true experimental user, though not yet addicted, could benefit from a search requirement as readily before, as after, a conviction. Consequently, we perceive no logical reason why the trial court should not have the discretion to impose similar conditions on diversion, thereby fulfilling the statutory purpose of treatment and rehabilitation. (People v. Superior Court (On Tai Ho), supra, 11 Cal.3d. 59, 61.)
Indeed, given the opportunity to proceed under a grant of diversion rather than face criminal prosecution, it is difficult to perceive how a sincere *1572 defendant could reasonably object to such a requirement since even the searches thus authorized may not be conducted in an unreasonable or harassing fashion. As our Supreme Court has unanimously stressed: "We do not suggest that searches of probationers may be conducted for reasons unrelated to the rehabilitative and reformative purposes of probation or other law enforcement purposes. A waiver of Fourth Amendment rights as a condition of probation does not permit searches undertaken for harassment or searches for arbitrary or capricious reasons. [Citations.]" (People v. Bravo (1987) 43 Cal.3d 600, 610-611 [238 Cal. Rptr. 282, 738 P.2d 336].)
We also note that the 1992 amendment of the diversion statute gives the court, rather than the district attorney, the power to refer a case to the probation department, arguably indicating the intent of the Legislature to vest wider discretion with the court. Nonetheless, and despite our views, we are loathe to reject a rule of such long standing, at least where, as here, it is not necessary to affirm an otherwise correct judgment. We, therefore, will content ourselves with (1) urging our Supreme Court to conduct an early reconsideration of this entire field and, if necessary, (2) calling upon our Legislature to modify Penal Code section 1000 et seq., to explicitly give the trial court discretion to impose conditions it deems fitting and proper to carry out the purpose of the statute.
II. Good Faith Exception to the Exclusionary Rule
(2) We need not weigh the merits of appellant's contention that her consent to the search that revealed the proofs of her guilt was "involuntary" since we disagree with appellant's contention that the good faith exception to the exclusionary rules is inapplicable. (Cf. People v. Mason, supra, 5 Cal.3d 759, 763, fn. 1.)
In United States v. Leon (1984) 468 U.S. 897, 903-906 [82 L.Ed.2d 677, 685-688, 104 S.Ct. 3405], the Supreme Court held, in essence, that the exclusionary rule should not be applied when an officer conducting a search objectively acts in good faith based on a warrant issued by a detached and neutral magistrate that subsequently is determined to be invalid. (People v. Barbarick (1985) 168 Cal. App.3d 731, 739 [214 Cal. Rptr. 322].) In Leon, the search warrant issued by the magistrate was later found to be lacking in probable cause. Refusing to suppress the evidence, the court concluded that deterrence of police misconduct would not be served (United States v. Leon, supra, at pp. 916-922 [82 L.Ed.2d at pp. 694-698), and that an officer acting in good faith cannot be expected to question the legal conclusions of the issuing magistrate. (Id., at pp. 918-921 [82 L.Ed.2d at pp. 695-697].)
In Barbarick, a magistrate issued a search condition to a misdemeanor "own recognizance" (OR) release. The court held that the magistrate made a *1573 mistake of law since no statute or case law authorized such a search condition "merely because the judge is concerned that defendant will continue to engage in criminal conduct." (People v. Barbarick, supra, 168 Cal. App.3d at pp. 736-737.) However, the court affirmed the denial of the motion to suppress the evidence, finding that the officer acted in good faith. (Ibid.)
Here, we find that the first prong of the good faith exception rule is met in that the magistrate issued a facially valid condition to the grant of diversion. Appellant urges that the instant situation is distinguishable from Barbarick because there it was ambiguous whether a search condition could be attached to an OR release, while here, error was clear under Frederick v. Justice Court, supra, 47 Cal. App.3d 687. However, the focus of the exclusionary rule is to "deter police misconduct, not to correct the errors of judges or magistrates." (Miranda v. Superior Court (1993) 13 Cal. App.4th 1628, 1632 [16 Cal. Rptr.2d 858].) "Where the defect in paperwork derives not from police negligence, but from judicial error, no remedial benefit will come from suppressing the evidence." (Ibid.) Here, the error was not caused in whole or part by the police. (See, e.g., People v. Ivey (1991) 228 Cal. App.3d 1423, 1426 [279 Cal. Rptr. 554] [exclusionary rule should apply where error of official transmission of misinformation by police occurred].) Despite appellant's arguments to the contrary, both Leon and Barbarick held that an improper legal determination, i.e., a mistake of law made by the magistrate in issuing a facially valid search condition, falls within the good faith exception to the exclusionary rule. (People v. Barbarick, supra, 168 Cal. App.3d at p. 739; see also People v. Tellez (1982) 128 Cal. App.3d 876 [180 Cal. Rptr. 579] [motion to suppress properly denied where, as a matter of law, parole with search condition had terminated before search].)
Although, as to the second prong, appellant argues that the arresting officers did not make a "reasonable mistake of law," and therefore did not act in good faith, we find otherwise. Officers must act in objective good faith and have a reasonable knowledge of what the law prohibits. (People v. Barbarick, supra, 168 Cal. App.3d at p. 740.) Here, Hopkins testified that he knew appellant was under a search and seizure condition because of his previous contact with her. He specifically asked her if she was "on probation" and subject to a search and seizure condition. She replied in the affirmative.
We, therefore, conclude, as in People v. Barbarick, supra, 168 Cal. App.3d 731 that the officer acted in good faith. Further, even had he known that this condition arose from a diversion, rather than a formal probation, and there was no evidence that he did, his failure to appreciate this fine distinction *1574 when the magistrate had not, did not render his conduct unreasonable. To apply the exclusionary rule here would serve neither to deter unlawful police activity nor to ensure the integrity of the judicial process.
The motion to suppress was properly denied.
DISPOSITION
The judgment is affirmed.
Gates, Acting P.J., and Fukuto, J., concurred.
Appellant's petition for review by the Supreme Court was denied May 18, 1994. Mosk, J., was of the opinion that the petition should be granted.
NOTES
[1] With respect to conditions of probation, Penal Code section 1203.1, subdivision (j), states, in pertinent part, that "[t]he court may impose and require any or all of the above-mentioned terms of imprisonment, fine, and conditions, and other reasonable conditions, as it may determine are fitting and proper to the end that justice may be done, that amends may be made to society for the breach of the law, for any injury done to any person resulting from that breach, and generally and specifically for the reformation and rehabilitation of the probationer...." Section 3152 of the Welfare and Institutions Code states that persons in outpatient status shall be subject to periodic and surprise testing for narcotic use.
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721 N.W.2d 218 (2006)
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Jon Michael EDGAR, Defendant-Appellant.
Docket No. 129777. COA No. 263780.
Supreme Court of Michigan.
September 26, 2006.
On order of the Court, the application for leave to appeal the August 17, 2005 order of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court. The motion for appointment of counsel is DENIED.
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379 F.2d 424
UNITED STATES of America, Plaintiff-Appellee,v.James E. BUCKLEY, Robert D. Walker, Hugh Norwood, Jr., andWesley K. Green, Defendants-Appellants.
Nos. 15870-15873.
United States Court of Appeals Seventh Circuit.
June 13, 1967, Rehearings Denied in Nos. 15870, 1, 2 July 20, 1967.
Delars J. Bracy and Stephen Levy, Chicago, Ill., for appellants.
Edward V. Hanrahan, U.S. Atty., Gerald M. Werksman, Asst. U.S. Atty., Chicago, Ill., John Peter Lulinski, Asst. U.S. Attys., of counsel, for appellee.
Before HASTINGS, Chief Judge, KNOCH, Circuit Judge, and MAJOR, Senior Circuit Judge.
KNOCH, Circuit Judge.
1
The defendants-appellants, James E. Buckley, Robert D. Walker, and Hugh Norwood, Jr. were convicted after trial by jury of the theft of television sets moving in interstate commerce in violation of Title 18, U.S.Code 659. The defendant-appellant, Wesley K. Green, was convicted of possession of stolen chattels taken from interstate commerce in violation of the same statute.
2
The Trial Judge imposed sentences of one year on each of the first three defendants above listed and three years on Mr. Green.
3
All four defendants contend that they were entrapped into taking and possessing the chattels in question and that, consequently, the items cannot be said to have been stolen.
4
At the trial, Federal Bureau of Investigation Special Agnet, Russell R. Girsch, testified that on a visit to the defendants' employer, Associated Truck Lines, Inc., on December 7 or December 8, 1965, he conferred with Terminal Manager, Steven Generis, who advised him that Associated Truck had suffered a number of thefts and that the four defendants (among others) were viewed as suspects. Agent Girsch testified that he arranged to conduct a surveillance.
5
Milton Smazik, Associated Truck's safety and personnel supervisor, testified that on December 9, 1965, about noon, he saw three cartons of television sets, four cartons of Ampex recorders and a carton of spark plugs in a trailer which was parked in the fifth row from the west side, among the six rows of trailers parked in the yard of Associated Truck's premises. The record does not disclose who placed these items in that trailer.
6
Another F.B.I. Agent, James A. Roberts, testified that with Agent Girsch and Mr. Smazik, he conducted surveillance on December 9, 1965, from a truck parked in Associated Truck's parking lot, beginning at about 9:30 p.m.
7
George Reinhofer, who was employed by Associated Truck as a spotter and dock hand, testified that he telephoned defendant James Buckley about 7 or 8 p.m., on December 9, 1965, and told him 'that there was some freight on a trailer,' although he did not at that time know the character of the 'freight.' He stated that Mr. Buckley answered that he would look at it and take care of it.
8
None of the four defendants had duties which required him to handle or move freight.
9
Agent Roberts testified that about 10:20 p.m. he saw defendants Buckley and Walker engaged in a conversation, after which defendant Buckley moved a Pontiac automobile, then drove away in a panel truck and returned shortly. Agent Roberts then saw defendants Walker and Buckley transfer a carton from the panel truck to the Pontiac, which defendant Buckley then moved away. He saw defendant Buckley bring another automobile (license number 945-500) to the same location where the two defendants transferred to the automobile a carton brought by a yellow truck, after which the second automobile was moved to another spot, where the two defendants proceeded to change its oil. Agent Roberts then observed defendant Norwood drive up in a red truck from which two cartons were transferred to a Pontiac convertible. Still later he saw defendant Norwood drive up in a 1966 Mercury automobile license number 5D 5647,1 into which defendant Norwood placed two cartons and then moved the automobile away. Some time later he saw defendant Norwood drive up a fifth automobile and put two more cartons into it from the truck.
10
Mr. Reinhofer testified that when he arrived for work that night about 11 p.m. he met Mr. Buckley with whom he had a conversation; that Mr. Buckley told him what was in the parked trailer and said that 'he already had one.'
11
About midnight, Mr. Reinhofer had another conversation with Mr. Buckley and Mr. Norwood during which Mr. Buckley repeated that he had a television set in his car and asked Mr. Reinhofer what he wanted. Hugh Norwood asked Mr. Reinhofer for the keys to Mr. Reinhofer's automobile, which were given to him. Later Mr. Reinhofer heard Mr. Norwood ask Wesley Green if he wanted anything from the trailer and Mr. Green had said 'yes.' About 2:30 or 3:00 a.m., Mr. Norwood had returned Mr. Reinhofer's keys.
12
Meanwhile, about 12:30 a.m. Hugh Norwood had asked Mr. Reinhofer to move the trailer to a more convenient spot because he 'didn't want anybody to see him' and Mr. Reinhofer had done so. Mr. Reinhofer testified that this was the only time he personally visited the trailer.
13
Each of the defendants was arrested after he had left the premises of Associated Truck and was driving home. The stolen items were found in the trunks of the various automobiles driven by the defendants.
14
Special Agent Swiercz testified that when Mr. Green's automobile trunk was opened, Mr. Green volunteered the statement that he had purchased the two cartons from someone at the terminal knowing they were stolen, and later he said that he agreed to buy a stolen radio and spark plugs from Mr. Norwood, turning his car keys over to the latter so that these items could be placed in his automobile; that about 2:30 a.m. defendant Norwood had returned his keys with the statement that a radio and spark plugs were in the Green car trunk.
15
The four defendants testified to a series of approaches allegedly made to them individually by George Reinhofer in which he repeatedly urged them, despite their firm refusals to participate in thefts from Associated Truck, particularly urging three of them to take away the very items involved in this case because if they did not get rid of these items, another dock employee would be in trouble.
16
In his rebuttal testimony, George Reinhofer himself specifically denied any such approaches, asserting that the conversations had been limited to the telephone call and the other conversations that same night at the terminal as outlined by him in his earlier testimony.
17
The jury was thus faced with a clear conflict in testimony, resolution of which truned on the issue of credibility, a matter for decision by the jury. Evidently the jury accepted as true the testimony of Mr. Reinhofer and rejected the testimony of the four defendants. Masciale v. United States, 1958, 356 U.S. 386, 388, 78 S.Ct. 827, 2 L.Ed.2d 859.
18
It is axiomatic that this Court must view the evidence and the inferences reasonably to be drawn from it in the light most favorable to the appellee. Glasser v. United States, 1942, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680. So viewed, the evidence clearly indicates a situation in which the defendants were merely afforded an opportunity for wrongdoing which they seized of their own free will. United States v. Carter, 7 Cir., 1963, 326 F.2d 351, 353; United States v. Stocker, 7 Cir., 1960, 273 F.2d 754, 756, cert. den. 362 U.S. 963, 80 S.Ct. 879, 4 L.Ed.2d 878.
19
The record before us does not support a conclusion that otherwise innocent persons were induced to violate the law by trickery, persuasion or fraud of any agents either of the government, or of their own employer. United States v. Millpax, Inc., 7 Cir., 1963, 313 F.2d 152, 156-157, cert. den. 373 U.S. 903, 83 S.Ct. 1291, 10 L.Ed.2d 198, rehrg. den. 373 U.S. 954, 83 S.Ct. 1677, 10 L.Ed.2d 708; Sorrells v. United States, 1932, 287 U.S. 435, 451, 53 S.Ct. 210, 77 L.Ed. 413; United States v. Georgiou, 7 Cir., 1964, 333 F.2d 440, 441-442, cert. den. 379 U.S. 901, 85 S.Ct. 191, 13 L.Ed.2d 176.
20
After defendant Green had been found guilty as charged in the indictment (which charged him with unlawful possession) the written Order of Judgment and Commitment incorrectly stated that he was convicted of 'embezzling, stealing, taking and carrying away' chattels etc. as well as of 'having in his possession stolen goods' etc.
21
Defendant Green contends that in sentencing him, the Court gave consideration to an additional crime of which he had not been convicted. He also contends that he was penalized for electing to be tried by jury.
22
The government argues that the reference to theft in the written judgment is clearly a clerical error and that the Trial Judge could not have been misled. We do not believe that we can make that assumption on the state of the present record, although we would be inclined to agree that clerical error is a likely explanation.
23
We do believe, as the government does, that the phrase 'we went through a jury trial here' which has been lifted out of its context by defendant Green does not reflect any reproach to the defendants by the Trial Judge for having chosen to be tried by jury, but, on the contrary, refers to the Judge's opportunities for observing the defendants and his remarks on a lack of evidence of remorse or contrition at the time of the hearing.
24
Because of the discrepancy in the written Judgment, the Judgment and sentence as to defendant Green only is hereby vacated and this cause is remanded to the District Court solely for the purpose of resentence of defendant Green. In all other respects, the judgment of the District Court is affirmed.
25
Affirmed in part. Judgment in part vacated and cause remanded solely for resentence of defendant Green.
1
That was defendant Green's automobile
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469 F.2d 163
81 L.R.R.M. (BNA) 2664, 69 Lab.Cas. P 13,133
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.LOCAL NO. 42, INTERNATIONAL ASSOCIATION OF HEAT AND FROSTINSULATORS AND ASBESTOS WORKERS, Respondent.
No. 72-1145.
United States Court of Appeals,Third Circuit.
Submitted Oct. 2, 1972.Decided Nov. 7, 1972.Rehearing En Banc Denied Feb. 21, 1973.
Marcel Mallet-Prevost, Asst. General Counsel, N.L.R.B., Washington, D. C., for petitioner.
Harvey B. Rubenstein, Wilmington, Del., for respondent.
Before SEITZ, Chief Judge, and HASTIE and HUNTER, Circuit Judges.
OPINION OF THE COURT
PER CURIAM:
1
This is an application by the National Labor Relations Board (Board) for enforcement of its order against Respondent, Local No. 42, International Association of Heat & Frost Insulators & Asbestos Workers (Union).
2
As found by the Board, the three insulation contractors in Wilmington, Delaware had negotiated as a multi-employer unit previous to 1970, with each employer signing the final contract with the Union separately. In anticipation of the 1970 contract negotiations, they joined the Allied Construction Industries Division of the Delaware Contractors' Association, Inc. (DCA), a trade association; DCA then formed the Insulation Trade Group, a subdivision composed exclusively of the three contractors. These contractors desired the association to negotiate and execute the upcoming contracts with the Union. Both DCA and the employers notified the Union of this intention. When negotiations began on May 19, 1970, the Union objected to the substitution of DCA as the contracting party. Although it continued these objections in subsequent bargaining sessions, the Board found these insufficient to nullify the acceptance evidenced by the Union's negotiations with DCA on substantive elements of the contract. While it noted that substantial progress had been made on various provisions, it focused particularly upon the tentative term in the contract recognizing DCA as the contracting party.
3
On July 14, 1970, the existing contract expired, and the Union struck the contractors. DCA issued a press release detailing the bargaining positions of the parties, contrary to the past practice of secrecy during negotiations. Because of this, the Union refused to bargain further with DCA and insisted that all future negotiations be between the Union and the employers themselves, as in the past.
4
DCA filed a complaint with the Board, charging the Union with refusal to negotiate, in violation of Sec. 8(b)(3) of the National Labor Relations Act, as amended [29 U.S.C. Sec. 158(b)(3) (1971)]. After a hearing, the Trial Examiner concluded that the Union had never accepted DCA as a negotiating party and dismissed the complaint; he premised the dismissal upon his finding that the continuing objections by the Union nullified any manifested acceptance of DCA as a party. The Board reversed, ordering the Union to sign a contract with DCA, upon request, identical to the one executed with the three employers, but incorporating a provision designating DCA as the bargaining and contracting agent for the three. It is this order which it now seeks to have us enforce.
5
Once a party agrees to multiemployer unit bargaining, it cannot withdraw its assent during negotiations absent special conditions or mutual consent of the parties. Cf. NLRB v. John J. Corbett Press, 401 F.2d 673 (2d Cir. 1968); see also NLRB v. Dover Tavern Owners' Ass'n, 412 F.2d 725 (3d Cir. 1969). A corollary is that once assent is given to the inclusion of a party, it cannot be withdrawn during negotiations absent similar conditions. However, a peculiar twist is presented here. While the Board found that the Union continued to object to DCA as the bargaining party, it also found that the Union had negotiated with DCA on specific terms of the contract, manifesting by its actions acceptance of DCA as the contracting party. This finding, which directly contradicted the Trial Examiner's, was the premise for the Board's reversal. Therefore, the critical issue before this court is whether the Board properly exercised its powers in making this determination.
6
The Board has the power to draw different conclusions from evidentiary facts presented to the Trial Examiner, as it did here. See International Union of Elec., Radio and Machine Workers, A.F.L.-C.I.O. v. NLRB, 273 F.2d 243, 247 (3d Cir. 1959). In turn, this court must determine whether the Board's decision is supported by substantial evidence on the record. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Utilizing these two standards, we find that the Board validly exercised its power in reversing the Trial Examiner and that its findings were substantially supported by the record.
7
Three additional issues raised by the Union merit short discussion. First, the Union contends that substitution of DCA as signatory party was a subject for negotiation. The Board's order requiring it to execute a contract with DCA, it claims, undermines the collective bargaining process. However, the Board found that the Union had accepted DCA as the contracting party; consequently, its order merely remedies the unfair labor practice committed by the Union. Secondly, the Union contends that since DCA was not a party to the final contract, the association had no standing to file a complaint with the Board over its wrongful exclusion. The Union claims the Act grants standing only to an "aggrieved party"; therefore, the Board rule which grants standing to "any party" exceeds the statutory grant and is invalid. This court previously has upheld the validity of the Board's rule. See NLRB v. Television & Radio Brdcstg. Studio Employees, 315 F.2d 398 (3d Cir. 1963). Thirdly, the Union contends that since the final contracts, as signed, failed to include a stipulation preserving DCA's rights before the Board, DCA and the employers have waived their right to a Board-enforced remedy. However, absent an express waiver of Sec. 8 rights, none will be inferred. See Timken Roller Bearing Co. v. NLRB, 325 F.2d 746 (6th Cir. 1963), cert. denied, 376 U.S. 971, 84 S.Ct. 1135, 12 L.Ed.2d 85 (1964). The Union has not shown any express waiver here.
8
After examining the record, we have concluded that a modification of the Board's order must be made. Prior to the Union's refusal to negotiate with DCA, the parties agreed the signatory party for the employers would be the Insulation Trade Group of DCA, composed exclusively of the three area insulation contractors. This limitation was agreed upon to ameliorate the Union's fears that signing with DCA would require it to furnish its members to all association members upon demand. This necessarily was one of the elements which induced the acceptance by the Union of DCA found by the Board. Therefore, the order requiring the Union to execute a contract with DCA will be modified to require the Union to execute it solely with the Insulation Trade Group, Allied Construction Industries Division of DCA.
9
The order of the Board will be enforced as modified herein.
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301 F.Supp. 1016 (1969)
Ballard F. SMITH and Helen Smith, Plaintiffs,
v.
UNITED STATES of America, Defendant.
No. 67-1133-Civ.
United States District Court S. D. Florida.
April 14, 1969.
James O. Murphy, Jr., of Rimes & Greaton, Fort Lauderdale, Fla., for plaintiffs.
Lavinia L. Redd, Asst. U. S. Atty., Miami, Fla., for defendant.
MEMORANDUM OPINION
FULTON, Chief Judge.
The Plaintiffs, Dr. and Mrs. Smith, instituted this action against the United States for a refund of income taxes in the amount of $7,954.39 for the year 1965. They claim that said amount was collected from them erroneously in that the Commissioner determined that Dornberger Smith Ferayorni McKay Lauderdale Group Professional Association (hereinafter referred to as the "Professional Association") was taxable as a partnership, rather than as a corporation, and that a distributable share of the partnership income in the amount of $14,462.50 was accordingly taxable to Dr. Smith as a 16 2/3 % partner in the Professional Association.
From 1957 to 1961, Dr. Smith practiced medicine in partnership with two other physicians, Drs. Dornberger and Ferayorni, and all three of them were physicians duly licensed under the laws of Florida. In 1959 the partnership, known as the Lauderdale Medical Group, *1017 took in a fourth licensed Florida physician, Dr. McKay.
In October, 1961, the four partners agreed to organize a Florida corporation (Plaintiff's Exhibit 1) and pursuant to that Agreement, on October 20, 1961, the Professional Association was incorporated under Chapter 621 of the Florida Statutes, F.S.A. Its initial stockholders were the four former partners, Drs. Smith, Dornberger, Ferayorni and McKay, who agreed that no stockholder could transfer or encumber his shares of Professional Association stock without the unanimous consent of all others at a stockholders' meeting called specifically for that purpose.
At the time of its incorporation, the Professional Association acquired all of the assets and liabilities of the former partnership. (These assets included cash on hand and in banks in the amount of $2,000, the partnership goodwill, and a lease on the premises of 3000 Bayview Drive, Fort Lauderdale, Florida.) All of the former partnership's employees, including nurses, secretaries, and technicians, became employees of the Professional Association.
Following the incorporation, the four doctor-stockholders executed substantially identical employment contracts with the Professional Association. Dr. Smith's contract with the Professional Association (Plaintiff's Exhibit 2) required him to furnish professional services for the Professional Association on a year to year basis, for which he was to receive from the Professional Association either a certain percentage of his billings or a stipulated minimum guarantee, whichever was greater. The contract further provided that all medical records and case histories were and shall be the sole and permanent property of the Professional Association.
In accordance with Florida's Professional Service Corporation Act, Chapter 621, Florida Statutes, 1961, F.S.A., Article XI of the Professional Association's Articles of Incorporation (Plaintiff's Exhibit 4) precluded the issuance of any capital stock to anyone other than an individual who is a graduate physician licensed to practice in the State of Florida.
The Articles further precluded any stockholder from selling or transferring his stock in the corporation "without the unanimous approval, at a stockholders' meeting called specifically for such purpose, of all stockholders of the corporation." The stockholders were, however, permitted to adopt by-laws providing for purchase or redemption by the corporation of its shares. Article XII, Articles of Incorporation, Plaintiff's Exhibit 4. That provision is echoed in Article V, Section 3(a) of the By-Laws (Plaintiff's Exhibit 5), which also provides that if such unanimous consent is not granted, the corporation shall purchase all of that stockholder's stock.
Since its inception, the Professional Association has operated as a corporation. As prescribed by the By-Laws (Plaintiff's Exhibit 5), its affairs and business have been managed by the Board of Directors (who have been, since 1965, Drs. Smith, Dornberger and Ferayorni). The Board of Directors has held regular annual and monthly meetings and various special meetings in accordance with the By-Laws since incorporation, and written minutes of the regular meetings have been transcribed. Among the decisions concerning the day-to-day operation of the Professional Association made by the Board have been the following:
(a) Scheduling of professional and non-professional employees;
(b) Scheduling nights and week-ends on call for professional employees;
(c) Scheduling vacation times for all employees;
(d) Deciding upon and approving all purchases in excess of $50.00;
(e) Deciding when new professional and non-professional employees are needed;
(f) Hiring, firing and setting salaries of non-professional employees;
*1018 (g) Hiring professional employees, after consultation with all stockholders;
(h) Determining contributions to the Professional Association's profit-sharing plan, and deciding how the plan's funds are to be invested;
(i) Making lease arrangements for the building which the Professional Association occupies and the equipment it uses;
(j) Determining compensation of professional employees, within the terms of their respective employment contracts.
Stationery, medical and business forms have been printed, and all bear the Professional Association's name. The Professional Association maintains a bank account in its name and all checks issued in connection with the operation of the medical practice have been and are issued in the name of the Professional Association. All accounting records are kept in the name of the Professional Association and receipts for payments to the Professional Association, statements issued to patients and all accounting records relating to the patients are in the name of the Professional Association. The Professional Association, and not the individual physicians, is billed for materials furnished by suppliers. Once a patient is accepted by the Professional Association, no individual physician may refuse to treat that patient, and indeed, no individual physician may accept only those patients he wishes to treat. Over the course of years, a patient will see each physician employed by the Professional Association.
In the Professional Association's practice of medicine, there is no supervision of one physician over another, nor is there duplication of work by the physicians. Generally the physician who is then responsible for a patient who requires hospitalization admits that patient to the hospital. However in case of an emergency, the physician who is on call admits a patient requiring immediate hospitalization.
The physician who treats a patient sets the fee for that treatment, but he must and does do so within guidelines established by the Board of Directors. Moreover, fee charges are subject to, and have been, reviewed by the Board of Directors. All checks received by the Professional Association for medical services performed by physician-employees are deposited in the Professional Association's bank account. No fees are received or retained by an individual physician; each of the physicians is compensated by the Professional Association according to his employment contract with the Professional Association, which employment contract sets forth in detail all of the rights and duties of the physician relating to his employment by the Professional Association.
Each of the physician-employees of the Professional Association, including Dr. Smith, has individual malpractice insurance coverage with the Professional Association named as an additional insured. Since June, 1966, the malpractice insurance policy has insured the physician-employees both individually and as the Professional Association. Both policies cover acts performed by the insured as an individual and on behalf of the Professional Association. The premiums on all such malpractice policies are paid by the Professional Association.
At all times material to this action, Florida's Professional Service Corporation Act set forth the liabilities of employees of the Professional Association, as well as of the Association itself.
"Nothing contained in this act shall be interpreted to abolish, repeal, modify, restrict or limit the law now in effect in this state applicable to the professional relationship and liabilities between the person furnishing the professional services and the person receiving such professional service and to the standards for professional conduct. Any officer, shareholder, agent or employee of a corporation organized *1019 under this act shall remain personally and fully liable and accountable for any negligent or wrongful acts or misconduct committed by him, or by any person under his direct supervision and control, while rendering professional service on behalf of the corporation to the person for whom such professional services were being rendered. The corporation shall be liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its officers, shareholders, agents, or employees while they are engaged on behalf of the corporation in the rendering of professional services." Section 621.07, Florida Statutes, F.S.A.
The Professional Association has since 1961 been continuously engaged in the practice of medicine under Florida's Professional Service Corporation Act. It has timely filed a corporate Federal Income Tax Return for each and every calendar year since its incorporation in 1961. Each and every year since 1961 it has also filed Federal Payroll Tax Returns (Form 941) for all of its employees, including its physician employees (and thus including Dr. Smith), which Payroll Tax Returns include the withholding of income tax from wages and social security taxes. W-2 statements reporting income tax withholding for each employee of the Professional Association, including the physician employees, were likewise filed by the Professional Association.
During the year 1965 the Plaintiff Dr. Smith was employed as a physician by the Professional Association, and he owned thirty-five shares of its outstanding capital stock. Dr. Smith did then and does now reside in Broward County, Florida. Dr. and Mrs. Smith, the Plaintiffs herein, were then and are now married, and they filed a joint individual income tax return for the taxable year ending December 31, 1965, which return was filed with Florida's District Director of Internal Revenue on or about April 15, 1966.
Thereafter the Commissioner of Internal Revenue determined that the Professional Association was taxable as a partnership, rather than as a corporation. He further determined that Dr. Smith was a 16 2/3 % partner of that "partnership" for the year 1965 and that there was accordingly taxable to Dr. Smith as his distributable share of the "partnership" income for 1965 the additional amount of $14,462.50. The Commissioner thus assessed against Dr. and Mrs. Smith additional income taxes in the amount of $7,954.39 for the year 1965, which amount, together with interest thereon, was paid by the Smiths in February, 1967. On April 27, 1967 Plaintiffs duly filed with Florida's District Director of Internal Revenue a claim for refund of said additional income tax and interest. This claim was rejected by the District Director on November 6, 1967.
In asserting that the Professional Association was, for Federal income tax purposes, a partnership and not a corporation, the Government relies upon §§ 7701(a) (2) and (3) of the Internal Revenue Code and the Regulations promulgated thereunder, particularly the so-called "Kintner Regulations," §§ 301.7701-1 and 301.7701-2, Treasury Regulations, as amended in 1965. Alternatively, the Government contends that even if the 1965 addition to the Kintner Regulations [§ 301.7701-2(h), Treasury Regulations] is held to be invalid, the Professional Association should still be considered a partnership based upon the 1960 Regulations and the criteria set forth in Morrissey v. Commissioner of Internal Revenue, 296 U.S. 344, 56 S.Ct. 289, 80 L.Ed. 263 (1935).
Section 7701(a) of the Internal Revenue Code defines the words "partnership" and "corporation" as follows:
(2) Partnership and partnerThe term "partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, *1020 within the meaning of this title, a trust or estate or a corporation; and the term "partner" includes a member of such a syndicate, group, pool, joint venture, or organization.
(3) CorporationThe term "corporation" includes associations, jointstock companies, and insurance companies (emphasis added).
The definition of "corporation" in Section 7701(a) (3) of the 1954 Internal Revenue Code quoted above is identical with the one contained in the Revenue Acts of 1924 and 1926, under which arose the landmark Morrissey case, supra. The Court there established that the proper classification of unincorporated organizations for federal tax purposes depended upon whether their essential characteristics were those of a partnership or those of a corporation. The Court set forth four criteria the presence or absence of which should determine an organization's tax status:
(a) continuity of life;
(b) limited personal liability on the part of participants;
(c) centralized management through representatives of the members of the organization;
(d) transferability of interests in the organization.
Some years later, the Morrissey criteria were applied to an unincorporated association of physicians in United States v. Kintner, 216 F.2d 418 (9 Cir. 1954). The Kintner court held that the association was to be treated as a corporation, notwithstanding the fact that each physician remained individually liable for his own negligence or lack of skill and the association disclaimed liability therefor. The same result was reached in Galt v. United States, 175 F. Supp. 360 (N.D.Tex.1959). It should be noted that neither the association in Kintner nor the one in Galt could take advantage of a state statute permitting physicians and other professionals to incorporate.
In response and reaction to the Kintner and Galt cases, in the following year (1960), the Treasury adopted the regulations immediately dubbed the "Kintner Regulations," upon which the Government relies here, §§ 301.7701-1 and 301.7701-2 Treasury Regulations, which regulations deal with determining whether an organization shall be treated as a corporation or as a partnership for federal income tax purposes. These regulations appear to be primarily concerned with unincorporated organizations which sought tax treatment as corporations, such as the situations in Morrissey, Kintner, Galt, and related cases.
Then, because the 1960 Regulations took the position that a partnership or association subject to a statute corresponding to the Uniform Partnership Act could not qualify as a corporation for tax purposes, a number of states began to adopt statutes enabling professionals to incorporate, and as of this date, approximately thirty-seven states have such statutes, including, of course, Florida.
After losing again in Foreman v. United States, 232 F.Supp. 134 (S.D. Fla.1964), and after adoption of such statutes by many states, the Treasury again amended its Regulations, this time dealing specifically with the "classification of professional service organizations." § 301.7701-2(h), Treasury Regulations, 1965. It is upon this 1965 amendment that the Government relies most heavily in this case, and it is this amendment which the Plaintiffs contend is invalid.
Treasury regulations are entitled to substantial weight in the courts, Lykes v. United States, 343 U.S. 118, 72 S.Ct. 585, 96 L.Ed. 791 (1952), and must be upheld unless they are unreasonable and plainly inconsistent with revenue statutes. Fawcus Mach. Co. v. United States, 282 U.S. 375, 51 S.Ct. 144, 75 L. Ed. 397 (1931); Commissioner of Internal Revenue v. South Texas Lumber Co., 333 U.S. 496, 68 S.Ct. 695, 92 L.Ed. 831 (1947). However a court may consider the reasonableness of such a regulation, especially where, as here, the regulation *1021 was not issued contemporaneously with the promulgation of the Code provision which it seeks to interpret, it does not embody a long-standing interpretation, and there has been no evidence of re-enactment by Congress. 1 Davis Administrative Law, Ch. 5, Interpretative, Legislative, and Retroactive Rules, § 503, p. 300 (1958). See generally, Eisenstein, Some Iconoclastic Reflections on Tax Administration, 58 Harv.L.Rev. 477 (1945); Griswold, A Summary of the Regulations Problem, 54 Harv.L.Rev. 398 (1941); Feller, Addendum to the Regulations Problem, 54 Harv.L.Rev. 1311 (1941); Surrey, The Scope and Effect of Treasury Regulations Under the Income, Estate, and Gift Taxes, 88 U. of Pa.L.Rev. 556 (1940).
The 1965 amendment, § 301.7701-2(h), Treasury Regulations, permits the Commissioner to determine that validly incorporated professional service organizations constitute partnerships for federal income tax purposes if they more closely resemble partnerships than corporations. Detailed criteria are set forth in the regulation to guide the Commissioner in making his decision; however, it cannot be doubted that except for the most unusual circumstances, these criteria preclude all professional service organizations from achieving corporate tax status. One need only compare Section 301.7701-2(h) with sections 301.7701-2(a)-(g) to perceive this phenomenon. At once, it becomes apparent that a dual set of criteria exists. One set is for the non-professional organization; the other and much stricter set of criteria is for the professional service organization. There is no support for this discrimination either in the cases or elsewhere. There is no factual or legal characteristic which would justify different tax treatment of closely held professional service organizations on the one hand and closely held non-professional service organizations on the other hand.
"The fallacy of [the Treasury's] argument is readily apparent when one considers the large number of corporations presently existing in our economy whose primary income is earned solely from the personal service of employees. The corporate tax status of businesses engaged in advertising or promotion, investigation, sales, contract janitorial or secretarial service, to name a few, has not been seriously questioned to this Court's knowledge." Foreman v. United States, 232 F. Supp. 134, 137 (S.D.Fla.1964).
Aside from the above, the regulation herein involved contradicts the clear and unequivocal language of § 7701(a) of the Internal Revenue Code of 1954. The Professional Association is validly incorporated under Florida law. According to the unequivocal express terms of § 7701(a), it cannot constitute a partnership for tax purposes and must constitute a corporation. There simply is no precedent in case law for the proposition that an organization validly incorporated under state law is taxable as a partnership rather than a corporation aside from the "business purpose" rule of Gregory v. Helvering, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935); Anderson, Tax Aspects of Professional Corporations, U.S.C. 15th Tax Inst. 398 (1963); Eaton, Professional Associations as Planning Techniques, N.Y.U. 24th Inst. on Fed. Tax 671 (1966); Note, Professional Corporations and Associations, 75 Harv.L.Rev. 756 (1962); Scallen, Federal Income Taxation of Professional Associations and Corporations, 49 Minn.L.Rev. 603 (1965).
There is precedent for the proposition that because Treasury Regulation 301.7701-2(h) contradicts the clear language of § 7701 (a) of the Code, it is invalid. See Empey v. United States, 272 F.Supp. 851 (D.Colo.1967), affirmed 406 F.2d 157, (10 Cir.1969); and O'Neill v. United States, 281 F.Supp. 359 (N.D.Ohio 1968). The Court need not and does not at this time reach such a conclusion. As previously noted, there is another reason why the Commissioner's ruling cannot be sustained. Suffice it to say that the apparent inconsistency between the Regulation and the Code is *1022 but another factor supporting the conclusion that the Regulation is unreasonable. The unreasonableness of the Regulation is brought into sharper focus when it is read in juxtaposition with Morrissey v. Commissioner, supra; United States v. Kintner, supra; Galt v. United States, supra; and Foreman v. United States, supra.
When analyzed in terms of the four Morrissey factors set forth above, this case is more deserving of the corporate tax status than Kintner, Galt and Foreman. The Professional Association's Articles of Incorporation provide for perpetual existence. The stockholders of the Professional Association, by virtue of the provisions of § 621.13, Florida Statutes, F.S.A., have sharply limited liability. Their liability differs from the liability of a stockholder in any other corporation only in that each is personally liable for negligent or wrongful acts performed by him or by any employee under his direct supervision or control. Shareholder liability in the Kintner, Galt, and Foreman cases was unlimited. Centralized management in the Professional Association is identical to that in Kintner, Galt, and Foreman. In each case there was either an Executive Committee, Board of Directors, or Board of Governors that managed the affairs of the associates. No special significance can be attached to the fact that Dr. Smith was both a stockholder and Board member. This situation is found in the myriad of general corporations in Florida which have only one or two stockholders. Stock in the Professional Association is transferable, but only to another licensed physician and only with the consent of all of the stockholders. A similar limitation upon transferability is found in Galt and Foreman. In Kintner, the interests of the members were non-assignable. Notwithstanding the limitation that is present in this case, the ability to transfer interests without disturbing continuity of the enterprise and the ability to issue interests to large numbers of participants is not affected. It is the latter factor and not the presence or absence of limitations on transferability per se that is important. Indeed, the limitation involved herein provides the very cornerstone for assuring that no one but a member of the profession, be he doctor, attorney, certified public accountant, or otherwise, can exercise a voice in the policy of the organization. To permit a non-professional person to exercise a voice in policy may well be unethical in most professions.
In view of all of the foregoing, the Court concludes that Section 301.7701-2(h), Treasury Regulations, 1965, is unreasonable, and therefore invalid. The Court further finds and concludes that even applying the 1960 Kintner Regulations and the Morrissey criteria, the Professional Association should be treated as a corporation, rather than as a partnership. See Empey v. United States, supra; First National Bank and Trust Co. of Tulsa, Okl. v. United States, Civil No. 68C 28, D.Okl. March 4, 1969; Cochran v. United States, 299 F.Supp. 1113, D.Arizona; Wallace v. United States, 294 F.Supp. 1225 (E.D. Ark.1968); Holder v. United States, 289 F.Supp. 160 (N.D.Ga.1968); Kurzner v. United States, 286 F.Supp. 839 (S.D. Fla.1968); O'Neill v. United States, supra. See also St. Louis Park Medical Center v. Lethert, 286 F.Supp. 271 (D. Minn.1968). Finally, the Court concludes that it has jurisdiction over the subject matter hereof, by virtue of 28 U.S.C. § 1346(a).
This Memorandum Opinion shall serve in lieu of separate findings of fact and conclusions of law in this case. Counsel for the Plaintiffs is hereby directed to submit an appropriate judgment form in conformity with this Memorandum Opinion within ten days of the date of entry hereof.
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689 F.2d 190
Doucetv.Diamond M. Drilling Co.
80-3796
UNITED STATES COURT OF APPEALS Fifth Circuit
9/22/82
W.D.La., 683 F.2d 886
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274 P.2d 792 (1954)
George Burton HOLLAND, Plaintiff in Error,
v.
The STATE of Oklahoma, Defendant in Error.
No. A-12023.
Criminal Court of Appeals of Oklahoma.
September 24, 1954.
*793 Harold McArthur, Tulsa, for plaintiff in error.
Mac Q. Williamson, Atty. Gen., Sam H. Lattimore, Asst. Atty. Gen., for defendant in error.
BRETT, Judge.
The plaintiff in error George Burton Holland, defendant below, was charged by information in the district court of Tulsa county, Oklahoma, with having committed the crime of manslaughter in the first degree on the 14th day of March 1953 in Tulsa county, Oklahoma, in that without premeditated design on his part so to do he did effect the death of Marie Marguerite Mott while engaged in the commission of a misdemeanor, driving and operating an automobile on Peoria Street in Tulsa at a high, dangerous and reckless speed then existing under the circumstances in passing another vehicle within an intersection and driving said automobile across the center line of the roadway, all of which things could not be done with safety and proper concern of the rights of the said Marie Marguerita Mott.
The information further alleged that in so driving said automobile he struck the body of Marie Marguerite Mott and ran the automobile over and across her body inflicting certain mortal wounds, from which said wounds she did die.
To the foregoing charge the defendant entered a plea of not guilty. Upon said plea he was tried by a jury, convicted of manslaughter in the first degree and being unable to agree upon the punishment left the punishment to the trial court. The trial court fixed the defendant George Burton Holland's sentence at 10 years in the State Penitentiary at McAlester, Oklahoma; *794 judgment and sentence was entered accordingly, from which this appeal has been perfected.
Briefly the facts herein are as follows to wit. On March 14, 1953 the defendant who was a resident of Bartlesville, Oklahoma, drove from Bartlesville to Tulsa with a view to visiting his children at his divorced wife's residence in Tulsa. En route he drove south on Peoria Street in the city of Tulsa. It appears that he got in behind a line of traffic which was led immediately in front of him by a large truck, he being the second car behind said truck. The truck was 21 feet and 9 inches long, the van of which was 12 feet in length and the bed was 7 feet and 4 inches wide. The van was covered with a tarpaulin which obscured the defendant's view. As the defendant approached the intersection at Peoria with 10th Street he pulled out of the line of traffic and undertook to pass at the intersection of 10th Street and Peoria where the traffic on 10th Street flowed from the east into Peoria which ran north and south. At this intersection 10th Street was a deadend street because of the cemetery located on the west side of Peoria where 10th Street traffic flows into Peoria. The van in front of the defendant obscured not only his view of the oncoming traffic but his view of the pedestrian cross-walk from the west side of Peoria to the east side of Peoria at the south side of the intersection. As the defendant pulled to the left out of the lane and undertook to pass, the driver of the truck slowed down in order to permit the decedent Marie Marguerita Mott to cross the street from the west over to the east side of Peoria. The record shows, the defendant proceeded on past the truck and made no attempt to slow down or stop until after he had actually entered the intersection. The state's evidence produced through William Davis and H.D. Vierra shows that they were proceeding north on Peoria as they approached the intersection and that as the defendant proceeded across the intersection they were compelled to suddenly pull their automobile to the right or east side of Peoria and swerve toward the curb to avoid being hit by the defendant Holland as he proceeded south. The skidmarks produced by the defendant Holland's automobile show that he skidded almost the entire distance across the intersection. At the point where he struck the decedent Mott he released his brakes. She fell to the pavement and both wheels of his automobile ran over her. The defendant Holland did not stop but proceeded on southward on Peoria where he stopped at the stoplight and then made a left-hand turn, drove around several blocks and finally went to his sister's house where some two hours later he was arrested. The identity of his automobile was secured only because a woman driver procured the license from his automobile and gave it to the police. The evidence herein discloses that the defendant was driving at approximately 40 miles per hour when he proceeded around the truck in the intersection and that at the time he struck Marie Marguerita Mott he was driving approximately 25 miles per hour, and that as revealed by the skidmarks his automobile was straddling the center line of the street.
The defendant's defense was that there were no automobiles coming from the south at the time he proceeded around the truck. This evidence is clearly refuted by the testimony of William Davis and H.D. Vierra. His further defense was that the decedent was looking toward the southeast and stepped in front of his automobile and that her death was purely an accident.
The first contention of the defendant is that the trial court erred in refusing his requested instruction defining "assured clear distance ahead". The misdemeanor contained in the information upon which the charge is predicated consists of passing another vehicle within an intersection and driving said automobile across the center line of the roadway at an excessive rate of speed when such movement could not be made with safety. Only incidentally is the section involving "assured clear distance ahead" involved. The pertinent sections of the statute involved are as follows. Title 47 O.S. 1951 § 121.4, par. (c), reads:
"(c) The following rules shall govern the overtaking and passing of vehicles proceeding in the same direction, subject to those limitations, exceptions *795 and special rules hereinafter stated: * * *
"(e) No vehicle shall be driven to the left side of the center of the roadway in overtaking and passing another vehicle proceeding in the same direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking and passing to be completely made without interfering with the safe operation of any vehicle approaching from the opposite direction, or any vehicle overtaken. * * *"
Subsection (i):
"(1) A vehicle shall be driven as nearly as practical entirely within a single lane until the driver has first ascertained that any other movement can be made with safety."
Title 47 O.S. 1951 § 121.3, reads:
"(a) Any person driving a vehicle on a highway shall drive the same at a careful and prudent speed not greater than, nor less than is reasonable and proper, having due regard to the traffic, surface and width of the highway and of any other conditions then existing, and no person shall drive any vehicle upon a highway at a speed greater than will permit him to bring it to a stop within the assured clear distance ahead * * *.
"(j) It shall be deemed reckless driving for any person to drive a motor vehicle in a careless or wanton manner without regard for the safety of persons or property or in violation of the conditions outlined in paragraph (a).
"Every person convicted of reckless driving shall be punished upon a first conviction, * * *."
Thereafter follows provisions for punishment both by imprisonment and for fines in varying degrees for first and second or subsequent offenses.
Title 21 O.S. 1951 § 711, defining manslaughter in the first degree provides that homicide is manslaughter in the first degree first, when perpetrated without design to effect death by a person while engaged in the commission of a misdemeanor. In support of the contention that the court should define the term "clear distance ahead" the defendant cites no authority where a criminal charge was involved. He cites only the case of Taylor v. Ray, 177 Okl. 18, 56 P.2d 376, wherein the term "assured clear distance ahead" is discussed, but nowhere therein does it appear that any suggestion is made that an instruction should be given defining the term. We do find that it is said:
"Nor should we overlook the fact that just what is a `clear distance ahead' must in practice vary with almost every case, and that this is a question of fact. The length of headlight beams has, of course, nothing to do with it in day driving and is not allcontrolling in night driving, when it is constantly shifting in accord with the turns in the road and the suddenness thereof, or ascent or descent of the roadway, the presence of other traffic, or the fact of blinding headlights from the opposite direction, as well as a score of other factors. The clear distance of visibility may change suddenly from a long distance to virtually none at all, and vice versa."
With this conclusion we are highly in accord. We are of the opinion that any definition of the term would in effect resolve itself into a comment on the evidence. Moreover the term "assured clear distance ahead" is like such term as reasonable doubt which because of its special significance we have repeatedly held need not be defined in the instructions. Wallace v. State, Okl.Cr., 250 P.2d 484; Moore v. State, 90 Okl.Cr. 415, 214 P.2d 966. Any attempt to define a term the meaning of which within itself is clear would only tend to confuse. Hence for the foregoing reasons it was not error to refuse the defendant's requested instruction defining the term "assured clear distance ahead".
Defendant next contends that the court erred in giving instruction No. 8 in that said instruction did not include the element of proximate cause. Instruction No. 8 deals entirely with second degree manslaughter *796 by reason of culpable negligence. The jury did not find the defendant guilty of second degree manslaughter hence the error complained of is therefore immaterial. However in instructions 11, 12 and 15 relating to manslaughter in the first degree and manslaughter in the second degree, the court fully and definitely instructed the jury on the proposition of proximate cause. In this connection it has been repeatedly held that the instructions must be considered as a whole and when so considered together if they fairly and correctly state the law applicable to the case they will be sufficient. Lamb v. State, 70 Okl.Cr. 236, 105 P.2d 799. The instructions when so considered in the case at bar sufficiently state the proposition that the violations of law complained of must be the proximate cause of the manslaughter charged to sustain a conviction.
The defendant further contends that the trial court erred in not instructing on his theory of the case, that the homicide was accidental. Under the facts of the case we are not impressed but in any event if additional instructions were desired it was the duty of the defendant's counsel to reduce the desired instruction to writing and request the giving thereof, and in the absence of such request a conviction will not be reversed unless the Criminal Court of Appeals believe in light of the entire record and instructions the defendant was deprived of substantial rights. Taylor v. State, 94 Okl.Cr. 368, 236 P.2d 270. We do not believe the facts warranted such an instruction, for the record clearly shows and the jury found that the homicide was the result of clear violations of law and not that of an accident. This contention is therefore without merit.
Finally, the defendant contends that the evidence is insufficient to support the verdict. The evidence discloses that the defendant was driving at an excessive rate of speed while passing in an intersection against approaching traffic which was compelled to pull to the curb to keep from being hit while the decedent was crossing the intersection in a crosswalk where she had a right to be when the defendant struck her with his automobile. This evidence clearly presented an assignment of facts for the determination of the jury, and there is sufficient evidence in our opinion to sustain the jury's finding.
The record discloses that a penalty of 10 years in the penitentiary was imposed under the provisions of Title 21 O.S.A. 1951 § 715. We cannot say that in light of the defendant's prior convictions of unlawful transportation of liquor and conviction for drunken driving, when combined with his flight from the scene of the crime and his attempt to avoid identification, that the penalty imposed is too severe. Nevertheless there are matters of mitigation appearing in the record which compel us in the interest of justice to modify the judgment to 8 years in the Penitentiary. For all the foregoing reasons the judgment and sentence, as so modified, is accordingly affirmed.
POWELL, P.J., and JONES, J., concur.
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795 F.2d 81
Alstonv.Franklin County Sheriff
86-7105
United States Court of Appeals,Fourth Circuit.
7/3/86
1
E.D.N.C.
AFFIRMED
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FILED
NOT FOR PUBLICATION DEC 23 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MILAN PAUL PAKES, No. 13-16706
Petitioner, D.C. No. 3:11-cv-05284 CRB
v.
MEMORANDUM*
P.D. BRAZELTON,
Respondent.
On Appeal from the United States District Court
for the Northern District of California
Charles R. Bryer, Senior District Judge, Presiding
Argued and Submitted December 11, 2014
San Francisco, California
Before: TASHIMA and PAEZ, Circuit Judges, and BLOCK, District Judge.**
Milan Paul Pakes, a California state prisoner, appeals the district court’s
denial of his petition for habeas corpus under 28 U.S.C. § 2254. We have
jurisdiction under 28 U.S.C. § 2253(c) and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Frederic Block, Senior United States District Judge for
the Eastern District of New York, sitting by designation.
Trial counsel’s stipulation that Pakes “intended to flee from the traffic
accident because he reasonably believed he would be sent back to prison if
apprehended” was not more prejudicial than the alternative evidence that Pakes
was on parole. Such evidence was relevant to his intent to flee and admissible
under California law. See, e.g., People v. Scheer, 68 Cal. App. 4th 1009, 1020 n.2
(Cal. Ct. App. 1998); People v. Johnson, 15 Cal. App. 4th 169, 176 (Cal. Ct. App.
1993). The stipulation was a sound strategic decision that did not prejudice Pakes.
The state court’s rejection of his ineffective assistance claim was therefore not
contrary to, nor an unreasonable application of, Strickland v. Washington, 466 U.S.
668 (1984). See 28 U.S.C. § 2254(d)(1).
Pakes further argues that he was denied a fair trial due to cumulative
prejudice resulting from several other errors made by his trial attorney and by the
prosecutor. Since we cannot identify any individual error, no cumulative prejudice
is possible. See Hayers v. Ayers, 632 F.3d 500, 504 (9th Cir. 2011).
AFFIRMED.
2
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 18-1808
___________________________
Rembrandt Enterprises, Inc.
lllllllllllllllllllllPlaintiff - Appellee
v.
Dahmes Stainless, Inc.
lllllllllllllllllllllDefendant - Appellant
____________
Appeal from United States District Court
for the Northern District of Iowa - Sioux City
____________
Submitted: November 13, 2018
Filed: February 15, 2019
[Unpublished]
____________
Before BENTON, BEAM, and ERICKSON, Circuit Judges.
____________
PER CURIAM.
Rembrandt Enterprises and Dahmes Stainless entered into a multi-million dollar
agreement involving Dahmes' design, manufacture, and installation of an industrial
egg product dryer at one of Rembrandt's sites. Within months of entering into the
contract, Rembrandt stopped making progress payments to Dahmes. Thereafter,
Dahmes provided notice to Rembrandt that it considered Rembrandt to have
terminated the agreement without cause. In the resulting contract dispute between the
parties, the district court,1 applying Minnesota law, rejected Rembrandt's defense of
frustration of purpose for its failure to perform its obligations under the Agreement.
The court then calculated damages, including Rembrandt's restitution claim, among
other matters, and concluded that despite Rembrandt's breach, Dahmes owed
Rembrandt $2,795,919.45. Dahmes appeals the district court's award to Rembrandt
and seeks recovery of $724,448.55. Citing legal errors, Dahmes challenges the district
court's denial of its lost-profits damages; alternatively claims that at the very least
there were reversible factual errors; and finally argues that the court's award of
restitution to Rembrandt compounded the inequity that resulted in this case. Dahmes
additionally seeks an award of costs as the prevailing party.
"After a bench trial, this court reviews legal conclusions de novo and factual
findings for clear error." Urban Hotel Dev. Co. v. President Dev. Grp., L.C., 535 F.3d
874, 879 (8th Cir. 2008). Dahmes erroneously maintains that the district court ruled
out lost profits as a matter of law because it applied too exacting a standard (i.e.,
"mathematical precision"), which Dahmes claims fails under a de novo standard of
review. Our review reveals, however, that the district court applied the proper legal
standard, recognizing that the lost-profits determination is a calculation proven with
reasonable, not absolute, certainty. Olson v. Rugloski, 277 N.W.2d 385, 388 (Minn.
1979).
On the factual issue, Dahmes does not so much refute the particular evidence
relied upon by the district court in arriving at its determinations, but rather points to
additional evidence that Dahmes claims should have been more persuasive to the
district court and weighed more heavily in favor of Dahmes' claim for lost profits.
"Under the clearly erroneous standard, we will overturn a factual finding only if it is
1
The Honorable Leonard T. Strand, Chief Judge, United States District Court
for the Northern District of Iowa.
-2-
not supported by substantial evidence in the record, if it is based on an erroneous view
of the law, or if we are left with the definite and firm conviction that an error was
made." Kingman v. Dillard's, Inc., 721 F.3d 613, 616 (8th Cir. 2013) (quoting
Roemmich v. Eagle Eye Dev., LLC, 526 F.3d 343, 353 (8th Cir. 2008)). Having
reviewed the trial evidence, the record as a whole, briefing on appeal, and the district
court's orders, all under the exacting2 lens afforded by our standard of review, we
affirm the judgment of the district court for the reasons explained in its thorough
opinion, including its resolutions regarding restitution and the discretionary award of
costs. See 8th Cir. R. 47B.
______________________________
2
"To be clearly erroneous, a decision must strike us as more than just maybe or
probably wrong; it must . . . strike us as wrong with the force of a five-week-old,
unrefrigerated dead fish." Kaplan v. Mayo Clinic, 847 F.3d 988, 992 (8th Cir.)
(alteration in original) (quoting In re Nevel Props. Corp., 765 F.3d 846, 850 (8th Cir.
2014)), cert. denied, 138 S. Ct. 203 (2017).
-3-
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
June 21, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-60703
Summary Calendar
LOUIS DAVIS, JR.,
Plaintiff-Appellant,
versus
STATE OF MISSISSIPPI DEPARTMENT OF CORRECTIONS;
CORRECTIONAL MEDICAL SERVICES; BEARRY, Doctor,
Medical Director, in his private, individual and
official capacities; CABE, Doctor, Medical Doctor,
in his private, individual and official capacities;
SANTOS, Doctor, Medical Doctor, in his private,
individual and official capacities,
Defendants-
Appellees.
-------------------------------------------------------------
Appeal from the United States District Court
for the Northern District of Mississippi
USDC No. 4:04-CV-151-D-B
-------------------------------------------------------------
Before WIENER, STEWART and DENNIS, Circuit Judges.
PER CURIAM:*
Louis Davis, Jr., Mississippi prisoner # 16425, appeals from the district court’s dismissal of
his civil rights suit pursuant to 28 U.S.C. § 1915(e)(2)(B) for failure to state a claim. Davis argues
*
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.
that the defendants were deliberately indifferent to his medical needs and provided inadequate medical
care. We affirm.
According to the complaint, Davis was examined for a foot condition by several doctors, who
gave him different diagnoses and prescribed various pain medications and antibiotics. Doctors also
x-rayed his foot. Davis complains that he was not permitted to see a foot specialist at a hospital
outside the priso n. We conclude that Davis’s complaints about his medical care and the lack of
further opinions from specialists do not rise t o the level of deliberate indifference. See Estelle v.
Gamble, 429 U.S. 97, 105-07 (1976); Domino v. Texas Dep't of Criminal Justice, 239 F.3d 752, 756
(5th Cir. 2001); Johnson v. Treen, 759 F.2d 1236, 1238 (5th Cir. 1985). At most, Davis’s allegations
amount to claims for medical malpractice, which is insufficient for relief under 42 U.S.C. § 1983. See
Varnado v. Lynaugh, 920 F.2d 320, 321 (5th Cir. 1991).
AFFIRMED.
-2-
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26 F.Supp.2d 894 (1998)
BAYOU FLEET, INC.
v.
Ellis ALEXANDER, Individually and in His Capacity as a Council Member of the St. Charles Parish Council, et al.
Civil Action No. 97-2205.
United States District Court, E.D. Louisiana.
September 8, 1998.
*895 J. Mac Morgan, New Orleans, LA, for Bayou Fleet, Inc.
Darryl Harrison, New Orleans, LA, for Ellis A. Alexander.
Randell O. Lewis, Luling, LA, for St. Charles Parish.
ORDER AND REASONS
MENTZ, District Judge.
The court addresses here defendant Ellis A. Alexander's motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Plaintiff Bayou Fleet, Inc. filed this action against Alexander and others asserting claims under 42 U.S.C. § 1983, the Sherman Act, 15 U.S.C. §§ 1 and 2, and the Louisiana Unfair Trade Practices Act, La. Rev.Stat. ann. § 51:1401, et seq. for activities allegedly intended to destroy Bayou Fleet's business.
Bayou Fleet sued Alexander in both his individual and official capacity as a member of the St. Charles Parish Council. Alexander seeks dismissal of all claims asserted against him in his individual capacity on the ground of immunity under the Noerr-Pennington *896 doctrine and legislative immunity from liability under § 1983.[1]
Bayou Fleet engages in barge and vessel repair, as well as the ownership and operation of sand pits on Mississippi River batture located in St. Charles Parish, Louisiana. Bayou Fleet accesses its property by crossing the Mississippi River levee.
Bayou Fleet alleges that Alexander attempted to destroy its business to eliminate it as a competitor of Home Place Batture Leasing, Inc., by: (1) promoting various permit and zoning challenges to Bayou Fleet's sand pit operation before the Louisiana Coastal Zone Management Authority, the United States Army Corps of Engineers, and the Lafourche Basin Levee District Board; (2) proposing a resolution before the Parish Council for a sales tax audit of Bayou Fleet's operations; (3) proposing an ordinance before the Parish Council making it a criminal act to operate any business across any portion of the Mississippi River levee without express written approval of the Parish Council; and (4) proposing a resolution for appointment of Home Place's attorney as "Special Legal Counsel" to investigate whether Bayou Fleet had lost the non-conforming status of its property which enabled it to operate its business.
The zoning and permit challenges Alexander lobbied for failed, as did the resolution to conduct a sales tax audit. But, the levee ordinance and the Special Counsel resolution were adopted. After trial on the merits of Bayou Fleet's request for a preliminary and permanent injunction, this court declared both acts unconstitutional. See Bayou Fleet Inc. v. Alexander, 1997 WL 625492 (E.D.La. Oct.7, 1997). The Council thereafter voted to rescind the ordinance and resolution.
Noerr-Pennington Doctrine
Alexander argues that the Noerr-Pennington doctrine entitles him to judgment on the Sherman Act claim against him in his individual capacity. This doctrine protects private parties from antitrust liability in lobbying for anti-competitive action from the government. City of Columbia v. Omni Outdoor Advertising, 499 U.S. 365, 111 S.Ct. 1344, 1354, 113 L.Ed.2d 382 (1991). Alexander's unofficial activities to persuade governmental authorities other than the Parish Council (of which he is a member) to make zoning and permit decisions which would close down Bayou Fleet's sand pit operations are immune from antitrust liability under the Noerr-Pennington doctrine. See Erie Builders Concrete Co. v. Erie-Western Pennsylvania Port Authority, 705 F.Supp. 1125, 1130 (W.D.Pa.), aff'd, 882 F.2d 510 (3rd Cir.1989) (Noerr-Pennington immunity from antitrust liability "applies to an official of a state authority to the extent that the plaintiff alleges that the official's conduct is taken in his private capacity); Chambers Development Co. v. Municipality of Monroeville, 617 F.Supp. 820, 823 (W.D.Pa.1985) (councilman's actions in individual capacity are immune under the Noerr-Pennington doctrine); Lockary v. Kayfetz, 587 F.Supp. 631 (N.D.Cal.1984) (local members of the public utility district and the planning council were immune from liability for activities engaged in their individual capacities under the Noerr-Pennington doctrine).
The sham exception to the Noerr-Pennington doctrine does not apply in this case. That exception involves a defendant who uses "the governmental process as opposed to the outcome of that process as an anticompetitive *897 weapon." Omni, 499 U.S. at 380, 111 S.Ct. at 1354. Here, the pleadings are undisputed that Alexander genuinely sought to achieve the governmental measures for which he lobbied. He was not interested in the process itself as a weapon, but in actually obtaining the agency decisions that would effectively close Bayou Fleet's sand pit operation. Because Alexander's actions taken individually were aimed at procuring governmental action, the sham exception does not apply.
The Noerr-Pennington doctrine does not apply to Alexander's actions taken in his official capacity as a member of the St. Charles Parish Council. However, if it is Bayou Fleet's position that Alexander somehow acted in his individual capacity when he made legislative proposals before the Parish Council, then he is entitled to Noerr-Pennington immunity on that conduct as well.
Louisiana Unfair Trade Practices Act
Bayou Fleet's state law claim is based on the same facts and circumstances as its federal antitrust claims. The Noerr-Pennington doctrine applies to antitrust actions premised on state law. See Video Int'l Prod., Inc. v. Warner-Amex Cable Communications, Inc., 858 F.2d 1075, 1084 (5th Cir. 1988) (the Noerr-Pennington doctrine, which originally arose in the antitrust field, has been extended to protect first amendment petitioning of the government from claims brought under federal and state laws"), cert. denied, 490 U.S. 1047, 109 S.Ct. 1955, 104 L.Ed.2d 424 (1989)(citing Evers v. County of Custer, 745 F.2d 1196, 1204 (9th Cir.1984); Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607, 614 (8th Cir.1980)); see also Kottle v. Northwest Kidney Centers, 146 F.3d 1056 (9th Cir.1998) (the Noerr-Pennington doctrine sweeps broadly and is implicated by both state and federal antitrust claims that allege anticompetitive activity in the form of lobbying or advocacy before any branch of either federal or state government). Accordingly, the claims against Alexander under the Louisiana Unfair Trade Practices Act, § 51:1401, et seq., for actions undertaken in his individual capacity must be dismissed under the Noerr-Pennington doctrine.
Section 1983
"[A]ny behavior by a private party that is protected from antitrust liability by the Noerr-Pennington doctrine is also outside the scope of section 1983 liability." Video Int'l Prod., Inc., 858 F.2d at 1084; Boulware v. State of Nevada, Dept. of Human Resources, 960 F.2d 793, 800 (9th Cir.1992); Evers, 745 F.2d at 1204. Having found that Alexander individually is immune from antitrust liability under the Noerr-Pennington doctrine, he also is immune from individual liability under § 1983 liability.[2]
Accordingly,
IT IS ORDERED that defendant Ellis A. Alexander's 12(c) Motion For Judgment On The Pleadings is GRANTED dismissing as a matter of law all claims against Alexander in his individual capacity under the Sherman Act, 15 U.S.C. §§ 1 and 2, the Louisiana Unfair Trade Practices Act § 51:1401, et seq.; and 42 U.S.C. § 1983.
NOTES
[1] Alexander filed an answer to the complaint which generally alleges Bayou Fleet's failure to state a cause of action, but does not assert any affirmative defenses. Federal rules of pleading require that affirmative defenses like immunity must be asserted in the answer or in a motion to dismiss filed as the first response to the complaint. See Fed.R.Civ.P. 8(c); U.S. v. Burzynski Cancer Research Institute, 819 F.2d 1301 (5th Cir.1987), cert. denied, 484 U.S. 1065, 108 S.Ct. 1026, 98 L.Ed.2d 990 (1988) (an affirmative defense can be raised by a summary judgment motion when that is the first response to the plaintiff's complaint); Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure §§ 1277, 1357 (immunity defenses may properly be considered on a motion to dismiss). Having reviewed the present motion, the court finds that these are proper defenses, and that Bayou Fleet will suffer no unfair prejudice if they are considered on the merits. The present motion wherein these defenses were asserted for the first time was filed shortly after Bayou Fleet answered the complaint. The court finds that under these circumstances, it would not serve justice to deem these defenses waived.
[2] Because Alexander individually has Noerr-Pennington immunity from § 1983 liability, it is not necessary to discuss the merits of his additional defense of absolute legislative immunity.
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Opinion Issued: November 5, 2009
In The
Court of Appeals
For The
First District of Texas
NO. 01-08-00699-CR
01-08-00700-CR
01-09-00157-CR
JOSHUA JERMAINE JULIUS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 10th District Court
Galveston County, Texas
Trial Court Cause Nos. 07CR0342; 07CR1775; 07CR1774
MEMORANDUM OPINION
Appellant, Joshua Jermaine Julius, appeals a judgment that convicts him for the
murder of Jarian Garrett; for aggravated assault on Jamel Washington; and, for
burglary of a habitation. (1) Appellant pleaded not guilty to the three offenses before
a single jury. The jury found him guilty and the court determined his sentence at 25
years in prison for each of the offenses to run concurrently. In three issues, appellant
contends that his trial attorney rendered ineffective assistance of counsel; that the
accomplice witness testimony is insufficient to support his conviction; and that the
non-accomplice evidence is insufficient to support his convictions. We conclude that
appellant's trial counsel did not render ineffective assistance of counsel, and that the
evidence is sufficient to support appellant's convictions. We affirm.
Background
One early morning in January 2007, several men, including appellant and
Jamaal Lewis (hereinafter "Jamaal"), raided a house occupied by Jarian Garrett and
Jamel Washington, the complainants.
Darron Lewis (hereinafter "Darron"), the older brother of appellant's
accomplice, Jamaal, said that several hours before the shooting, appellant and Tim
Campbell discussed purchasing ammunition. Darron, appellant, Campbell, and
Campbell's friend, an unidentified African-American male, then went to Wal-Mart
to purchase ammunition. Darron stated that upon arriving at Wal-Mart, the group
initially split up. Darron and appellant first looked at air mattresses, while Campbell
and his friend went directly to the ammunition counter. After looking at mattresses,
Darron and appellant joined Campbell and his friend. Campbell asked Darron to buy
the ammunition because Campbell did not have the identification needed to purchase
ammunition. Darron purchased 7.62 x 39 millimeter AK-47 ammunition. Darron
said that appellant also looked at ammunition, but decided not to purchase any
because he said it was too expensive. A Wal-Mart surveillance camera recorded the
ammunition purchase. The camera taped Darron, appellant, Campbell, and
Campbell's friend, purchasing AK-47 ammunition.
Later that evening, appellant and several other men raided a house occupied by
Garrett and Washington. The initial assault occurred while Garrett and Washington
were sleeping, and occurred so quickly that Washington was shot before he woke up.
When he eventually awoke wounded, Washington saw two of the assailants, Jamaal
and Williams. Jamaal had a handgun and was standing by the back room, while
Williams had an AK-47 and was standing directly above him. When Williams notice
Washington was awake, he shot him, causing Washington to black out. Washington
then woke up again, so Williams shot him an additional time. However, this time, he
stuck the muzzle of the AK-47 in Washington's mouth. When he fired, Washington
jerked his head, resulting in a bullet wound to Washington's neck. Washington
blacked out again, and when he awoke he heard Williams tell the other assailants to
get out of the house because Williams was "fixing to shoot the whole house up" with
his AK-47. After William's announcement, several men left the back room.
Appellant was one of those men. Washington saw him run out of the back room into
the living room, shoot Garrett multiple times with a handgun, and exit the house.
Although appellant wore a hood over his head, Washington was able to distinguish
appellant from the other assailants because of appellant's skin condition that caused
white spotting on this face and body. Before exiting the house, Williams shot Garrett
again, and then turned the gun on Washington, shooting him too. In all, Washington
was shot 22 times, but survived. Garrett was shot six times and died.
One of the men who helped raid the house was Jamaal. At trial, Jamaal
testified against appellant as an accomplice witness. Jamaal explained that he,
appellant, Williams, Tim Campbell, and Elmo Flowers decided to rob Garrett of drugs
and money at Garrett's house after appellant and Campbell proposed the idea. Jamaal
testified that appellant and Campbell supplied the two AK-47s used in the shooting.
When the group arrived at Garrett's house, they tried to kick-in Garrett's door. When
this failed, the group broke the locks by firing on the door with AK-47s. Once inside,
Jamaal ran directly to the back room looking for drugs, while appellant and the other
accomplices initially stayed in the living room where Garrett and Washington were
located. While in the back room, Jamaal heard multiple gunshots come from the
living room. After the raid, appellant told Jamaal he shot Garrett. Appellant also
helped the other men get rid of evidence by having them dispose of their clothes at
a hotel.
At trial, the State presented testimony of Washington, Jamaal, Darron,
Garrett's mother, a medical examiner, a crime scene investigator, and the Wal-Mart
surveillance video. Appellant called Garrett's two neighbors, his father, and
Washington's former girlfriend to testify. The two neighbors testified to hearing
multiple gunshots at Garrett's house the night of the shooting. Appellant's father
testified that appellant was with him at his house the night of the shooting.
Appellant's father, however, acknowledged during cross-examination that he could
not say for certain what date appellant was with him at his house. Appellant did not
testify. The jury was instructed that because Jamaal was an accomplice, the jury
could not convict unless his testimony was corroborated by other evidence tending
to connect the defendant with the offense.Sufficiency of Non-Accomplice Testimony
In his third issue, appellant challenges the sufficiency of the non-accomplice
evidence that establishes his guilt. The trial court instructed the jury that Jamaal was
an accomplice as a matter of law. Appellant contends that the purchase of the
ammunition at the Wal-Mart is too remote to connect appellant to the offense and that
Washington's testimony cannot be used as corroboration because it conflicts with
Jamaal's testimony.
A. Applicable Law
An accomplice witness is someone who participated before, during, or after the
commission of the crime that could be prosecuted for the offense with which the
defendant was charged. See Blake v. State, 971 S.W.2d 451, 454-55 (Tex. Crim.
App. 1998). Under the Texas accomplice-witness rule, a conviction cannot be had
on the testimony of an accomplice unless corroborated by other evidence that tends
to connect the defendant with the offense committed, and the corroboration is not
sufficient if it merely shows the commission of the offense. Tex. Code Crim. Proc.
Ann. art. 38.14 (Vernon 2005); Cathey v. State, 992 S.W.2d 460, 462 (Tex. Crim.
App. 1999) (en banc). The accomplice-witness rule creates a statutorily imposed
review that is not derived from federal or state constitutional principles defining the
legal and factual-sufficiency standards. Brown v. State, 270 S.W.3d 564, 567 (Tex.
Crim. App. 2008).
In conducting a sufficiency review under the accomplice-witness rule, we
eliminate the testimony of the accomplice witness from consideration. Castillo v.
State, 221 S.W.3d 689, 691 (Tex. Crim. App. 2007). We then examine the testimony
of other witnesses to ascertain whether the non-accomplice evidence tends to connect
the accused with the commission of the offense. Id. We view the corroborating
evidence in the light most favorable to the finding of guilt. Torres v. State, 137
S.W.3d 191, 196 (Tex. App.--Houston [1st Dist.] 2004, no pet.); Cantelon v. State,
85 S.W.3d 457, 461 (Tex. App.--Austin 2002, no pet.). The non-accomplice
corroborating evidence need not be sufficient itself to establish the accused's guilt
beyond a reasonable doubt. Castillo, 221 S.W.3d at 691. Additionally, the
corroborating evidence need not directly link the accused to the commission of the
offense. Id.
Mere presence of a defendant at the scene of the crime is insufficient to
corroborate accomplice witness testimony. Dowthitt v. State, 931 S.W.2d 244, 249
(Tex. Crim. App. 1996). However, evidence of the presence of the accused in the
company of the accomplice, coupled with other suspicious circumstances, is proper
corroborating evidence. McDuff v. State, 939 S.W.2d 607, 613 (Tex. Crim. App.
1997). The court may examine all facts and circumstances to determine whether an
accomplice's testimony is corroborated. Munoz v. State, 853 S.W.2d 558, 560 (Tex.
Crim. App. 1993) (en banc). Even apparently insignificant incriminating
circumstances may sometimes afford satisfactory evidence of corroboration.
Dowthitt, 931 S.W.2d at 249. If the combined weight of the non-accomplice evidence
tends to connect the defendant to the offense, the requirement of article 38.14 has
been fulfilled. Gosch v. State, 829 S.W.2d 775, 777 (Tex. Crim. App. 1991).
B. Non-Accomplice Evidence Sufficient
In this case there is sufficient non-accomplice evidence that tends to connect
appellant to the offense. Washington, the surviving victim, testified. His testimony
directly links appellant to the death of Garrett. Washington testified that appellant
was among several individuals who stormed Garrett's house. He testified that
appellant shot Garrett "two to three" times. Washington positively identified
appellant, remarking that appellant had a skin condition that left white spots on his
face and body.
Because Washington positively identified appellant as one of the assailants
who stormed the house and shot Garrett, that is sufficient to tend to connect appellant
to the commission of the offense. See Gosch, 829 S.W.2d at 777. After eliminating
the accomplice witness testimony from our consideration and examining the non-accomplice evidence, we conclude that the non-accomplice evidence tends to connect
appellant to the offense sufficiently to corroborate Jamaal's accomplice testimony.
We hold the evidence is sufficient to meet the corroboration requirements of the Code
of Criminal Procedure. See Tex. Code Crim. Proc. Ann. art. 38.14; Rios v. State,
263 S.W.3d 1, 7 (Tex. App.--Houston [1st Dist.] 2005, pet. dism'd) (victim's witness
testimony that assailants wore masks added to circumstances that tended to connect
appellant to the offense sufficiently to corroborate accomplice testimony). We need
not address whether the purchase of the ammunition is also evidence that tends to
connect appellant to the offense because Washington's testimony, alone, is sufficient.
We overrule appellant's third issue for all three appeals.
Legal Sufficiency of Evidence
In his second issue, appellant contends the "accomplice witness'[s] testimony
[is] insufficient to support conviction." Appellant's entire argument is,
As stated from the record, [a]ccomplice did not witness the [a]ppellant
shoot the [d]ecedent. The [a]ccomplice, while testifying[,] changed his
version of how the [a]ppellant arrived at [the] house of the [d]ecedent
three times. Further, it m[ust] be called into question the obvious, glaring
disparity between the [a]ccomplice listing three additional co-defendants
in direct from confrontation [sic] from testimony of the [w]itness
Washington, who names three other completely different individuals.
We construe appellant's argument as a legal sufficiency challenge. See Rischer v.
State, 85 S.W.3d 839, 843 (Tex. App.--Waco 2002, no pet.) (where defendant does
not specify whether his challenge to evidence is factual or legal, appellate court may
construe general sufficiency challenge as challenge to only legal sufficiency of
evidence); Markey v. State, 996 S.W.2d 226, 229 (Tex. App.--Houston [14th Dist.]
1999, no pet.).
A. Law Pertaining to Legal Sufficiency
In a legal sufficiency review, we consider the entire trial record to determine
whether, viewing the evidence in the light most favorable to the verdict, a rational
jury could have found the accused guilty of all essential elements of the offense
beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S. Ct.
2781, 2788-89 (1979); Vodochodsky v. State, 158 S.W.3d 502, 509 (Tex. Crim. App.
2005). The jurors are the exclusive judges of the facts, the credibility of the
witnesses, and the weight to give their testimony. Margraves v. State, 34 S.W.3d
912, 919 (Tex. Crim. App. 2000). A jury is entitled to accept one version of the facts
and reject another, or reject any part of a witness's testimony. Id. In conducting our
review of the legal sufficiency of the evidence, we do not reevaluate the weight and
credibility of the evidence, but ensure only that the jury reached a rational decision.
Muniz v. State, 851 S.W.2d 238, 246 (Tex. Crim. App. 1993). In reviewing the
evidence, circumstantial evidence is as probative as direct evidence in establishing
the guilt of an actor, and circumstantial evidence alone can be sufficient to establish
guilt. Hooper v. State, 214 S.W.3d 9, 13 (Tex. Crim. App. 2007). On appeal, the
same standard of review is used for both circumstantial and direct evidence cases.
Id.
A challenge of insufficient evidence to support the verdict is not the same as
a challenge of insufficient corroboration. Utomi v. State, 243 S.W.3d 75, 80 (Tex.
App.--Houston [1st Dist.] 2007, pet. ref'd), cert. denied, 128 S. Ct. 2058 (2008). We
consider accomplice and non-accomplice evidence in deciding whether evidence is
legally sufficient. See Rios, 263 S.W.3d at 7 (using both accomplice and non-accomplice evidence to determine legal sufficiency of evidence).
B. Elements of the Offenses
Under Texas Penal Code section 19.02(b)(1), a person commits murder if he
intentionally or knowingly causes the death of an individual. See Tex. Penal Code
Ann. § 19.02(b)(1) (Vernon 2003). A person commits aggravated assault, under
Texas Penal Code section 22.02(a), if he either intentionally or knowingly causes
serious bodily injury to another or he intentionally or knowingly causes bodily injury
to another with the use of a deadly weapon. See id. § 22.02(a)(1)-(2) (Vernon Supp.
2009). A person acts intentionally with respect to a result of his conduct when it is
his conscious objective or desire to cause the result. See id. § 6.03(a) (Vernon 2003).
A person acts knowingly with respect to a result of his conduct when he is aware that
his conduct is reasonably certain to cause the result. See id. § 6.03(b).
A person commits burglary when he, without the effective consent of the
owner, enters a building or habitation and commits or attempts to commit a felony,
a theft, or an assault. See id. § 30.02(a)(3) (Vernon 2003). A person commits theft
when he unlawfully appropriates property with intent to deprive the owner of the
property. See id. at § 31.03(a) (Vernon Supp. 2009).
C. Sufficiency of Evidence Analysis
Viewing the evidence in a light most favorable to the jury's verdict, the record
shows that appellant was one of the men who raided Garrett's house the night of the
shooting, that he shot Garrett, and that he helped purchase ammunition for the raid
just hours before the raid occurred.
Appellant contends the evidence is insufficient to show appellant shot Garrett.
However, both Washington and Jamaal testified that appellant was one of the men
who stormed Garrett's house and shot Garrett. Washington identified appellant
because of white spotting on appellant's skin, and he noted how appellant shot
Garrett "two to three" times. Jamaal specifically testified that appellant was one of
the men who helped raid the house, and who later told Jamaal that he shot Garrett. Additionally, Darron testified that appellant helped purchase 7.62 x 39
millimeter AK-47 ammunition before the shooting. He testified that it was at
appellant's insistence they buy the ammunition, and he testified that appellant was
there in the Wal-Mart at the ammunition counter when he purchased the ammunition.
A Wal-Mart surveillance video demonstrated that appellant was at Wal-Mart,
shopping for and helping Darron purchase ammunition approximately nine hours
before the shooting. The crime scene investigator, Officer Mora, also testified that
Garrett's door and house were riddled with bullets and covered with multiple 7.62 x
39 and .380 millimeter shell casings.
Appellant further contends the evidence is insufficient because Jamaal changed
his testimony regarding how appellant arrived at the house. Prior to trial, Jamaal
made a statement to the police in which he said appellant was not in the house during
the raid. At trial, Jamaal testified that appellant entered the house during the raid, and
was one of the men who shot Garrett. When asked why his testimony differed from
his original statement, Jamaal explained that he initially covered up for appellant
because he knew appellant and his brother were close friends. Jamaal stated that he
later decided to tell the truth because he felt badly that a person was dead as a result
of appellant's actions.
Finally, appellant asserts that the evidence is insufficient because there were
inconsistencies between statements by Washington and Jamaal regarding which men
stormed Garrett's house. When Washington gave his initial statement to police after
the shooting, he listed appellant, Jamaal, Williams, Alfred Spurlock, Chris Spurlock,
and Jeremy Jones as the men who raided Garrett's house. Washington later said he
could not be sure that Alfred, Chris, and Jones were involved. At trial, Washington
stated that he could only identify appellant, Jamaal, and Williams as part of the group
that stormed the house.
Jamaal, on the other hand, stated prior to trial that appellant was not one of the
men who stormed his house. Jamaal later changed his statement, and testified that
appellant was one of the men, and that he initially did not identify appellant because
he was trying to protect him from prosecution. At trial, he testified that he, appellant,
Williams, Campbell, and Flowers were the men who raided Garrett's house.
Although the initial statements by Washington and Jamaal differed, their
testimony at trial concerning appellant was the same. Both testified that appellant,
Jamaal, and Williams were three of the men who raided Garrett's house. Washington
testified that he did not know for sure who the other men were, besides those he
identified. Jamaal testified that two of those men were Campbell and Flowers. Both
testimonies identified appellant as one of men who shot Garrett.
When the evidence is viewed in the light most favorable to the jury's verdict,
the logical force of the total combined evidence shows that a jury could reasonably
find beyond a reasonable doubt that appellant shot Garrett, and was one of the several
men who raided Garrett's house. See Vodochodsky, 158 S.W.3d at 509. We,
therefore, hold the evidence is legally sufficient to prove that appellant intentionally
or knowingly caused the death of Garrett. See Tex. Penal Code Ann. § 19.02(b)(1).
We further hold that the evidence was legally sufficient to prove that appellant
intentionally or knowingly threatened Washington with imminent bodily injury by
pointing a firearm at Washington. See Tex. Penal Code Ann. §§ 22.02(a)(1)-(2).
Finally, we hold that the evidence was legally sufficient to show he entered the
habitation of Washington and committed a felony. See id. § 30.02(a)(3).
We overrule appellant's second issue for all three appeals.
Ineffective Assistance of Counsel
In his first issue, appellant contends that trial counsel's representation was
ineffective because trial counsel (1) failed to introduce impeachment evidence against
accomplice witness Jamaal and (2) failed to timely object to the Wal-Mart in-store
video of the ammunition purchase.
A. Applicable Law
To prevail on a claim of ineffective assistance of counsel, the appellant must
show that his trial counsel's performance was deficient and that a reasonable
probability exists that the result of the proceeding would have been different.
Strickland v. Washington, 466 U.S. 668, 687, 694, 104 S. Ct. 2052, 2064, 2068
(1984). The first prong of the Strickland test requires that the defendant show that
counsel's performance fell below an objective standard of reasonableness. Thompson
v. State, 9 S.W.3d 808, 812 (Tex. Crim. App. 1999). Thus, the defendant must prove,
by a preponderance of the evidence, that trial counsel's representation objectively fell
below professional standards. Mitchell v. State, 68 S.W.3d 640, 642 (Tex. Crim. App.
2002). The second prong requires the defendant to show a reasonable probability
that, but for his counsel's unprofessional errors, the result of the proceeding would
have been different. See Strickland, 466 U.S. at 694, 104 S. Ct. at 2068; Thompson,
9 S.W.3d at 812. Because the reviewing court must, however, indulge a strong
presumption that counsel's conduct falls within the wide range of reasonable
professional assistance, the defendant must overcome the presumption that, under the
circumstances, the challenged action "might be considered sound trial strategy."
Strickland, 466 U.S. at 689, 104 S. Ct. at 2065.
Any allegation of ineffectiveness must be firmly founded in the record, which
must demonstrate affirmatively the alleged ineffectiveness. Thompson, 9 S.W.3d at
813 (citing McFarland v. State, 928 S.W.2d 482, 500 (Tex. Crim. App. 1996)). We
will not speculate to find trial counsel ineffective when the record is silent on
counsel's reasoning or strategy. See Jackson v. State, 877 S.W.2d 768, 771 (Tex.
Crim. App. 1994); Gamble v. State, 916 S.W.2d 92, 93 (Tex. App.--Houston [1st
Dist.] 1996, no pet.). In rare cases, however, the record can be sufficient to prove that
counsel's performance was deficient, despite the absence of affirmative evidence of
counsel's reasoning or strategy. See Robinson v. State, 16 S.W.3d 808, 813 n.7 (Tex.
Crim. App. 2000). Such cases are limited to occasions where no reasonable attorney
could have made such a decision. Weaver v. State, 265 S.W.3d 523, 538 (Tex.
App.--Houston [1st Dist.] 2008, pet. ref'd).
Appellant did not file a motion for new trial, which would have afforded trial
counsel an opportunity to explain her strategy, and no direct evidence in the record
establishes why appellant's attorney acted as she did. We therefore presume that
counsel had a plausible reason for her actions. See Thompson, 9 S.W.3d at 814. We
review the record to determine whether this is one of those rare cases where no
reasonable attorney could have made the decisions complained of in this appeal. See
id.
B. Analysis of Lack of Witness Impeachment
Appellant contends he received ineffective assistance when his trial counsel did
not offer into evidence a prior inconsistent statement by Jamaal, the accomplice
witness. (2)
The proper predicate for impeachment by a prior inconsistent statement
requires that the witness first be asked if he made the contradictory statement at a
certain place and time, and to a certain person. Huff v. State, 576 S.W.2d 645, 647
(Tex. Crim. App. 1979). If the witness denies making the contradicting statement,
it can then be proved by the prior inconsistent statement. Id. If, however, the witness
admits to the prior inconsistent statement, the prior statement is not admissible. Id.
At trial, appellant's trial counsel cross examined Jamaal about inconsistencies
between his prior statement and his trial testimony. During cross examination,
appellant's trial counsel showed Jamaal his statement and asked him to read it. The
State objected, stating this was improper. The trial court agreed, stating, "It is
improper. It is not admitted into evidence. You can use it for impeachment purposes.
However, you cannot have him read it to the jury." Appellant's trial counsel then
asked Jamaal several questions concerning the inconsistencies between his former
statement and his later testimony. Jamaal admitted to the inconsistencies. He stated
the reason behind the inconsistencies was that he initially tried to protect appellant
by not identifying him in his earlier statement. Because Jamaal admitted to making
the prior inconsistent statements, the statements would not have been admissible. See
id.
Appellant contends his attorney was ineffective for not attempting to admit
inadmissible statements. We disagree with this contention because an attorney's
failure to take a frivolous action does not constitute ineffective assistance of counsel.
See Cooper v. State, 707 S.W.2d 686, 689 (Tex. App.-- Houston [1st Dist.] 1986,
pet. ref'd).
C. Analysis of Admission of Surveillance Video
Appellant contends his trial counsel should have moved to exclude the in-store
Wal-Mart video of the ammunition purchase because the video was more prejudicial
than probative. He contends that because his trial counsel failed to object to the
video, he received ineffective assistance of counsel.
Appellant asserts that the video was prejudicial because the State relied heavily
on the video to support the State's law of parties theory. Appellant notes testimony
that he did not personally purchase the ammunition, and asserts the Wal-Mart
ammunition was not the same ammunition used in the shooting. Appellant claims
that excluding the video from evidence would have damaged the credibility of
Jamaal's accomplice testimony.
For trial counsel to be rendered ineffective for not objecting to the video,
appellant must show that, had his counsel objected to the evidence, the trial court
would have erred in overruling his counsel's objection. See Vaughn v. State, 931
S.W.2d 564, 566 (Tex. Crim. App. 1996) (en banc). To object that the video was
more prejudicial than probative, trial counsel would have had to object under Rule
403 of the Texas Rules of Evidence. Rule 403 provides that relevant evidence "may
be excluded if its probative value is substantially outweighed by the danger of unfair
prejudice, confusion of the issues, or misleading the jury . . . ." Tex. R. Evid. 403.
The Court of Criminal Appeals has identified a non-exclusive list of factors to apply
in making a rule 403 analysis. See Reese v. State, 33 S.W.3d 238, 240-41 (Tex.
Crim. App. 2000). These factors include, but are not limited to,
(1) how probative the evidence is;
(2) the potential of the evidence to impress the jury in an irrational but
indelible way;
(3) the time the proponent needs to develop the evidence; and
(4) the proponent's need for the evidence.
Id.
Under the first Reese factor, the video was probative because it showed
appellant present at an ammunition purchase several hours before being identified at
the shooting by another witness. The video shows appellant, Darron, Campbell, and
another unidentified man at the ammunition counter talking to the sales
representatives. It shows appellant shopping for the ammunition. The video then
shows Darron purchasing the ammunition with appellant and Campbell at the counter.
The video also supported Darron's testimony that appellant went to Wal-Mart to
purchase ammunition.
The second factor requires that we examine the potential of the video to
impress the jury in an irrational but indelible way. The videotape visually shows
what Darron described in his testimony. The evidence from the surveillance camera
would not impress the jury in an irrational and indelible way because it documents
the preparation leading up to the shooting.
The third factor concerns the time that the proponent needs to develop the
evidence. The record indicates that the surveillance video was short, and that it took
relatively little time to develop the evidence.
The fourth factor, the need for the evidence, would also support a trial court's
ruling to admit the evidence. The State used the evidence to support one of its non-accomplice witnesses.
Under the factors identified in Reese appellant fails to show that, had
appellant's trial counsel objected to the admission of the video, the trial court would
have erred in overruling his counsel's objection. See Vaughn, 931 S.W.2d at 566.
It is well-established that failure to object to admissible evidence does not constitute
ineffective assistance of counsel. See Cooper, 707 S.W.2d at 689.
Appellant does not meet the first prong of Strickland because he has failed to
show that his counsel's performance fell below an objective standard of
reasonableness. See Mitchell, 68 S.W.3d at 642; Thompson, 9 S.W.3d at 812. We
hold appellant has failed to show he received ineffective assistance of counsel.
We overrule appellant's first issue for all three appeals.
Conclusion
We affirm the judgment of the trial court.
Elsa Alcala
Justice
Panel consists of Justices Keyes, Alcala, and Hanks.
Do not publish. Tex. R. App. P. 47.2(b).
1. The murder is appellate cause number 01-08-00699-CR, which is trial cause number
07CR0342. The aggravated assault is appellate cause number 01-08-00700-CR, which is
trial cause number 07CR1775. The burglary is appellate cause number 01-09-00157-CR,
which is trial cause number 07CR1774.
2. Appellant also complains that his trial counsel failed to offer a prior inconsistent statement
against Washington. However, appellant fails to demonstrate where in the record this occurs,
and fails to discuss the issue besides the statement that "at no time did Defense counsel offer
the written or recorded statements of the [sic] neither Witness nor Accomplice."
Furthermore, appellant fails to offer any argument, theory, or authority regarding how trial
counsel was ineffective in her questioning of Washington. Texas Rules of Appellate
Procedure require appellant's brief to "contain a clear and concise argument for the
contentions made, with appropriate citations to authorities and to the record." Tex. R. App.
P. 38.1(i); Russeau v. State, 171 S.W.3d 871, 881 (Tex. Crim. App. 2005) (holding if an
argument is inadequately briefed, there is nothing for the appellate court to review).
| {
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152 B.R. 597 (1993)
In re AREACO INVESTMENT COMPANY, INC. d/b/a Rocky Ridge Ranch and Log Cabin Estates, Debtor/Movant.
Bankruptcy No. 91-43555-293.
United States Bankruptcy Court, E.D. Missouri, E.D.
March 17, 1993.
*598 Dana Hockensmith, Weier, Hockensmith & Sherry, St. Louis, MO, Stuart J. Radloff, Clayton, MO, for debtor in possession.
Leonora S. Long, Attorney/Advisor for the Office of the U.S. Trustee, St. Louis, MO.
Wendi S. Alper, St. Louis, MO, for Official Unsecured Creditors Committee.
David Waltrip, St. Louis, MO, for Kaye V. Reichard.
Peter D. Kerth, St. Louis, MO.
MEMORANDUM OPINION
DAVID P. McDONALD, Bankruptcy Judge.
JURISDICTION
This Court has jurisdiction over the parties and subject matter of this proceeding pursuant to 28 U.S.C. §§ 1334, 151, and 157 and Local Rule 29 of the United States District Court for the Eastern District of Missouri. This is a "core proceeding" pursuant to 28 U.S.C. § 157(b)(2)(A), which the Court may hear and determine.
PROCEDURAL AND FACTUAL BACKGROUND
Arthur E. Collins organized the Debtor corporation in August 1961 for the purpose of developing Rocky Ridge Ranch, a resort community south of St. Louis. In 1969 the Debtor launched its second resort, in Malakoff, Texas, patterned after Rocky Ridge Ranch and known as Log Cabin Estates. Areaco offered memberships in both resorts ranging from ownership of lots to contractual memberships allowing access *599 to the meeting rooms and recreation halls, restaurants, shops, swimming pools, tennis courts, driving ranges and various recreational activity areas. In the ensuing years the Debtor was engaged in continual and protracted litigation with the homeowners. The Debtor stated in its disclosure statement that a combination of seemingly endless litigation and a decrease in cash flow from unpaid assessments precipitated its Chapter 11 filing. In seeking the protection of the Bankruptcy Code Areaco hoped to reach a comprehensive settlement of both its management and financial problems in Texas and Missouri.
The Debtor filed its Voluntary Chapter 11 Petition on May 30, 1991. On that same day, the Debtor filed two nearly-identical Application(s) For Employment Of Attorney seeking to retain the legal services of the law firms of Radloff & Riske and Weier, Hockensmith & Sherby. Due to Dana Hockensmith's admitted lack of experience in representing Chapter 11 Debtors, the Debtor decided it was necessary to retain Stuart Radloff for his expertise as a bankruptcy counsel. The Debtor, however, also believed it was necessary to retain Hockensmith as bankruptcy counsel because he had represented the Debtor for over fifteen years and had intimate knowledge of the corporate problems and litigation facing the Debtor. Since Radloff had never represented the Debtor, AREACO felt that Hockensmith would provide a vital service and assistance to Radloff. Without Hockensmith's assistance Radloff would have to have invested additional time investigating and becoming familiar with the Debtor's problems. The estate would have ultimately borne the costs associated with Radloff's education.
The Affidavits of Stuart J. Radloff and Dana Hockensmith which accompanied each applications for employment were prepared by Mr. Radloff's office and were identical in content (except for the names of the attorneys and their firms). The Weier, Hockensmith & Sherby Application contained the following pertinent language:
"5. To the best of Applicant's knowledge, Weier, Hockensmith & Sherby, have no connection with the creditors or any other party in interest or their respective attorneys.
6. Weier, Hockensmith & Sherby, represents no interest adverse to Applicant as Debtor-In-Possession or to the estate in the matters upon which they are to be engaged by Applicant as Debtor-In-Possession, and their employment is necessary and should be in the best interest of the estate."[1]
Dana Hockensmith's Affidavits contained the following pertinent language:
"2. They have no connection with the above-named Debtor, its creditors or any other party in interest herein or their respective attorneys.
3. They do not represent any interest adverse to the Debtor-In-Possession herein or its estate in the matters upon which they are to be engaged."[2]
The Court approved the employment of both Stuart Radloff and Dana Hockensmith as attorneys for the Debtor, on June 11, 1991. In the years that followed they both took a very active and open roll in attempting to settle various disputes between the Debtor and creditors and landowners in both Texas and Missouri.
On July 13, 1992 Hockensmith filed his First Interim Application seeking compensation in the amount of $27,623.32 for legal services and $529.41 for reimbursement of expenses, for a total of $28,152.73. Thereafter, Hockensmith filed a Supplemental Application For Compensation And Expenses Of Debtor's Attorney seeking an additional $9,059.24 for legal services and $638.98 reimbursement of expenses for the period from June 1, 1992 through October 2, 1992 for a sub-total of $9,698.23, and a total of $36,682.56 for legal services and $1,168.39 for reimbursement of expenses. Hockensmith had received and used a $4,500.00 retainer without requesting or receiving the permission of this Court. He also received an additional payment of *600 $3,219.93 from the Debtor, which he now seeks the Court's permission to apply to his present fee application.
Notice was given and a hearing was scheduled for November 23, 1992 to hear Mr. Radloff and Mr. Hockensmith and any objections to their requests for fees.[3] Objections to Hockensmith's fees and expenses were filed by the United States Trustee, the Official Unsecured Creditors' Committee and Kaye V. Reichard, a creditor. The objections were numerous, but the primary thrust of the objections was that the application failed to give adequate detail regarding the services provided and as a result, it was not possible to determine if the services were valuable and the compensation requested reasonable. In addition there were objections based on the failure to identify who performed the work, the hourly fee for those individuals, the lack of specificity regarding the substance of many telephone calls, the bunching of time into large blocks without sufficient explanation as to what services were rendered within the large blocks of time, and billing for services that appear to be for the benefit of Art and Wanda Collins. The Court sustained the U.S. Trustee's objections and granted Hockensmith fifteen days to amend the Application and the Supplemental Application to address the issues raised in the objections of the United States Trustee and to provide further and more detailed information. Mr. Hockensmith complied with the Court Order by filing his Second Application which provided additional information to supplement his previous fee applications. Hockensmith's Second Application also requested fees for legal services in the amount of $4,560.00 and reimbursement of expenses of $369.19 for the period between October 1, 1992 and December 8, 1992.[4] Therefore, he presently seeks a total fee and reimbursement of expenses in the sum of $47,280.15 for legal services and expenses and permission to apply the $4,500.00 and $3,219.93 he previously received to the $47,280.15:
Initial Retainer For Fees &
Expenses: $ 4,500.00
First Interim Application
Fees & Expenses: 28,152.73
Supplemental Application
Fees & Expenses: 9,698.23
Final Request For Fees &
Expenses: 4,929.19
__________
$47,280.15
Both the U.S. Trustee and the Official Unsecured Creditors' Committee renewed their objections, which the Court heard on January 21, 1993. They both objected that many of the legal services were provided for the benefit of Art and Wanda Collins and not for the Debtor. In addition the Committee requested that if the Court intended to grant Hockensmith a fee it should be reduced by $12,374.00 a sum which the Committee argues represents duplicate efforts of Hockensmith and other attorneys.
The U.S. Trustee asserts that Hockensmith failed to promptly reveal his past representation of the Collinses. A review of the Debtor's Disclosure Statement and schedules (filed on June 14, 1991) indicates that Art and his wife Wanda Collins are the sole stockholders, officers and directors of the Debtor corporation. Paragraphs 13a (Payments of loans, installment purchases and other debts) and 20 (Payments or transfer to attorneys) of the schedules indicate that Weier, Hockensmith & Sherby received the following fees from the Debtor, *601 during the year immediately preceding the filing this bankruptcy:
June 14, 1990 $ 1,000.00
June 20, 1990 9,187,85
Aug. 2, 1990 2,665.65
Nov. 19, 1990 14,472.14
Jan. 22, 1991 314.20
Feb. 27, 1991 303.41
Mar. 19, 1991 564.36
Apr. 24, 1991 435.23
May 24, 1991 10,000.00 ($4,000.00 retainer)
May 24, 1991 500.00
_________
$39,442.84
The May 24 payment of $10,000.00 to Hockensmith included a general retainer to be used for legal service rendered for the current Chapter 11 case.[5] With the exception of the $4,000.00 retainer, the record is silent as to the nature of the legal service rendered by Hockensmith that entitled him to receive $29,442.84 from the Debtor.[6] Apparently these fees were earned for providing non-bankruptcy legal services prior to the filing of the current Chapter 11 case. Other than the reference to legal fees found in paragraphs 13a and 20 Hockensmith had not informed the Court, U.S. Trustee or any creditors that he had represented both the Debtor and the Collinses before he filed his fee applications. The Assistant United States Trustee appointed three individuals to the Committee of Unsecured Creditors on December 31, 1991. On May 29, 1992 the Committee filed an application to approve their employment of Wendi S. Alper as their attorney and on June 4, 1992 the Court entered an Order approving the Committee's request. Ms. Alper stated she did not become aware of Hockensmith's former representation of both the Debtor and the Collinses until September 11, 1992. The U.S. Trustee also pointed out that Hockensmith's Affidavit and Debtor's Application for Employment of Attorney did not mention his past representation of Areaco and the Collinses and the Trustee did not receive this information until the Fall of 1992. Mr. Hockensmith testified that his Affidavit and Application were prepared by Radloff and he assumed they were in proper form.
During the confirmation hearing on November 23, 1992 and the hearing on his fees on January 28, 1993, Hockensmith readily admitted that he not only had provided extensive legal service for the Debtor prior to the filing of the bankruptcy case, but on occasions he represented Areaco's sole stockholders, Art and Wanda Collins. Hockensmith denied that he had any conflict of interest and insisted that he represented only the Debtor and not the Collinses during the course of this Chapter 11 case and that none of the fees he sought reflected any legal services rendered on behalf of the Collinses. However, at the Confirmation hearing Arthur Collins and Donald L. Nolton, President of Rocky Ridge Property Owners both testified that during the negotiations of the "Settlement Agreement" Dana Hockensmith represented the Collins. Other than the statements of Collins and Nolton the objecting parties did not offer any evidence which would prove that any of the hours Hockensmith billed for the Debtor were actually hours *602 for legal services rendered on behalf of the Collinses or benefitted the Collinses in such a way that was detrimental to the Debtor or its creditors. As a result of the legal services Hockensmith and Radloff performed for the Debtor corporation, a comprehensive settlement was achieved, the Debtor's Plan of Reorganization was confirmed and as owners of Areaco Investment Company the Collinses may eventually receive several million dollars if the Plan is fully implemented.
DISCUSSION
The Debtor was entitled to employ an attorney of its choice, so long as the selection complied with 11 U.S.C. § 327(a):
"§ 327. Employment of professional persons
(a) Except as otherwise provided in this section, the trustee, with the court's approval, may employ one or more attorneys . . . that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee's duties under this title."
Section 1107(b) provides that a person is not necessarily disqualified from employment under § 327 by a Debtor in possession solely because of employment by or representation of the debtor before the commencement of the bankruptcy case. However, it must be kept in mind that to be employed pursuant to § 327 such a person must, in all other respects, be disinterested as that term is defined in § 101.
The trustee and the Official Unsecured Creditors' Committee filed numerous objections to Mr. Hockensmith's fee applications. Although they do not question or challenge the quality of Hockensmith's services, his hourly rates or that he personally holds an interest adverse to the estate, the objectors argue that his loyalty was to the Collinses and that he supported their individual efforts to get as much out of the settlement as possible to the estate's detriment. Neither the U.S. Trustee nor the Creditors' Committee seek to deny his entire fee. The primary objection deals with an alleged conflict of interest which existed by the virtue of Hockensmith's representing both the Debtor and its sole stockholders, Art and Wanda Collins. If proven, the representation of an interest adverse to the estate during his employment under § 327(a) is cause to deny Hockensmith's right to receive a fee, in whole or in part, pursuant to § 328(c) of the Bankruptcy Code. The use of § 328(c) to penalize the attorney rests in the discretion of the bankruptcy judge. See In re Howell, 148 B.R. 269 (Bkrtcy.S.D.Tex.1992); In re Amdura Corp., 139 B.R. 963, 978 (Bankr.D.Colo. 1992).
The U.S. Trustee and Creditor's Committee also argue that the court should take into consideration Hockensmith's failure to explain his past representation of the Debtor and the Collinses in his Application For Employment of Attorney and Affidavit or at least at some earlier point in the case. They further assert that the Application For Employment Of Attorney and Affidavit contain statements that are untrue and provide additional reasons for reducing or denying his fee request. In his employment application and affidavit Hockensmith indicates that he and his firm "have no connection with the creditors or any other party in interest . . ." and "They do not represent any interest adverse to the Debtor-In-Possession herein or its estate in the matters upon which they are to be engaged." (emphasis added) The objectors are correct in their assertion these statements are simply not true. Clearly Hockensmith's long association with and representation of the Collinses represents a connection with a party of interest and the Collinses' interest may be adverse to the Debtor-in-possession.
In his defense Mr. Hockensmith points out that he is not a bankruptcy attorney and at the inception of this case he recognized that he did not possess the requisite expertise to represent Areaco in its Chapter 11 case. Hence, the Debtor retained Mr. Radloff, who prepared Hockensmith's affidavit and application for employment, which he signed relying on Radloff's expertise and because he felt and still believes the documents were accurate. He concludes that the documents are accurate because *603 he personally does not hold an interest adverse to the estate and because he has not represented the Collinses since the Chapter 11 filing. Specifically, he insists that he has represented the Debtor and denies representing the interest of both parties' while negotiating a final settlement of lawsuits and the sale of the Debtor's property. He further testified:
"Over the years 99% of my representation was for the corporation. Does that mean the Collinses have not benefitted by my representation of the corporation? No it doesn't. Obviously, when you have two shareholders, obviously what helps the corporation will help the shareholders. Every thing I have done in these proceedings have been for the benefit of the corporation. I would also agree that has been substantially beneficial to the Collinses."
I agree with Mr. Hockensmith's assertion that the fact that the settlement of the various lawsuits against Areaco may have benefitted the Collinses does not, without additional evidence, prove that Mr. Hockensmith labored under a conflict of interest which would render him ineligible for employment under section 327(a) of the Bankruptcy Code. He also correctly points out that in a small, closely-held corporation whatever is good for the corporation is usually good for the stockholders. However, the fact remains Mr. Hockensmith failed to fully inform the creditor community and the U.S. Trustee of his past representation of the Collinses who may have interests adverse to the estate. Although I accept Mr. Hockensmith's testimony that he actually believed that he only represented the Debtor during the course of the Chapter 11, his failure to explicitly explain that to the Collinses and other parties of interest led to further confusion as to whom he actually represented. Art Collins and Donald L. Nolton testified that it was their belief Hockensmith represented the Collinses during the negotiation of the Debtor's final settlement. Under these circumstances it is reasonable to reduce Mr. Hockensmith's fee by thirty-three percent. In addition, before applying the one-third reduction, his fee request for the period of October 1 through December 8, 1992 shall be deceased by $1,860.00 to $2,700.00, which represents the additional time expended in revising and correcting his previous fee applications in compliance with the Court's previous order.[7] Accordingly, Mr. Hockensmith is allowed a fee of $29,066.31, plus expenses of $2,037.58, less a retainer of $7,219.93:
REQUESTED FEES LESS 33% ALLOWED EXPENSES
$ 4,000.00 $ 1,320.00 $ 2,680.00 $ 500.00
27,623.32 9,115.70 18,507.62 529.41
9,059.24 2,989.55 6,069.69 638.98
2,700.00 891.00 1,809.00 369.19
__________ __________ __________ ________
$43,382.56 $14,316.25 $29,066.31 $2,037.58
With the exception of the objection to duplication of legal services, all other objections were resolved by the filing of Mr. Hockensmith's Second Response, which set forth his work with sufficient detail as to render the remaining objections moot. Since it was necessary for the Debtor's attorneys to confer, it is difficult if not impossible to determine the extent of any duplicated efforts. However, having reviewed his time records I find that the thirty-three percent reduction in allowed fees is sufficient to compensate the estate for any duplication of efforts that existed as well as the other infractions previously discussed.
NOTES
[1] Stuart Radloff's application was identical to the Hockensmith application.
[2] Stuart Radloff's Affidavit was identical to that of Dana Hockensmith.
[3] On October 6, 1992 Radloff filed his Application for Compensation seeking $28,976.50 for legal services and $2,077.85 for reimbursement of expenses. There were no objections filed to his application and an Order was issued on November 25, 1992 granting fees and expenses as requested.
[4] The last fee request includes hours expended by Hockensmith in revising and filing his Supplemental Application. Since this additional work was necessitated by Hockensmith's lack of knowledge of the Court's Guidelines, he has expressed a willingness to waive a portion of this additional fee request.
[5] Radloff and Riske received $20,000.00 as a retainer (including filing fee) prior to filing the bankruptcy.
[6] There is a discrepancy as to the amount of Mr. Hockensmith's initial retainer. The schedules indicate a retainer of $4,000.00, but he testified that he received $4,500.00 as a retainer. The Court assumes the $500.00 was used as the filing fee.
[7] See footnote 4.
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258 B.R. 206 (2001)
In re Kwan and Betty CHU, Debtors.
Nos. 99-45054 TG, RS 01-0018.
United States Bankruptcy Court, N.D. California.
January 31, 2001.
Lewis Phon, San Francisco, CA, for debtors.
Edward A. Kunnes, The Law Office of David A. Boone, San Jose, CA, for Creditors.
*207 MEMORANDUM OF DECISION
LESLIE TCHAIKOVSKY, Bankruptcy Judge.
The above-captioned debtors (the "Debtors") move to avoid the lien of Creditors Kin Lam Tse and Yuk Mui Tse ("Creditors") on their residence pursuant to 11 U.S.C. § 522(f)(1)(A). Creditors seek relief from the automatic stay in the above-captioned case to foreclose their lien pursuant to 11 U.S.C. § 362(d)(1). For the reasons specified below, the Court will deny the Debtors' motion and grant the Creditors' motion.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
The Debtors own a residence located in Alameda County, California (the "Residence"). The Residence is encumbered by a first deed of trust (the "First Deed of Trust") in favor of Bank of America. In 1991, the Creditors loaned $60,000 to the Debtors' corporation, Grand Orient Incorporated ("Grand Orient"). Grand Orient executed a promissory note in favor of the Creditors (the "Note") evidencing the debt (the "Debt"), and the Debtors executed a deed of trust (the "Deed of Trust") in favor of the Creditors granting them a security interest in the Residence to secure the Debt. The Deed of Trust was duly recorded in 1991.
The Debtors failed to repay the Debt as required by the Note. The Creditors filed an action for judicial foreclosure against Grand Orient and the Debtors. In May 1999 the Creditors obtained a judgment of foreclosure and order of sale (the "Judgment") against Grand Orient and the Debtors.
The Judgment includes the following provisions:
1. Grand Orient is declared to be indebted to the Creditors in specified amounts.
2. The Residence is ordered sold and, after payment of court costs and costs of the levy and sale, the proceeds paid to the Creditors with interest at the rate of ten percent per annum from the date of the judgment.
3. The Creditors are declared entitled to a deficiency judgment against Grant Orient. The court retains jurisdiction to determine the amount of the deficiency judgment.
4. The sale of the Residence is declared to be subject to the right of redemption.
5. Once the deed is delivered by the levying officer to the purchaser at the sale, the rights of defendants and all persons claiming under them after the execution of the Deed of Trust and, once the redemption period has elapsed, all such parties' equity of redemption shall be extinguished.
On June 16, 1999, before the Residence was sold at a judicial foreclosure sale, the Debtors filed a chapter 13 bankruptcy case. On July 19, 1999, the Debtors filed a chapter 13 plan (the "Plan"). The only secured creditor the Plan proposed to pay as such was Bank of America. Under the section entitled optional provisions, the Plan stated that: "The judgment lien of Kin Lam Tse and Yuk Mui Tse will be avoided to the extent it impairs the homestead exemption of debtors." The Creditors were served with a summary of the Plan and did not file an objection to it. In accordance with the Court's procedures, therefore, the Plan was confirmed without being set for hearing on August 30, 1999.[1]
*208 On November 17, 2000, the Debtors filed a motion to avoid the Creditors' lien on the Residence pursuant to 11 U.S.C. § 522(f)(1)(A) on the ground that it was a judicial lien that impaired their homestead exemption. On December 6, 2000, the Creditors filed an opposition to the Debtors' motion and requested a hearing. On January 4, 2001, the Debtors filed a motion for relief from the automatic stay. The motion for relief came on for preliminary hearing on January 12, 2001. Both parties appeared and the Court took the matter under submission.[2] Because the motion for relief from stay and the motion to avoid the Creditors' lien present the same issues and are fully briefed, the Court considers both motions to be under submission and, therefore, addresses and rules on both motions in this memorandum.
DISCUSSION
In their motion, the Debtors contend that the Creditors hold a judicial lien on the Residence and that the Debtors are entitled to avoid it pursuant to 11 U.S.C. § 522(f)(1)(A). The principal issue presented by these motions is whether the Creditors' lien qualifies as a judicial lien within the meaning of § 522(f)(1)(A).[3] A "judicial lien" is defined in 11 U.S.C. § 101(36) as a "lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding."
The Debtors concede that, prior to the issuance of the foreclosure judgment, the Deed of Trust was a security agreement rather than a judicial lien. Courts have consistently held that these categories are mutually exclusive. In re DeSeno, 17 F.3d 642, 645 (3rd. Cir.1994); In re County of Orange, 189 B.R. 499, 502 (C.D.Cal.1995). Section 522(f)(1)(A) does not authorize avoiding a security interest on the ground that it impairs the debtor's exemption. However, the Debtors contend that, when a judgment of judicial foreclosure is issued, the deed of trust merges with the judgment. At that point, the Debtors contend, the lien becomes a judicial lien that may be avoided under § 522(f)(1)(A). The Debtors cite no authority for this contention.[4]
The Creditors do not appear to contest the first point made by the Debtors: i.e., that when a foreclosure judgment is issued, the deed of trust merges with the judgment. However, they dispute the Debtors' contention that this changes the nature of the lien from a consensual lien into a judicial lien. By contrast with the Debtors, the Creditors cite three Third Circuit Court of Appeals decision as authority for their position: In re Johns, 37 F.3d 1021 (3rd Cir.1994); In re DeSeno, 17 F.3d 642 (3rd Cir.1994); and First National Fidelity Corp. v. Perry, 945 F.2d 61 (3rd Cir.1991).[5]
*209 The holdings by all three courts on the primary issues raised in those cases have since been statutorily overruled. However, these statutory changes do not detract from the three courts' preliminary conclusions that a security interest does not become a judicial lien upon issuance of a judgment of judicial foreclosure.[6]
In Perry, a creditor whose claim was secured only by the debtor's residence had reduced its claim to a foreclosure judgment pre-petition. The debtor filed a plan that proposed to pay the secured claim in full during the term of the plan. The Perry court considered whether this constituted an unlawful modification of a debt secured only by the debtor's residence. 11 U.S.C. § 1322(b)(2). The court concluded that it did and declined to confirm the plan. Id. 945 F.2d at 65-67.
The debtor contended that § 1322(b)(3) did not apply because once the foreclosure judgment was issued, the security interest was transformed into a judicial lien. The Perry court concluded that the issue was a close one. However, for policy reasons, given the purpose of § 1322(b)(2), the Perry court concluded that it was not. Id., 945 F.2d at 64-65. The Perry court reasoned that it was unlikely that Congress would wish the special protections given to home mortgages to terminate upon issuance of a foreclosure judgment. Id., 945 F.2d at 65.
While 11 U.S.C. § 1322(b)(2) is not at issue here, the same reasoning applies. Section 522(f)(1)(A) permits a debtor to avoid only judicial liens, not liens created by agreement. It seems unlikely that Congress would wish to prohibit avoidance of consensual liens prior to issuance of a foreclosure judgment but to permit avoidance after issuance of such a judgment.
Moreover, there is another reason for rejecting the Debtors' argument. As stated in In re Schlecht, 36 B.R. 236, 240 (Bankr.Alaska 1983):
The doctrine of merger is one aspect of the larger principle of res judicata. [Citation omitted.] The general rule of merger is that when a valid and final personal judgment is rendered in favor of the plaintiff, the plaintiff cannot maintain a subsequent action on any part of the original claim. [Citation omitted.] The original claim merges into the judgment. The effect of the merger is that the old debt ceases to exist and the new judgment debt takes its place. [Emphasis added.]
From this discussion, the Court concludes that, when a claim based on a security interest is reduced to judgment, while the claim may merge into the judgment, the security interest remains intact unless the judgment expressly cancels or avoids it. Here, the Judgment does not cancel or avoid the Deed of Trust.
CONCLUSION
For the reasons stated above, the Court concludes that the Creditors hold a security *210 interest in the Residence despite the fact that their claim was reduced to a foreclosure judgment pre-petition. Because 11 U.S.C. § 522(f)(1)(A) does not permit the Debtors to avoid a security interest on the ground that it impairs their homestead exemption, their motion to avoid the Deed of Trust will be denied. Furthermore, because the Plan does not provide for payment of the Debt during its term, the Creditors' security interest is not adequately protected, and their motion for relief from the automatic stay will be granted. The Court has already signed a previously lodged order granting Creditors relief from the automatic stay. Counsel for Creditors is directed to submit a proposed form of order denying the Debtors' motion to avoid their lien.
NOTES
[1] At the hearing on the motion, it was suggested that the Creditors' lien had already been avoided pursuant to the Plan. This contention is without merit. The use of the term "will" in the optional provision in the Plan implied that some further action will be taken to avoid the Creditors' lien. Since the Debtors drafted the Plan, ambiguous language must be interpreted in the manner least favorable to them. In re Miller, 253 B.R. 455, 459 (Bankr.N.D.Cal.2000).
[2] On January 16, 2001, the Creditors sent a letter to the Court citing additional authorities. The Court authorized the submission of the letter brief. However, there was no evidence that a copy of this letter was served on the Debtors. Therefore, this letter constitutes an improper ex parte contact, and the Court will not consider it.
[3] The meaning of "impairment" is set forth in § 522(f)(2). Assuming the Debtors' valuation of the Residence is accurate and the Creditors' lien is a judicial lien, § 522(f)(2) would permit the Debtors to avoid the Creditors' lien. The Creditors contend that the Debtors have substantially undervalued the Residence but have submitted no competent evidence to support this contention. However, because the Court concludes that the Creditors' lien is not a judicial lien, the Court need not reach the issue of valuation.
[4] However, the Debtors' position is not without some judicial support. In First National Fidelity v. Perry, 945 F.2d 61, 63 (3rd Cir. 1991) (a case cited by the Creditors), the Perry court notes that, in In re Coleman, 82 B.R. 15, 18 (Bankr.D.N.J.1988), a bankruptcy court concluded that § 1322(b)(2) did not apply to a security interest that had been reduced to a foreclosure judgment pre-petition because the foreclosure judgment was not a lien created by an agreement and therefore did not qualify as a "security interest" under the Bankruptcy Code.
[5] They also cite two bankruptcy court decisions: In re Laws, 163 B.R. 449, 452 (E.D.Pa. 1994); and Matter of Smith, 156 B.R. 11 (Bankr.D.N.J.1993). These lower court decisions simply cite and follow the authority of the higher courts without separate analysis.
[6] The legislative history to the Bankruptcy Reform Act of 1994 indicates that certain changes to § 1322 were made for the express purpose of overruling Perry and In re Roach, 824 F.2d 1370 (3rd Cir.1987). 140 Cong.Rec. H10,769 (October 4, 1994). Roach held that a default on a secured claim could not be cured after a judicial foreclosure judgment had been issued. As discussed above, Perry held that 11 U.S.C. § 1322(b)(2), prohibiting modification of a claim secured only by the debtor's residence, barred payment of a secured claim that had been reduced to a foreclosure judgment pre-petition. Sections 1322(c)(1) and (2) now expressly permit the cure of a secured claim after the issuance of a foreclosure judgment as long as the petition is filed before the foreclosure sale occurs. The Bankruptcy Reform Act of 1994 also statutorily overruled the primary issue addressed in DeSeno: i.e., whether a default on a security interest that had been reduced to a foreclosure judgment could be cured over time through a chapter 11 plan. The DeSeno court held that it could be. The Bankruptcy Reform Act of 1994 closed that loophole by adding § 1123(b)(5) which prohibits the modification of a debt secured only by the debtor's principal residence in a chapter 11 case.
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963 A.2d 653 (2009)
112 Conn.App. 478
Fred GALLIMORE
v.
COMMISSIONER OF CORRECTION.
No. 28935.
Appellate Court of Connecticut.
Argued December 2, 2008.
Decided February 3, 2009.
*655 Erin M. Kallaugher, special public defender, for the appellee (petitioner).
Toni M. Smith-Rosario, senior assistant state's attorney, with whom, on the brief, were Michael Dearington, state's attorney, and Linda N. Howe, senior assistant state's attorney, for the appellee (respondent).
BISHOP, DiPENTIMA and FOTI, Js.
PER CURIAM.
The petitioner, Fred Gallimore, appeals following the habeas court's denial of his petition for certification to appeal from the judgment denying his petition for a writ of habeas corpus. The petitioner claims that the court abused its discretion when it denied his petition for certification to appeal and improperly rejected his claims that his trial counsel rendered ineffective assistance. We dismiss the appeal.
The following facts and procedural history provide the necessary backdrop to the disposition of the petitioner's appeal. On June 1, 2002, the petitioner, along with Erin O'Connor, was arrested for assaulting and robbing Robert Schofield in the hallway of Schofield's apartment building in New Haven after the couple followed him there from a local convenience store. Schofield, who was seventy-four years old at the time, was pushed to the floor and injured during the robbery. His wallet, containing his identification and automated teller machine card, was taken. Schofield identified both O'Connor and the petitioner prior to their arrest while the pair was in police custody. O'Connor and the petitioner, who were separated after their arrest, gave to the police investigating the incident essentially the same account of what had occurred. They each claimed, in essence, that the alleged robbery was in actuality an altercation resulting from a dispute between O'Connor and Schofield involving the fee for sexual services. They alleged that Schofield physically accosted O'Connor after an agreed on price could not be reached and that the petitioner, who was waiting outside Schofield's apartment building in a car, merely, and in response to O'Connor's plea for help, separated the two.[1] O'Connor, however, gave a different account at the petitioner's trial when she testified for the state. At the petitioner's trial, her testimony basically was identical to that of Schofieldthat the pair robbed and assaulted Schofield in the hallway of his apartment building, pushing him to the floor and taking his wallet from his pants pocket.
After the jury trial, the petitioner was convicted of robbery in the second degree in violation of General Statutes § 53a-135(a)(1), conspiracy to commit larceny in the second degree in violation of General Statutes §§ 53a-48 and 53a-123(a)(3), and assault in the third degree of a person older than sixty years in violation of General Statutes § 53a-61a(a)(1). The petitioner was sentenced to an effective term of fifteen years of incarceration.[2] The petitioner filed a direct appeal with this court. His appellate counsel, however, was permitted to withdraw after filing an *656 Anders brief.[3] The appeal was dismissed on June 2, 2005, because the petitioner, proceeding pro se, failed to file a brief with this court. The petitioner subsequently brought this petition for a writ of habeas corpus. In his second amended petition, the petitioner asserted several claims of ineffective assistance of trial counsel. In a memorandum of decision, the habeas court denied the petition, finding as to his ineffective assistance of trial counsel claims that the petitioner had failed to prove that he was denied effective assistance of counsel under the two-pronged test set forth in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052,80 L.Ed.2d 674 (1984).[4] The court denied the petitioner's request for certification to appeal. The petitioner, on appeal, pursues three of the issues he raised in his petition.[5] The petitioner claims that trial counsel provided ineffective assistance by failing to cross-examine O'Connor properly, by failing to apprise the petitioner of plea offers from the state and by failing to investigate to prepare a defense.
Preliminarily, we set forth the proper standard of review and applicable legal principles that govern our resolution of these issues. "In a habeas appeal, although this court cannot disturb the underlying facts found by the habeas court unless they are clearly erroneous, our review of whether the facts as found by the habeas court constituted a violation of the petitioner's constitutional right to effective assistance of counsel is plenary.... Faced with a habeas court's denial of a petition for certification to appeal, a petitioner can obtain appellate review of the dismissal of his petition for habeas corpus only by satisfying the two-pronged test enunciated by our Supreme Court in Simms v. Warden, 229 Conn. 178, 640 A.2d 601 (1994), and adopted in Simms v. Warden, 230 Conn. 608, 612, 646 A.2d 126 (1994). First, he must demonstrate that the denial of his petition for certification constituted an abuse of discretion.... Second, if the petitioner can show an abuse of discretion, he must then prove that the decision of the habeas court should be reversed on its merits....
"To prove an abuse of discretion, the petitioner must demonstrate that the [resolution of the underlying claim involves issues that] are debatable among jurists of reason; that a court could resolve the issues [in a different manner]; or that the questions are adequate to deserve encouragement to proceed further.... For the petitioner to prevail on his claim of ineffective assistance of counsel, he must establish both that his counsel's performance was deficient and that there is a reasonable probability that, but for the counsel's mistakes, the result of the proceeding would have been different." (Internal *657 quotation marks omitted.) Guadalupe v. Commissioner of Correction, 83 Conn.App. 180, 182, 849 A.2d 883, cert. denied, 270 Conn. 911, 853 A.2d 525 (2004). Furthermore, "[i]n a habeas corpus proceeding, the petitioner's burden of proving that a fundamental unfairness had been done is not met by speculation ... but by demonstrable realities." (Emphasis added; internal quotation marks omitted.) Crawford v. Commissioner of Correction, 285 Conn. 585, 599, 940 A.2d 789 (2008).
We first address the petitioner's claim that the court improperly concluded that he failed to demonstrate that his trial counsel provided him with ineffective assistance by failing to cross-examine O'Connor properly. The petitioner argues that his trial counsel, Shepard Sherwood, failed to impeach O'Connor effectively in a number of ways. Chief among those was that counsel failed to cross-examine her as to possible favorable treatment from the state as a result of her testimony at the petitioner's trial and potential perjury charges lodged against her for her previous testimony and also about her history of drug use and criminal behavior. At the habeas trial, however, Sherwood testified that his strategy was not to impeach O'Connor at all in an attempt to convince the jury that her previous signed statement and testimony in which she indicated that no robbery had occurred was the truth. Sherwood's tactic was to portray her as angry and resentful of being incarcerated and that the change in her story was a result of her anger and resentment. "An attorney's line of questioning on examination of a witness clearly is tactical in nature. [As such, this] court will not, in hindsight, second-guess counsel's trial strategy." State v. Drakeford, 63 Conn. App. 419, 427, 777 A.2d 202 (2001), aff'd, 261 Conn. 420, 802 A.2d 844 (2002). After reviewing the record, we conclude that the court did not abuse its discretion in determining that the petitioner failed to meet his burden of showing that Sherwood was deficient in his cross-examination of O'Connor.
The petitioner's second claim on appeal involves Sherwood's failing to apprise him of plea offers from the state. The petitioner claims that he was prejudiced because Sherwood failed to explain to him fully, in terms that he could comprehend, the plea deal offered by the state. The petitioner also claims that there were actually two plea offers and that Sherwood never divulged the second offer to him and failed to explain the other fully. Sherwood testified that there was only one plea offer and that the petitioner flatly rejected it after Sherwood apprised him of it. The court made no specific finding in this regard; however, it stated that the petitioner "failed to introduce evidence in [the] habeas trial that supported any of the points [he raised]." After reviewing the record, we conclude that the court did not abuse its discretion in this determination.
The last claim on appeal involves the contention that Sherwood was ineffective for failing to investigate to prepare a defense. Specifically, the petitioner claims that Sherwood failed to find and interview Richard True, a potential exculpatory witness who apparently was living with O'Connor at the time of the petitioner's arrest. "[A]lthough it is incumbent on a trial counsel to conduct a prompt investigation of the case and explore all avenues leading to facts relevant to the merits of the case and the penalty in the event of conviction ... counsel need not track down each and every lead or personally investigate every evidentiary possibility." (Internal quotation marks omitted.) Crawford v. Commissioner of Correction, supra, 285 Conn. at 598-99, 940 A.2d 789. True died sometime after the petitioner's trial and, *658 therefore, did not testify at the habeas trial. As a result, we cannot say that the court abused its discretion in determining that the petitioner failed to meet his burden of proving ineffective assistance of trial counsel in this regard.
The court, after considering all of the evidence presented concluded that the petitioner had not been deprived of the effective assistance of counsel in any respect at any stage of the proceedings. Furthermore, the court's findings are supported by the evidence in the record. We conclude that the court's analysis is sound. Moreover, our thorough review of the issues raised by the petitioner and the court's resolution of those issues leads us to conclude that the petitioner has not demonstrated that further review is warranted. The court concluded properly that the petitioner failed to show that Sherwood's representation was deficient. The record does not reveal any errors made by trial counsel that deprived the petitioner of his right to effective representation. Considering the record in light of Strickland, we cannot conclude that the issues in this case are debatable among jurists of reason, that they could have been resolved in a different manner or that they raise any question deserving of further examination. See Simms v. Warden, supra, 230 Conn. at 616, 646 A.2d 126. We therefore conclude that the court's denial of the petition for certification to appeal reflected a sound exercise of discretion.
The appeal is dismissed.
NOTES
[1] O'Connor gave a signed statement to New Haven police indicating this version of events. She also testified as to this version of events at the petitioner's violation of probation hearing.
[2] This sentence was to run concurrently with a three year sentence that the petitioner was serving for a violation of probation. The substance of the violation of probation sentence was the underlying incidents to his criminal conviction. That sentence, however, was not part of the habeas trial and is, therefore, not part of this appeal.
[3] Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967).
[4] "Under [the Strickland] test, to prevail on a constitutional claim of ineffective assistance of counsel, the petitioner must demonstrate both deficient performance and actual prejudice. The first prong is satisfied by proving that counsel made errors so serious that he was not functioning as the `counsel' guaranteed by the sixth amendment. The second prong is satisfied if it is demonstrated that there exists a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Russell v. Commissioner of Correction, 49 Conn.App. 52, 53, 712 A.2d 978, cert. denied, 247 Conn. 916, 722 A.2d 807 (1998), cert. denied sub nom. Russell v. Armstrong, 525 U.S. 1161, 119 S.Ct. 1073, 143 L.Ed.2d 76 (1999).
[5] The petitioner raised a fourth claim in his brief to this court involving ineffective assistance of counsel during the postconviction, presentencing phase of his trial; however, the petitioner abandoned this claim at oral argument.
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82 So.2d 364 (1955)
Lawrence BLOOMFIELD, Willard Johnson, Harry G. Rodefeld, Albert W. Furen and Sheldon A. Lindsey, Appellants,
v.
CITY OF ST. PETERSBURG BEACH, Florida, a municipal corporation, Earl W. Compton, Carlisle T. Manly, Virginia R. Neel, Mayrie G. Woolf, Walter Sweeney, Rex Padgett, Ben F. Overton, Harold Soehl, and William Meinberg, Appellees.
Supreme Court of Florida. En Banc.
September 16, 1955.
*365 Sheldon A. Lindsey and R.M. Cargell, St. Petersburg Beach, for appellants.
*366 Carroll R. Runyon, St. Petersburg, Ben F. Overton, St. Petersburg Beach, and S.E. Simmons, St. Petersburg, for appellees.
THORNAL, Justice.
The appellees above named were plaintiffs in a declaratory judgment proceeding in the trial court. From a decree adverse to their liking the appellants, who were among the defendants below, have appealed.
The dispute grows out of a contest for political control of the government of the City of St. Petersburg Beach. By an amended complaint the appellees, Compton, Manly and Neel, contended that they, plus the appellants, Bloomfield and Johnson, were the duly elected and qualified City Commissioners of St. Petersburg Beach. The appellants Bloomfield, Johnson and Rodefeld contended by their answer that they, plus appellees, Compton and Neel, were the duly elected and qualified City Commissioners of said city. The whole dispute centered around the appellee Manly in that if he was a qualified elector of the city and therefore duly elected, the majority control of the government of the city rested with what we shall call the "Manly group". On the contrary, if Manly was not legally elected, the majority control rested with what we shall call the "Bloomfield group". Although ultimately the control of the government of the city turns on the question of the election of Mr. Manly, the facts set forth in the complaint as well as the answer reveal a condition of municipal chaos and uncertainty that according to appellees justified the exercise of the jurisdiction of the Circuit Court under the Declaratory Judgment Act, F.S.A. § 87.01 et seq. The other parties to this appeal were various city officials appointed by the respective groups.
It seems that they had a city election at St. Petersburg Beach on May 4, 1954. When the smoke of the political battle cleared away, the tabulation of votes revealed Manly had received 262 votes, Compton had received 253, Rodefeld had 185, and Furen had 181. It was obviously a factional contest. Under normal conditions pursuant to the municipal charter, the results of the election would have been that Manly and Compton would become members of the City Commission. In fact the then-incumbent City Commission, which included three of the appellants, formally met on May 7, 1954, canvassed the ballots and certified the results of the election. On June 15, 1954, on the occasion of the first meeting of the City Commission subsequent to the election, the appellees Manly and Compton, having theretofore taken the oath of office, attended the meeting with the expectation of performing the duties of City Commissioners. At this point the so-called "Bloomfield group" declared Manly ineligible to hold the office of City Commissioner on the ground that at the time of the election he was not a qualified elector of the community for reasons hereinafter pointed out; that his election was, therefore, of no consequence at all, and in the judgment of this group, it was necessary to fill the vacancy created by the alleged ineligibility of Mr. Manly, and in order to fill such alleged vacancy, Mr. Rodefeld was elected to a position on the municipal commission.
The contesting groups thereupon withdrew to opposite sides of the same meeting room. In an atmosphere reminiscent of the Hatfields and the McCoys challenging each other from opposite sides of the valley, each group proceeded to appoint its own city department heads. Out of the welter of feuding that resulted, the City of St. Petersburg Beach, like Noah's Ark, had two of everything; including city clerks, police chiefs, patrolmen, city attorneys, city judges and building inspectors. The "Bloomfield group" retained control of the Police Department patrol car, as well as the books and records of the city, but this did not produce any dismay on the part of the department heads appointed by the "Manly group". Apparently the respective police officers patroled opposite sides of the street, the respective city attorneys rendered varied and conflicting opinions as to the authority of the various officials. Offenders against law and order were faced with possible trial by two municipal judges, and the Gulf *367 Beach Bank, where public funds were on deposit, refused, for obvious reasons, to honor any checks at all because the officials at the bank did not know whose check to honor.
It cannot be denied that when this suit was filed, as alleged in the complaint and admitted in the answer, "business affairs and government of the City of St. Petersburg Beach, Florida, are in a state of chaos and confusion". The complaint was filed as a step toward eliminating the chaos. This leads us back to what appears to be the controlling question to wit: the eligibility of Mr. Manly to run for municipal office in the City of St. Petersburg Beach.
Manly's eligibility was questioned on the ground that he was not an elector of the city within the contemplation of applicable statutes at the time that he became a candidate for office early in 1954. The Circuit Judge, after hearing all of the testimony, concluded that Mr. Manly was a qualified elector and therefore eligible to hold office in the city. Appellants seek reversal on several grounds, the principal one, however, being founded on certain provisions of the city charter which require that municipal officials shall be qualified electors of the municipality. Another section of the charter provides that "all electors shall be qualified according to the laws of the State of Florida or special acts applicable to electors in the County of Pinellas."
Appellants further contend that under Section 97.041, Florida Statutes, F.S.A., in order to be a qualified elector among other things a person must be "a permanent resident living in Florida for one year and residing in the county where he wishes to register for six months". Furthermore, appellants refer to Article VI, § 1 of the Florida Constitution, F.S.A., which fixes a very similar requirement, and also reference is made to Chapter 24214, Acts of 1947, governing registration in Pinellas County where in addition to the other requirements, it is stipulated that to be an elector in a municipality one must be a resident of such municipality for three months. As other grounds for reversal appellants contend that the provisions of the Declaratory Judgment Act are not available to the appellees to test the title to an office inasmuch as the appropriate procedure, so they contend, would have been quo warranto, and furthermore that in this contest the burden should have been upon the plaintiffs below to establish that Mr. Manly was a qualified elector rather than upon the defendants below to prove that he was not.
As we shall see, the principal question to be resolved is whether Manly was a qualified elector on May 4, 1954, when at least 262 of his fellow-townsmen thought he was by voting for him for City Commissioner.
It becomes necessary to summarize briefly the history of Mr. Manly's residence in Florida. It appears that he and his wife visited St. Petersburg Beach in 1949. They returned again in 1950, and bought a piece of real estate. They were visitors again in 1951. It then appears that early in 1952 they decided to build a motel on the land which they had previously purchased, constructing one apartment in the motel for themselves pursuant to a decision to move to St. Petersburg Beach to make their future home. Early in 1952 application was made for a construction loan at a local savings and loan association, and the motel was completed in August, 1952.
The Manlys, prior to the completion of the motel, placed on the market for sale their home in Michigan. They actually sold it in September, 1952, and put the proceeds of the sale into their Florida property or in Florida banks. Prior thereto Mrs. Manly had moved to the apartment in the motel and had brought with her from Michigan all of the personal effects of herself and her husband such as dishes, lamps and other personal belongings accumulated over a lifetime. They sold the bulk of their furniture with their home in Michigan. In August, 1952, they closed out two bank accounts in Michigan and immediately opened an account in Florida. Ever since the construction of the motel they have retained the same motel apartment as their residence according to their original plan. The Manlys filed their joint income tax return *368 for 1952 income in the Jacksonville District Office of the Internal Revenue Department, the same having been filed between January and March, 1953. Similarly in 1954 they filed their income tax return in the same office for the 1953 income taxes. In both of these returns they showed their residence to be at the address of the motel above described. Both husband and wife testified positively that they decided to become legal residents of Florida on December 1, 1952, when Mr. Manly was in Florida. Their testimony is positive, consistent and unequivocal on this point. It appears that on or about that date they concluded that the motel cost them more than they had anticipated and was not yet producing the income they expected, and that therefore Mr. Manly would continue working for his company in Michigan for one more year in order to supplement their income and to qualify him for an additional year on his retirement benefits. He went back to Michigan early in 1953 to accomplish this purpose and this purpose alone. For awhile he had a room with a nephew there and then rented a small apartment on a month-to-month basis. All of this time, however, he referred to Florida as his home, his wife remained in Florida taking care of their motel and it was only on one or two brief occasions described as visits, and the evidence shows that they were, that she ever went back to Michigan during 1953. Finally in December, 1953, having worked the year according to plan and having earned the additional retirement benefits, Mr. Manly returned to St. Petersburg Beach, registered to vote in January, 1954, and qualified later as a candidate for the City Commission with the result above mentioned. In addition to the foregoing facts it appears that Manly had a Michigan tag on his automobile in 1953 for the reason that he kept the car in Michigan while he was working. He retained his Michigan driver's license because up there they had a three-year license and his did not expire until 1954. Out of all of these facts we are called upon to determine whether Manly was an elector with at least one year of residence behind him at the time he registered to vote and subsequently qualified to run for municipal office. The Circuit Judge concluded that he was, and we concur with the Circuit Judge.
We recognize the rule announced in the landmark case of Smith v. Croom, 7 Fla. 81, where it was stated: "The mere intention to acquire a new domicil without the fact of an actual removal avails nothing; neither does the fact of removal without the intention." Applying the rule in converse, however, we have consistently held that where a good faith intention is coupled with an actual removal evidenced by positive overt acts, then the change of residence is accomplished and becomes effective. This is so because legal residence consists of the concurrence of both fact and intention. The bona fides of the intention is a highly significant factor. In Wade v. Wade, 93 Fla. 1004, 113 So. 374, 375, the governing principles were announced as follows:
"In Phillmore's Law of Domicile (page 18), quoted with approval by this court in Smith v. Croom, 7 Fla. 81, it is said that `domicile' answers very much to the common meaning of our word `home.' Used in this connection, `legal residence' or `domicile' means a residence at a particular place, accompanied with positive or presumptive proof of an intention to remain there for an unlimited time. The term `domicile' was defined by the Roman law to mean:
"`In whatsoever place an individual has set up his household goods and made the chief seat of his affairs and interests, from which, without some special avocation, he has no intention of departing; from which, when he has departed, he is considered to be away from home, and to which, when he has returned, he is considered to have returned home.'
"The place where a married man's family resides is generally to be deemed his domicile, but the presumption from this circumstance may be overcome by other circumstances. Smith v. Croom, supra."
*369 We also hold that establishment of one's residence will usually depend on a variety of acts or declarations all of which must be weighed in the particular case as evidence would be weighed upon any other subject.
We hold further that if a man actually becomes a bona fide resident of this state and intends to remain permanently a citizen of the state, mere absence with the specific clear-cut bona fide intention of returning will not destroy the residence actually theretofore established. It appears to this Court that in absolute good faith Mr. Manly fully intended to establish his permanent residence in Florida in December, 1952. This intention was evidenced by innumerable steps theretofore definitely taken by disposing of his home in Michigan, the transfer of his bank accounts, the acquisition of a home in Florida, the filing of income tax returns, and by the maintenance of the Florida home by his wife with whom he enjoyed a happy and congenial marriage relationship. All of these together with the other factors mentioned above point inescapably to the conclusion that as of December, 1952, this man not only bona fidely intended but actually had taken the necessary steps to make himself a resident of the State of Florida. The intent and the act, therefore, had concurred. He was a resident from that date forward.
We distinguish this case from Campbell v. Campbell, Fla., 1952, 57 So.2d 34, where the evidence pointed to an intent to establish a residence for divorce purposes at some date in the future. In the Campbell case this Court held that the concurrence of the intent and the act of establishing the residence had not concurred. Although a headnote indicates a holding that actual physical presence in the state for the required time is essential, a careful examination of the opinion will reveal that in actuality such was not entirely the ruling of the Court. The Court did insist, however, that in a divorce proceeding which is a cause in which the State is always an unnamed third party, there must be a positive showing that the establishment of actual permanent residence is bona fidely intended and that there must be clear and positive evidence of fulfilling this intention by affirmative acts that point conclusively to the desire to make Florida one's permanent residence. Here again the intent and the act must concur.
Having held that the appellee Manly was a qualified elector within the requirements of the laws applicable, we consider the other two questions raised by appellants. In the matter of the propriety of employing the Declaratory Judgment Act it appears to us that the proceeding under this act was thoroughly justifiable in the case at bar in order to bring an expeditious termination to the public confusion that resulted from the situation described above. While the matter of the right to an office was involved, it is perfectly obvious from this record, that the basic objective of the proceeding was to eliminate the chaos that existed throughout the entire municipal government. If the issue had been limited solely to trying title to an office, quo warranto would have been the remedy. In view of the record in this particular case, appellants cannot successfully dispute the appropriateness of the procedure followed.
We dispose of the alleged error assigned on the matter of the burden of proof by a reference to the record itself which reveals that the appellants through their attorney took the position they were willing to assume the burden and stated, "We would like for the record to show that we assumed that burden voluntarily, and it was not cast upon us, and we do not admit it was cast upon us as a matter of law". Having voluntarily assumed the responsibility of going forward with the proof, we cannot see that the appellants are now in a position to found an alleged error on this proposition. Therefore, we do not consider it necessary to explore the law applicable.
Finding no error, the decree of the lower court is, therefore,
Affirmed.
*370 TERRELL, HOBSON and SEBRING, JJ., concur.
DREW, C.J., concurs specially.
THOMAS J., dissents.
ROBERTS, J., not participating.
DREW, Chief Justice (concurring specially).
In this case, as in many other cases before us recently, the question of the propriety of bringing the action under the Declaratory Judgment Statute, Chapter 87, F.S.A., is raised. I think the situation presented here, and so ably discussed in the opinion of Justice THORNAL, clearly evidences the wisdom of the provision in Section 87.12, F.S.A., that the existence of another adequate remedy shall not preclude the exercise of jurisdiction.
It was never intended that the adoption of Chapter 87, F.S.A., would eliminate all other forms of action. On the other hand, it was never intended to put the Act in a strait jacket because another remedy might be available. In my specially concurring opinion in Halpert v. Olesky, Fla., 65 So.2d 762, text page 764, speaking on this general subject I said:
"I cannot agree that Chapter 87, F.S.A., is as limited in its scope as the main opinion seems to indicate. Section 87.05, F.S.A., especially provides that the enumeration of certain specific things in Sections 87.02, 87.03 and 87.04 does not restrict the exercise of the general powers conferred in 87.01 in any proceedings where declaratory relief is sought. Our statute is broad and flexible and is designed to serve and does serve a highly useful purpose.
"Section 87.11 of the Act negatives such a narrow construction as is apparently placed on it by the main opinion. It provides that `its purpose is to settle and to afford relief from insecurity and uncertainty with respect to rights, status and other equitable or legal relations; and is to be liberally administered and construed.' (Emphasis added.) Section 87.12 provides that the existence of `another adequate remedy' shall not preclude the exercise of jurisdiction.
"It is my view that to place such a narrow and strained construction on this Act is not only inconsistent with many of our decisions construing it, but does violence to the legislative intent. In the practical application of the Act to given facts or circumstances, there is no substitute for the proper exercise of sound judicial discretion by the court."
While it would be disastrous to extend the provisions of Chapter 87, F.S.A., supra, to all forms of action, equal harm would be done by unduly limiting the scope of this Act. This is especially true where, as here, when the case reaches us, it has been thoroughly litigated by the parties.
THORNAL, J., concurs.
THOMAS, Justice.
I dissent because I think the litigation should have been determined in quo warranto proceedings.
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706 F.2d 228
113 L.R.R.M. (BNA) 2321, 113 L.R.R.M. (BNA) 3226,97 Lab.Cas. P 10,070
The LACKAWANNA LEATHER COMPANY, Appellant,v.UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,AFL-CIO & CLC, District Union No. 271, formerlyAmalgamated Meatcutters & ButcherWorkmen of North America,AFL-CIO (Local 271),Appellee.The LACKAWANNA LEATHER COMPANY, Appellee,v.UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,AFL-CIO & CLC, District Union No. 271, formerlyAmalgamated Meatcutters & ButcherWorkmen of North America,AFL-CIO (Local 271),Appellant.
Nos. 81-2434, 82-1052.
United States Court of Appeals,Eighth Circuit.
Submitted Jan. 13, 1983.Decided April 25, 1983.
Robert L. Berry (argued), Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for appellant and cross-appellee.
Thomas F. Dowd (argued), Dowd & Fahey Law Offices, Omaha, Neb., for appellee and cross-appellant.
Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, HEANEY, BRIGHT, ROSS, McMILLIAN, ARNOLD, JOHN R. GIBSON, and FAGG, Circuit Judges, en banc.
BRIGHT, Circuit Judge.
1
Lackawanna Leather Company (Lackawanna) appeals the district court's1 grant of summary judgment enforcing an arbitration award in favor of United Food & Commercial Workers International Union, AFL-CIO & CLC, District Union No. 271 (Union). Lackawanna contends the district court should have vacated a portion of the award because the arbitrator exceeded the scope of his authority by interpreting a section of the collective bargaining agreement not placed in issue by the parties. The Union cross-appeals from the district court's denial of attorneys' fees, claiming entitlement to fees on grounds that Lackawanna wrongfully refused to comply with the arbitration award. We affirm the judgment of the district court.I. Background.
2
On March 11, 1980, Lackawanna served one of its employees, Charles Hodges, with a written notice of poor work performance. The notice reflected Lackawanna's dissatisfaction with Hodges' operation of a hide-shaving machine. Upon receiving the warning, Hodges also received a notice of discharge, pursuant to section 8.4 of the collective bargaining agreement then in effect. Section 8.4 provided in pertinent part:
3
An employee, who during the course of a years [sic] period, receives three written notices in relation to inefficiency, absesenteeism [sic], etc. shall be immediately discharged upon receipt of the third notice.
4
Lackawanna discharged Hodges because he had received two prior notices, one for an unexcused absence, and one for excessive tardiness, in less than a year's time.
5
The Union filed a grievance on behalf of Hodges, contending that Lackawanna did not issue the warning notice and discharge for justifiable cause under the labor agreement, and that Lackawanna's action, in fact, was taken in retaliation for Hodges' refusal to take vacation time rather than draw unemployment during a recent plant shutdown. After the initial grievance procedure proved unsuccessful, the parties submitted the grievance to arbitration.
6
Following a hearing, the arbitrator found that although Lackawanna had justifiable cause for issuing the warning notice, it had wrongfully discharged Hodges. The arbitrator held that section 8.4 of the collective bargaining agreement allowed discharge only when the employer issued three written notices for the same type of infraction. Because Hodges had not received any prior notices for poor work, the arbitrator held that Hodges should not have been discharged and ordered him reinstated.
7
Lackawanna filed a complaint in the district court claiming the arbitrator both exceeded his authority by interpreting section 8.4, when neither side had placed the meaning of section 8.4 in issue, and interpreted section 8.4 incorrectly. Lackawanna sought an order either vacating and correcting that portion of the award dealing with section 8.4, or, in the alternative, reopening arbitration in order to allow it to present evidence regarding the meaning of section 8.4. The district court granted summary judgment in favor of the Union, and Lackawanna appealed.2
8
II. Discussion.
9
A. Arbitrator's Scope of Authority.
10
Lackawanna contends the arbitrator exceeded his authority in interpreting section 8.4 because neither the Union nor Lackawanna disputed the meaning of section 8.4 or placed its interpretation in issue. Lackawanna argues that the Union and Lackawanna had always understood section 8.4 to allow discharge after the employee received three written notices of any combination of infractions. According to Lackawanna, the only issue placed before the arbitrator involved whether Lackawanna properly issued a poor work notice to Hodges. Consequently, Lackawanna argues, that portion of the arbitrator's award which interprets section 8.4 incorrectly must be vacated. We disagree. In our judgment, the record demonstrates that the arbitration award properly rests on the collective bargaining agreement.
11
An arbitrator's award must be upheld as long as it "draws its essence" from the collective bargaining agreement. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61, 4 L.Ed.2d 1424 (1960); United Food & Commercial Workers, Local No. 222, AFL-CIO v. Iowa Beef Processors, Inc., 683 F.2d 283, 285 (8th Cir.1982). In determining whether an arbitrator has exceeded his authority, the agreement must be broadly construed with all doubts being resolved in favor of the arbitrator's authority. Resilient Floor and Decorative Covering Workers, Local Union 1179 v. Welco Mfg. Co., 542 F.2d 1029, 1032 (8th Cir.1976).
12
Lackawanna claims that the arbitrator acted outside his jurisdiction because neither party ever submitted the "proper interpretation" of section 8.4 to him. That argument is seriously flawed. Whether the arbitrator erred in reaching a particular result is irrelevant to the determination of whether the arbitrator acted within his jurisdiction. The central issue is whether the arbitrator acted within his jurisdiction in interpreting section 8.4. We hold that he did so act.
13
Lackawanna's justification for discharge required that it establish a factual and contractual basis for the discharge. Similarly, the Union's challenge of the discharge required that it establish a factual and contractual basis for its challenge. The record demonstrates that both parties supported their relative positions by relying on the collective bargaining agreement.
14
The grievance letter filed by the Union contended that Hodges' warning notice and discharge were "not for justifiable cause as per the labor agreement. " (Emphasis added). Lackawanna introduced evidence during the arbitration hearing that Hodges' discharge was in accordance with company policy and the collective bargaining agreement. At the outset of the case, the arbitrator outlined the issue as follows:
15
Did the Company have proper cause to warn and terminate Charles Hodges for poor work on March 7, 1980? If not, what is the proper remedy? [Emphasis added.]
16
Thus, the arbitrator considered each element of the issue separately, asking, first, whether Hodges' conduct justified a warning notice, and, second, whether a warning notice properly made would justify the discharge.
17
After concluding that Hodges' conduct justified a warning notice, the arbitrator considered Lackawanna's right to terminate Hodges. The arbitrator first recognized Lackawanna's position "that under Section 8.4 discharge is automatic upon receipt of a third warning notice for any reason." Next, after observing that neither party introduced any evidence regarding the interpretation of section 8.4, and that "[a] Company witness testified that the discharge of Hodges was in accord with Company policy, but no prior instances of the administration of such a policy were introduced[,]" the arbitrator referred to the usual interpretation given provisions similar to section 8.4.
18
The arbitrator observed that provisions such as section 8.4 are common in collective bargaining agreements and that such provisions are commonly interpreted to require multiple notices of specific offenses in order to justify discharge. The arbitrator construed section 8.4 to require three notices of inefficiency to justify discharge. Here, the company gave Hodges only one such notice. Thus, by determining the meaning of section 8.4, the arbitrator addressed the precise issue presented to him in the grievance letter: whether the warning notice and discharge constituted justifiable cause "as per the labor agreement."
19
That the parties failed to introduce evidence regarding the interpretation of section 8.4 does not constitute a valid ground for vacating the award. A provision such as section 8.4 and its ordinary interpretation must be reached in any decision made by an arbitrator interpreting a collective bargaining agreement. Without evidence as to the meaning of the contract clause in question, an arbitrator may properly give that clause a reading ordinary to similar labor contracts. To hold otherwise relieves the employer of its burden of showing that its actions were justified.
20
The Supreme Court has held that an arbitrator does not exceed the scope of the issue presented to him as long as the arbitrator "[stays] within the areas marked out for his consideration." United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 598, 80 S.Ct. at 1361. In applying this principle to the instant case, District Judge Schatz reasoned as follows:It is clear that the Union wished the arbitrator to decide whether Mr. Hodges' "warning notice and his discharge of March 11, 1980 is ... for justifiable cause as per the labor agreement. ["] Absent a formal submission of the issue, this grievance letter of March 12, 1980, served to present the issue to the arbitrator. The Court notes that very little, if any, evidence was presented at the arbitration hearing with regard to the past interpretations of section 8.4. However, that is not dispositive. What is dispositive is the fact that the Company relied on section 8.4 to discharge Mr. Hodges, and the grievance submitted to the arbitrator asked whether there was just cause for the warning and discharge. In United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, an arbitrator's award was challenged as going beyond the scope of the submission. The court held that he had not, noting that "he had stayed within the areas marked out for his consideration." 363 U.S. at 597 [80 S.Ct. at 1361]. In the instant case, Lackawanna may not have agreed with [the arbitrator's] construction of Section 8.4 of the CBA, but it cannot be said that the arbitrator went outside the areas marked for his consideration. "It is the arbitrator's construction which was bargained for, and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his." United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 599 [80 S.Ct. at 1362]. * * *
21
This Court will not review the reasoning of the arbitrator; it has merely determined that [the arbitrator] reached a rational conclusion based on the terms of the CBA and the grievance submitted to him. * * * Therefore, the defendant Union is entitled to have the arbitrator's decision enforced. [The Lackawanna Leather Co. v. United Food & Commercial Workers Int'l Union, AFL-CIO, & CLC, District Union No. 271, etc., No. 80-0-398, slip op. at 5-7 (D.Neb. Nov. 24, 1981) (footnotes omitted).]
22
After reviewing the record, we agree with the reasoning of the district court.
23
Lackawanna also raises the equitable doctrines of "unclean hands" and equitable estoppel in contesting enforcement of the award. Lackawanna claims that the Union should not benefit from the arbitrator's award after refusing to agree to reopen the arbitration hearing when it knew the arbitrator's decision was wrong. This argument lacks merit. Lackawanna carried the burden of proving its actions were justified under the labor contract. Regardless of the graciousness or ungraciousness of the Union's actions, Lackawanna cannot relieve its burden by asserting equitable doctrines in this proceeding. The Union did not mislead Lackawanna or make false representations regarding its claim upon which Lackawanna relied. See United States v. Aetna Casualty & Surety Co., 480 F.2d 1095, 1099 (8th Cir.1973) (estoppel not available for protection of one suffering loss solely by reason of own failure to act).
24
B. Attorneys' Fees.
25
In its cross-appeal, the Union seeks attorneys' fees, contending that Lackawanna acted without justification in refusing to comply with the arbitrator's award. Attorneys' fees are ordinarily not recoverable by the prevailing party in federal litigation unless authorized by statute or justified by circumstances in which the losing party has acted in bad faith. General Drivers, Helpers and Truck Terminal Employees, Local No. 120 v. Sears, Roebuck & Co., 535 F.2d 1072, 1077 (8th Cir.1976). Attorneys' fees are not authorized by statute in suits to enforce arbitration awards. Id. The district court found that Lackawanna did not act in bad faith in questioning the arbitrator's award. Because we find no abuse of discretion in the district court's determination, we affirm the court's denial of the Union's claim.
26
III. Conclusion.
27
We affirm the judgment of the district court and order that the arbitrator's award be enforced. In addition, we uphold the district court's denial of the Union's request for attorneys' fees. Costs are awarded to appellee.
28
JOHN R. GIBSON, Circuit Judge, concurring in part and dissenting in part, with whom FLOYD R. GIBSON, Senior Circuit Judge, and ROSS, Circuit Judge, join.
29
I concur in Part II.B of the majority opinion. I respectfully dissent from Part II.A because, in my view, the question of the proper interpretation of section 8.4 of the collective bargaining agreement was never submitted to the arbitrator for resolution.
30
On March 12, 1980, the Union filed a written grievance on behalf of Hodges. The grievance letter provided:
31
This letter is to be considered an official grievance on behalf of Charles Hodges' warning notice and discharge. It is the position of Mr. Hodges and the Union that the warning notice and his discharge of March 11, 1980 is not for justifiable cause as per the labor agreement.
32
Be further advised that it is Mr. Hodges' and the Union's position that this action is directly connected to the fact that Mr. Hodges refused to take his vacation and elected to draw unemployment during the recent plant shutdown.
33
Therefore, it is the request of Mr. Hodges and this Union that he be reinstated to his position with full back pay and seniority and the warning notice be removed from his file.
34
The majority opinion concludes that the language "not for justifiable cause as per the labor agreement " placed interpretation of section 8.4 in issue. I disagree. A fair reading of the letter does no more than indicate that the warning notice and discharge was not for justifiable cause under the labor agreement. Read in its entirety, the letter does no more than place into issue the propriety of the warning notice and the applicability of section 8.4. The letter does not, however, raise the question of that section's meaning and interpretation, and the language on which the majority bases its opinion, "as per the labor agreement," when read in the context of the letter, does not create such an issue.
35
Although the Union now contends that the proper interpretation of section 8.4 was part of the arbitration submission, this after-the-fact rationalization is belied by the Union's own conduct. The only issue disputed at either the informal grievance proceeding or the arbitration hearing was whether the written notice for poor work issued on March 11, 1980 was factually justified. Neither side, however, raised any issue, made any argument, or presented any evidence on whether Lackawanna could combine written notices for different types of infractions under section 8.4 in automatically terminating Hodges. Patently, neither party even thought that the interpretation of section 8.4 was in issue.
36
At the completion of the arbitration hearing, the arbitrator ruled that Lackawanna was justified in issuing the poor work notice. This conclusion is not contested here. What is contested is the arbitrator's further holding that section 8.4 of the CBA required three written notices for the same infraction and that Hodges' dismissal was improper since his three written notices were for different infractions. The arbitrator ordered Hodges to be reinstated but his warning notice for poor work to remain in effect.
37
Although a reviewing court gives deference to an arbitrator's decision, judicial deference does not grant carte blanche approval to any decision that an arbitrator might make. Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir.1980) (citing International Association of Machinists v. Hayes Corp., 296 F.2d 238, 243 (5th Cir.1961), reh'g denied, 316 F.2d 90 (5th Cir.1963) (per curiam)). An arbitrator can bind the parties only on issues that they have agreed to submit, and whether the arbitrator has exceeded those bounds is a proper issue for judicial determination. International Association of Machinists, District 776 v. Texas Steel Co., 639 F.2d 279, 283 (5th Cir.1981) (citing Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d at 583). A court may vacate a labor arbitration award if the arbitrator exceeds the scope of the submission by ruling on issues not presented to him by the parties. See, e.g., Kansas City Luggage & Novelty Workers Union, Local No. 66 v. Neevel Luggage Manufacturing Co., 325 F.2d 992, 994 (8th Cir.1964); Local Union No. 2-477, Oil, Chemical & Atomic Workers, International Union v. Continental Oil Co., 524 F.2d 1048, 1050 (10th Cir.1975), cert. denied, 425 U.S. 936, 96 S.Ct. 1668, 48 L.Ed.2d 177 (1976); Textile Workers Union of America, Local Union No. 1386 v. American Thread Co., 291 F.2d 894, 900-01 (4th Cir.1961); cf. Totem Marine Tug & Barge, Inc. v. North American Towing, Inc., 607 F.2d 649, 651-52 (5th Cir.1979) (commercial arbitration award may be vacated if arbitrator awards on matter not submitted).1 See generally R. Gorman, Basic Text on Labor Law, Unionization, and Collective Bargaining 588 (1976); D. Nolan, Labor Arbitration Law and Practice in a Nutshell 88-92 (1979); St. Antoine, Judicial Review of Labor Arbitration Awards: A Second Look at Enterprise Wheel and its Progeny, 75 Mich.L.Rev. 1137, 1150-52 (1977).
38
There is no dispute in this appeal as to whether the interpretation of section 8.4 is an arbitrable issue. The basic issue raised is whether the arbitrator exceeded the scope of the submission by construing the meaning of section 8.4 of the CBA and deciding that the three notices for work infractions required by section 8.4 to terminate an employee had to be for the same type of infraction. Careful review of the record can only justify a conclusion that interpretation of section 8.4 was not an issue that was "specifically or necessarily included in the subject matter submitted to arbitration," and that the arbitrator, by construing section 8.4, exceeded the scope of the submission. Kansas City Luggage & Novelty Workers Union, Local No. 66 v. Neevel Luggage Manufacturing Co., 325 F.2d at 994; cf. Truck Drivers & Helpers Union Local 784 v. Ulry-Talbert Co., 330 F.2d 562, 566 (8th Cir.1964) (arbitrator exceeds jurisdiction when award goes beyond limitation contained in collective bargaining agreement).
39
The Union makes two primarily factual arguments (which the district court found dispositive) to sustain the arbitrator's authority in this case.
40
First, the Union contends that the inclusion of the phrase "and discharge" in the grievance letter, supra, implicated the interpretation of section 8.4 as an issue at arbitration. I disagree. As stated previously, the grievance letter, when read in its entirety, does no more than raise the applicability of section 8.4, not its meaning and interpretation. Thus, the Union's narrow focus on the quoted phrase is misplaced. By itself, the phrase is so ambiguous and vague that it would not have put the parties fairly on notice that the proper interpretation of section 8.4 was being submitted to arbitration. Cf. Totem Marine Tug & Barge, Inc. v. North American Towing, Inc., 607 F.2d at 651 (parties to commercial arbitration entitled to notice). Adequate notice of the issues is a prerequisite to a fundamentally fair hearing, for without such notice the parties would be effectively denied an opportunity to prepare and present their case at arbitration. I believe that the grievance letter in this case failed to provide the parties with such adequate notice.
41
Moreover, the record shows no evidence that the parties had any understanding to the contrary.2 Rather, the opposite obtains. Testimony from the deposition of Arbitrator Doyle shows that neither party raised any issue or presented any evidence to the effect that Lackawanna could not combine written notices for different types of infractions under section 8.4 in automatically terminating Hodges. Affidavits submitted by Lackawanna are further confirmation of the same. Finally, in its Memorandum of Law in Support of Defendant's Cross-Motion for Summary Judgment, even the Union concedes that "Section 8.4 was not challenged at the hearing ...." Altogether, this is persuasive evidence that the interpretation of section 8.4 was not within the contemplation of the arbitration submission.
42
Secondly, the Union contends that the arbitrator was required to interpret section 8.4 by virtue of Lackawanna's reliance on that section in terminating Hodges. This argument assumes, however, that the parties understood there to be an issue in the first instance. In light of the evidence considered above to the contrary, the Union's argument is unsound. The company's reliance on section 8.4 does not demonstrate the company had notice that the interpretation of section 8.4 was in issue; rather, it tends to show merely that the company was automatically applying to Hodges what had been a long-standing and uniform company practice concerning the termination of employees under that section.3
43
The Supreme Court's Steelworkers Trilogy sets forth the principles which are to govern the arbitration process. The question of whether the arbitrator erred in reaching his result is not before us. Nor are we concerned with whether the arbitrator's interpretation of the contract may differ from what we believe it should be. Rather, the sole question before us, under United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960), is whether the arbitrator went beyond those "areas marked out for his consideration." I believe the arbitrator has exceeded those boundaries and, in doing so, has denied the parties their rightful opportunity to prepare and present their case. The result is a clear deprivation of industrial due process.
44
Accordingly, we should reverse and remand to the district court to order the arbitration hearing to be re-opened on the question of the proper interpretation of section 8.4.
45
FLOYD R. GIBSON, Senior Circuit Judge, concurring in part and dissenting in part.
46
I join Judge John Gibson's concurring and dissenting opinion but feel compelled to add a few comments of my own.
47
The majority argues that notice of the issue of Hodges' "termination" put the parties on notice of the issue of whether the warnings had to be for the same offense. However, there is absolutely nothing in the record to indicate that the union, the company, or the arbitrator thought the same offense question was at issue at the time of the hearing. The company reasonably had no idea there was a same offense issue; neither did the union. The arbitrator sub silentio sprung his own interpretation on this non-issue in his award without an iota of evidence in the record to support it, all in apparent direct conflict with past company practices as recognized by all the parties. The sandbagging that occurred in this case is simply a miscarriage of justice, and makes the arbitration proceeding in this case a farce.
48
It is difficult for me to fathom why the union and a majority of this court are fearful of a remand so that the now decisive issue in this case can be fairly and fully presented to an impartial arbitrator.
1
The Honorable Albert G. Schatz, United States District Judge for the District of Nebraska
2
Initially, a divided panel reversed the district court. On December 17, 1982, however, we issued an order granting a rehearing en banc. The parties reargued the case before the court en banc on January 13, 1983. The effect of this opinion serves to vacate the panel opinion previously filed on November 10, 1982 and reported at 692 F.2d 536
1
The Totem court, in vacating a commercial arbitration award, relied on the United States Arbitration Act Secs. 10(c)-10(d), 9 U.S.C. Secs. 10(c)-10(d) (1976)
2
In determining the scope of an arbitration submission, courts consider a number of factors to be relevant, including correspondence between the parties, arguments and discussion during arbitration, and evidence of confusion, uncertainty, or dissent in the record. See Local Union No. 2-477, Oil, Chem. & Atomic Workers, Int'l Union v. Continental Oil Co., 524 F.2d at 1050; Kroger Co. v. International Bhd. of Teamsters, Local No. 661, 380 F.2d 728, 731-32 (6th Cir.1967); Sweeney v. Morganroth, 451 F.Supp. 367, 369-70 (S.D.N.Y.1978); Delta Lines, Inc. v. Brotherhood of Teamsters, Local 85, 409 F.Supp. 873, 875-76 (N.D.Ca.1976); College Hall Fashions, Inc. v. Philadelphia Joint Bd., Amalgamated Clothing Workers of Am., 408 F.Supp. 722, 729 (E.D.Pa.1976). The majority concludes, without citing any support, that the failure to present any evidence is not a "valid ground." It is illogical to single out a particular factor as "invalid" when a variety of factors need to be considered in determining the scope of an arbitration submission. Here, when the failure to present evidence is considered along with other circumstances, it is evident that neither party presented any evidence on the interpretation of section 8.4 because neither party thought that was an issue
3
Exhibit X, attached to Lackawanna's motion for summary judgment, demonstrates that seventeen employees had been terminated pursuant to section 8.4 since June 15, 1975 for a combination of different types of infractions
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194 Pa. Superior Ct. 132 (1960)
Commonwealth
v.
Gazal, Appellant.
Superior Court of Pennsylvania.
Argued November 14, 1960.
December 14, 1960.
*133 Before RHODES, P.J., GUNTHER, WRIGHT, WOODSIDE, ERVIN, WATKINS, and MONTGOMERY, JJ.
Barney Phillips, for appellant.
William Claney Smith, Assistant District Attorney, with him Edward C. Boyle, District Attorney, for Commonwealth, appellee.
OPINION BY GUNTHER, J., December 14, 1960:
George Gazal was convicted and sentenced in the Court of Oyer and Terminer of Allegheny County on a charge of receiving stolen goods. This charge grew out of a burglary committed by Milton Kendrick, Jr., Martel Inmon and Thaw Washington who stole certain jewelry, silverware and watches from the Biggard Company on March 22, 1959. Gazal was indicted for receiving 15 stolen watches from this burglary.
Pleas of guilty were entered by Thaw Washington to burglary and by Louis Esposito to receiving stolen goods concerning this crime. Gazal waived jury trial and was tried before Honorable ROBERT M. MORRIS, specially presiding. The testimony of the owner of the establishment, together with that of Washington, Esposito and the police, was offered against Gazal.
*134 Kendrick and Inmon demanded a jury trial and a jury was selected to try them before Judge MORRIS. Prior to the trial of these cases, the court below took the pleas of Esposito and Washington and also heard the non-jury trial of Gazal. Washington testified that he participated in the burglary; that he knew Gazal for about ten years; that after the burglary he met Gazal in the B & M Restaurant and informed him that he had some watches; that Gazal rode over to the Southside of Pittsburgh with him and that 29 watches were turned over to Gazal for examination. The next day, Gazal met Washington at the same place, returned 14 watches and kept 15, giving Washington $500.00 in cash for the 15 watches.
Washington testified that he lived at 2124 Webster Avenue, Hill District of the City of Pittsburgh. Officer Butzler testified that he received a telegram, while Gazal was in custody, concerning the location of the missing watches and that this telegram was sent from a pay station in the Hill District about a block away from Washington's residence. As a result of this information 13 watches were recovered in a locker at the Pennsylvania Railroad Station. At the close of the Commonwealth's case, counsel for Gazal demurred to the evidence and requested additional time to present a brief on the evidence produced against his client.
On the same day, the Commonwealth opened to the jury on the cases involving Kendrick and Inmon. The cases were then recessed until the following morning, at which time both Kendrick and Inmon withdrew their pleas of not guilty and entered pleas of guilty. The court then proceeded to take testimony from the witnesses relative to the burglary charges. In the course of the testimony of Inmon and Kendrick, the assistant district attorney questioned them relative to the delivery of watches to Gazal but this testimony did not *135 implicate Gazal. Gazal was not present when this testimony was taken.
Sometime after these pleas of guilty to burglary and the testimony of Kendrick and Inmon, Gazal was found guilty of receiving stolen goods. Gazal moved for a new trial on the ground that the evidence produced against him was insufficient and also on the ground that the court committed error by permitting the interrogation of Inmon and Kendrick at the time of their pleas on matters which might have been material as affecting the case against him without opportunity to be present to cross-examine the witnesses. From the denial of the motion for a new trial and the imposition of sentence Gazal has taken this appeal.
On this appeal defendant raised the same objections to his conviction as he has in the court below.
The evidence produced by the Commonwealth was sufficient to make out the charge of receiving stolen goods. Gazal made no attempt to explain away his possession of 15 watches from one of the thiefs. He offered no explanation why he purchased 15 watches for $500.00. The evidence disclosed that defendant drove over to the Southside around midnight and that the watches were obtained from the apartment of a girl friend of Inmon. The evidence disclosed that the watches were stolen. These circumstances and those related by Washington were sufficient to sustain the conviction. Circumstances which would lead a reasonably prudent man to suspect that the goods have been stolen may be properly considered by a trial judge sitting without a jury in arriving at the determination of an accused's guilt. Commonwealth v. Frankina, 156 Pa. Superior Ct. 152, 39 A. 2d 628. Gazal knew or should have known that Washington was not a bona fide dealer in jewelry and, in turn, Washington undoubtedly knew the background of Gazal as a gambler. *136 The production of the watches from a hiding place should have put any reasonably prudent man on notice that these watches were stolen. Why would any person, not a dealer in watches, have 29 watches around? While Washington did not specifically inform Gazal that these watches were stolen, nevertheless, at the trial he so testified. Ownership of stolen property can be established by the uncorroborated testimony of a thief, if believed. Commonwealth v. Cohan, 177 Pa. Superior Ct. 532, 111 A. 2d 182. The testimony of the principal felon, in any event, is not necessary in order to convict a person of receiving stolen property. The rule that evidence of an accomplice be received with caution applies only where the witness joined in the commission of the particular crime for which the defendant is being tried. On a charge of receiving stolen goods, the thief who stole the goods received by the defendant is not an accomplice of the defendant. Commonwealth v. Cohan, supra.
The second contention of the defendant is equally without merit. There is no requirement under the law that when the burglar is tried for his crime, the one charged with receiving stolen goods must be present and must be given an opportunity to cross-examine such felon. The charges here involved were separate crimes committed by different persons. Defendant's case was concluded and it was only at the request of counsel that complete disposition of this case was postponed. The disposition of the burglary case, therefore, had no connection whatever with the disposition of the crime of receiving stolen goods. As a matter of fact, The Penal Code of June 24, 1939, P.L. 872, section 820, 18 P.S. section 4820, expressly authorizes prosecution and punishment of receivers of stolen property as well before as after the principal felon shall be taken and convicted. The mere fact that defendant's name was *137 mentioned in the burglary trial does not give him the right to be present.
The judgment of sentence is affirmed.
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722 F.Supp.2d 37 (2010)
UNITED STATES of America ex rel. Brady FOLLIARD, Plaintiff-Relator,
v.
CDW TECHNOLOGY SERVICES, INC., and CDW Government, Inc., Defendants.
Civil Action No. 07-2009(ESH).
United States District Court, District of Columbia.
June 28, 2010.
*38 H. Vincent McKnight, Jr., McKnight & Kennedy, LLC, Silver Spring, MD, for Plaintiff-Relator.
David M. Nadler, David Lee Tayman, Dickstein Shapiro LLP, Washington, DC, for Defendants.
MEMORANDUM OPINION
ELLEN SEGAL HUVELLE, District Judge.
Plaintiff-relator Brady Folliard ("relator") brings this qui tam action under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729 et seq., on behalf of the United States against defendants CDW Technology Services, Inc. ("CDWTS") and CDW Government, Inc. ("CDWG") (collectively "CDW"). Defendants now move to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), arguing that another qui tam complaint, filed two years before the instant complaint, deprives the Court of subject matter jurisdiction under the "first-to-file" bar of 31 U.S.C. § 3730(b)(5). For the reasons discussed herein, defendant's motion will be granted.
BACKGROUND
The Court need not repeat the facts and procedural history previously set forth in a prior Memorandum Opinion, see United States ex rel. Folliard v. CDW Tech. Servs., Inc., No. 07-CV-2009, 722 F.Supp.2d 20, 21-25, 2010 WL 1541224, at *1-*3 (D.D.C. Apr. 21, 2010), but will limit its discussion to those facts that relate only to this motion.
I. THE LIOTINE ACTION
In 2005, Joseph Liotine filed a qui tam suit under the FCA against CDWG in the U.S. District Court for the Southern District of Illinois. See Compl., United States ex rel. Liotine v. CDW-Government, Inc., No. 05-CV-033 (S.D. Ill. filed Jan. 19, 2005) ("Liotine Compl."). Paragraph 70(F) of the Liotine complaint alleges that CDW violated the FCA in part by
[s]elling non trade compliant items such as certain Tektronix printers (from 1999 to 2001) and accessories which originated from non trade compliant countries. While the government could purchase such items through an open market card, the items could not be listed in the GSA schedule. Despite this, Defendant knowingly listed approximately 20-25 similar items (such as certain HP backup tapes) which were created or assembled *39 in non-trade compliant countries. Because Defendant deliberately placed every item into one database, trade compliant and non trade compliant goods were commingled.
Id. ¶ 70(F).
II. THE INSTANT MOTION
Relator Folliard filed the instant suit in 2007. The gravamen of Folliard's complaint is that from 2007 to the present, CDW submitted false claims to the government by selling Hewlett-Packard ("HP") computer products and supplies in contravention of the Trade Agreements Act ("TAA"), 19 U.S.C. §§ 2501 et seq., through the GSA Advantage and Solutions for Enterprise-Wide Procurement ("SEWP") websites maintained by the General Services Administration ("GSA") and the National Aeronautics and Space Administration ("NASA"), respectively. As alleged in the complaint, when federal agencies make purchases for public use pursuant to acquisition contracts, they may only buy products from "designated" countries as specified in the TAA and its related regulations. See Folliard, 722 F.Supp.2d at 21-23, 2010 WL 1541224, at *1. The Court previously dismissed Folliard's claims relating to the GSA procurement portal under Federal Rule of Civil Procedure 12(b)(6). See id. at 37, at *14.
Defendants now argue that Folliard's lawsuit is barred under 31 U.S.C. § 3730(b)(5), which provides that "no person other than the Government may ... bring a related action based on the facts underlying" an earlier-filed qui tam action. In response, Folliard argues that his complaint is distinguishable from Liotine's because they allege different types of fraud involving different federal contracts and agencies. (See Pl.'s Opp'n to Defs.' Mot. to Dismiss ["Pl.'s Opp'n"] at 2, 5.) The United States, which has not intervened in this case, filed a statement of interest that largely echoes Folliard's position. Defendants respond that Folliard's argument elevates form over substance, and that in light of the analysis of § 3730(b)(5) in United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C.Cir.2003), Folliard's claims are barred because they are based on the "same material elements of fraud" as Liotine's. See id. at 217.
ANALYSIS
The parties agree that Hampton's analysis of the first-to-file rule governs the instant motion, but defendants advocate for dismissal by arguing that Hampton is controlling, while relator retorts that Hampton is distinguishable. Applying the controlling law to the allegations by Folliard and by Liotine, the Court is persuaded that Hampton and the statutory text require dismissal of Folliard's claims.
In Hampton, the D.C. Circuit found that the plaintiff's FCA qui tam action, in which she alleged that the defendants had engaged in Medicare home health care billing fraud, was barred by an earlier-filed action that alleged a similar fraudulent scheme by one of the same defendants. See 318 F.3d at 218-19. The Court of Appeals concluded that § 3730(b)(5) served to bar "`actions alleging the same material elements of fraud' as an earlier suit, even if the allegations [of the later-filed complaint] `incorporate somewhat different details.'" Id. at 217 (quoting United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189 (9th Cir.2001)) (emphasis added). In so doing, the Court rejected "another possible test, one barring claims based on `identical facts.'" Id. at 218. Acknowledging that there is no bright line rule for determining whether differences between complaints are "material," *40 the Court held that § 3730(b)(5) bars a subsequent action if it contains "merely variations" of the fraudulent scheme described in the first action. Id.
Here, Folliard's complaint alleges procurement fraud related to both the GSA and NASA contracts.[1] He claims that CDW submitted false claims and made false statements with respect to HP products listed for sale on the GSA Advantage and SEWP websites, in that CDW falsely listed those products as originating in the United States or as TAA-compliant when, in fact, the products did not originate here or in any other designated country. (See Am. Compl. ¶¶ 19-70, 73-75, Exs. 1A-1B; see also Pl.'s Opp'n at 7-8.) As Folliard alleges, these mislistings would be material because, by the express terms of its GSA contract and related federal acquisition regulations, CDWG "certified that it would only sell end products under these contracts to the United States Government that originate in designated countries," and that it would not sell end products that originate in non-designated countries such as China, India, and Malaysia. (Am. Compl. ¶ 17.) Similarly, SEWP allegedly requires vendors to correctly indicate a product's country of origin so that NASA contracting officers can determine the TAA's applicability to that product on a case-by-case basis. (See id. ¶ 23.) Liotine's complaint also alleges that CDWG listed and sold HP products on the GSA website that were not TAA-compliant,[2] but unlike Folliard, Liotine does not allege that CDWG misrepresented those products as TAA-compliant. Rather, CDWG's claims were false because it had certified to GSA that it would not sell noncompliant products through the GSA portal. Therefore, according to Folliard, the fact that the fraudulent scheme alleged by Liotine did not involve misrepresentations about products' countries of origin means that Liotine alleged a materially different type of fraud than Folliard does. (See Pl.'s Opp'n at 4-5.) In light of Hampton, the Court disagrees.
As the D.C. Circuit noted in Hampton, the "material elements" of a typical FCA claimsuch as Folliard'sare that (1) the defendant presented a claim to the government, (2) the claim was false, and (3) the defendant knew that the claim was false. See 318 F.3d at 218 (citing 31 U.S.C. § 3729(a)(1)-(3)(2002)). The Court of Appeals then compared the text of the plaintiff's complaint and the earlier-filed complaint to determine if their differences were material. The plaintiff's complaint alleged, inter alia, that the defendants "submitted improper bills for services for her mother and other patients" by "bill[ing] for services that were miscoded; already paid for; performed by others; [or] never administered," and by billing for "supplies and medications that were unnecessary or never received...." Id. at 219. The earlier-filed complaint contended that one of the defendant's "home health subsidiaries billed the government for services that did not meet the Medicare eligibility criteria, for undocumented services, *41 and for services not medically necessary." Id. Although the two complaints differed slightly in some of the types of billing fraud alleged (e.g., "miscoded" bills versus "undocumented" services), the Court of Appeals found that both sets of allegations established the same material elements of fraud, and that the plaintiff's claims merely listed additional examples of how the common defendant defrauded the government within the context of home health services. See id. at 218-19.
Hampton thus counsels that this Court must compare the Liotine and Folliard complaints at a sufficiently high level of generality, because Folliard's later-filed complaint will not pass muster by merely providing additional details about "the nature and extent of [the] fraud in the provision of" a given set of services (i.e., government procurement services), even if the manner of the later-alleged fraud "varie[s] greatly...." Id. at 219. Here, both Liotine and Folliard allege that (1) CDWG presented a claim to the government related to HP products listed through a procurement portal; (2) the claim was false by virtue of CDWG's failure to adhere to the requirements imposed upon government contractors in accordance with the TAA and related regulations; and (3) CDWG knew the claims were false. The difference between Liotine's allegations of non-compliant listings and Folliard's allegations of non-compliant listings that were misrepresented as compliant is therefore immaterial. Folliard's complaint merely alleges a variation on how CDW defrauded the government under the TAA in the course of fulfilling HP procurement orders, much as the Hampton plaintiff merely alleged additional examples of how the defendant there had defrauded the government under Medicare vis-à-vis home health services. Indeed, to credit Folliard's argument under the "material elements" test would come dangerously close to adopting the "identical facts" test that was explicitly rejected by Hampton.
The United States and Folliard also argue that the latter's allegations are distinguishable from Liotine's because they involve "completely different contracts and completely different agencies," unlike the two complaints at issue in Hampton, which both asserted the same material elements fraud in the context of home health services. (U.S. Second Statement of Interest at 4 ("U.S. Stmt."); see also Pl.'s Opp'n at 11-12.) No court appears to have squarely addressed this question,[3] but the United States suggests that the different procurement contracts and contracting agencies are relevant because the critical question is not whether the government as a whole was on notice of fraud related to the defendant, but rather whether "the administrating agencies themselves were on notice of the potential fraud in connection with their respective contracts." (U.S. Stmt. at 4 n. 3 (emphasis added).) However, the text of § 3730 and the statute's underlying policies do not support the creation of a distinction between the two complaints on this basis.[4]
*42 Section 3730(a), entitled "Responsibilities of the Attorney General," provides that "[t]he Attorney General diligently shall investigate a violation under section 3729," and that "[i]f the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action under this section against the person." 31 U.S.C. § 3730(a) (emphases added). This language strongly suggests that once a relator has alleged, in the government's name, that a defendant submitted false claims to any federal governmental entity, this filing serves first and foremost as notice to the Attorney General that he should investigate the allegations. Accordingly, the statutory language suggests that the primary function of a qui tam complaint is to notify the investigating agency, i.e., the Department of Justice ("DOJ"). Cf. United States ex rel. Batty v. Amerigroup Illinois, Inc., 528 F.Supp.2d 861, 874 (N.D.Ill.2007) ("The allegations in [the earlier-filed action] of which the government had notice and an opportunity to investigate should be considered in determining whether Plaintiff's case is duplicative [under § 3730(b)(5)]." (emphasis added)); United States ex rel. Chovanec v. Apria Healthcare Group Inc., 606 F.3d 361, 364 (7th Cir.2010) (explaining that § 3730(b)(5) is intended to bar "secondary suits that do no more than remind the United States of what it has learned from the initial suit," because "[t]he author of the fraud won't escape when the first suit (or the ensuing federal investigation) tells the agency everything it needs to know" (emphases added)).[5]
Moreover, the policy underlying § 3730 militates against accepting relator's argument. In Hampton, the D.C. Circuit noted that the history of the False Claims Act bears heavily on interpreting the first-to-file bar because it "demonstrates repeated congressional efforts to walk a fine line between encouraging whistle-blowing and discouraging opportunistic behavior." 318 F.3d at 218. The Court of Appeals therefore concluded that § 3730(b)(5) "must be analyzed in the context of these twin goals of rejecting suits which the government is capable of pursing itself, while promoting those which the government is not equipped to bring on its own." Id. (quoting United States ex rel. Springfield Terminal Ry. v. Quinn, 14 F.3d 645 (D.C.Cir.1994)). For this reason, courts must strive to minimize "duplicative claims" that "do not help reduce fraud or return funds to the federal fisc, since once the government knows the essential facts *43 of a fraudulent scheme, it has enough information to discover related frauds." United States ex rel. LaCorte v. Smith-Kline Beecham Clinical Labs., Inc., 149 F.3d 227, 234 (3d Cir.1998). As this Court has recognized, "[p]ermitting infinitely fine distinctions among complaints has the practical effect of dividing the bounty among more and more relators" by constricting how broadly a court will construe the fraud alleged inand thus the potential recovery onthe first-filed complaint, "thereby reducing the incentive to come forward with information of wrongdoing." United States ex rel. Ortega v. Columbia Healthcare, Inc., 240 F.Supp.2d 8, 12 (D.D.C.2003). Thus, the purpose of the first-to-file bar is not to enable the government to intervene at its discretion in materially similar fraud actions, but to protect the first-filed relator precisely in order to incentivize private citizens to bring informative claims under the FCA.
To permit Folliard's suit would contravene these statutory policies. Folliard never worked for the defendants, and his complaint contains no "insider" information that a DOJ attorney who was already investigating Liotine's complaint could not have learned. Rather, Folliard merely reiterated Liotine's core allegation that CDWG was making false claims related to federal procurement of HP products. It is irrelevant "whether the United States put[] those facts to their best use. The allegations of the [Liotine] suit[] are what they are...." Chovanec, 606 F.3d at 365. Rather, the question is whether Folliard's lawsuit alleges a "materially similar situation[] that ... investigations launched in direct consequence of [Liotine's] complaint[] would have revealed...." Id. at 365 (emphasis added); cf. id. at 365 (finding later-filed action alleging billing fraud in Illinois between 2002 and 2004 was barred by earlier-filed allegations about same defendant's 1990s billing fraud in California and Kansas, despite the fact "that the United States apparently did not conduct the sort of follow-up investigation and prosecution that would have prevented [the defendant's] office in Illinois from conducting an upcoding scam in the early 2000s").
It is reasonable to conclude that the government, armed with Liotine's allegations about government procurement of HP products from CDWG, was "equipped... on its own" to discover the extent to which defendants had other federal procurement contracts that were governed by the TAA and, in turn, whether any wrongdoing had occurred. See Hampton, 318 F.3d at 218. For example, a DOJ attorney looking into Liotine's claims could have easily reviewed publicly available information to determine whether CDWG was a party to other government procurement contracts that required TAA-compliance. See, e.g., CDW-G, Federal Government Resources, Products and Solutions, at http://www.cdwg.com (permitting registered users to search public contract information by federal agency and specific contract) (last visited June 28, 2010); see also CDW-G Federal Government, at http:// web.archive.org/web/XXXXXXXXXXXXXX/ http://www.cdwg.com/shop/profiles/federal. asp (same, as archived on Aug. 29, 2006) (last visited June 28, 2010). The investigating attorney could then have determined whether CDWG was listing any HP products for sale through the procurement portals associated with those contracts.
In sum, to permit Folliard's complaint to proceed under the above circumstances would deviate from "`the golden mean'" between offering "`adequate incentives for whistle-blowing insiders with genuinely valuable information'" and discouraging "`opportunistic plaintiffs who have no significant information to contribute of their own....'" Graham County Soil & Water *44 Conservation Dist. v. United States ex rel. Wilson, ___ U.S. ___, 130 S.Ct. 1396, 1406, 176 L.Ed.2d 225 (2010) (quoting United States ex rel. Springfield Terminal R.R. Co. v. Quinn, 14 F.3d 645, 649 (D.C.Cir.1994)). Accordingly, the Court concludes that Folliard's action is "based on the facts underlying" Liotine's previously filed qui tam action, and it is therefore barred under § 3730(b)(5).
CONCLUSION
For the foregoing reasons, defendants' motion is granted, and the complaint is dismissed for lack of jurisdiction. A separate order accompanies this Memorandum Opinion.
NOTES
[1] Although the Court has dismissed Folliard's GSA-related claims under Rule 12(b)(6), this is not relevant under § 3730(b)(5), which looks only to whether a later-filing relator has "br[ought] a related action." These GSA claims clearly would have been barred by the first-to-file rule had the instant jurisdictional motion been filed before the Rule 12(b)(6) motion.
[2] Although the Liotine complaint does not explicitly reference the TAA, the Court agrees with defendant that by including phrases such as "non-trade compliant countries," Liotine put the government on notice that CDW was allegedly violating the requirements of the TAA with respect to the sale of HP products. (See Reply in Supp. of Defs.' Mot. to Dismiss ["Defs.' Reply"] at 4 n. 4.)
[3] Compare United States ex rel. Pratt v. Alliant Techsystems, Inc., 50 F.Supp.2d 942, 950 (C.D.Cal.1999) (stating in dicta that "a new defendant and different contracts" would "preserve the Court's jurisdiction" under the first-to-file bar), with Hyatt v. Northrop Corp., No. 87-CV-6892, 1989 U.S. Dist. LEXIS 18941, at *4 (C.D.Cal. Dec. 27, 1989) (dismissing, without analysis, allegations under first-to-file bar despite different government contract underlying some of the later-filed claims).
[4] In addition, the Court's prior opinion suggests that each procurement contract is only material to the elements of Folliard's claims because it is associated with a specific website where defendants allegedly mislisted the HP products at issue. The Court previously determined that each agency's procurement website represents the "place" (if only in cyberspace) where part of the alleged fraud took place. See Folliard, 722 F.Supp.2d at 30-31, 2010 WL 1541224, at *8. Thus, where Liotine alleged that defendants listed non-compliant items "on the GSA schedule" by placing them "into one database," see Liotine Compl. ¶ 70(f), Folliard alleged that defendants listed non-compliant items in that same GSA location as well as another, SEWP. However, Hampton clarifies that where a later-filed complaint adds different locations for the alleged fraud, these "are not differences in the material elements of the fraud." 318 F.3d at 218 (rejecting later-filing plaintiff's argument that her complaint was not barred because it alleged fraud by common defendant's subsidiary in Georgia, while first-filed complaint alleged fraud in other states but not Georgia); see also, e.g., United States ex rel. Branch Consultants v. Allstate Ins. Co., 560 F.3d 371 (5th Cir.2009) (holding that later-filed case "could not avoid the preclusive effect of [the first-filed case] by focusing on additional instances of fraud occurring in other geographic locations").
[5] Apria's passing reference to "tell[ing] the agency everything it needs to know" might seem to support the United States' argument about the importance of notice to the administering agency, but Aprialike Hampton considered multiple suits alleging Medicare billing fraud and had no occasion to consider the precise question presented here.
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943 So.2d 316 (2006)
ALHAMBRA HOMEOWNERS ASSOCIATION, INC., a Florida not-for-profit corporation, Appellant,
v.
Adnan ASAD, Wafa Asad, Issa Asad, and Noha Asad, Appellees.
No. 4D06-835.
District Court of Appeal of Florida, Fourth District.
December 13, 2006.
Lawrence D. Bache of Law Office of Lawrence D. Bache, Pembroke Pines, for appellant.
Roger G. Pickles of Law Office of Robert P. Kelly, Hollywood, for appellees.
GROSS, J.
In this case we hold that a defendant is entitled to recover attorney's fees under a statute awarding fees to the prevailing party in litigation after the plaintiff took a voluntary dismissal without prejudice. We apply the general rule even though the plaintiff subsequently refiled the identical lawsuit and ultimately prevailed.
On April 13, 2005, Alhambra Home-owners Association filed a complaint for injunctive relief and damages against appellees, Adnan, Wafa, Issa, and Noha Asad, the fee simple owners of real property subject to a declaration of covenants and restrictions for the Alhambra residential community. The complaint alleged that the Asads violated the declaration by painting their home a color not approved by the Association.
As a defense, the Asads contended that the Association had not complied with a condition precedent to bringing suit, in that it failed to notify the Florida Department of Business Regulation and request mandatory mediation before filing suit, in violation of section 720.311, Florida Statutes (2004).[1] In its reply, the Association alleged that section 720.311 was not applicable.
On May 18, 2005, the Asads moved for summary judgment based on the Association's *318 failure to comply with section 720.311. Two days before the motion hearing, on July 8, 2005, the Association filed a notice of voluntary dismissal without prejudice. After filing the dismissal, the Association paid the costs mandated under Florida Rule of Civil Procedure 1.420(d).
The parties attended mediation in September, 2005, which was unsuccessful. The Association refiled the complaint. Ultimately, the Asads acceded to the demands of the Association by paying $1,000 in fines and repainting their home.
In the dismissed action, the Asads moved for attorney's fees under section 720.305(1), Florida Statutes (2004), which provides that the "prevailing party" in litigation between the association and a member "is entitled to recover reasonable attorney's fees and costs." The trial court ruled that the Asads were "entitled to reasonable attorney's fees as prevailing parties" and entered a judgment for $8,146.
The issue in this case is whether the Asads were "prevailing parties" under section 720.305(1).
The general rule is that when a plaintiff voluntarily dismisses an action, the defendant is the "prevailing party" within the meaning of statutory or contractual provisions awarding attorney's fees to the "prevailing party" in litigation. See Griffin v. Berkley S. Condo. Ass'n, 661 So.2d 135 (Fla. 4th DCA 1995) (applying prevailing party provision in condominium statute, section 718.303, Florida Statutes (1993)); Hatch v. Dance, 464 So.2d 713, 714 (Fla. 4th DCA 1985) (in a case where plaintiff voluntarily dismissed "after limited pre-trial activity," court held that "it is well-established that statutory or contractual provisions providing for an award of attorney's fees to the prevailing party in a litigation encompasses defendants in suits which have been voluntarily dismissed"); Stuart Plaza, Ltd. v. Atl. Coast Dev. Corp. of Martin County, 493 So.2d 1136, 1137 (Fla. 4th DCA 1986) (involving prevailing party attorney's fee provision in a lease); Boca Airport, Inc. v. Roll-N-Roaster of Boca, Inc., 690 So.2d 640, 641 (Fla. 4th DCA 1997) (applying attorney's fee provision of mechanics' lien statute and recognizing that Stuart Plaza "stated the correct rule"); Lion Oil Co. v. Tamarac Lakes, Inc., 232 So.2d 20 (Fla. 4th DCA 1970) (applying mechanic's lien statute); Vidibor v. Adams, 509 So.2d 973 (Fla. 5th DCA 1987) (involving section 723.068, Florida Statutes (1985)); Century Constr. Corp. v. Koss, 559 So.2d 611 (Fla. 1st DCA 1990) (involving contractual provision); Landry v. Countrywide Home Loans, Inc., 731 So.2d 137 (Fla. 1st DCA 1999) (attorney's fee provision on mortgage note); Ajax Paving Indus., Inc. v. Hardaway Co., 824 So.2d 1026, 1029 (Fla. 2d DCA 2002) (contractual provision); Rushing v. Caribbean Food Prods., 870 So.2d 953 (Fla. 1st DCA 2004) (lease provision).
Factually, the closest case to this one is Dolphin Towers Condominium Ass'n, Inc. v. Del Bene, 388 So.2d 1268 (Fla. 2d DCA 1980). There, a unit owner sued a condominium association seeking to compel the association to remove a trellis and trees from a recreation area of the condominium. The association raised the affirmative defense of failure to join the owner of the trellis and trees as an indispensable party. Id. at 1269. The unit owners took a voluntary dismissal; they later refiled the identical action, except that the owners of the improvements were added as party defendants. Id.
The second district held that the association was the prevailing party in the first action within the meaning of section 718.303(1), Florida Statutes (1979), a statute *319 containing "prevailing party" language similar to section 720.305(1). The court rejected the argument that the filing of the second lawsuit negated the association's right to recover fees for the first suit, observing that the "association incurred attorney's fees in asserting what proved to be a meritorious affirmative defense." Id. The court reasoned that "the legislature must have had this situation in mind, as well as those in which a defendant might prevail on the merits, when it provided for the allowance of attorney fees to the prevailing party." Id. This court has cited Dolphin Towers with approval. See Hills of Inverrary Condos., Inc. v. Slachter, 444 So.2d 1132 (Fla. 4th DCA 1984).
Applying the general rule consistent with Dolphin Towers, we conclude that the Asads were the prevailing parties in the first suit. They correctly asserted the defense of failure of a condition precedent. In the face of a likely adverse ruling on the Asads' motion for summary judgment, the Association opted for a voluntary dismissal without prejudice. The refiling of the same suit after mediation does not alter the Asads' right to recover prevailing party attorney's fees incurred in defense of the first suit.
The Association relies upon language in Thornber v. City of Fort Walton Beach, 568 So.2d 914, 919 (Fla.1990), to avoid the application of the general rule. The issue in Thornber was whether certain defendants were the prevailing parties in a federal civil rights suit after the plaintiff voluntarily dismissed the action with prejudice. Holding that the defendants were prevailing parties entitled to statutory attorney's fees, the supreme court wrote:
We agree with the district court that the council members prevailed in this action. In general, when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party. Stuart Plaza, Ltd. v. Atlantic Coast Development Corp., 493 So.2d 1136 (Fla. 4th DCA 1986). A determination on the merits is not a prerequisite to an award of attorney's fees where the statute provides that they will inure to the prevailing party. Metropolitan Dade County v. Evans, 474 So.2d 392 (Fla. 3d DCA 1985); State Department of Health & Rehabilitative Services v. Hall, 409 So.2d 193 (Fla. 3d DCA 1982). There must be some end to the litigation on the merits so that the court can determine whether the party requesting fees has prevailed. Simmons v. Schimmel, 476 So.2d 1342 (Fla. 3d DCA 1985), rev. den., 486 So.2d 597 (Fla.1986). Ray [the plaintiff] dismissed the council members in both their official and individual capacities with prejudice, thus signalling an end to the litigation.
Id. On the one hand, the supreme court in Thornber referred to the general rule stated in Stuart Plaza, where a "determination on the merits" is not a prerequisite to an award of prevailing party attorney's fees under a statute or contract. On the other hand, the supreme court indicated that "[t]here must be some end to the litigation on the merits so that the court can determine whether the party requesting fees has prevailed." (Emphasis added). We read such language not as a negation of the general rule stated in the preceding sentence, but as a reference to the facts of Thornber, where a plaintiff voluntarily dismissed an action with prejudice.
Cases after Thornber have cited it as supporting the general rule, which does not require a merits determination as a precondition to prevailing party attorney's fees. These cases have treated a voluntary dismissal without prejudice as the bright line "end to litigation" mentioned by the supreme court. Thus, in Boca Airport, *320 we affirmed an award of prevailing party attorney's fees after a voluntary dismissal, observing that "[i]t is clear since Thornber that Stuart Plaza . . . state[s] the correct rule." 690 So.2d at 641. Rushing affirmed a fee award after a voluntary dismissal, holding that costs contemplated under Florida Rule of Civil Procedure 1.420(d) "include attorney's fees when provided by statute or agreement." 870 So.2d at 955. Relying on Thornber, the second district reversed an order denying defendants any attorney's fees after a plaintiff voluntarily dismissed a specific performance action without prejudice. See Prescott v. Anthony, 803 So.2d 835, 836-37 (Fla. 2d DCA 2001); see also Ajax Paving, 824 So.2d at 1029.
These post-Thornber district court of appeal cases find support in Caufield v. Cantele, 837 So.2d 371 (Fla.2002). The issue in Caufield was the defendants' entitlement to attorney's fees after the plaintiffs voluntarily dismissed their complaint. From the opinion, it appears that the plaintiffs dismissed their action without prejudice; they had not previously dismissed the complaint and the opinion does not indicate the dismissal stated that it was with prejudice. Id. at 373; see Fla. R. Civ. P. 1.420(a)(1)(providing that "[u]nless otherwise stated in the notice or stipulation, the dismissal is without prejudice," except that the notice "operates as an adjudication on the merits when served by a plaintiff who has once dismissed in any court an action based on or including the same claim"). The supreme court remanded the case for a determination of attorney's fees, lending tacit support to the idea that such fees are recoverable in the absence of a merits determination, after a voluntary dismissal without prejudice. 837 So.2d at 379-80.
In Padow v. Knollwood Club Ass'n, Inc., 839 So.2d 744, 745-46 (Fla. 4th DCA 2003), this court relied on Thornber to identify an exception to the general rule entitling a defendant to attorney's fees under a prevailing party statute or contract provision, after a plaintiff's voluntary dismissal of an action. We looked behind a plaintiff's voluntary dismissal to find that the Padow defendant was not a prevailing party entitled to fees, because prior to the dismissal the defendant had "paid the substantial part of the association's claim for delinquent assessments." Id. at 746. The Padow exception to the general rule does not apply in this case; the Asads did not cave in to the Association's demands prior to the voluntary dismissal.
The Association also relies upon Simmons v. Schimmel, 476 So.2d 1342 (Fla. 3d DCA 1985)[2]. There, the plaintiff filed a medical malpractice case against multiple defendants, including a defendant doctor. Before empaneling a jury, the plaintiff voluntarily dismissed all defendants except the hospital. Id. at 1343. The defendant doctor moved for attorney's fees under section 768.56, Florida Statutes (1981), which entitled the "prevailing party" to fees. Id. at 1344. The third district reversed an award of fees, finding that the defendant doctor was not a "prevailing party" within the meaning of the statute. Id. The court reasoned that for there to be *321 a "prevailing party" in litigation there had to "be some end or finality to the litigation on the merits" so that a "court can determine whether the party requesting fees has prevailed." Id. at 1344-45. Reviewing the record, the third district found that there was "no basis to conclude that the [defendant doctor was] the prevailing party." Id. at 1345. To justify that conclusion, the court pointed to (1) an affidavit of the plaintiff's expert finding the defendant doctor to be negligent and (2) the plaintiff's argument that the "voluntary dismissal was not related to the merits of the case, but rather was a strategic move to avoid jury confusion." Id.
The Simmons approach requires a trial court in all cases to look behind a voluntary dismissal to decide whether the dismissal represents "an end or finality to the litigation on the merits." Both the second and fifth districts have rejected the Simmons approach to prevailing party attorney's fee statutes. See Dam v. Heart of Fla. Hosp., Inc., 536 So.2d 1177 (Fla. 2d DCA 1989); Vidibor v. Adams, 509 So.2d 973 (Fla. 5th DCA 1987).
Dam involved a plaintiff doctor who brought suit against a hospital which suspended his staff privileges. The plaintiff voluntarily dismissed his suit without prejudice. The hospital and the other defendants then moved for attorney's fees under section 395.0115(5)(a), Florida Statutes (1987), which awarded attorney's fees and costs to "prevailing defendants." 536 So.2d at 1178. The second district affirmed an award of attorney's fees to the defendants and rejected the plaintiff doctor's argument that the record did "not establish that [the defendants] would have prevailed on the merits." Id. The court did not "find persuasive" the argument that it "should adopt the third district's contrary view" in Simmons. Id.
Similarly, in Vidibor, the fifth district confronted a plaintiff who took a voluntary dismissal without prejudice. The defendant sought attorney's fees under a "prevailing party" attorney's fee statute. 509 So.2d at 974. The fifth district reversed an order denying fees, explicitly rejecting "the view of our sister court in Simmons." Id.
As did the second and fifth districts, we too reject the Simmons approach. Instead of a bright line general rule to control the award of attorney's fees after a voluntary dismissal, the Simmons approach would engender more litigation after a voluntary dismissal directed at whether a defendant requesting fees has, in fact, prevailed. Such a soft standard would yield inconsistent results, foment litigation, and create an intensely fact-based jurisprudence that would be difficult to apply.
For these reasons, we affirm the final judgment awarding attorney's fees and certify conflict with Simmons v. Schimmel, 476 So.2d 1342 (Fla. 3d DCA 1985).
HAZOURI, J., and MAASS, ELIZABETH T., Associate Judge, concur.
NOTES
[1] Section 720.311(2)(a), Florida Statutes (2004) provides that "[d]isputes between an association and a parcel owner regarding use of or changes to the parcel . . . and other covenant enforcement disputes . . . shall be filed with the department [of Business and Professional Regulation] for mandatory mediation before the dispute is filed in court." (Emphasis added).
[2] The Association also cites to O.A.G. Corp. v. Britamco Underwriters, Inc., 707 So.2d 785 (Fla. 3d DCA 1998). That case is distinguishable from this one based on the wording of the attorney's fee statutes involved. Section 627.428(1), Florida Statutes (1995), at issue in Britamco, provided for prevailing party attorney's fees "[u]pon the rendition of a judgment or decree." Id. at 786. The statute here at issue provides for an award of fees to the "prevailing party" in "litigation." § 720.305(1), Fla. Stat. (2005). Unlike Britamco, this case does not involve a statute that conditions fees upon the entry of a judgment or decree, a conclusion to a case different from a voluntary dismissal.
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 25 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAZMIN ROSMERY BARAHONA- No. 16-73808
MARTINEZ; et al.,
Agency Nos. A208-163-394
Petitioners, A208-163-395
v.
MEMORANDUM*
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted April 17, 2019**
Before: McKEOWN, BYBEE, and OWENS, Circuit Judges.
Jazmin Rosmery Barahona-Martinez and her son, natives and citizens of El
Salvador, petition for review of the Board of Immigration Appeals’ order
dismissing their appeal from an immigration judge’s decision denying their
application for asylum and withholding of removal. We have jurisdiction under 8
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
U.S.C. § 1252. We review the agency’s factual findings for substantial evidence.
Dai v. Sessions, 884 F.3d 858, 866 (9th Cir. 2018). We deny the petition for
review.
Substantial evidence supports the agency’s conclusion that the harassment
and threats Barahona-Martinez experienced from gang members did not rise to the
level of past persecution. See Duran-Rodriguez v. Barr, 918 F.3d 1025, 1028 (9th
Cir. 2019) (threats alone “rarely constitute persecution”); Lim v. INS, 224 F.3d 929,
936 (9th Cir. 2000) (threats do not rise to the level of persecution unless they are
“so menacing as to cause significant actual suffering or harm”). Substantial
evidence also supports the agency’s conclusion that Barahona-Martinez did not
establish a well-founded fear of persecution because she failed to show that she
could not safely relocate to another part of El Salvador or that it would be
unreasonable to expect her to do so. See 8 C.F.R. §§ 1208.13(b)(2)(ii) (asylum),
1208.16(b)(2) (withholding of removal); Kaiser v. Ashcroft, 390 F.3d 653, 659 (9th
Cir. 2004) (burden of proof is on applicant if she has not established past
persecution). Thus, Barahona-Martinez’s asylum and withholding of removal
claims fail.
We reject petitioners’ contention that the immigration court lacked
jurisdiction over their case. See Karingithi v. Whitaker, 913 F.3d 1158, 1160-62
(9th Cir. 2019) (initial notice to appear need not include time and date information
2 16-73808
to vest jurisdiction in immigration court).
PETITION FOR REVIEW DENIED.
3 16-73808
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540 U.S. 825
JUDICIAL WATCH, INC.v.ROSSOTTI ET AL.
No. 02-1849.
Supreme Court of United States.
October 6, 2003.
1
Appeal from the C. A. 4th Cir.
2
Certiorari denied. Reported below: 317 F. 3d 401.
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IN THE SUPREME COURT OF PENNSYLVANIA
WESTERN DISTRICT
MILTON DESHAWN PASCHAL, : No. 12 WM 2017
:
Petitioner :
:
:
v. :
:
:
PENNSYLVANIA BOARD OF :
PROBATION AND PAROLE, :
:
Respondent :
ORDER
PER CURIAM
AND NOW, this 31st day of March, 2017, the Petition for Leave to File Petition
for Allowance of Appeal Nunc Pro Tunc is denied.
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555 P.2d 1246 (1976)
276 Or. 639
Joe E. MILLER and Jerry A. Miller, Appellants,
v.
Donald MILLER and Janet C. Miller, Husband and Wife, Respondents.
Supreme Court of Oregon, Department 1.
Argued and Submitted September 2, 1976.
Decided November 12, 1976.
*1247 William D. Cramer of Cramer & Pinkerton, Burns, argued the cause for appellants. With him on the briefs was Stephen D. Finlayson, Burns.
Irvin D. Smith, Burns, argued the cause and filed a brief for respondents.
Before DENECKE, C.J., and McALLISTER, HOLMAN, and HOWELL, JJ.
HOLMAN, Justice.
Plaintiffs brought a suit for the specific performance of a contract to sell to plaintiffs shares of stock in a family corporation. They appeal from an adverse decree.
Plaintiffs and Donald Miller[1] are the sons of Clarence (Taft) Miller, who, through the years, accumulated a ranch and six children.[2] About 1960 he incorporated his ranch for the purpose of facilitating gifts of interests in his estate to his children, whereupon 2,150 shares of stock were issued. At various times he made gifts of stock to his children. Plaintiffs, who were then young men, remained on the ranch and collaborated with their father in its operation. Plaintiffs entered into identical agreements with their brother (defendant Donald Miller) and their sisters, whose shares of stock in the corporation were to be purchased by plaintiffs. It was assumed by all that by this means plaintiffs would eventually acquire ownership of the ranch. However, there is no evidence or claim by anyone that Taft Miller had ever agreed to divest himself of a controlling interest in the ranch in consideration of the plaintiffs' remaining and working thereon, and he is not a party to this litigation. The agreement between plaintiffs and defendant Donald Miller is, in part, as follows:
"WHEREAS, Clarence S. Miller, the father of the seller and of the buyers, has heretofore made gifts to the seller of 34 shares of capital stock of Rock Creek Ranch, Inc., an Oregon Corporation, and
"WHEREAS, the seller desires to sell said shares of stock to the buyers and the buyers desire to purchase the same, and
"WHEREAS, the seller expects to receive similar future gifts of said stock which he likewise desires to sell to the buyers and the buyers desire to purchase the same, it is hereby agreed between the parties hereto as follows:
"I.
"The seller does hereby promise and agree to sell and the buyers do hereby promise and agree to buy the above mentioned 34 shares of capital stock of said corporation at the market value thereof, the sum of $175.
"* * *.
"WHEREAS, it is contemplated that additional shares of stock in said corporation shall either be (1) given to the seller over the years by the parent, Clarence S. Miller, or inherited by the seller from said parent or obtained by both gift and inheritance, and, whereas, the seller desires to herein obligate himself to likewise *1248 sell said shares of stock to the buyers and it is the desire of the buyers to likewise purchase any such additional shares of stock obtained either by gift or inheritance, it is hereby agreed as follows:
"A. The seller does hereby promise and agree to sell to the buyers and the buyers do hereby promise and agree to purchase from the seller, any and all shares of stock of Rock Creek Ranch, Inc. that the seller may hereafter become the owner of and the sale and purchase price is hereby fixed at the market value of each such share of stock at the date that the seller shall become the owner thereof. * * *.
"* * *." (Emphasis ours.)
Some ten to twelve years went by during which plaintiffs gradually took over the operation of the ranch. At the same time they accumulated control of 1,002 shares of stock either by direct gifts from their father or as the result of his gifts to their brother and sisters which plaintiffs acquired under their agreements. Misunderstandings and friction then developed between plaintiffs and their father as well as between the two plaintiffs themselves, and the father came to the conclusion that he should keep control of the ranch and not make any more gifts. Upon hearing this, one of the plaintiffs left the ranch in June of 1972.
The other plaintiff remained on the ranch until January or February of 1973, during which time he entered into negotiations with his father and defendant Donald Miller concerning the purchase of a controlling interest by himself and Donald Miller. These negotiations were fruitless. This plaintiff also left when his father informed him that he was entering into some sort of a transaction solely with Donald Miller. There is no evidence that Donald Miller interfered with the relations between plaintiffs and their father or that he instigated or caused the father to change his mind and to come to the conclusion that he should, by terminating his gifts to his children, prevent plaintiffs from acquiring control of the ranch through their agreements with their brother and sisters.
The agreement between the father and Donald Miller was made on February 16, 1973, and purported to grant an option to Donald to acquire the father's remaining 1,148 shares of stock in the corporation. The option was to run for ten years, during which time the optionee was to pay not less than $500 a year to keep the option in effect. If the option was not exercised such payments were forfeited. The agreement provided that the option was to be exercised by a notice sent to the father by certified mail. The purchase price was $432,000 and, upon exercise of the option, payments were due in the sum of not less than $20,000 per year, payable by December 15 of each year. Interest upon the unpaid balance would accrue at 4 per cent upon the exercise of the option. At the time of the litigation Donald Miller had paid his father one $6,705 payment, which represented a debt the father had incurred by way of income taxes, and two $20,000 payments: one immediately prior to December 15, 1973, and the other prior to December 15, 1974. However, the option was not purported to have been exercised because of the lack of the requisite notice.
As part of the same transaction, the father gave to Donald what appears on its face to be a revocable proxy to vote the 1,148 shares of stock. Donald has since occupied, operated and controlled the ranch and, while no dividends have been declared, he has paid himself and his wife salaries of approximately $30,000 out of ranch revenues. Had any dividends been declared, those dividends payable on the shares which were the subject of the option and the proxy would have gone to the father but would have been credited on the purchase price when the option was exercised.
Plaintiffs contend that (1) the purported option was not an option but a sale and that, even if it was only an option, it has been exercised; and (2) defendants, *1249 under Donald's agreement with plaintiffs, are required to sell their acquired interest in the stock to plaintiffs. Defendants, on the other hand, contend that Donald Miller has no present interest in the stock because the option has not been exercised and that even if he is shown to have a present interest, such interest was not acquired by gift or inheritance and therefore is not subject to sale under the agreement. The trial judge did not construe the agreement between plaintiffs and their brother Donald but disposed of the case by determining that the purported option was, in fact, an option; that the option had not been exercised because the written notice required by the agreement was never given; and that Donald therefore had no interest in the stock which was capable of being transferred to plaintiffs.
Although the trial judge disposed of the matter by deciding that the option had never been exercised, we choose to decide the ultimate issue, which has been fully briefed and argued, i.e., whether the agreement between plaintiffs and Donald requires Donald to sell to plaintiffs any shares which he has acquired or might acquire by purchase under his agreement with his father.
Plaintiffs argue that the inclusive operative clause of the corporation stock sale and purchase agreement should be enforced despite the narrow recital immediately preceding it. Their argument is based on a rule of English origin for the interpretation of deeds:
"Now there are three rules applicable to the construction of such an instrument. If the recitals are clear and the operative part is ambiguous, the recitals govern the construction. If the recitals are ambiguous, and the operative part is clear, the operative part must prevail. If both the recitals and the operative part are clear, but they are inconsistent with each other, the operative part is to be preferred."
Ex parte Dawes, 17 Q.B.D. 275, 286 (1886). This rule has been adopted by most American courts and has been applied to contracts as well as to deeds. Williams v. Barkley, 165 N.Y. 48, 58 N.E. 765, 767 (1900), 17A C.J.S. Contracts § 314 (1963). 17 Am.Jur.2d Contracts § 268 (1964). The rule has been neither adopted nor rejected in Oregon, but the statement of the rule in Williams v. Barkley, supra, was quoted in Hulin v. Veatch, 148 Or. 119, 133-34, 35 P.2d 253, 94 A.L.R. 1319 (1934), in support of the proposition that recitals in a mortgage do not have the force of contractual stipulations. It is also usually held that the inconsistent statement in the recitals may not be used to create an ambiguity as to the operative part of the agreement.
On the other hand, a few jurisdictions have refused to apply the rule but hold that the entire agreement, recitals included, should be considered in determining the intent of the parties. If this holding is followed, a patent ambiguity exists in the present case as to the intent of the parties. Scott v. Albemarle Horse Show Ass'n., 128 Va. 517, 104 S.E. 842, 845-46 (1920) acknowledged the ordinary rule of construction but nevertheless relied on recitals in determining intent. A similar holding was reached in Thomson Electric Welding Co. v. Peerless Wire Fence Co., 190 Mich. 496, 157 N.W. 67, 70 (1916), which said:
"In construing written agreements the actual undertaking of the parties is to be deduced from the entire instrument, taking into consideration, reconciling, and giving meaning to all its parts so far as possible, including recitals as well as operative clauses, and, when so considered, language which has a distinct meaning standing alone may, in the connection used, become doubtful or its meaning modified by other parts of the instrument, including particular recitals."
In Downing v. Independent School Dist. No. 9, 207 Minn. 292, 291 N.W. 613, 616 (1940), it was said that in the construction of written agreements the intention of the parties is to be deduced from the entire instrument. The court used the following language:
"The `cardinal rule' in the interpretation of contracts (and this applies to statutes, ordinances, and the like) `is to ascertain *1250 the intention of the parties and to give effect to that intention if it can be done consistently with legal principles.' 12 Am.Jur., Contracts, § 227. The rules of interpretation `are not inflexible, their purpose being to reach the probable intent of the parties.' * * *."
Also see the opinion by Cardozo, J., in Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917), which used recitals in establishing a mutuality of obligations and thus a binding contract. More recently, in Employer's Liability Assurance Corporation v. Lunt, 82 Ariz. 320, 313 P.2d 393, 398 (1957), the Arizona Supreme Court said as follows:
"Appellees rely on the holding in Jamison v. Franklin Life Insurance Co., 60 Ariz. 308, 136 P.2d 265, to the effect that if both the recital and the operative clause are clear but inconsistent with each other, the operative part is to be preferred. We recognize the Jamison case as the law; however, we point out that the rule stated therein is but an arbitrary device adopted of necessity where the intention of the parties cannot otherwise be fairly determined. * * * Where the intention can be determined from the entire instrument, the contract is to be construed as a whole. * * *."
That case was followed by Bowen v. SilFlo Corporation, 9 Ariz. App. 268, 451 P.2d 626, 635 (1969), which stated:
"* * * A recital is a part of a contract which should be considered in determining the intent of the parties as expressed in the entire document, and on occasion a recital may be a most important indication of the parties' intent. [Citations omitted]."
A slightly different position has been taken by a New York court:
"* * * Such recitals, while not strictly forming a part of the contract, may be resorted to as indicating the intention of the parties and the meaning and scope of the agreement. [Citations omitted]." Industrial Dev. Found. v. United States Hoff. M. Corp., 11 Misc.2d 625, 171 N.Y.S.2d 562, 570 (1958), aff'd mem., 8 A.D.2d 579, 183 N.Y.S.2d 1011 (1959).
The overriding rule in the construction of contracts is that the intention of the parties prevails. The refusal to give any weight to the recital if the operative provisions are "clear" is nonsense, because it ignores the doubt which a conflict between the two may raise as to whether the operative provisions accurately report the intention of the parties. The blind following of the rule asserted by plaintiffs is a catechetical method of construing contracts which, depending upon the circumstances, may or may not have something to do with what the parties intended. The recitals must necessarily concern the contract in some manner; otherwise, there would be no object in including them. If, in the particular fact context, the recitals appear to be inconsistent with the operative clauses, as a matter of common sense there is an ambiguity or question about the intent of the parties, and evidence of the circumstances under which the contract was made should therefore be admitted as an aid in determining the parties' assumed or actual intent.[3] Language consists of words which are mere symbols of ideas. Consequently, any ascertainment of the meaning of language in an agreement requires consideration of the atmosphere in which it originated. By this process the language is made more understandable and is less likely to be misconstrued. It is capable of clear meaning only when read in the light of the circumstances of its employment.
Rules of construction such as the one for which plaintiffs contend are not given the status of positive or substantive rules of law. deNeergaard v. Dillingham, 123 Vt. 327, 187 A.2d 494, 498 (1963). They are aids which experience indicates will most likely bring about the intent of the parties in the absence of an ability to *1251 determine that intent with some likelihood by means of other evidence. The rule of construction which plaintiffs put forth here should be applied only in circumstances where the intent of the parties cannot be determined with a fair degree of likelihood when the language is considered in the light of the situation in which it was used.[4]
At the time of the agreement plaintiffs had an amicable relationship with their father and with each other and were working with their father in the operation of the ranch. It was apparently contemplated by the entire family that this amicable relationship would continue and that the father would make available to plaintiffs the ownership of the ranch through stock either given or bequeathed to all of his children and thereafter acquired by plaintiffs in accordance with the agreements between plaintiffs and their brother and sisters. It was not contemplated by anyone that plaintiffs would have a falling out with their father and with each other, or that the father would change his mind about allowing plaintiffs to acquire a controlling interest and would desire to sell to someone else so that plaintiffs could not acquire such an interest by the contemplated means.
The contract was obviously made with the father's plan to distribute his estate in mind and, in our opinion, was not meant to be applied to situations which were not the result of the intended distribution. Had these subsequent circumstances been anticipated at the time of the agreement, we believe that plaintiffs could not have reasonably contemplated that Donald was obligating himself to sell to them stock which he did not acquire by gift or inheritance but could acquire only by purchase stock which the father would not have sold to him had he thought that Donald would merely be an intermediary for its acquisition by plaintiffs under the agreement with their brother and sisters which the father was intentionally thwarting. The entire agreement was based upon the supposition that Taft Miller would continue to give stock in the ranch to his children or would leave it to them by inheritance. We therefore believe the contract was not intended to be binding under the circumstances which are disclosed here.
The judgment of the trial court is affirmed.
NOTES
[1] Defendant Janet Miller is the wife of defendant Donald Miller.
[2] By the time of trial one child had died, leaving heirs.
[3] ORS 42.220.
[4] Three law review notes dealing with the effect of recitals upon operative clauses of contracts are: 35 Colum.L.Rev. 565 (1935); 41 Cornell L.Q. 126 (1955); 25 Minn.L.Rev. 924, 931 (1941).
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77 F.3d 361
James Edward HALL, Petitioner-Appellant,v.Robert FURLONG; Attorney General for the State of Colorado,Respondents-Appellees.
No. 95-1176.
United States Court of Appeals,Tenth Circuit.
Feb. 26, 1996.
James Edward Hall, pro se.
Gale A. Norton, Attorney General, Paul S. Sanzo, First Assistant Attorney General, Denver, Colorado, for Respondents-Appellees.
Before BRORBY, HOLLOWAY, and HENRY, Circuit Judges.
BRORBY, Circuit Judge.
1
Petitioner James Edward Hall appeals the district court's order denying his petition for habeas corpus pursuant to 28 U.S.C. § 2254. We have jurisdiction pursuant to 28 U.S.C. § 2253. We reverse the district court's order and remand for further proceedings.1
2
Mr. Hall's petition shows that he was arrested on August 3, 1977, was unable to post bail due to indigency,2 and therefore remained confined in jail for 219 days prior to being sentenced. After pleading guilty to first degree sexual assault, a class two felony, Mr. Hall received an indeterminate sentence of twenty-seven to fifty years. The fifty-year term was the maximum sentence authorized by law for a class two felony on the date of his offense. See People v. Hall, 619 P.2d 492, 492 & n. 2 (Colo.1980).
3
The Colorado trial court credited Mr. Hall with eighty-four days for time served toward the minimum term of his sentence, but gave him no credit toward his maximum sentence. Mr. Hall contends that he was denied equal protection of the laws when his indigency caused him to remain incarcerated prior to trial, and he failed to receive full credit for time served against both the minimum and maximum terms of his sentence.
4
The district court, following the recommendation of the magistrate judge assigned to this case, concluded that Mr. Hall's petition did not present a justiciable controversy. It also concluded that failure to award Mr. Hall the requested credit did not violate his rights to due process or to equal protection.
I.
5
In Williams v. Illinois, 399 U.S. 235, 90 S.Ct. 2018, 26 L.Ed.2d 586 (1970), the United States Supreme Court determined that when a defendant's aggregate imprisonment resulting solely from involuntary inability to pay a fine or court costs exceeds the maximum term fixed by statute, there is an impermissible discrimination based upon inability to pay. Id. at 240-41, 90 S.Ct. at 2021-22. The Court reasoned that "the Equal Protection Clause of the Fourteenth Amendment requires that the statutory ceiling placed on imprisonment for any substantive offense be the same for all defendants irrespective of their economic status." Id. at 244, 90 S.Ct. at 2023-24; see also Tate v. Short, 401 U.S. 395, 398-99, 91 S.Ct. 668, 670-71, 28 L.Ed.2d 130 (1971).
6
Several of our sister circuits have applied the Williams rule to require that an indigent unable to post bail receive credit against the maximum sentence for time spent in presentence confinement. See Johnson v. Riveland, 855 F.2d 1477, 1484 n. 7 (10th Cir.1988) (citing cases from sister circuits). In Vasquez v. Cooper, 862 F.2d 250 (10th Cir.1988), this court declined to extend the rule in Williams to situations in which "[an indigent's] total time to be spent in confinement does not exceed the maximum term defined by statute." Id. at 254. We reasoned that when an indigent receives less than the statutory maximum term for his offense, he is in the same position as a defendant who receives bail, because in both cases,
7
the total time during which liberty would be deprived ... is specifically considered by the judge. Requiring the judge to determine the sentence necessary to serve the state's penological interests by disregarding the time previously served by the defendant, and then mechanically subtracting that time from the sentence given, would be an artificial and meaningless exercise.
8
Id. at 253.
9
We did not, however, have occasion in Vasquez to determine whether an indigent has a constitutional right to receive credit for time served where his presentence incarceration time, when added to the sentence he received, exceeds the maximum authorized sentence. We acknowledged that a period of confinement which effectively exceeds the maximum authorized by law might implicate other concerns. Id. at 253 n. 3; see also Johnson, 855 F.2d at 1484 n. 7; Brotherton v. United States, 420 F.2d 1357, 1357 (10th Cir.1970) (acknowledging that federal district court had discretion to deny credit where total of sentence time and prior custody was within permissible term); Davis v. Willingham, 415 F.2d 344, 345-46 (10th Cir.1969) (adopting presumption that credit for presentence custody not granted where maximum sentence imposed).
II.
10
The district court determined, however, that Mr. Hall's challenge to his sentence was not ripe for decision at this time. It reasoned that even though Mr. Hall received the maximum sentence for his crime, since he has served only approximately seventeen years of that sentence and might be released prior to serving the entire sentence on parole or due to good time credits, he was "not at risk at this time for serving a sentence in excess of the maximum." R. Vol. I doc. 8 at 2 (emphasis added).
11
The district court's analysis imports an overly narrow reading to the rule in Williams and Tate. Although many of the cases cited above, including Vasquez, speak of total "confinement" in excess of the statutory maximum, the fact that Mr. Hall might receive early release is irrelevant to a determination of whether his constitutional rights were violated in this instance. See Hook v. Arizona, 496 F.2d 1172, 1174 (9th Cir.1974).3 The fact that indigents can receive good time credits, just as non-indigents, does not detract from the violation of equal protection which may occur if indigents who receive a maximum sentence do not receive credit for time served. Good time credits are "fixed by statute," just as is the maximum term for a given offense. See Colo.Rev.Stat. § 17-22.5-201.
12
Moreover, under the district court's reasoning, Mr. Hall would have to wait to bring his petition until he had actually served forty-nine years and 146 days of his sentence. This smacks of the prematurity doctrine, rejected by the United States Supreme Court in Peyton v. Rowe, 391 U.S. 54, 64, 88 S.Ct. 1549, 1554-55, 20 L.Ed.2d 426 (1968); see also Preiser v. Rodriguez, 411 U.S. 475, 487-88, 93 S.Ct. 1827, 1835-36, 36 L.Ed.2d 439 (1973) (discussing applicability of Peyton to claims involving good time credits). We conclude that Mr. Hall's petition presents a justiciable controversy.
III.
13
We turn to the merits of Mr. Hall's claim. "[W]hen the aggregate imprisonment exceeds the maximum period fixed by the statute and results directly from an involuntary nonpayment of fine or court costs [or, as in this case, an inability to make bail] we are confronted with an impermissible discrimination that rests on ability to pay...." Williams, 399 U.S. at 240-41, 90 S.Ct. at 2022. It is impermissible, under the Equal Protection Clause, to require that indigents serve sentences greater than the maximum provided by statute solely by reason of their indigency. When an indigent receives the maximum sentence for his crime, the process of crediting him with time served is no longer an "artificial and meaningless exercise." Vasquez, 862 F.2d at 253. We have found no circuit which denies credit for time served under these circumstances. Accordingly, we now hold that the Equal Protection Clause mandates the grant of full credit toward the maximum term of Mr. Hall's sentence for the time he spent incarcerated prior to sentencing due to his indigency.
IV.
14
The judgment of the United States District Court for the District of Colorado is REVERSED, and the cause is REMANDED for further proceedings in accordance herewith.4 The mandate shall issue forthwith.
1
After examining the briefs and appellate record, this panel has determined unanimously to grant the parties' request for a decision on the briefs without oral argument. See Fed.R.App.P. 34(f) and 10th Cir.R. 34.1.9. The case is therefore ordered submitted without oral argument
2
The State contends that Mr. Hall failed to allege indigency in his petition. We construe liberally the petition of a pro se prisoner. See Ruark v. Solano, 928 F.2d 947, 949 (10th Cir.1991). In his statement of supporting facts, Mr. Hall states the following:
A person who had been unable to make bond because of his indigency, and upon conviction is sentence[d] to the statutory maximum imposable sentence authorized by law, and is not given credit for time spent in custody before trial, during trial, pending sentence and such credit to be given against both minimum and maximum terms of imprisonment, the court is illegally extending the sentence beyond the statutory limits.
R. Vol. I, doc. 3 at 7 (emphasis added)
The petition also indicates that Mr. Hall was represented by the public defender at the time of his arraignment and plea. The habeas petition which Mr. Hall signed was made under penalty of perjury in compliance with 28 U.S.C. § 1746, and thus had the force of an affidavit or sworn declaration.
3
Johnson, 855 F.2d at 1480-83, cited by the district court, is not to the contrary. In that case, the petitioner unsuccessfully sought credit against a minimum sentence from which he had been paroled, on the ground that he might be reincarcerated at some date in the future. We refused to allow petitioner to "bank" credits against possible future wrongdoing. Id. at 1483. The petitioner's possible reincarceration in that case was speculative; Mr. Hall is actually incarcerated at this time
4
Mr. Hall's petition also requests full credit against his minimum sentence for presentence time served. We find no constitutional violation in denial of this credit, particularly since the function of the minimum term of an indeterminate sentence is to establish a parole date and Mr. Hall is already eligible for parole. See Vasquez, 862 F.2d at 254 (sentence not in excess of maximum did not raise equal protection concern based on indigency)
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968 A.2d 154 (2009)
408 Md. App. 703
Georgia TRIANTIS
v.
Ottis Gus TRIANTIS, et al.
No. 963, September Term, 2007.
Court of Special Appeals of Maryland.
March 26, 2009.
*155 Richard D. Daniels (Daniels & Green, LLC on the brief), College Park, for Appellant.
Ellie J. Koch, Rockville, for Appellee.
Panel: KRAUSER, C.J., ZARNOCH, and SALLY D. ADKINS,[*] JJ.
KRAUSER, Chief Judge.
We are asked to decide whether the holder of an equitable interest in real property may sue for partition or sale in lieu of partition of that parcel of property under section 14-107(a) of the Real Property Article of the Maryland Code ("RP") (1974, 2003 Repl.Vol.). Georgia Triantis, appellant, claims that she has an equitable interest in a forty-acre parcel of property that is jointly titled in the names of her former husband, Ottis Gus Triantis, and Konstantinos Stamoulis and his wife, Ourania Stamoulis, appellees. Invoking that *156 interest, Mrs. Triantis brought an action in the Circuit Court for Montgomery County to compel the sale, in lieu of partition, of that property (the "Parcel").
The circuit court granted summary judgment in favor of Mr. Triantis and his co-owners, the Stamoulises, holding that Mrs. Triantis lacked standing to bring such an action because she had no more than an equitable interest in the Parcel. In reaching that conclusion, the court construed RP section 14-107(a) to preclude those who hold only an equitable interest in a property from bringing a partition action. Mrs. Triantis now asks us to decide whether she must have legal title to a property before she may seek partition of it and, if not, whether her equitable interest was sufficient to give her standing to bring such action.
We conclude that RP section 14-107(a) permits a person who holds an equitable interest, as a concurrent owner, to bring an action for partition of that real property or to compel its sale in lieu of partition. Because the motion court did not reach the question of whether Mrs. Triantis had such an interest in the property at issue, we vacate the judgment and remand for further proceedings.
Factual Background
Georgia and Gus Triantis married in 1955. Twenty-nine years later, while the couple was still married, Mr. Triantis and Konstantinos Stamoulis purchased approximately forty acres of land in Montgomery County, taking title as tenants in common. A deed, dated September 5, 1984, was recorded in the land records for Montgomery County, stating that each held an undivided one-half interest in fee simple. Some time later, Mr. Stamoulis conveyed his undivided one-half interest in the Parcel to his wife, Ourania, and himself, as tenants by the entirety.
During their marriage, Mr. and Mrs. Triantis acquired other parcels of property. Some parcels were titled in just Mr. Triantis's or Mrs. Triantis's name; others were titled in both of their names; and still others were jointly titled in either Mr. or Mrs. Triantis's name and the name of a third party.
By 2000, Mr. and Mrs. Triantis had separated and were living apart. On June 1, 2000, they executed a written agreement (the "Agreement") "to evidence their intent, agreement, and understanding as to the ownership, management, maintenance, repair, operation and sale" of their numerous properties, including the Parcel. Those properties were referred to collectively in the Agreement as the "Property."
According to paragraph one of the Agreement, the Property (which included the Parcel) was to be treated as jointly owned by both Mr. and Mrs. Triantis, even when Mrs. Triantis was not on the title. That provision states:
The parties agree that all of the Property, and any interests therein, whether held in the name of one party or the other, or by the parties jointly, or in the name of or with a third party, or in the name of or with a third party entity, was acquired by and for the parties jointly, and for the benefit of both equally. ... In making this Agreement, the parties acknowledge and agree that each is the joint legal and/or equitable owner of the Property, notwithstanding the fact that the Property, or any one or more assets or interests which make up the Property, may be titled in the name of one party or the other, individually, or in the name of the parties jointly, and notwithstanding the fact that one or more items making up the Property or *157 any interest therein, may be held with... a third party ....
(Emphasis added.)
Paragraph five of the Agreement states that Mr. and Mrs. Triantis "will use reasonable commercial efforts to market and sell the Property." This provision requires that contracts for the sale, lease, or brokerage of the Property be approved by both parties and that such approval "may not be unreasonably withheld, delayed, or conditioned." It then specifically authorizes Mr. Triantis, "subject to the receipt of written consent" of Mrs. Triantis, to "retain the services of any real estate broker, leasing agent or other real estate professional necessary or desirable to sell or lease the Property." In paragraph seven, "the parties agree[d] to deal with one another in good faith and ... to execute and deliver any and all documents necessary to... maintain, operate, market, sell, or lease the Property."
Although the Agreement contains an integration clause in paragraph 12, stating that it "constitutes the entire agreement of the parties relating to the subject matter hereof," paragraph 20 cautions that "this Agreement is not intended to be a full resolution of their respective marital and property rights, which the parties intend to be addressed in a separate property agreement." We have no information before us about any subsequent agreement. Although Mr. and Mrs. Triantis divorced some time after the Agreement was executed, the record does not disclose when that actually occurred or whether a subsequent agreement was entered into by the parties.
On April 4, 2002, the Agreement was recorded in the land records for Montgomery County, not as a deed, but simply as an "agreement." On December 6, 2006, Mrs. Triantis filed a complaint in the circuit court, requesting that the Parcel be sold in lieu of partition. That complaint was met by a motion for summary judgment filed by appellees, claiming that Mrs. Triantis "lacked standing" to bring such an action because she did "not appear as a grantee in any deed vesting an ownership right in her." Only a person with a legal interest in property, established by a duly recorded deed, has standing, they maintained, to bring a partition action under RP section 14-107. The court granted the motion "for the reasons that [appellees' counsel] sets forth in his oral argument and in his papers." This appeal followed.
Discussion
I.
Mrs. Triantis contends that the circuit court erred in granting summary judgment on the ground that the holder of an equitable interest in real property may not bring an action for partition or sale. Although appellees agree that an equitable interest in property may be partitioned, they renew the argument they made below that only a person with legal title to a property, as represented by a deed, has standing to bring a partition action.
To resolve this dispute, we turn first to the language of RP section 14-107(a), which provides in pertinent part:
A circuit court may decree a partition of any property, either legal or equitable, on the bill or petition of any joint tenant, tenant in common, parcener, or concurrent owner, whether claiming by descent or purchase. If it appears that the property cannot be divided without loss or injury to the parties interested, the court may decree its sale and divide the money resulting from the sale among the parties according to their respective rights.
(Emphasis added.)
When interpreting any statute, our task is to discern and implement the legislature's *158 intent. See Chesek v. Jones, 406 Md. 446, 458, 959 A.2d 795 (2008). We begin by examining the plain meaning of the language used by the General Assembly. See id. We "construe the statute as a whole so that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless, or nugatory." Mayor of Oakland v. Mayor of Mountain Lake Park, 392 Md. 301, 316, 896 A.2d 1036 (2006). "[I]f the plain language of the statute is unambiguous and consistent with the statute's apparent purpose, we give effect to the statute as it is written." Id. "We consider both the ordinary meaning of the language of the statute and how that language relates to the overall meaning, setting, and purpose of the act." Id. "We avoid a construction of the statute that is unreasonable, illogical, or inconsistent with common sense" or that requires us to "add or delete language so as to reflect an intent not evidenced in the plain and unambiguous language of the statute." Chesek, 406 Md. at 459, 959 A.2d 795; Mayor of Oakland, 392 Md. at 316, 896 A.2d 1036.
Section 14-107(a) plainly authorizes partition of both legal and equitable interests in real property, because the phrase "either legal or equitable" clearly modifies the preceding word "property," and "property" in turn is defined by sections 1-101(k) as "real property or any interest thereon or appurtenant to."[1] Hence, it is clear that an equitable interest may be subject to partition. The question raised by this appeal, however, is whether, and under what circumstances, a person, who holds an equitable interest in real property, may petition the court for partition or sale of that property.
Section 14-107(a) seems to answer that question but only in broad and, hence, unedifying terms. It states that a circuit court may decree a partition of property "on the bill or petition of any joint tenant, tenant in common, parcener, or concurrent owner, whether claiming by descent or purchase." Thus, the dispute between the parties boils down to whether Mrs. Triantis's equitable interest in the Parcel qualifies her as a "concurrent owner" within the meaning of section 14-107(a).
Although neither side cites any caselaw to support its competing interpretation of the statute, the circuit court appears to have been persuaded by appellees' "mischievous consequences" argument, that is, that the "net effect" of permitting equitable interest holders such as Mrs. Triantis to compel partition "would be to permit *159 the purchaser in every real estate contract to immediately bring a partition suit even before the contract was fully performed." We do not agree with appellees' narrow reading of "concurrent owner" or find persuasive their prediction of "mischief."
The term "concurrent owner" is not defined in the Real Property Article or in any other provision of the Maryland Code or the Code of Maryland Regulations, and no Maryland case addresses the question of whether a holder of equitable interest in property can be a "concurrent owner" for purposes of section 14-107(a). Therefore, to determine whether an equitable interest holder can be a "concurrent owner," such that he or she has standing to bring a partition action, one must examine the meaning of that term in light of the legislature's intent to allow partition claims by such persons.
There is no indication that the legislature intended that the term "concurrent owner" be given a narrow construction, so as to prohibit an equitable resolution of a property dispute. We are therefore inclined to define that term broadly as simply two or more persons with contemporaneous interests in the same property. See, e.g., Black's Law Dictionary 586 (8th ed.2004) (defining "concurrent estate" as "[o]wnership or possession of property by two or more persons at the same time"); 2 Herbert T. Tiffany & Basil Jones, Tiffany on Real Prop. § 417 (database updated through Sept. 2008) (co-ownership exists when "two or more persons ... have undivided interests in the land; the common characteristic of all such interests being that the owners have no separate rights as regards any distinct portion of the land, but each is interested, according to the extent of his share, in every part of the whole land") (footnotes omitted).
The language of section 14-107(a) or of its statutory predecessors[2] does not suggest to us that the General Assembly intended the term "concurrent owner" to refer only to those who hold legal title. The construction advocated by appellees would require us read into the statute a restriction that simply is not there. Specifically, we would have to interpret the class of "concurrent owner[s]" who may file a "bill or petition" seeking partition to mean only "concurrent holders of legal title." (Emphasis added.)
Moreover, the history of Maryland's partition statute does not support such a narrow interpretation of concurrent ownership or otherwise suggest that the General Assembly intended that the term "concurrent owner" would operate to restrict the partition remedy to those holding legal title. Section 14-107(a) and its statutory predecessors codified the common law right to partition, historically an equitable remedy.[3] Given that courts of *160 equity have had jurisdiction over matters that were not cognizable at law and that the legislature expressly gave courts of equity the power to partition property, it is reasonable to infer that the legislature did not intend to bar holders of equitable interests in real property from seeking the equitable remedy of partition. Yet appellees ask us to conclude that for more than 200 years the General Assembly has given Maryland courts the power to partition equitable interests in real property but simultaneously closed the courthouse doors to the petitions of those who hold such interests. We reject such an anomalous interpretation.
We are persuaded that, when the equitable interest holder claims that she is a concurrent owner of real property that is actually titled in the names of other parties, she may file a lawsuit to establish her rights in the property and to request partition or sale. Cf., e.g., Bowers v. Baltimore Gas & Elec. Co., 228 Md. 624, 628, 180 A.2d 878 (1962) (having exercised jurisdiction to determine existence of easement giving rise to request for partition, court had jurisdiction to subsequently order partition); Lewis v. Lewis, 136 Md. 601, 609-10, 110 A. 885 (1920) (court of equity has jurisdiction to resolve dispute over ownership of property raised by defendant cotenant in the course of partition proceeding).[4] Indeed, that procedure is the simplest and most economical way to resolve the dispute over Mrs. Triantis's rights in the Parcel.
This approach is consistent with the well-reasoned view, adopted by commentators and other state courts, construing comparable partition statutes. Among these authorities, there appears to be general agreement that in certain circumstances the holder of an equitable interest may sue for partition. Although the right to demand partition is defined by the terms of the applicable state statute, one commentator has observed that
in a number of cases, ... one who has merely an equitable interest in an undivided share of certain land is entitled to demand partition, at least in a court of equitable jurisdiction, but whether he can do so properly depends on the character of the interest. In most of the cases referred to, the equitable interest of the plaintiff was such as to entitle him to demand a conveyance of the legal title, so that he was, in the view of a court of equity, in effect, the holder of such a title. And so it has occasionally been decided that one can, in the same proceeding, ask for specific performance of a contract to convey to him, and also partition.
Tiffany on Real Prop., supra, § 477 (footnotes omitted). See also id. § 478 (in a suit for partition, some jurisdictions permit a court of equity "to determine, in the partition proceeding, questions as to the legal title," and in all states "courts of equity will adjudicate in reference to the legal title if this involves merely a construction of the language of some particular instrument") (collecting cases). See, e.g., Murphy v. Shelby, 353 F.2d 418, 420 (8th Cir.1965) (recognizing that under Missouri law "a court of equity may establish *161 the interest of one claiming an equitable interest and may then proceed after determining the interest to order partition").
In our view, there is little danger that this procedure will give rise to the parade of problems predicted by appellees. To establish standing as a concurrent owner under the partition statute, an equitable interest holder, like Mrs. Triantis, must allege facts establishing she has a contemporaneous and fully vested ownership interest in the property.
Construing section 14-107(a) to encompass an equitable interest holder who has a fully vested right as a concurrent owner will not create the problems posited by appellees. Under such a construction, the statute still does not authorize partition by every holder of an equitable interest in real property. For example, section 14-107(a) does not permit partition by a mortgagee because the mortgagee's interest is a security interest, not a concurrent ownership interest. See, e.g., Van Dyk v. Bloede, 128 Md. 330, 97 A. 630 (1916) ("`a mortgagee of the undivided interest of one tenant in common has no right to file a bill for partition'") (citation omitted). Nor would partition be available to a contract purchaser of real property until all the sale terms are fulfilled, because the equitable interest that arises in that situation is not vested during the executory period of the contract. In neither of these circumstances can the equitable interest holder claim an existing ownership interest in the property. Accordingly, we hold that RP section 14-107(a) permits partition of an equitable interest in real property when that interest is held by a fully vested concurrent owner. Whether a petitioner has such an interest must necessarily be decided on a case-by-case basis. We now turn to the question of whether Mrs. Triantis may petition for a partition sale on the basis of her equitable interest in the Parcel.
II.
Mrs. Triantis bases her claim of concurrent ownership in the Parcel on the equitable interest in the Parcel granted to her by the Agreement. The second question raised in her appeal is whether she has "equitable title sufficient to give her standing to bring this partition action." The circuit court did not reach this question because it concluded that Mrs. Triantis's lack of legal title precluded her suit for partition, and our review is limited to that ruling. See, e.g., La Belle Epoque, LLC v. Old Europe Antidue Manor, LLC, 406 Md. 194, 209, 958 A.2d 269 (2008) (appellate review of summary judgment is limited to grounds upon which motion was granted).
Because we have held that legal title is not a prerequisite for partition, we remand this case for a determination of whether Mrs. Triantis has the sort of equitable interest that entitles her to bring a partition action. On remand, the court shall consider the parties' intentions as reflected in the Agreement and any subsequent agreements relating to the Parcel.
JUDGMENT VACATED.
CASE REMANDED TO THE CIRCUIT COURT FOR MONTGOMERY COUNTY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY APPELLEES.
NOTES
[*] Sally D. Adkins, now serving on the Court of Appeals, participated in the hearing and conference of this case while an active member of this Court; she participated in the adoption of this opinion as a specially assigned member of this Court.
[1] Indeed, Maryland has statutorily authorized partition of an equitable "right" or "interest" in real property for more than one hundred years. In 1860, the statutory predecessor of the current statute stated:
The court may decree a partition of any lands or tenements, or any right, interest or estate therein, either legal or equitable, on the bill or petition of any joint tenant, tenant in common, or any parcener, or concurrent owner, whether claiming by descent or purchase.
Former Md.Code (1860), Art. 16, § 99 (emphasis added). That language remained in the statute until it was recodified as part of the new Real Property Article. See former Md.Code (1957, 1973 Repl.Vol.), Art. 21, § 14-107 ("The circuit courts may decree a partition of any property, or any right, interest or estate or property, either legal or equitable."). It was in the recodification process that the General Assembly deleted the explicit reference to partitioning an equitable "right" or "interest" and adopted the current language authorizing "[a] circuit court [to] decree a partition of any property, either legal or equitable." In deleting the words "any right, interest, or estate," however, the Revisors disclaimed any substantive change, explaining that
the present reference to "any right, interest or estate or property" is proposed for deletion as unnecessary in light of the preceding reference to "property" and the definition in § 1-101(k).
1974 Md. Laws, ch. 12 (Revisors' note).
[2] See infra note 5 for a history of RP section 14-107(a).
[3] Maryland's courts of equity historically have exercised jurisdiction over partition actions. As Chief Judge Gilbert observed for our Court:
The authority of Maryland courts of equity to exercise jurisdiction over partition proceedings stems from 31 Henry VIII, ch. 1 ([1540]). That parliamentary statute remained an integral part of the Common Law of Maryland following the War of Independence waged between the colonies and the British crown. Subsequently, the General Assembly enacted a partition statute by Laws of 1785, ch. 72, § 12. The statute has been amended from time to time. The current version is found in [RP] section 14-107.
Lentz v. Dypsky, 49 Md.App. 97, 102, 430 A.2d 109 (1981) (citations and footnotes omitted).
One amendment added the sale in lieu of partition remedy. At common law, a court of equity could partition property but lacked authority to order a sale in lieu thereof. See Hardy v. Leager, 212 Md. 565, 569, 130 A.2d 737 (1957). In 1831, the General Assembly gave equity courts jurisdiction to order either partition or sale. See 1831 Md. Laws, ch. 311.
[4] The holding in Cambridge Discount Corp. v. Bd. of Educ. of Dorchester County, 181 Md. 455, 462-63, 30 A.2d 753 (1943), that "the court had no jurisdiction to try title to the property here concerned as between the parties in the bill for partition" is inapposite, because the plaintiff inconsistently claimed sole ownership of the property in question while seeking partition as a concurrent owner, and the suit pre-dated the merger of law and equity.
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331 A.2d 338 (1975)
AUTOCOMP INCORPORATED, a Maryland Corporation, Appellant,
v.
PUBLISHING COMPUTER SERVICE, INC., t/a PCS, a District of Columbia Corporation, Appellee.
No. 8005.
District of Columbia Court of Appeals.
Argued June 12, 1974.
Decided January 20, 1975.
Jack H. Olender, Washington, D. C., with whom Martin Held, Reston, Va., was on the brief, for appellant.
*339 Robert E. Jensen, Washington D. C., with whom Eric D. Roiter, Washington, D. C., was on the brief, for appellee.
Before KELLY, FICKLING and KERN, Associate Judges.
KELLY, Associate Judge:
Appellant Autocomp Incorporated filed suit against Systems Associates, Inc. (SAI) and appellee Publishing Computer Service, Inc. (PCS) for the value of computer services and materials furnished SAI for which PCS had promised to pay, alleging in the complaint that after an initial payment of $2,000 PCS had refused to further liquidate the debt. A default judgment was entered against SAI, but after a nonjury trial against PCS the court found for PCS on Autocomp's claim. The question raised on appeal is whether the pleadings clearly posited the issue of a de facto merger between SAI and PCS as a basis for Autocomp's claim[1] and, if not, whether the trial court abused its discretion in denying Autocomp's alternative request during trial to amend its complaint or to take a voluntary nonsuit.[2]
The pertinent portions of the pleadings in dispute are Autocomp's allegations that:
3. After plaintiff provided the said services and materials, and defendant Systems Associates, Incorporated had failed to make payment therefor, defendants Publishing Computer Service, Inc. and Jerald A. Cerand advised plaintiff they were acquiring the other defendant and assured plaintiff they would pay for said services and material, but they failed and refused to do so, after making an initial payment of $2,000.00 on February 15, 1973.
4. The promises and assurances of defendants Publishing Computer Service, Inc. and Jerald A. Cerand were made to induce plaintiff to forego collection efforts and plaintiff relied thereon to its detriment. [R. at 264-65.]
and PCS' answer that:
4. This defendant admits that at one time it had conducted negotiations with defendant Systems Associates, Incorporated concerning a proposed merger but that said merger was never consummated; this defendant denies that it or any of its authorized agents ever promised or assured plaintiff that this defendant would pay for services or material furnished to defendant Systems Associates, Incorporated between November 2, 1972 and January 3, 1973; this defendant admits it loaned to defendant Systems Associates, Incorporated $2,000 which was used to make payment to plaintiff on February 15, 1973. [R. at 267.]
The question of the proposed merger was also explored at some length in pretrial depositions of corporate officers of both PCS and SAI.
Counsel for PCS claimed surprise at the mention of de facto merger during Autocomp's opening statement and argued that it was not prepared to litigate a question not raised by the pleadings. The court sustained PCS' objection for the reason that it was clear from the complaint that Autocomp's claim was based solely upon an alleged promise of PCS to pay the debt of SAI. It did, however, allow limited examination of the witnesses with respect to the proposed acquisition of the one company by the other. Autocomp's subsequent request to amend its complaint or to take a voluntary nonsuit was denied, and the court ultimately ruled that Autocomp had failed to carry its burden of proving that PCS had promised to pay the antecedent debts of SAI.
*340 We agree with the trial court's interpretation of the pleadings that the complaint did not give PCS fair notice of de facto merger as a ground for Autocomp's claim.[3] There was no doubt that a merger was proposed and steps taken by the parties to that end. But there is no indication in the complaint that Autocomp was advancing the apparently novel theory that there was a merger in fact, if not in law, upon which liability could be established under the statute. Accordingly, the court was correct in limiting Autocomp's examination of the witnesses to the one issue unequivocally raised by the complaint; viz., whether PCS or its agent had expressly promised to reimburse plaintiff for its services to SAI, thereby causing it to rely on this promise to its detriment.[4]
The question whether the trial court exceeded the limits of its discretionary power in refusing to allow the complaint to be clarified by an amendment at trial is more troublesome.[5] We note that counsel for PCS raised no strenuous objection to the grant of a motion to amend if, in turn, it were provided the opportunity to adequately prepare its defense to the new claim. And while amendments to pleadings are liberally allowed, Seek v. Edgar, D.C.App., 293 A.2d 474 (1972), the court was unwilling to continue the matter and consequently denied the motion to amend.
Super.Ct.Civ.R. 15(a), upon which the court relied, provides in pertinent part that:
A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action had not been placed upon the trial calendar, he may so amend it at any time within 20 days after it is served. Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.. . .
An exercise of discretion by the trial court is not disturbed upon review absent a finding of abuse. Saddler v. Safeway Stores, D.C.App., 227 A.2d 394 (1967). In refusing Autocomp permission to amend here the court expressed its concern over a delay in a trial already underway and said:
[Y]ou're not going to have a case certified as ready for the trial calendar and then come in and decide to retry it if you want to. I'm not going to permit an amendment while we're in trial.
Such reasoning is valid, we think, given the length of time this case had been pending in the trial court during which Autocomp could have sought an amendment and given the many problems attending the disposition of litigation which so concern that court. And so, while reasonable minds may differ as to the relief warranted in any given situation, we cannot say that it was reversible error for the trial court to deny the request to amend in this case and to order the trial to proceed.
Affirmed.
NOTES
[1] Autocomp proposed to rely upon the provisions of D.C.Code 1973, § 29-927f(e), that in a merger the surviving or new corporation is responsible for the liabilities of the merged corporation.
[2] See Super.Ct.Civ.R. 41(a).
[3] See Etty v. Federal Consulting Service, D. C.Mun.App., 59 A.2d 692 (1948). See also Super.Ct.Civ.R. 8(a), 8(e).
[4] The fact that the proposed merger was explored at length in the course of discovery does not alter the cause of action pleaded in the complaint.
[5] While we speak only in terms of amendment, the same principles apply to a voluntary dismissal under Rule 41(a).
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348 S.E.2d 147 (1986)
STATE of North Carolina
v.
Darryl Scott HUGHES.
No. 8615SC256.
Court of Appeals of North Carolina.
September 16, 1986.
*149 Atty. Gen. Lacy H. Thornburg by Asst. Atty. Gen. Dolores O. Nesnow, Raleigh, for the State.
Daniel H. Monroe, Graham, for defendant-appellant.
MARTIN, Judge.
The issue dispositive of this appeal is whether the trial court erred when it refused defendant's request that the jury be instructed concerning the law of self-defense. We hold that defendant's evidence was sufficient to place the question of self-defense before the jury and that the failure of the court to instruct upon the law applicable thereto requires that defendant be granted a new trial.
Self-defense is a complete or "perfect" defense to homicide if it is established that at the time of the killing:
(1) it appeared to defendant and he believed it to be necessary to kill the deceased in order to save himself from death or great bodily harm; and
(2) defendant's belief was reasonable in that the circumstances as they appeared to him at the time were sufficient to create such a belief in the mind of a person of ordinary firmness; and
(3) defendant was not the aggressor in bringing on the affray, i.e., he did not aggressively and willingly enter into the fight without legal excuse or provocation; and
(4) defendant did not use excessive force, i.e., did not use more force than was necessary or reasonably appeared to him to be necessary under the circumstances *150 to protect himself from death or great bodily harm.
State v. Bush, 307 N.C. 152, 158, 297 S.E.2d 563, 568 (1982). Imperfect self-defense arises when only elements (1) and (2) are established, in which case a defendant would remain guilty of at least voluntary manslaughter. "However, both elements (1) and (2) in the preceding quotation must be shown to exist before the defendant will be entitled to the benefit of either perfect or imperfect self-defense." Id. at 159, 297 S.E.2d at 568.
A defendant is entitled to an instruction on self-defense if there is any evidence in the record which establishes that it was necessary or that it reasonably appeared to the defendant to be necessary to kill in order to protect himself from death or great bodily harm. State v. Pate, 62 N.C. App. 137, 302 S.E.2d 286 (1983), aff'd, 309 N.C. 630, 308 S.E.2d 326 (1983). When defendant's evidence is sufficient to support an instruction on self-defense, the instruction must be given even though the State's evidence is contradictory. State v. Watkins, 283 N.C. 504, 196 S.E.2d 750 (1973). However, if the court determines as a matter of law that there is no evidence in the record from which the jury could find that the defendant reasonably could have believed it to be necessary to kill to protect himself from death or great bodily harm, then the defendant is not entitled to an instruction on self-defense. Bush, supra. When judging the sufficiency of the evidence the facts must be interpreted in the light most favorable to the defendant. State v. McCray, 312 N.C. 519, 324 S.E.2d 606 (1985).
In Bush, the Supreme Court articulated a two-question test for judging the sufficiency of the evidence to support an instruction on self-defense:
(1) Is there evidence that the defendant in fact formed a belief that it was necessary to kill his adversary in order to protect himself from death or great bodily harm, and (2) if so, was that belief reasonable? If both queries are answered in the affirmative, then an instruction on self-defense must be given. If, however, the evidence requires a negative response to either question, a self-defense instruction should not be given.
Bush at 160-61, 297 S.E.2d at 569.
In the present case, defendant presented evidence which, when viewed in the light most favorable to defendant, could support a finding that he in fact believed it to be necessary to strike Wagstaff with the bat to protect himself from death or great bodily harm. Defendant testified that Wagstaff came toward him "right fast" from out of a "pitch-black" area with a silver object that looked like a hawk-billed knife in his hand. As he approached the defendant, the heavily intoxicated Wagstaff threatened, "Now that I've got you, ain't nowhere you can go, goddamn it," and continued toward defendant. According to defendant's evidence, Wagstaff's words and actions caused him to fear for his life because he thought the object might be a knife and that Wagstaff might be going to do something to him.
Defendant's testimony, if believed by a jury, is also sufficient to support a finding that such a belief was reasonable. Defendant presented at least some evidence from which the jury could conclude that Wagstaff was in fact armed and a threat to defendant's life or health. It was for the jury, and not for the court, to determine the reasonableness of defendant's belief, under the circumstances as they appeared to him. See State v. Johnson, 166 N.C. 392, 81 S.E. 941 (1914).
Both Bush queries must therefore be answered in the affirmative and it was error for the trial court to refuse to instruct the jury on self-defense.
In view of our decision, we need not address defendant's second assignment of error. For the reasons stated, defendant is entitled to a
New trial.
HEDRICK, C.J., and PHILLIPS, J., concur.
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IN THE SUPREME COURT OF PENNSYLVANIA
WESTERN DISTRICT
IN RE: FORTIETH STATEWIDE : No. 104 WM 2018
INVESTIGATING GRAND JURY :
:
:
PETITION OF: T.S. :
ORDER
PER CURIAM
AND NOW, this 6th day of July, 2018, upon consideration of the Petition for
Review, and in light of the Office of Attorney General’s indication that it has not fully
developed the merits of its counter-argument and its request to submit additional briefing
should this dispute proceed beyond the initial filings, this matter is to be considered by
the Court upon full briefing by the parties on an expedited basis.
Petitioner is challenging a June 19, 2018 order which the supervising judge
certified for appellate review. See Pa.R.A.P. 3331(a)(5). As identified in Petitioner’s
Petition for Review, with some rephrasing by this Court, Petitioner is presenting the
following appellate claims:
1. Whether the supervising judge erred in determining that he lacked
the authority to redact the Report, in that the absence of an explicit
prohibition in the law against such redaction vests discretion with the
supervising judge to, at the least, remove any mention of Petitioner’s
name?
2. Alternatively, if this Court concludes that the Investigating Grand Jury
Act does not afford such discretion to the supervising judge, whether
that act is unconstitutional, as it deprives Petitioner and other
similarly uncharged individuals of due process rights afforded by the
federal and state constitutions, as well as the right to reputation
guaranteed by the Pennsylvania Constitution?
3. Whether the Grand Jury Act violates the federal and state
constitutional rights to due process, as well as the Pennsylvania
Constitutional right to reputation to the extent it does not afford
Petitioner and similarly situated uncharged individuals the right to
see and challenge evidence presented against them?
Petitioner’s brief is due by 2:00 p.m. on July 10, 2018. At that time, Petitioner shall
present an unredacted brief, which shall be filed under seal. Simultaneously, to ensure
as much public access as possible without violating grand jury secrecy, Petitioner shall
submit a redacted version of the brief suitable for public docketing. The Office of Attorney
General, as the opposing party, shall review Petitioner’s redacted brief and, no later than
2:00 p.m. on July 13, shall file a letter with the Prothonotary, either certifying that the
Office of Attorney General agrees that the redacted brief does not violate grand jury
secrecy or objecting to the release of the redacted version of the brief on the basis that it
allegedly violates grand jury secrecy.
In the event the Office of Attorney General certifies that it agrees that Petitioner’s
redacted brief does not violate grand jury secrecy, the document shall be immediately
docketed for public view. If the Office of Attorney General objects to the release of the
redacted version, such objections shall be immediately forwarded to the supervising judge
for his prompt consideration and disposition.
The Office of Attorney General’s appellate brief shall be due by 2:00 p.m. on July
13, 2018. At that time, the Office of Attorney General shall present an unredacted brief,
which shall be filed under seal. Simultaneously, the Office of Attorney General shall
submit a redacted version of the brief suitable for public docketing. Petitioner, as the
opposing party, shall review the redacted brief. Following that review, and no later than
2:00 p.m. on July 17, 2018, Petitioner shall file a letter, either certifying agreement that
the Office of Attorney General’s redacted brief does not violate grand jury secrecy or
[104 WM 2018] - 2
identifying with specificity any aspects of the redacted version which Petitioner believes
violate such secrecy.
In the event Petitioner certifies agreement that the Office of Attorney General’s
redacted brief does not violate grand jury secrecy, the document shall be immediately
docketed for public view. In the event Petitioner objects to the release of the redacted
version, such objections shall be immediately forwarded to the supervising judge for his
prompt consideration and disposition.
The parties are cautioned against instigating unnecessary ancillary litigation
regarding the production of redacted versions of the brief suitable for public docketing,
and any such ancillary litigation will not delay this Court’s resolution of the challenges to
the Report.
Any amicus curiae briefs, regardless of which side they support, shall be due by
2:00 p.m. on the fourth business day following the public disclosure of Petitioner’s or the
Office of Attorney General’s redacted brief, whichever occurs later.
In consideration of the timeliness concerns, the parties will not be permitted to
submit reply briefs. Service of all submissions must be made at the time of filing via e-
filing, fax, e-mail, or personal delivery. Requests for changes to the briefing schedule will
not be entertained, and no extensions will be granted.
Consistent with the expedited treatment of this matter, the request of the Office of
Attorney General to proceed to oral argument, which it has made in several of its answers,
is DENIED. This matter will be submitted on the briefs.
The instant order is unsealed.
[104 WM 2018] - 3
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291 Pa. Superior Ct. 51 (1981)
435 A.2d 214
COMMONWEALTH of Pennsylvania ex rel. Sandra V. KISTLER
v.
George W. KISTLER, Jr.
Appeal of Sandra V. KISTLER.
Superior Court of Pennsylvania.
Argued March 3, 1981.
Filed September 25, 1981.
*52 Mark S. Sigmon, Bethlehem, for appellant.
Joseph C. Bernstein, Allentown, for appellee.
Before CERCONE, President Judge, and WICKERSHAM and BROSKY, JJ.
BROSKY, Judge:
This is a support case. Sandra Kistler has appealed from the lower court's order granting appellee's petition to modify and reducing the amount of support to be paid to appellant from $225 per week to $100 per week, retroactive to the date of filing, March 17, 1980. In addition, appellee was found to be in contempt of court and directed to pay $1,500 within 30 days. The issue before us is whether appellee *53 showed a change in circumstances which would justify the reduction. We find that he did not, and accordingly reverse.
The basic facts, which are not in dispute, are as follows. The parties were married on March 9, 1974, and separated August 17, 1978. Prior to and during her marriage, Mrs. Kistler was employed by United Airlines. When her husband insisted that they move from New Jersey to Allentown, Pennsylvania, Mrs. Kistler continued to work for United Airlines on a part-time basis, in their Allentown office. At all times relevant to this appeal, appellee was and remains, president of Geo. W. Kistler, Inc. The six hundred pages of testimony taken during the three hearings in this case focus primarily upon the earnings and losses of Geo. W. Kistler, Inc. At the time of the December 5, 1978 hearing, appellee was the president and sole shareholder, receiving a weekly salary of $900, for a gross yearly salary of $46,000. The corporation provided appellee with a vehicle, a 1978 Cadillac, and paid all the insurance, gas and maintenance expenses. The corporation also provided appellee with Blue Cross and Blue Shield; paid all his travel and entertainment expenses, and paid him a monthly rental of $2,000 for a building which it leases from him. As of December 5, 1978, appellee's net worth was $200,000. At the time of the December 5, hearing, appellee resided with his father, but testified that he intended to purchase a condominium for $54,000.
At the November 14, 1979 hearing, appellee testified that his corporation had a severe "working capital" problem, and that upon the advice of a management consultant, he had reduced his salary from $900 to $700 per week. Due to the need for capital, Mr. Kistler opened up his corporation to an outside investor, a Mr. Kuthy, who purchased roughly 25% of the corporation's stock. Based upon the purchase price, the stock of the corporation was worth approximately $200,000 at the time of purchase, according to Thomas McDonald, the certified public accountant who handled the corporation's books. The testimony of Mr. McDonald established that the purchase of the stock was very beneficial to the corporation. *54 Appellee also testified that his mother had purchased the condominium about which he had testified at the December, 1978 hearing, because the bank had denied him a mortgage; and that he was living in it and paying her $325 per month rent, plus $55 per month for maintenance. Although he indicated that he had an agreement with his mother that he would pay her back for the purchase of the condominium, no written agreement was produced by him to this effect; and he admitted that he was not currently making any payments to her.
At the February 13, 1980 hearing, Mr. Kistler testified to a personal financial statement prepared by him which showed his net worth to be $177,124 as of June 22, 1979. He also stated that he owned real estate worth $220,000, encumbered by a mortgage of $153,598.
Appellee stated that his net worth as of February 13, 1980 was approximately $170,000. He also testified that he had received $19,000 as his share of the proceeds upon the sale of the marital residence.
At the April 30, 1980 hearing, appellee testified that his total income for 1979, as indicated on his W-2 form, was $38,800. His weekly income of $700 had remained the same, and he was still receiving the same amount of monthly rental income from the corporation for the use of the building. Mr. Kistler also received the same benefits as before, including the car and health insurance. The only significant change testified to by appellee with regard to the financial condition of his corporation was the fact that an ongoing sales and use tax audit had been concluded unfavorably, resulting in a $14,000 deficiency owed to the Bureau by the corporation. Mr. Kistler stated that this obligation was going to be repaid at the rate of $1,000 per month.
Mrs. Kistler testified that she lived with her parents, paying them $75 per week. She was still employed by United Airlines part-time; however, her hours had been decreased from 3½ hours per day for 4-5 days per week to 1½ hours per day for 6 days per week. Her hourly pay increased from the time of the first hearing, from $8.12 per hour to $10.57 per hour.
*55 At the time of the April, 1980 hearing, it was established that the arrearages on the original support order were $7,680.
At the outset, we note that our scope of review in this case is narrowly defined, and that we will not interfere with the lower court's determination absent a clear abuse of discretion. Commonwealth ex rel. Levy v. Levy, 240 Pa.Super. 168, 361 A.2d 781 (1976); Commonwealth ex rel. McQuiddy v. McQuiddy, 238 Pa.Super. 390, 358 A.2d 102 (1976).
An abuse of discretion does not necessarily imply a willful abuse, but if, in reaching a conclusion, the law is overridden or misapplied or the judgment exercised is manifestly unreasonable as shown by the evidence or the record, discretion is then abused and it is the duty of the appellate court to correct the error. (Emphasis in original). Prescott v. Prescott, 284 Pa.Super. 430, 435, 426 A.2d 123, 126 (1981).
"A finding of abuse of discretion is not lightly made; but only upon a showing of clear and convincing evidence." Commonwealth ex rel. Hartranft v. Hartranft, 267 Pa.Super. 572, 574, 407 A.2d 389, 390 (1979).
It is equally well established that it is the burden of the party seeking to modify a support order to show by competent evidence such a change of circumstances as will justify a modification. Commonwealth ex rel. Levy v. Levy, supra; Bell v. Bell, 228 Pa.Super. 280, 323 A.2d 267 (1974). The change must be material and substantial. Bell v. Bell, supra.
Here, we find, upon a thorough examination of the record, that appellee has not met his burden of showing such a change of circumstances. Appellee's evidence consists primarily of his testimony to the effect that his net worth decreased from $200,000 to $177,000. We do not find this decrease to be substantial or meaningful, especially in view of the fact that appellee's corporation is still financially viable. Although appellee's accountant testified that the *56 corporation had working capital problems, it also was established that those problems were greatly diminished by the addition of Mr. Kuthy, who purchased 25% of the corporation's stock. The corporation continues to supply Mr. Kistler with an automobile and to pay for all expenses in connection therewith. Mr. Kistler continues to receive a monthly rental of $2,000 from the corporation for use of his building, which is valued at $220,000 less the mortgage encumbrance of $153,598. Therefore, the fact that appellee's net worth may have decreased, when viewed in light of all the relevant facts, Bell v. Bell, supra, is not sufficient to warrant a modification.
The corporation is still financially sound, and continues to provide appellee with a weekly income of $700, for an approximate yearly income of $36,000. Although appellee makes much of this reduction in salary, the record shows that he agreed voluntarily to it, in order to help the corporation. We can see no reason why appellee's salary could not be increased now that the corporation's financial problems have been mitigated. Also, it is well established that it is the earning power and not merely the actual earnings, which must be considered. Commonwealth ex rel. Levy v. Levy, supra. In Levy, a physician voluntarily took a reduction in pay by changing jobs. We held that the court may consider such a reduction as an intended circumstance, and may ignore the actual earnings and look to the defendant's earning capacity.
It is clear here that appellee's earning capacity has not diminished, and that his reduction in salary to benefit the corporation does not reflect his actual earning capacity.
Mr. Kistler's only other evidence of changed circumstances is that he now pays to his mother a monthly rental of $325 plus a $55 maintenance fee; whereas at the time of the December 5, 1978 hearing appellee lived rent-free with his father. The only personal debt testified to by appellee is the amount claimed to have been advanced by his mother to purchase the condominium. No judgment note or other written evidence of this debt was produced by appellee at *57 the time of trial, and appellee testified that he had not yet begun repayment on this obligation.
For these reasons, we hold that the court below abused its discretion, in that the evidence presented by appellee is insufficient to show such a permanent change in circumstances as would justify a modification. Commonwealth ex rel. Roviello v. Roviello, 229 Pa.Super. 428, 323 A.2d 766 (1974). Appellee's circumstances have not materially or substantially changed since the original order for support was entered in December, 1978.
Accordingly, we hold that the lower court was not justified in modifying the support order of December 27, 1978. The order of August 26, 1980 is reversed, and the order of December 27, 1978 is reinstated, as entered by the Court of Common Pleas retroactive, however, to August 26, 1980, allowing credit for any payments thereunder.
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71 F.3d 884
John Leev.U.S.
NO. 94-6488
United States Court of Appeals,Eleventh Circuit.
Nov 03, 1995
S.D.Ala., 66
F.3d 341
1
DENIALS OF REHEARING EN BANC.
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513 S.W.2d 839 (1974)
Ex Parte Woodrow Wilson SMITH.
No. 48804.
Court of Criminal Appeals of Texas.
September 24, 1974.
*840 Pierce P. Stacy, III, Bryan, for appellant.
W. T. "Tom" McDonald, Jr., Dist. Atty., J. Bradley Smith, Asst. Dist. Atty., Bryan, and Jim D. Vollers, State's Atty., Austin, for the State.
OPINION
GREEN, Commissioner.
This is a post-conviction habeas corpus proceeding brought under the provisions of Article 11.07, Vernon's Ann.C.C.P., by petitioner, an inmate of the Texas Department of Corrections.
Petitioner was convicted of being an accomplice to murder with malice in Cause No. 9574, 85th District Court of Brazos County, on June 13, 1964. Punishment was assessed at 99 years. No appeal was perfected from this conviction.
Petitioner filed an application for the writ of habeas corpus alleging, inter alia, that the State improperly introduced in evidence, over his objections, the confession of one Willie Coverson, indicted as a principal offender, which denied petitioner his right to confrontation and cross-examination of the witness. When the writ was filed in our Court, we found that the record, and particularly the transcript of the evidence, was incomplete, and since the writ raises a serious contention of constitutional dimensions we returned the proceeding to the trial court with instructions to hold a hearing to complete the record.
*841 Such hearing was had, and the complete record is now before us. By order of May 24, 1974, this Court found all claims in petitioner's application to be without merit except the contention pertaining to the admission of Coverson's confession, which raises a substantial constitutional question of law. See Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). Roberts v. Russell, 392 U.S. 293, 88 S.Ct. 1921, 20 L.Ed. 1100 (1968); Evans v. State, 500 S.W.2d 846 (Tex.Cr.App.1973); Hearne v. State, 500 S.W.2d 851 (Tex.Cr. App.1973); Schepps v. State, 432 S.W.2d 926 (Tex.Cr.App., opinion on State's Motion for Rehearing (1968)).
This Court thereupon set this cause for submission, limiting the issues to the following:
(1) Was the petitioner denied his Sixth Amendment right to confrontation and cross-examination by the admission in evidence of co-indictee Coverson's confession, over petitioner's objection that it was hearsay?
(2) If the admission into evidence was error in violation of the petitioner's Sixth Amendment rights to confrontation and cross-examination, was the error harmless beyond a reasonable doubt in view of the other evidence submitted by the State?
The indictment, returned into court March 31, 1964, alleged in substance that on or about November 25, 1963, in Brazos County, John P. Allen, Willie Lee Coverson, and Howard Connally, acting together unlawfully and with malice aforethought killed Thomas McGee by shooting him with a gun; and that petitioner Woodrow Wilson Smith was an accomplice to said killing in that, although not present at the commission of the offense, he advised, encouraged, and commanded the principal offenders to kill deceased. Petitioner was the sole defendant to be tried in the instant trial.
In order to sustain its burden to prove beyond a reasonable doubt the guilt of the principal Willie Lee Coverson,[1] the State placed in evidence the judgment of conviction of Coverson of the murder of deceased. This judgment was admissible as evidence of Coverson's guilt as a principal offender. Tucker v. State, supra, and authorities there cited. In addition, over petitioner's hearsay objections, the State placed in evidence Coverson's written confession, reading in part as follows:
"On November 23, 1963, the date that they buried the President, Howard Connally, John Allen, Woodrow Smith and myself all went to Bryan, Texas. We went in two different cars. I rode with Howard Connally in Howard's 1955 Buick, white looking. John Allen and Woodrow Smith went in a brown looking Dodge, Plymouth, or DeSoto. I don't know just what kind of car it was but it was a Chrysler product. I don't know what time it was when we arrived in Bryan, but it was sometime just before dark. Both of the cars stopped near a cafe in Bryan. Woodrow Smith and John Allen got out of their car and came over and got in the car with us. We all four just drove around in Howard's car and Howard was doing the driving. This man Woodrow Smith told Howard, said `There's the place, can you find it? Howard told him that he could. We then drove back to Bryan. This place that Woodrow pointed out was the place where the man lived that Howard was supposed to kill. After we got back to Bryan, John Allen and Woodrow Smith both got out of Howard's car. As they were leaving Smith said that he had to go to workthat he would see you in the morning. He was talking to Howard at the time ...."
The foregoing portion contains the sole references in the confession to the actions of petitioner. In the remainder of the confession. Coverson told in detail of the manner in which deceased was shot and killed, naming Howard Connally as the actual *842 killer, and implicating himself as a principal.
Coverson did not testify, and petitioner had no opportunity to cross-examine him.
The general rule of law with regard to confessions made by one party in the absence of the accused has long been that a confession of guilt can be used only against the confessor, and is inadmissible against others under the hearsay rule; and its use in evidence against one other than the person making the confession is a violation of the right of confrontation and cross-examination guaranteed by the Sixth Amendment. See McCormick & Ray, Texas Law of Evidence, 2d Ed., Sec. 1219, p. 96; Evans v. State, supra; Hearne v. State, supra; Carey v. State, Tex.Cr.App., 455 S.W.2d 217; Schepps v. State, supra; Bruton v. United States, supra; Brookhart v. Janis, 384 U.S. 1, 86 S.Ct. 1245, 16 L.Ed. 2d 314; Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065, 13 L.Ed.2d 923; Barber v. Page, 390 U.S. 719, 88 S.Ct. 1318, 20 L.Ed.2d 255. An exception to this rule applicable under certain circumstances when an accomplice is on trial separately from his principal has been discussed by this Court in Schepps v. State, supra (opinion on State's Motion for Rehearing); Tucker v. State, Tex.Cr.App., 461 S.W.2d 630; Chapman v. State, Tex. Cr.App., 470 S.W.2d 656; and in Griffin v. State, Tex.Cr.App., 486 S.W.2d 948. Reference is made to those authorities for such discussions.
In Schepps v. State, supra, one of the grounds of error presented on appeal was whether Schepps, charged as an accomplice to the offense of printing and making a counterfeit cigarette stamp, was deprived of his federal constitutional right (Sixth and Fourteenth Amendments) to be confronted with the witnesses against him. See also Texas Constitution, Art. 1, Sec. 10, Vernon's Ann. At the defendant's trial, the extra-judicial confessions of three of the alleged principals named in the indictment, taken after their arrest and in the defendant's absence, were introduced in evidence over his objection that he was being deprived of his right of confrontation and cross-examination, and that said confessions were hearsay as to him. The confessions implicated Schepps as an accomplice to the offense. After a thorough discussion of the rules of law set forth in the immediately preceding paragraph hereof, a majority of the Court held the introduction of such confessions to be reversible error. See opinion on State's Motion for Rehearing. 432 S.W.2d 938.
In Chapman, supra, a trial of an accomplice wherein statements of the principal implicating the defendant were admitted in evidence, we said:
"In Schepps v. State, supra, on the State's motion for rehearing, two judges held that the introduction of such a confession implicating the accused violated his constitutional right of confrontation under the circumstances described. A third judge agreed with the reversal because of the court's refusal to excise the hearsay portion of the principals' confessions implicating the accused, the limiting charge being insufficient to remove the injury caused."
Two of the judges in Schepps dissented to the reversal, being of the opinion that the references in the principal's confession to appellant and the actual commission of the crime "were so interwoven with the acts of the principal that to excise them would render the confessions incomplete and fragmentary."
However, in Chapman, the Court said that it was unnecessary to decide whether Schepps controlled the decision there, since the admission in evidence of the statements of the principal offender was reversible error for other reasons.
In Griffin v. State, supra, we said:
"However, Bruton, supra, and Schepps, supra, both involved the admission of a defendant's confession without the deletion of references to his co-defendant. Such is not the case here.
*843 * * * * * *
"We, therefore, conclude since deletion is an effective remedy, as is indicated by our opinion in Schepps, supra, and the 5th Circuit's case of Posey, supra,[2] no error is presented in the case at bar."
See also Browney v. State, 128 Tex.Cr. App. 81, 79 S.W.2d 311, 314.
In the instant case, the entire confession was in evidence. The portion of Coverson's confession implicating appellant was not so interwoven with that portion admitting the guilt of Coverson as a principal offender as to render the confession with the deletion of the part copied above incomplete and fragmentary. The confession was not necessary to prove the guilt of Coverson, since the judgment of his conviction was sufficient to establish his guilt, and appellant made no contest of that issue.
Under the facts and circumstances of the case, we hold that the petitioner was denied his Sixth Amendment right to the confrontation and cross-examination of Coverson due to the admission in evidence of that portion of Coverson's confession implicating petitioner as an accomplice over petitioner's objection that it was hearsay and violated his constitutional right of confrontation and cross-examination. Chapman v. State, supra; Schepps v. State, supra; Tucker v. State, supra; Griffin v. State, supra; Posey v. United States, supra.
We next come to the second question set for submission by this Court. Was the error of the court in admitting Coverson's confession in evidence harmless beyond a reasonable doubt, in view of the other evidence introduced by the State?
A constitutional error can, under some circumstances, be harmless constitutional error, provided the appellate court finds that from all the facts and circumstances in evidence the error was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L. Ed.2d 705; Harrington v. California, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284; Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340; Carey v. State, Tex.Cr.App., 455 S.W.2d 217.
The record reflects that deceased was the uncle of petitioner. It was the State's position that petitioner had a short time before the killing forged deceased's name on certain applications for insurance on deceased's life with petitioner to be named as sole beneficiary, and that after policies had been issued, petitioner entered into an agreement with Willie Lee Coverson, Howard Connally, and John P. Allen that Connally would kill deceased, and that Connally would be paid for committing the offense and the proceeds of the policies would be split between the conspirators.
As proof of this conspiracy, the State placed in evidence a number of applications for life insurance, apparently signed by deceased, all asking that petitioner be named as sole beneficiary. Also in evidence were a number of life insurance policies on deceased issued as the result of such applications, all naming petitioner as sole beneficiary. Uncontradicted evidence of witnesses familiar with deceased's handwriting was to the effect that deceased's signatures on the applications were forgeries. Expert witnesses testified that such signatures were written by petitioner signing deceased's name.
The State introduced in evidence the written confession of petitioner, in which he admitted taking out an insurance policy on deceased, and agreeing with the killer that the victim would be killed and the conspirators would split the insurance money. A comparison of this confession with the portion of Coverson's statement implicating petitioner reveals that petitioner admitted every material fact stated by Coverson. *844 Petitioner's confession, omitting the formal parts, is as follows:
"My name is Woodrow Wilson Smith. My address is 4202 Hatcher Street, Dallas, Texas. I am 40 years old. On or about November 25, 1963, it was around the time that the (sic) buried the President, John Allen, Willie Coverson, Howard Connally and I all went to Bryan, Texas. We all met at Allen's Cafe, Lagow and Spring Streets around noon. Me and John Allen went in my car which is a 1959 Plymouth, color tan and Willie Coverson and Howard Connally went in Howard Connally's 1955 or 1956 Buick. We all took off from the cafe at the same time and drove out onto Highway 75 and on down to Bryan. We got there sometime around the middle of the evening, about 3:00 pm and we parked somewhere on a side street and then we all got in Howard's car. We directed Howard out to where L. T. McGee lived which was out in the country. Both John Allen and I knew where L. T. McGee lived and as we drove down this country road one of us, either John or I, pointed this house out. I then asked Connally if he could find the house and I think that he said yes. Then we drove on back to Bryan and John Allen and I got back in my car and came on back to Dallas. A few days prior to going to Bryan me and John Allen had discussed an insurance policy that L. T. McGee was carrying which would have paid off $4,500.00 in the event L. T. was accidentially killed. This policy was carried by the Reliable Life Insurance Company and I had taken it out on L. T. McGee sometime around July, 1962. I had signed the name of Lynn McGee to it as that is the way that the insurance agent had me to sign it. At this time John Allen was in a financial strain and needed some money. He and I agreed that we would dispose of L. T. McGee so we could collect the money on the policy that was made payable to me. We discussed the manner in which it was to be done and all the arrangements were left up to John Allen. John Allen was to pay Howard Connally to kill L. T. McGee and we all four drove to Bryan, Texas for the purpose of setting up the killing. I was going to let John Allen have four or five hundred dollars of the insurance money to get his business strait (sic) in his cafe.
"Two or three days after we had all been to Bryan, Texas I saw Howard Connally at a service station at Corinth and Eighth Streets in Dallas. Howard asked me if I had heard anything from that man down in Bryan, meaning L. T. McGee, and I told him that I had, that they had called me and told my wife that he had been murdered.
/s/ Woodrow W. Smith."
Other evidence established the fact that deceased was enticed from his home on the night in question by two men, and was shot and killed. Coverson and Connally were arrested in Connally's home on December 15, 1963, and a pistol was found under the bathtub in the house. A ballistics expert testified, after making tests, that two bullets taken from deceased's head were fired from this gun. Medical testimony was given that the wounds in the head caused by these bullets were the cause of death.
Petitioner at his trial vigorously challenged the voluntariness of his confession. A hearing in the absence of the jury was held by the court, and a number of witnesses testified concerning the giving of the confession. Petitioner testified that he did not voluntarily give his confession, but that he was hit, kicked, "cussed" and intimidated into making it.
After hearing the evidence of six officers present at various times during the giving of the confession, which testimony was contrary to that of petitioner, the court made findings that the confession was voluntarily made, and overruled petitioner's objections. The court granted petitioner's request that he be allowed to testify *845 before the jury on the sole issue of the admissibility of his confession without making himself subject to cross-examination on any other issue. Petitioner repeated the substance of his previous testimony of abuse and coercion by the officer prompting him to sign the statement. Thereafter, all of the officers participating in or present at the time of the giving of the confession testified denying the use of any force or coercion in the taking of the confession, and stating facts to establish that the confession was voluntarily made by petitioner. The issue of voluntariness was submitted to the jury in the court's charge.
Since the only evidence linking Coverson to the offense was the two confessions, the judgment of his conviction, and the finding of the murder weapon as above stated, petitioner now contends that the admission of Coverson's confession and the corroboration therein of the statements in petitioner's confession assisted the jury in determining the issue of voluntariness of petitioner's confession. Due to such taint, petitioner says, the introduction of Coverson's confession cannot be found to be harmless error.
We do not agree. The petitioner was the only witness who testified to alleged acts of force and coercion by the officers taking his confession. No less than six witnesses present at different times during the examination testified that there was no force or coercion toward petitioner during the examination and giving of his statement, and that he was not in any manner abused. At the time Coverson's confession was admitted in evidence, and also in the court's charge, the jury was instructed that it could consider that statement only on the limited issue of Coverson's guilt as a principal. The record does not reflect that there was any objection made by petitioner to these instructions.
The evidence of the voluntariness of petitioner's confession was overwhelming. Without such confession, as was also the case in Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340, the evidence of any connection between petitioner and his principal was virtually non-existent. True, as was also the case in Schneble under the court's instructions the jury might have found petitioner's confession involuntary, and, therefore, inadmissible. As stated by the Supreme Court in a situation similar in principle in Schneble, supra:
"But this argument proves too much; without Schneble's confession and the resulting discovery of the body, the State's case against Schneble was virtually non-existent .... Judicious application of the harmless-error rule does not require that we indulge assumptions of irrational jury behavior when a perfectly rational explanation for the jury's verdict, completely consistent with the judge's instructions, stares us in the face. See Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 504-505, 77 S.Ct. 443, 447, 1 L.Ed.2d 493 (1957)."
See also Hoover v. Beto, 467 F.2d 516, 541 (5th Cir. 1972), cert. denied, 409 U.S. 1086, 93 S.Ct. 703, 34 L.Ed.2d 673.
We also quote further from Schneble, as follows:
"Having concluded that petitioner's confession was considered by the jury, we must determine on the basis of `our own reading of the record and on what seems to us to have been the probable impact... on the minds of an average jury,' Harrington v. California, supra. 395 U.S., at 254, 89 S.Ct., at 1728, 23 L. Ed.2d 284, whether Snell's admissions were sufficiently prejudicial to petitioner as to require reversal. In Bruton, the Court pointed out that `[a] defendant is entitled to a fair trial but not a perfect one.' 391 U.S. at 135, 88 S.Ct. at 1627, 20 L.Ed.2d 476 quoting Lutwak v. United States, 344 U.S. 604, 619, 73 S.Ct. 481, 490, 97 L.Ed. 593 (1953). Thus, unless there is a reasonable possibility that the improperly admitted evidence contributed to the conviction reversal is not required. *846 See Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705 (1967). In this case, we conclude that the `minds of an average jury' would not have found the State's case significantly less persuasive had the testimony as to Snell's admissions been excluded. The admission into evidence of these statements, therefore, was at most harmless error."
See also Milton v. Wainwright, 407 U.S. 371, 92 S.Ct. 2174, 33 L.Ed.2d 1.
We conclude beyond a reasonable doubt from what seems to us to have been the probable impact on the minds of an average jury that the admission in evidence of the improper testimony from Coverson's confession was not sufficiently prejudicial to petitioner as to constitute reversible error. The State's case would not have been less persuasive had such evidence been excluded. The admission of this evidence was, at most, harmless error. See Carey v. State, Tex.Cr.App., 455 S.W.2d 217.
The relief prayed for is denied.
Opinion approved by the Court.
NOTES
[1] See Tucker v. State, Tex.Cr.App., 461 S.W.2d 630; Schepps v. State, supra.
[2] Posey v. United States, 416 F.2d 545 (5th Cir. 1969).
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314 S.W.2d 915 (1958)
Warren FRAZEE, Appellant,
v.
Howard PARTNEY, Respondent. Richard FRAZEE, Linda Frazee, Donna Jean Frazee, and Gary Frazee, Minors, by Warren Frazee, Next Friend, Appellants,
v.
Howard PARTNEY, Respondent.
Nos. 46389, 46390.
Supreme Court of Missouri, Division No. 2.
July 14, 1958.
*916 Robert L. Carr, Potosi, for appellants.
Roberts & Roberts, J. Richard Roberts, Farmington, for respondent.
EAGER, Judge.
Two actions for wrongful death have been argued and submitted together on one set of briefs, but with separate, though largely identical, transcripts. In the first Warren Frazee sues for the death of a minor child, and in the second four minor children sue for the death of their mother in the same accident. The injuries and deaths occurred on October 10, 1954, and the suits were not filed until September 21, 1956. We shall refer to all appellants as plaintiffs and to the respondent as defendant. The petition in each case alleged that the defendant "fraudulently, intentionally, deliberately, wilfully, maliciously, and of his spite absented himself and concealed his identity from the plaintiffs and all other persons from and after the 10th day of October, 1954, until the 23rd day of March, 1956. This action is commenced within one year after the accrual of the cause of action herein stated."
Defendant pleaded in each case the one-year bar of § 537.100 RSMo 1949, V.A.M.S. *917 (to which all statutory citations will refer unless otherwise stated); and the defendant, by motion, requested a separate hearing on this issue of limitations. This request was granted and such a hearing was held by the court, a jury being waived; evidence was heard, and it was agreed that the evidence should be applicable to both cases. At the conclusion of this hearing the court found the issues for the defendant upon the stated ground that the plaintiffs' causes of action were barred by § 537.100, and it thereupon entered judgments for the defendant. Motions for new trial were duly filed and overruled; these adequately preserved the points here considered.
The evidence of plaintiff Warren Frazee was in substance as follows: On Sunday, October 10, 1954, at a little after 1:00 p. m., he was driving west on Missouri Highway No. 8, about 10 miles west of Potosi in Washington County; he was driving a 1953 Chevrolet, and his wife and five children were with him; the weather was good. As Frazee approached a curve a green pickup truck, traveling east, came around the curve and "swerved directly over on my side of the road * * * directly in my path"; to avoid a head-on collision Frazee, applying his brakes, swerved to the right, but when he did so he caused his car to go down an embankment and it turned over several times; Mrs. Frazee died almost immediately, and Karen Frazee, one of the children, died in a hospital later the same day; there was no contact between the cars. Mr. Frazee testified that the horn of his car was blowing after the accident until someone shut it off, and that his older children were screaming, but that no one came back to the scene from the pickup, and that he first learned the identity of its driver in March, 1956, from the Highway Patrol. The testimony of two members of the Highway Patrol, considered jointly, indicated the following: That in the investigation of this accident the defendant was located and interviewed at Potosi in March, 1956; that he admitted driving a green pickup truck at the time and place in question, and that he went to the scene of the accident with them and showed "where it occurred"; that, in fact, he was able to tell them of the location shortly before they actually reached the place; that defendant stated that at the time he was drowsy and had dozed off, when suddenly his wife (sitting beside him) grabbed him or the wheel and shouted "look out"; as he opened his eyes he saw a car "whiz by" on his left and he was then headed toward the right-hand ditch; he looked in the rear vision mirror but never saw the other car any more; that he did not stop until he got to the top of a hill, where he got out and looked back but didn't "see anyone"; that about a mile further on, he drove off on a side road and stopped for perhaps 15 minutes; there they discussed the fact that there might have been an accident, but then proceeded on to St. Louis. There was further evidence from the sheriff of the county that no one except Warren Frazee and the Highway Patrol had reported the accident, either to him or to the nearest police station.
Counsel for plaintiffs makes two points: (1) that the causes of action did not accrue until suits could be validly commenced and maintained against an "actual" defendant; and (2), that defendant's criminal violation of § 564.450 (requiring reports of accidents) prevented plaintiffs from filing their suits earlier and excused their delay. Construing the petitions somewhat broadly, we hold that these points are within the pleadings. We shall, however, consider the substance of these points in the following manner and order: A. Did defendant's acts operate to toll or extend the one year bar of § 537.100 (which is the substance of plaintiffs' Point 2)? B. When did the causes of action accrue? In so doing we shall accept as true, for our present purposes, the substance of the evidence as related above. The trial court made no findings of fact as such, and we may consider the evidence here anew under § 510.310.
Sections 537.070 to 537.100, inclusive, being part of Ch. 537 on "Torts and Actions *918 for Damages," constitute our wrongful death act. The applicable part of § 537.100 is as follows: "Every action * * * shall be commenced within one year after the cause of action shall accrue * * *". These identical words were contained in the original section enacted in 1855. In 1905 a proviso was added extending the benefits of the general "nonsuit" section to the death act (Mo.Laws 1905, pp. 137-138). Under the prior law it was held (see Clark v. Kansas City, St. L. & C. R. Co., 219 Mo. 524, 118 S.W. 40) that the general saving clause in case of nonsuit did not apply to suits under the death act, which carried "its own special statute of limitations, which must control." And see Gerren v. Hannibal & St. Joseph R. Co., 60 Mo. 405. In 1909 the tolling provision of the general statutes applicable in case of absence from the state (now § 516.200) was added to the death act, in a somewhat broader form than the general statutory section. (Laws 1909, pp. 463-464.) This was undoubtedly done for the same reason; namely, that the general tolling provisions or exceptions did not apply to this special act which carried its own limitations. At this point we should also note the provisions of § 516.300, as follows: "The provisions of sections 516.010 to 516.370 shall not extend to any action which is or shall be otherwise limited by any statute; but such action shall be brought within the time limited by such statute." The sections therein referred to are, of course, the provisions of the general statutes of limitations.
Our death act creates a new and different cause of action not known to the common law. Cummins v. Kansas City Public Service Co., Banc, 334 Mo. 672, 66 S.W.2d 920. There has been considerable discussion in our cases as to whether the one-year limitation therein is a condition imposed upon the right itself, so that the very right ceases to exist after one year, or whether it is merely a statute of limitation. For the former view see: Barker v. Hannibal & St. Joseph R. Co., 91 Mo. 86, 14 S.W. 280; Baysinger v. Hanser, 355 Mo. 1042, 199 S.W.2d 644; Packard v. Hannibal & St. Joseph R. Co., 181 Mo. 421, 80 S.W. 951; Chandler v. Chicago & A. R. Co., 251 Mo. 592, 158 S.W. 35, and see, generally, for this view 25 C.J.S. Death § 53b, pp. 1158-1159. The contrary view appears to have been taken in Cytron v. St. Louis Transit Co., Banc, 205 Mo. 692, 104 S.W. 109, and in Wentz v. Price Candy Co., 352 Mo. 1, 175 S.W.2d 852. In the Cytron case the question actually involved was whether (after one year) the court should have permitted the filing of an amended petition which sought to add the mother as a plaintiff in a suit instituted by the father alone, for the death of a minor; it was held that the proposed amendment did not change the cause of action and that such was permissible even after the limitation had expired. In the Wentz case the court was primarily concerned only with the limitation section of the Workmen's Compensation Act (now, in substance, § 287.430), considerably different in wording and meaning from that of the death statute. (On this see the discussion in State ex rel. Bier v. Bigger, quoted hereinafter.) However, the court discussed the death act by way of analogy, and its statements appear to be broad enough to constitute, by decision or dicta, a determination that the limitations of both acts are merely limitations upon the remedy, or statutes of "limitation and repose." The sole question involved there was whether an amendment extending the period for filing claims from six months to one year was applicable to an accrued claim, and such was held proper in the case of a pure statute of limitation, affecting the remedy only. The Baysinger case, supra, 199 S.W.2d 644, took the contrary view without discussing the Wentz case, and, so far as we have found, it is the last direct word of this court on the subject. We have determined that in this case we need not attempt to rescue that particular phase of the law from the morass into which it seems to have fallen; perhaps, for practical purposes, the distinction is more academic than real.
*919 If we consider the one year provision of § 537.100 as a statute of limitation affecting only the remedy, it is nevertheless a special statute of limitation. And it seems also to come within the precise terms of § 516.300 which excludes from the operation of the general statutes any action which is "otherwise limited by any statute * * *." The significance of this is that the tolling provisions and exceptions of the general statutes are inapplicable, such as § 516.280 providing an extension of time when one absconds or conceals himself or by other improper act prevents the commencement of an action. A special statute of limitations must carry its own exceptions and we may not engraft others upon it. State ex rel. Bier v. Bigger, Banc, 352 Mo. 502, 178 S.W.2d 347, loc.cit. 350, 351; our court there said: " * * * In cases involving limitations under articles 8 and 9 of chapter 6 this court has often held that fraud or other improper conduct had the effect of tolling the statute. The same result has been reached in cases under special statutes of limitation which expressly provide for extending the time for certain reasons. All the Missouri cases cited by relator on this point fall within one or the other of these two lines of decisions. * * * Wentz v. Price Candy Co., 352 Mo. 1, 175 S.W.2d 852, is not in point on the question now being considered. In that case we held that the extension of the period of limitation by amendment of a statute would extend an existing cause of action which had not expired at the time of amendment. Relator quotes from our opinion in that case where we said that limitation laws recognize instances of excusable delay. We were speaking of a statute which is expressly made subject to our general statute of limitations, which includes Section 1031, supra.
"This court has uniformly held that where a statute of limitations is a special one, not included in the general chapter on limitations, the running thereof cannot be tolled because of fraud, concealment or any other reason not provided in the statute itself." Then continuing, and quoting in part from another case, the court said: "`No other exceptions whatever are engrafted on that statute, and it is not the duty or the right of the courts to write new provisions into the statute. The infancy of plaintiff does not change the law. The express provision in his behalf of five years excludes all other exceptions. Moreover, it is a special statute of limitations upon the sole topic of wills and their contest, and it must be held to be exclusive of other statutes of limitation.' See, also, State ex rel. [State Life Ins. Co.] v. Faucett, Mo.Sup., 163 S.W.2d 592 and cases cited.
"Section 532 is a special statute limiting the time for probating wills and it does not expressly or impliedly authorize the time to be extended for any reason.
"The purpose of such statutes is expressed in one of the earliest of them, 21 James I, chap. 16, `For the quieting of men's estates and the avoiding of suits.' In particular cases, this inflexible limitation may seem harsh. If so, the remedy is legislative, not judicial."
See, also: Blaser v. Osage River Gravel Co., Mo., 219 S.W. 585 (calling attention to our statute which is now § 516.300); Dryer v. Chicago & A. R. Co., 170 Mo.App. 550, 157 S.W. 129; City of Macon ex rel. Little v. Sparrow, 197 Mo.App. 654, 198 S.W. 1136; Haver v. Bassett, Mo.App., 287 S.W.2d 342 (holding the general tolling statute for absence not applicable to the death act); Kober v. Kober, 324 Mo. 379, 23 S.W.2d 149. The Kober case was a suit by a widow to set aside certain deeds on account of the fraud of her husband, and to establish her dower rights. The court held that the limitation of two years, specially fixed by § 1308 RSMo 1919 (applicable to actions by married women to recover real estate) was controlling, and said, 23 S.W.2d loc. cit. 152: "Nor does the failure to discover the fraud, or acts of defendants in concealing the fraud, toll the running of the statute. No such exceptions are written into the statute, and we are not at liberty to *920 insert them. Parish v. Casner, Mo.Sup., 282 S.W. 392, 409; Turnmire v. Claybrook, Mo.Sup., 204 S.W. 178, 179."
A very full annotation on the subject of the tolling or suspension of the limitation periods of death statutes appears in 132 A.L.R. at pages 292-334. It will be impossible to discuss that here, but, as we construe it, it furnishes substantial authority for our conclusions. Plaintiffs cite a note in 10 A.L.R.2d at page 564. The author suggests, citing three cases, that the failure of a motorist to report an accident as required by statute may constitute a concealment within the meaning of an applicable tolling provision. He does not pretend to state that, under the authorities, such a failure would operate independently to toll the limitation of a death statute which does not carry any applicable exception for concealment.
In the final analysis we are seeking here to determine the legislative intent. We must consider not only the fact that our legislature has, in twice adding specific exceptions to the time limitation of our death act, failed to enact any exception which would extend the time by reason of such conduct as is shown here, but also the fact that § 516.300, which has at all times remained in force, specifically provides that the general statutes of limitations shall not extend "to any action * * * otherwise limited by any statute." We must further consider the various judicial constructions of these statutes, which have entered into and become part of them. We must and do hold that the limitation of one year specifically provided in § 537.100 was not tolled or the period extended by the defendant's conduct, even attributing to it the full effect of plaintiffs' contentions.
The remaining point is that these causes of action did not accrue until plaintiffs learned the identity of defendant so that they might institute and maintain effective suits against an actual defendant. It may be stated as a general principle that, unless affected by statute, a cause of action "accrues at the moment of a wrong, default or delict by the defendant and the injury of the plaintiff * * * if the injury, however slight, is complete at the time of the act." 1 Am.Jur., Actions, § 61, pp. 451-452. In Hunter v. Hunter, Mo., 237 S.W.2d 100, 103, this court said: "A cause of action accrues, and limitations thereon begin to run, when the right to sue arises." In Coleman v. Kansas City, Banc, 353 Mo. 150, 182 S.W.2d 74, at loc. cit. 78, the court said: "`It may be stated as a sound general proposition that a cause of action accrues the moment the right to commence an action comes into existence, and the statute of limitations commences to run from that time.' 34 Am.Jur., page 92, sec. 113." In Unexcelled Chemical Corp. v. United States, 345 U.S. 59, loc. cit. 65, 73 S.Ct. 580, 583, 97 L.Ed. 821, the court said: "A cause of action is created when there is a breach of duty owed the plaintiff. It is that breach of duty, not its discovery, that normally is controlling." Counsel for plaintiffs cite the case of Brinkmann v. Common School Dist. No. 27, Mo.App., 238 S.W.2d 1, 5, which quotes a headnote from 1 C.J.S. Actions § 124a as follows: "'A cause of action accrues at the time when its owner may legally invoke the aid of a proper tribunal to enforce his demand; when he has a present right to institute and maintain an action or suit.'" That text further states (citing cases) that a cause of action accrues "at the moment when the party owning it has a legal right to sue thereon." There are apparently some authorities which require also the existence of a party capable of suing and of a suable party against whom the demand may be enforced. Tobias v. Richardson, 26 Ohio Cir.Ct.Rep. 81, 85. But therein the term existence must be distinguished from a discovery of identity. Such decisions are usually based upon a delay in the appointment of an administrator who would be a necessary party plaintiff or defendant. 34 Am.Jur., Limitation of Actions, § 114, pp. 93-94. And the contrary has very frequently been held, even as to delay in the appointment of an administrator. Bickford v. Furber, 271 Mass. 94, 170 N.E. 796, 70 A.L.R. 469 (a death act case); *921 Reading Co. v. Koons, 271 U.S. 58, 46 S.Ct. 405, 70 L.Ed. 835 (death case under F.E.L.A.). In the note appearing at 174 A.L.R. at page 816 et seq., it is indicated that the doctrine that in death cases the limitation only begins to run from the appointment of an administrator has been very generally repudiated, and that the period is generally held to begin at the death (loc. cit. 823). We are not concerned here with any question of the existence of either a cause of action, or of parties plaintiff, or of a party defendant; this case presents merely an inability to discover the identity of the defendant. We do not think that the authorities discussed sustain a holding of delayed accrual of the present causes of action.
Plaintiffs argue, with some citation of authority, that there can be no valid commencement of an action by a suit in which no valid summons can be issued. Even so, that does not reach our controlling point. We are construing the positive terms of a statute which starts the limitation in motion from the "accrual" of the cause of action, not from the time when one may be effectively commenced. Such a situation has been remedied in the general statutes by § 516.280 (prevention of the commencement of an action by concealment, absconding or by other improper act), but it is inapplicable here.
To be somewhat more specific, our courts have held in several cases that the cause of action for wrongful death accrues at the death. Kennedy v. Burrier, 36 Mo. 128, 130; Goldschmidt v. Pevely Dairy Co., 341 Mo. 982, 111 S.W.2d 1, 5; Glasgow v. City of St. Joseph, 353 Mo. 740, 184 S.W.2d 412, 415; Cummins v. Kansas City Public Service Co., 334 Mo. 672, 66 S.W.2d 920, 929; Fair v. Agur, 345 Mo. 394, 133 S.W.2d 402, 404. In the Kennedy case, which has often been cited, the court said, at loc. cit. 130: "The sixth section of the act provides that suit must be brought `within one year from the time the cause of action accrued.' When, then, did the cause of action accrue? We think the cause of action accrued whenever the defendant's liability became perfect and complete. Whenever the defendant had done an act which made him liable in damages, and there was a person in esse to whom the damages ought to be paid and who might sue for and recover the same, then clearly the cause of action had accrued as against him. When, then, did this liability take place? Evidently at the death of Kennedy. * * *" It is true that in those cases the courts were discussing the question under facts widely different from ours. But we do not feel justified in departing from the general principle announced in the absence of supporting authority.
Section 516.100, of the general statutes of limitations, provides in substance that a cause of action shall not be deemed to accrue when the breach of duty occurs but when the damage therefrom is sustained and capable of ascertainment. By its very terms it could be of no benefit to plaintiffs here, for their damages were immediately ascertainable. And, for the reasons discussed heretofore, it could not in any event apply to a death action which is "otherwise limited." Section 516.300.
The legislature has not seen fit to enact for death actions either a tolling provision or a delayed accrual on account of fraud, concealment, or other improper act (as § 516.280), notwithstanding the prior constructions which we have discussed. Undoubtedly a hardship has resulted here, and this decision has not been easy. We are forced to construe the cold, clear words of the statute, and if its scope is to be enlarged we feel that the remedy is legislative, not judicial. We deem it unnecessary to discuss what would have been the effect of a "John Doe" suit against a fictitious defendant, as argued pro and con, for no such suit was in fact filed. The judgment of the trial court will be affirmed. It is so ordered.
All concur.
| {
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0143n.06
No. 11-6406
FILED
UNITED STATES COURT OF APPEALS Feb 08, 2013
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF TENNESSEE
MICHAEL ANTHONY DOWLEN, )
)
Defendant-Appellant. )
)
BEFORE: MARTIN and ROGERS, Circuit Judges, and TARNOW, District Judge.*
ROGERS, Circuit Judge. A federal jury convicted Michael Dowlen of twenty-nine counts
of bank fraud for kiting checks worth nearly two-million dollars. On appeal, Dowlen challenges his
conviction and thirty-seven-month, within-Guidelines sentence. He argues that the evidence was not
sufficient, that irrelevant and prejudicial testimony was admitted, that the jury instructions were
improper, that the district court incorrectly calculated the losses he caused, that he should have
*
The Honorable Arthur J. Tarnow, United States District Judge for the Eastern District of
Michigan, sitting by designation.
No. 11-6406
U.S. v. Dowlen
received a reduction for acceptance of responsibility, and that the district court should have granted
his request for a downward departure. None of Dowlen’s arguments warrants reversal.
I. FACTUAL AND PROCEDURAL BACKGROUND
Michael Dowlen operated a real estate construction business in southeastern Tennessee for
over thirty years. Dowlen borrowed most of his funds from Colony LP and used business checking
accounts with Northwest Georgia Bank and Cornerstone Community Bank. Following the decline
of the real estate market in 2008, Colony refused to allow Dowlen to make further draws and Dowlen
experienced cash flow problems.
This was not the first time that Dowlen experienced cash flow problems. According to
Dowlen, for years he had regularly written checks to his subcontractors before he received funds to
back the checks. Northwest Georgia Bank covered any overdrafts and charged Dowlen
“nonsufficient fund” fees amounting to $1000 to $1500 a month. Dowlen saw these fees as
analogous to interest costs and says he treated his checking account as a line of credit. Dowlen says
he always expected to cover the checks.
The Government put forth evidence showing that from July 2008 to September 2008, Dowlen
cross-deposited fifty checks between his accounts at Northwest Georgia Bank and Cornerstone
Community Bank. Dowlen deposited twenty-nine checks, totaling $1,910,500, from his Northwest
Georgia account into his Cornerstone account. During the same time period, he deposited twenty-
one checks, totaling $1,812,100, from his Cornerstone account into his Northwest Georgia account.
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No. 11-6406
U.S. v. Dowlen
This suggests a classic check-kiting scheme.1 Dowlen maintains that he expected all of these checks
to be covered by legitimate funds.
In late August 2008, Dowlen’s loan officer at Cornerstone spoke with Dowlen about the
bank’s suspicion that Dowlen was kiting checks and instructed him that if he wanted to make
deposits from his Northwest Georgia account into his Cornerstone account, he would need to use
cashier’s checks. The loan officer said that Dowlen agreed. However, Dowlen continued to write
checks on his Northwest Georgia account and deposit the checks into his Cornerstone account.
1
Check kiting is a systematic scheme to defraud, whereby nonsufficient checks are
traded or cross deposited between two or more checking accounts in order to
artificially inflate the bank account balances. This is accomplished by using the float
time in the bank system. Once bank accounts are artificially inflated, checks that
would normally be returned for nonsufficient funds are, in fact, paid or honored by
the issuing banks.
United States v. Abboud, 438 F.3d 554, 563 n.1 (6th Cir. 2006). As Abboud explained, check kiting
can act as a substitute for a short-term loan.
For example, if the defendant needed $100,000 today but would not have sufficient
money for three days, he would write a check for $100,000 on Day 1 from an account
with Bank A with insufficient funds. If Bank A has a one day float time, then it
would find insufficient funds on Day 2. Before Bank A returned the check, the
defendant would write a check for $100,000 on Day 2 from an account with Bank B
with [insufficient] funds. If Bank B has a one day float time, then it would find
insufficient funds on Day 3. Before Bank B returned the check, the defendant would
write a check for $100,000 on Day 3 from the account at Bank A with insufficient
funds. Before Bank A returned the check on Day 4, the defendant would hopefully
have received sufficient money and deposited this in the account at Bank A.
Id. at 590.
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No. 11-6406
U.S. v. Dowlen
According to the Government, Dowlen was able to continue his behavior because on August
25, 2008, he deposited $250,000 in third-party funds into his Northwest Georgia account. These
funds came from two couples, the Howards and the Shoemakers, for whom Dowlen was building
houses. Although both couples had already made their down payments and were not obligated to
give Dowlen more money before the closing, Dowlen was able to convince them to pay him before
their houses were complete. The Howards gave $100,000, and the Shoemakers gave $150,000.
These funds appear to have covered two of the Northwest Georgia checks Dowlen deposited into his
Cornerstone account in late August (checks from August 25th and August 26th totaling $98,000).
However, subsequent checks were written without sufficient funds.
A few weeks later, the loan officer at Cornerstone became aware of Dowlen’s continued
check kiting and decided to close Dowlen’s account. After Cornerstone closed Dowlen’s account
on October 8, 2008 and Cornerstone and Northwest Georgia resolved all outstanding checks, Dowlen
was left with a positive balance at Cornerstone of $56,000. However, Northwest Georgia was left
with a $310,000 loss and said they would go to the police if Dowlen did not cover the loss. Dowlen
covered the $310,000 by entering into a settlement agreement with Colony LP. Colony paid
Northwest Georgia $310,000 in exchange for Dowlen’s release of any extortion claims he may have
had against Colony. Colony did not lend Dowlen further funds and Dowlen was forced to file for
bankruptcy.
The superseding indictment charged Dowlen with two counts of interstate transportation of
fraudulently obtained money, two counts of criminally derived monetary transactions, and twenty-
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No. 11-6406
U.S. v. Dowlen
nine counts of bank fraud (corresponding to the twenty-nine Northwest Georgia checks that Dowlen
deposited into his Cornerstone account). Following a two-day trial, the jury found Dowlen guilty
of the bank-fraud charges and acquitted him of the other charges.
The district court sentenced Dowlen to a within-Guidelines term of thirty-seven months’
imprisonment. The presentence report calculated the total amount of the loss at $560,000, summing
the $310,000 loss to Northwest Georgia and the $250,000 loss to the Howards and Shoemakers.
Dowlen challenged both alleged losses. He argued that because Northwest Georgia received the
$310,000, it had not lost money, and that the losses to the Howards and Shoemakers were unrelated
to the check-kiting scheme. The district court—relying upon Application Note 3(E) of U.S.S.G. §
2B1.1—determined that the $310,000 was an attributable loss because the repayment occurred after
Northwest Georgia detected the scheme. The district court allowed for a reduction in the loss related
to the Howards’ and Shoemakers’ funds to account for a portion of the funds that may have been
used by Dowlen for legitimate business purposes. For Guidelines-calculation purposes, the court
found only $100,000 of the losses to be attributable to Dowlen’s check-kiting scheme. In total, the
district court found the attributable losses to be $410,000. Because the offense level increases occur
at $400,000 and $1,000,000, see U.S.S.G. § 2B1.1(b), the change from $560,000 to $410,000 had
no effect on Dowlen’s Guidelines range.
Dowlen also moved for a downward departure. Dowlen argued that he was an atypical
white-collar defendant because he had been a law-abiding businessman for over thirty years and only
got into trouble because Colony LP decided not to provide him with needed funds. The district court
-5-
No. 11-6406
U.S. v. Dowlen
rejected this motion because the court found that Dowlen was “not outside of the heartland of
offenders” that the particular guideline was written for and that check kiting was “specifically the
type of offense that the Sentencing Commission had in mind.” Sentencing Hr’g Tr. 39, Nov. 3,
2011. Accordingly, the court did not find a downward departure to be appropriate.
Dowlen appeals his conviction and sentence.
II. ANALYSIS
On appeal, Dowlen raises six challenges to his conviction and sentence. None warrants
reversal.
A. Sufficiency of the Evidence
Dowlen first argues that the Government failed to offer sufficient evidence showing he
intended to defraud Cornerstone Community Bank. A rational jury could have found that when
Dowlen continued to cross-deposit checks without sufficient funds after Cornerstone bank told him
not to do so, sufficient circumstantial evidence of his fraudulent intent existed. A jury likely would
have been able to find that the extent of Dowlen’s actions before the warning from Cornerstone
Community Bank was sufficient, but even if the court assumes that Dowlen’s criminal intent was
not clear before the warning, there is no explanation other than an intent to defraud for his actions
after the warning.
When considering a challenge to the sufficiency of the evidence, “the relevant question is
whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier
of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson
-6-
No. 11-6406
U.S. v. Dowlen
v. Virginia, 443 U.S. 307, 319 (1979). There are three elements of bank fraud under 18 U.S.C. §
1344: (1) the defendant knowingly executed or attempted to execute a scheme to defraud a financial
institution, (2) the defendant had an intent to defraud, and (3) the financial institution was insured
by the FDIC. See United States v. Everett, 270 F.3d 986, 989 (6th Cir. 2001). Dowlen does not
challenge the applicability of 18 U.S.C. § 1344 to his actions or to Cornerstone Community Bank.
He contends, however, that the Government did not put forth sufficient evidence for a rational jury
to find that he intended to defraud Cornerstone.
“‘Intent to defraud’ means to act ‘with the specific intent to deceive or cheat for the purpose
of either causing some financial loss to another, or bringing about some financial gain to oneself.’”
United States v. Vavlitis, 9 F.3d 206, 212–13 (1st Cir. 1993) (quoting United States v. Cloud, 872
F.2d 846, 852 n.6 (9th Cir. 1989)). As this court has recognized, “[b]ecause direct evidence of a
defendant’s fraudulent intent is typically not available, specific intent to defraud may be established
by circumstantial evidence and by inferences drawn from examining the scheme itself which
demonstrate that the scheme was reasonably calculated to deceive persons of ordinary prudence and
comprehension.” United States v. Winkle, 477 F.3d 407, 413 (6th Cir. 2007) (quoting United States
v. Yoon, 128 F.3d 515, 523–24 (7th Cir. 1997) (modification in original)).
The combination of the number of checks exchanged by the banks, the large dollar value of
the checks, and the absence of an apparent legitimate purpose for the transactions suggests Dowlen
intended to defraud Cornerstone Community Bank. See United States v. Yoon, 128 F.3d 515, 524
(7th Cir. 1997). But even if we assume for purposes of argument that there are good-faith
-7-
No. 11-6406
U.S. v. Dowlen
explanations for these facts, there is no explanation for Dowlen’s continued check kiting after
Cornerstone confronted him. See United States v. Abboud, 438 F.3d 554, 593–94 (6th Cir. 2006).
His continued check kiting and the simultaneous infusion of the Howards’ and Shoemakers’ funds
can only be understood as demonstrating Dowlen’s intent to deceive Cornerstone for his own
financial benefit. For purposes of establishing guilt under 18 U.S.C. § 1344, it is not required that
Cornerstone suffered any loss. See Everett, 270 F.3d at 991. There was sufficient evidence to
support the jury’s conviction.
B. Admissibility of the Testimony of David Howard and Peggy Shoemaker
Second, Dowlen argues that the district court abused its discretion by finding the testimony
of David Howard and Peggy Shoemaker relevant and not unduly prejudicial. The admission of
David Howard’s and Peggy Shoemaker’s testimony does not warrant reversal.
The Government introduced the testimony of David Howard and Peggy Shoemaker, two
individuals who were buying homes that Dowlen was constructing. Although the Howards and
Shoemakers already paid their down payments, Dowlen was able to convince them to give him
$250,000 in additional funds in late August 2008. Based on the testimony of an expert in check
kiting, the Government alleged that Dowlen sought this $250,000 to perpetuate his check-kiting
scheme. The Government put Mr. Howard and Mrs. Shoemaker on the stand to provide background
evidence regarding the source of the $250,000 and Dowlen’s business dealings.
Dowlen objected, arguing that Mr. Howard’s and Mrs. Shoemaker’s testimony was irrelevant
and unduly prejudicial. Dowlen argues here on appeal that the Government’s purpose was to inject
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No. 11-6406
U.S. v. Dowlen
evidence of Dowlen’s breach of contract with the Howards and Shoemakers to bias the jury against
Dowlen. He argues that their testimony is irrelevant to the check-kiting scheme because there was
no nexus between the homes he was building for the Howards and Shoemakers and the check kiting.
The district court did not abuse its discretion in finding the evidence relevant. Relevancy is
a low bar; all that is required is for the evidence to have “any tendency to make a fact [of
consequence] more or less probable than it would be without the evidence.” Fed. R. Evid. 401. At
trial, the Government represented that the testimony would show Dowlen’s knowledge that his
check-kiting scheme was falling apart and that he had a guilty intent in “swindling these folks.”
Trial Tr. July 18, 2011, 146. The district court did not abuse its discretion in finding that Mr.
Howard’s and Mrs. Shoemaker’s testimony would have some tendency to make Dowlen’s intent to
defraud the banks more probable than it would be without the evidence.
Dowlen had a plausible argument that even if the evidence was relevant, its prejudicial nature
outweighed its probative value. However, this determination is within the broad discretion of the
trial judge and this court considers “the evidence in ‘the light most favorable to its proponent,
maximizing its probative value and minimizing its prejudicial effect.’” United States v. Bonds, 12
F.3d 540, 567 (6th Cir. 1993) (quoting United States v. Zipkin, 729 F.2d 384, 389 (6th Cir. 1984)).
The testimony of Mr. Howard and Mrs. Shoemaker had the potential to inform the jury about
Dowlen’s behavior after Cornerstone bank confronted him about his check-kiting scheme. This
could be probative of Dowlen’s intent to defraud the bank. The danger of unfair prejudice could be
as minimal as the time it took for two witnesses to speak. In fact, this is how the district court
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No. 11-6406
U.S. v. Dowlen
understood the prejudice. See Trial Tr. July 19, 2011, 165 (“The only prejudice I could see to your
client is that we may have to hear from two other witnesses.”).
Mrs. Shoemaker’s statement from the stand, “That was our life savings and it’s been stolen,”
id. at 189, confirmed Dowlen’s concerns of unfair prejudice, but as the Supreme Court stated in Old
Chief v. United States, “[i]t is important that a reviewing court evaluate the trial court’s decision
from its perspective when it had to rule and not indulge in review by hindsight.” 519 U.S. 172, 182
n.6 (1997). Perhaps the district court should have predicted Mrs. Shoemaker’s statement, but this
type of prediction is the province of the trial judge. It was not an abuse of discretion to allow Mr.
Howard and Mrs. Shoemaker to testify.
C. Jury Instructions
Third, Dowlen argues that it was error for the district court to instruct the jury that it was
irrelevant whether the financial institution was paid back. Looking at the jury instructions as a
whole, the instructions do not require reversal.
The district court instructed the jury as follows:
It is sufficient to prove an intent to defraud if the government proves the funds of the
financial institution were at risk. Note the language is “at risk,” not that the bank lost
money or that the defendant intended to cause the financial institution to lose money.
Neither an actual loss of money [n]or an intent on the part of the defendant for the
financial institution to lose money is required under the bank fraud statute. For that
reason it is also irrelevant whether the financial institution was paid back, was
reimbursed, or did not lose money. It is also irrelevant for your consideration
whether checks were covered or made good, whether insufficient funds fees or
penalties were paid, or if a financial institution honored the checks.
Bank fraud is a federal offense. So whether a bank participated in, acquiesced
in, or approved the fraud would not be a defense. For a person to have the intent to
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No. 11-6406
U.S. v. Dowlen
defraud, they cannot act in good faith. A person who acts or causes another person
to act on a belief or an opinion honestly held is not punishable under the bank fraud
statute merely because the belief or opinion turns out to be inaccurate, incorrect, or
wrong. An honest mistake in judgment or an honest error in management does not
rise to the level of criminal conduct. A defendant does not act in good faith if, even
though he honestly holds a certain opinion or belief, that defendant also knowingly
makes false or fraudulent pretenses, representations, or promises to others or acts
with reckless disregard for the true facts.
While the term good faith has no precise definition, it encompasses, among
other things, a belief or opinion honestly held, an absence of malice or ill will, and
an intention to avoid taking unfair advantage of another. The burden of proving good
faith does not rest with the defendant, because the defendant does not have any
obligation to prove anything in this case. It is the government's burden to prove to
you beyond a reasonable doubt that the defendant acted with an intent to defraud. If
the evidence in this case leaves you with a reasonable doubt as to whether the
defendant acted with an intent to defraud or instead acted in good faith, you must find
the defendant not guilty on that particular count of fraud.
Trial Tr. July 20, 2011, 347–49 (emphasis added). Dowlen acknowledges that his postdetection
repayment does not reduce his culpability. Dowlen contends, however, that the jury could consider
his repayment relevant to whether he initially intended to defraud the banks.
Dowlen is logically correct that evidence of repayment could be relevant to Dowlen’s
predetection intent because repayment makes it more probable that it was an honest mistake than if
Dowlen had refused to reimburse Northwest Georgia for its loss. But the question for this court is
whether “the instructions, when viewed as a whole, were confusing, misleading, and prejudicial.”
Roberts ex rel. Johnson v. Galen of Va., Inc., 325 F.3d 776, 787 (6th Cir. 2003) (quoting United
States v. Wells, 211 F.3d 988, 1002 (6th Cir. 2000). The statement about relevance was made in the
course of instructing the jury concerning the issue of whether a bank needs to suffer a loss. The
district court subsequently gave detailed instructions covering the good-faith defense. The jury was
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No. 11-6406
U.S. v. Dowlen
told “An honest mistake in judgment or an honest error in management does not rise to the level of
criminal conduct . . . . While the term good faith has no precise definition, it encompasses, among
other things, a belief or opinion honestly held, an absence of malice or ill will, and an intention to
avoid taking unfair advantage of another.” Trial Tr. July 20, 2011, 348. As a whole, the instructions
were acceptable because a jury would have understood that it could take all facts into account when
considering whether Dowlen acted in good faith when he initially presented the checks to
Cornerstone.
In addition, the record reflects that the district court was open to the idea of substituting
another word for the word irrelevant, to address Dowlen’s concerns. See id. at 330 (“I would be
willing to consider replacing the word irrelevant with something else.”). The district court also
considered other ways to express its point about repayment but decided that concerns about biasing
the jury outweighed more specific language. The district court said
I considered putting in, “It is not a defense whether the financial institution was paid
back,” but thought that was a little bit too much involved in this case. So I was trying
to tell the jury that “It’s really not a consideration for you whether the bank was paid
back or not paid back, or whether the checks were covered or not covered.”
Id. at 331.
Dowlen’s argument regarding the district court’s instructions does not warrant reversal.
D. Attributable Loss
Fourth, Dowlen contends that the district court incorrectly calculated the attributable loss
under U.S.S.G. § 2B1.1. Dowlen makes a two-part argument, but both parts fail.
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No. 11-6406
U.S. v. Dowlen
1. Northwest Georgia’s $310,000 Loss
Dowlen argues that because he was not charged in the superseding indictment with
defrauding Northwest Georgia Bank and because he paid Northwest Georgia back for its $310,000
loss, the district court’s inclusion of Northwest Georgia’s $310,000 loss was an error. This argument
is not meritorious.
First, Dowlen’s postdetection repayment is not material to the attributable loss calculation.
The Guidelines commentary allows for a reduction in attributable loss for predetection repayment.
See U.S.S.G. § 2B1.1 cmt. n.3(E)(I). The key moment, however, is detection. See Abboud, 438 F.3d
at 594. If postdetection repayments reduced the attributable loss, then wealthy defendants would
simply be able to buy their way out of jail. See United States v. Flowers, 55 F.3d 218, 221 (6th Cir.
1995). Because Dowlen’s repayment was made after detection, repayment does not change the
calculation of attributable loss under U.S.S.G. § 2B1.1.
Second, whether he was charged with defrauding Northwest Georgia Bank is also not
material to the attributable loss calculation. Attributable losses are calculated by looking at all acts
and omissions “that occurred during the commission of the offense of conviction, in preparation for
that offense, or in the course of attempting to avoid detection or responsibility for that offense . . .
[and] all harm that resulted from the acts and omissions.” U.S.S.G. § 1B1.3(a) (emphasis added).
Whether or not the Government charged Dowlen with defrauding Northwest Georgia bank, the
$310,000 loss resulted from acts occurring during the commission of Dowlen’s fraud upon
Cornerstone.
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No. 11-6406
U.S. v. Dowlen
Northwest Georgia’s $310,000 loss was properly attributed to Dowlen’s check-kiting scheme.
2. The $100,000 Loss Related to the Howards and Shoemakers
Dowlen’s argument that the Howards’ and Shoemakers’ losses should not have been taken
into account also does not require reversal. At the sentencing hearing, Dowlen and the Government
offered differing theories regarding whether the Howards’ and Shoemakers’ losses resulted from
Dowlen’s check-kiting scheme. The Government contended that the Howards’ and Shoemakers’
losses resulted from Dowlen’s acts that took place “in the course of attempting to avoid detection
or responsibility,” U.S.S.G. § 1B1.3(a)(1), for his bank fraud, and are therefore attributable losses.
In support of this theory, the Government pointed out that the injection of the Howards’ and
Shoemakers’ funds into the check-kiting scheme shifted losses from Northwest Georgia Bank to the
families. Dowlen maintained that he obtained the $250,000 from the Howards and Shoemakers in
the ordinary course of his construction business and that their losses resulted from the overall failure
of his business rather than anything related to the check-kiting scheme.
The district court appeared to split the difference, but effectively sided with the Government.
The district court said that it was giving Dowlen the benefit of the doubt and credited Dowlen with
$150,000 as being used for legitimate business purposes, but the court found the remaining $100,000
to be an attributable loss. When combined with Northwest Georgia’s $310,000 loss, this resulted
in a loss of $410,000—above the $400,000 threshold for U.S.S.G. § 2B1.1(b)(1) offense-level
determination. Because the next loss tier was at $1,000,000, the only question for Guidelines
calculation purposes was whether the attributable losses would be more than $400,000. As long as
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No. 11-6406
U.S. v. Dowlen
the district court found that at least $90,001 of the Howards and Shoemakers’ funds went into the
check-kiting scheme, the Guidelines range would be the same.
The court’s allocation of the $250,000 between legitimate business purposes and the check-
kiting scheme is a factual determination and thus is reviewed for clear error. See 18 U.S.C. §
3742(e). The amount of loss does not need to be precisely calculated; the Guidelines say that the
“court need only make a reasonable estimate of the loss.” U.S.S.G. § 2B1.1 cmt. n.3(C).
Accordingly, the question for this court is whether it “is left with a definite and firm conviction” that
the district court made an unreasonable estimate. Anderson v. City of Bessemer City, N.C., 470 U.S.
564, 573 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).
The district court’s allocation was not clear error. The district court was presented with two
plausible theories of how to treat the $250,000 and chose a reasonable estimate that was in-between
and resulted in a sentence that was consistent with the Government’s theory. As the Supreme Court
stated in Anderson, “[w]here there are two permissible views of the evidence, the factfinder’s choice
between them cannot be clearly erroneous.” Id. at 574. It would be more satisfying on review if the
district court had been able to trace where the $250,000 went, but a district court does not need to
determine loss amounts with precision. See United States v. Triana, 468 F.3d 308, 320 (6th Cir.
2006). The district court said its allocation was “very conservative” and gave Dowlen the benefit
of the doubt. Sentencing Hr’g Tr. 30, Nov. 3, 2011. The district court’s estimate was reasonable,
especially considering that the only two checks with sufficient funds were written around the same
time as Dowlen’s receipt of the Howards’ and Shoemakers’ money and these two checks had a
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No. 11-6406
U.S. v. Dowlen
combined value of $98,000. This consideration makes it very reasonable for a factfinder to conclude
that at least $90,001 of the Howards and Shoemakers’ funds went into the scheme. The district
court’s estimate was not clear error.
E. Reduction for Acceptance of Responsibility
Fifth, Dowlen argues that he should receive a two-level reduction for acceptance of
responsibility because he repaid Northwest Georgia Bank. Dowlen did not make this argument
below and failed to object to the presentence report’s recommendation that he should not receive an
adjustment for acceptance of responsibility. Therefore, our review is limited to plain error. That is,
Dowlen must show an error that was obvious or clear, affected his substantial rights, and affected
the fairness, integrity, or public reputation of the judicial proceeding. See United States v. Vonner,
516 F.3d 382, 385–86 (6th Cir. 2008) (en banc).
The Guidelines allow for a reduction only when the defendant “clearly demonstrates
acceptance of responsibility.” U.S.S.G. § 3E1.1 (emphasis added). Thus, for it to be an obvious or
clear error not to apply the acceptance-of-responsibility reduction, it must be doubly clear.
If this standard of review does not dictate the outcome in Dowlen’s case, the Guidelines
commentary does. The commentary states that:
This adjustment is not intended to apply to a defendant who puts the government to
its burden of proof at trial by denying the essential factual elements of guilt, is
convicted, and only then admits guilt and expresses remorse. . . . In rare situations a
defendant may clearly demonstrate an acceptance of responsibility for his criminal
conduct even though he exercises his constitutional right to a trial. This may occur,
for example, where a defendant goes to trial to assert and preserve issues that do not
relate to factual guilt (e.g., to make a constitutional challenge to a statute or a
challenge to the applicability of a statute to his conduct).
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No. 11-6406
U.S. v. Dowlen
U.S.S.G. § 3E1.1 cmt. n.2. In this case, Dowlen had not admitted guilt or expressed remorse even
after being found guilty; in fact, he maintains that there is an insufficient factual basis to convict him.
In addition, Dowlen does not challenge the constitutionality or applicability of 18 U.S.C. § 1344.
The acceptance-of-responsibility reduction is not intended to apply to someone in Dowlen’s position.
Dowlen argues that United States v. Flowers, 55 F.3d 218, 221–22 (6th Cir. 1995), requires
that defendants who make postdetection payments should receive a two-point reduction for
acceptance of responsibility. We did state in Flowers that “[t]he fact that a check kiter enters into
a repayment scheme after the loss has been discovered does not change the fact of the loss; such fact
merely indicates some acceptance of responsibility.” 55 F.3d at 221–22 (quoting United States v.
Mau, 45 F.3d 212, 216 (7th Cir. 1995)). But this statement was made in the context of the
calculation of losses for U.S.S.G. § 2B1.1, rather than the application of the acceptance-of-
responsibility reduction at § 3E1.1. In Flowers, the district court approved of a two-point reduction
for acceptance of responsibility after Flowers pled guilty, see 55 F.3d at 220, 222, so this court had
no occasion to consider the application of § 3E1.1. The opinion in Flowers could have just as easily
used the phrase “acceptance of the consequences” rather than “acceptance of responsibility” and
come to the same conclusion without any confusion about the application of U.S.S.G. § 3E1.1.
While Dowlen’s repayment may show that he is accepting the consequences of his actions,
he has not accepted full responsibility for his actions. Responsibility entails a recognition of moral
accountability. Dowlen, on the other hand, maintains that his actions were harmless and continues
to pin the blame on Colony LP. Dowlen has not demonstrated that plain error occurred.
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No. 11-6406
U.S. v. Dowlen
F. Downward Departure
Sixth, Dowlen argues that the court erred in rejecting his motion for a downward departure.
This court’s jurisdiction to review a district court’s decision not to depart downward is extremely
circumscribed; a decision not to depart downward cannot be reviewed “unless the record reflects that
the district court was not aware of or did not understand its discretion to make such a departure.”
United States v. Puckett, 422 F.3d 340, 344–45 (6th Cir. 2005) (quoting United States v. Stewart,
306 F.3d 295, 329 (6th Cir. 2002)); see also 18 U.S.C. § 3742. The transcript of the sentencing
hearing shows a lengthy colloquy regarding Dowlen’s argument for a downward departure. See
Sentencing Hr’g Tr. 31–42, Nov. 3, 2011. At no point did the court express any doubt that it could
make such a departure, and the lengthy nature of the colloquy suggests that the court understood that
it could grant the motion for a downward departure if it found it warranted. Dowlen has not
overcome the presumption that a district court is aware of and understands its discretion to depart
downward. See United States v. Byrd, 53 F.3d 144, 145 (6th Cir. 1995). Therefore, this court does
not have jurisdiction to review the district court’s decision not to depart downward.
III. CONCLUSION
For the foregoing reasons, Dowlen’s conviction and sentence are affirmed.
- 18 -
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 18-1370V
UNPUBLISHED
APRIL KEIB, Chief Special Master Corcoran
Petitioner, Filed: March 3, 2020
v.
Special Processing Unit (SPU);
SECRETARY OF HEALTH AND Damages Decision Based on Proffer;
HUMAN SERVICES, Influenza (Flu) Vaccine; Shoulder
Injury Related to Vaccine
Respondent. Administration (SIRVA)
Richard Gage, Richard Gage, P.C., Cheyenne, WY, for petitioner.
Mollie Danielle Gorney, U.S. Department of Justice, Washington, DC, for respondent.
DECISION AWARDING DAMAGES1
On September 7, 2018, April Keib filed a petition for compensation under the
National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et seq.,2 (the
“Vaccine Act”). Petitioner alleges that she suffered a shoulder injury related to vaccine
administration (“SIRVA”) as a result of an influenza (“flu”) vaccination administered on
September 21, 2016. Petition at 1-2. The case was assigned to the Special Processing
Unit of the Office of Special Masters.
On August 15, 2019, a ruling on entitlement was issued, finding Petitioner
entitled to compensation for SIRVA. On March 3, 2020, Respondent filed a proffer on
award of compensation (“Proffer”) indicating Petitioner should be awarded $100,040.00,
comprised of $100,000 for pain and suffering and $40.00 for past, unreimbursed
medical expenses. Proffer at 1. In the Proffer, Respondent represented that Petitioner
1 Because this unpublished decision contains a reasoned explanation for the action in this case, I am
required to post it on the United States Court of Federal Claims' website in accordance with the E-
Government Act of 2002. 44 U.S.C. § 3501 note (2012) (Federal Management and Promotion of
Electronic Government Services). This means the decision will be available to anyone with access
to the internet. In accordance with Vaccine Rule 18(b), Petitioner has 14 days to identify and move to
redact medical or other information, the disclosure of which would constitute an unwarranted invasion of
privacy. If, upon review, I agree that the identified material fits within this definition, I will redact such
material from public access.
2National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2012).
agrees with the proffered award. Id. Based on the record as a whole, I find that
Petitioner is entitled to an award as stated in the Proffer.
Pursuant to the terms stated in the attached Proffer, I award Petitioner a lump
sum payment of $100,040.00 (comprised of $100,000.00 for pain and suffering and
$40.00 for past, unreimbursed medical expenses) in the form of a check payable
to Petitioner. This amount represents compensation for all damages that would be
available under § 15(a).
The clerk of the court is directed to enter judgment in accordance with this
decision.3
IT IS SO ORDERED.
s/Brian H. Corcoran
Brian H. Corcoran
Chief Special Master
3 Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint filing of notice
renouncing the right to seek review.
2
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
OFFICE OF SPECIAL MASTERS
)
APRIL KEIB, )
)
Petitioner, )
) No. 18-1370V
v. ) Chief Special Master Cocoran
) ECF
SECRETARY OF HEALTH AND HUMAN )
SERVICES, )
)
Respondent. )
)
RESPONDENT’S PROFFER ON AWARD OF COMPENSATION
I. Items of Compensation
On August 13, 2019, respondent filed a Rule 4(c) report conceding petitioner’s
entitlement to compensation, under the terms of the Vaccine Act, for her shoulder injury related
to vaccine administration (“SIRVA”) Table injury, following a flu vaccine administered on
September 21, 2016. On August 15, 2019, former Chief Special Master Dorsey issued a Ruling
on Entitlement, finding that petitioner was entitled to compensation for her SIRVA. Based upon
the evidence of record, respondent proffers that petitioner should be awarded $100,040.00. The
award is comprised of the following: $100,000.00 for pain and suffering and $40.00 for past,
unreimbursed medical expenses. This amount represents all elements of compensation to which
petitioner would be entitled under 42 U.S.C. § 300aa-15(a). Petitioner agrees.
II. Form of the Award
The parties recommend that compensation provided to petitioner should be made through
a lump sum payment of $100,040.00, in the form of a check payable to petitioner. Petitioner
agrees.
Petitioner is a competent adult. Evidence of guardianship is not required in this case.
Respectfully submitted,
JOSEPH H. HUNT
Assistant Attorney General
C. SALVATORE D’ALESSIO
Acting Director
Torts Branch, Civil Division
CATHARINE E. REEVES
Deputy Director
Torts Branch, Civil Division
GABRIELLE M. FIELDING
Assistant Director
Torts Branch, Civil Division
/s/ Mollie D. Gorney
MOLLIE D. GORNEY
Trial Attorney
Torts Branch, Civil Division
U.S. Department of Justice
P.O. Box 146
Benjamin Franklin Station
Washington D.C. 20044-0146
(202) 616- 4029
[email protected]
Dated: March 3, 2020
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31 F.Supp.2d 1245 (1998)
Paul COOK and Falcon Communications Corp., Plaintiffs,
v.
NASD REGULATION, INC., Defendant.
No. Civ.A. 98-WY-1552-AJ.
United States District Court, D. Colorado.
October 8, 1998.
Jeffrey J. Scott, Scott & Associates, PC, Denver, CO, for plaintiffs.
Betty Grace Brooks, Nat. Ass'n of Securities Dealers, Inc., Office of General Counsel, Washington, DC, for defendant.
*1246 ORDER GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT
JOHNSON, District Judge.
NASD Regulation, Inc.'s Motion and Memorandum to Dismiss the Complaint and Opposition to Application for Preliminary Injunction, the plaintiffs' response thereto, and NASDR's further reply came before the Court for consideration, having been submitted to the Court upon the parties' written submissions. The Court has reviewed the motion, the file, the supporting memoranda of the parties, the applicable law and is fully advised in the premises. For reasons to be discussed, the Court finds that the defendant's Motion to Dismiss should be GRANTED.
Background
The plaintiffs are, respectively, a Colorado citizen and a Colorado corporation; defendant (National Association of Securities Dealers) NASD Regulation is a Delaware corporation with its principal place of business in Washington, D.C. Plaintiff asserts that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.
Plaintiff Cook complains that he and his corporation opened a securities brokerage account with The Harriman Group Inc. (HGI), a securities broker-dealer in New York, and invested substantial sums of money in stocks sold by HGI. After he lost a substantial amount of his investment capital because of the broker-dealer's wrongdoing, Cook began an arbitration proceeding by filing a statement of claim with NASD Regulation ("NASDR"), naming HGI and its control persons as respondents. An arbitration hearing was held in Denver and on May 14, 1998, the NASDR arbitration panel entered an arbitration award in the amount of $243,173.00 in favor of Cook and Falcon Communications. (The award is for $194,373 in actual damages; $45,000 attorney's fees and $3,800 in costs.) The arbitration award provides that HGI and Mark Hanna[1] are jointly and severally liable to plaintiffs. Pursuant to Rule 10330(h) of the NASD Code of Arbitration procedure, that arbitration award was to paid be within thirty days; the complaint alleges the award has not yet been paid.
Before the arbitration hearing, NASDR had initiated a separate disciplinary hearing against HGI, Hanna and another control person of HGI, Brian Scanlon, alleging wrongful conduct in regard to the same stocks sold to Cook. Cook was contacted by letter March 3, 1998, by the NASDR Enforcement Attorney. The letter informed Cook of the disciplinary hearing and advised that NASDR would request the hearing panel to require the respondents to restitute investors harmed by the misconduct of respondents. Cook was also informed that he was within a class of investors covered by that disciplinary complaint.
On May 26, 1998, Cook's attorney informed the NASDR Enforcement Attorney in charge of the disciplinary proceeding against HGI and Hanna of the arbitration award in favor of Cook and provided NASDR a copy of the award. During this period of time, NASDR was conducting settlement negotiations with Hanna and the other respondents. On June 17, 1998, NASDR entered its Order Accepting Offer of Settlement in the disciplinary proceeding, in which Hanna and Scanlon agreed to pay money to NASDR for the purpose of making restitution to investors. Hanna paid $100,000 and Scanlon paid $650,000 to NASDR pursuant to that settlement. NASDR holds the settlement proceeds for distribution to investors. The NASDR settlement agreement with Hanna and Scanlon also includes a confession of judgment to be entered in the event that either Hanna or Scanlon have funds available in excess of the settlement amount and a provision giving NASDR the ability to obtain a judgment for the full amount of the $5 million fine set forth in the settlement agreement.
NASDR has refused plaintiffs' demand to pay to them the amount of the plaintiffs' arbitration award out of the $750,000 paid to NASDR in settlement by Hanna and Scanlon. In the instant action, plaintiffs seek *1247 imposition of a constructive trust, arguing that NASDR unfairly holds the money paid in settlement by Hanna and Scanlon and that NASDR should be required to convey the entire arbitration award amount to plaintiffs. Plaintiffs also seek a declaratory judgment as to the rights and obligations of the parties and an injunction preventing NASDR from disbursing the funds until the instant complaint is resolved.
NASDR has filed a motion to dismiss the complaint and opposing the preliminary junction. It argues that the Court does not have subject matter jurisdiction for plaintiffs' failure to exhaust administrative remedies available to them at the Securities and Exchange Commission; that indispensable parties have not been named; and that the requirements for a preliminary injunction have not been met.
NASDR argues that the settlement of the disciplinary proceeding benefits the public by resulting in an additional $950,000 for payment to defrauded public investors who were not parties to the plaintiffs' arbitration award. The entire amount in the escrow account is to be paid exclusively to public investors pursuant to an administrative process for distribution of funds. None of the funds will revert back to the settling parties. NASDR anticipates that eligible claims for restitution will exceed the $950,000 in available restitution funds and that payments to investors will be made on a pro rata basis, with no monies from the funds going to NASDR.
NASDR argues there is no justiciable controversy or case yet between it and plaintiffs. Defendant has not yet begun distributing funds from the escrow account and has not yet confirmed or denied claims for restitution of actual losses. Plaintiffs have other administrative remedies available, i.e., petitioning the SEC which has plenary oversight and primary jurisdiction to remedy acts and omissions of self-regulatory organizations requiring aggrieved persons to exhaust administrative remedies at the SEC before seeking judicial review exclusively before a United States Court of Appeal, citing 15 U.S.C. § 78y.
NASDR also argues that indispensable parties have not been joined in this action, i.e., those parties possessing the settlement monies and all other public investors eligible to recover from the settlement funds whose interests could be adversely affected by an order granting any relief sought for the benefit of these plaintiffs alone. Defendant argues there is no cause of action against NASDR for violations of Sections 15A and 19 of the Exchange Act or National Association of Securities Dealers Rules, citing authority holding that there is no express or implied private right of action for violations of Sections 15A and 19 of the Exchange Act or NASD Rules. Additionally, the defendant asserts NASDR is immune from liability while operating in a regulatory and disciplinary capacity. NASDR seeks to have this Court, in the exercise of its discretion, deny declaratory relief sought by plaintiffs, especially when so many public investors and other parties in interest are not present before the Court.
Defendant contends that plaintiffs have an adequate remedy at law. Plaintiffs may reduce the arbitration award to judgment and levy against the assets of the two respondents against whom they obtained an arbitration award, HGI and Hanna. Additionally, only $100,000 of the escrow settlement was contributed by Hanna, an individual against whom the plaintiffs received an arbitration award. Plaintiffs appear to be eligible to participate in the settlement on a pro rata basis, but have offered no reason why the entire amount of the plaintiffs' losses, attorney's fees and costs should be paid first and in full from settlement funds paid for actual investment losses by similarly situated public investors rather than recovering equally on a pro rata basis with the other defrauded investors.
Plaintiffs have responded by asserting that NASDR has complete control over the settlement escrow account. When NASDR accepted the settlement offer from Hanna, it knew he had no funds available to pay plaintiffs' arbitration award. Plaintiffs assert they have stated a claim for constructive trust an equitable remedy based upon NASDR's bad faith in arranging for the payment to NASDR of settlement amounts by some of the respondents named in plaintiffs' *1248 arbitration claim. Plaintiffs argue NASDR was their fiduciary in regard to collection of the arbitration award, and that it is bound by its own rules which require payment of an award. Plaintiffs assert administrative relief is futile. "Neither NASDR, or the Securities and Exchange Commission to whom NASDR contends this issue must be brought, has any expertise in determining whether this common law equitable doctrine should be applied to the facts of this case." Plaintiffs state the relief they seek is equitable in nature and does not arise under the Exchange Act and that no requirement of exhaustion of remedies by appeal to the SEC exists.
Plaintiffs also asserts that joinder of the public customers eligible to receive distributions from the escrow account is not necessary for the Court to order complete relief. The public customers were not parties to the disciplinary proceeding giving rise to the Settlement Order entered into by NASDR after the plaintiffs obtained their arbitration award. The bank escrow agent was not a party to the disciplinary proceeding. Joinder is not feasible because no prejudice results, as NASDR stands in loco parentis in regard to public customers and can represent their interests at trial. The Court can avoid prejudice by shaping relief and including other protective provisions in the judgment. NASDR is alleged to have acted in bad faith by breaching its duty to plaintiffs, by the wrongful taking of money to which plaintiffs are entitled, and also by acting in its own self-interest.
Standard for Motions to Dismiss
Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a motion to dismiss may be granted if the court does not have subject matter jurisdiction over the matter. A motion to dismiss pursuant to Rule 12(b)(6) may be granted for failure to state a claim upon which relief can be granted. A dismissal under Fed.R.Civ.P. 12(b)(6) will be upheld when it appears that the plaintiff can prove no set of facts in support of the claim(s) that would entitle her to relief, accepting all well pleaded allegations of the complaint as true and construing them in the light most favorable to the plaintiff. Sutton v. United Air Lines, Inc., 130 F.3d 893, 896-897 (10th Cir. 1997), citing and quoting Yoder v. Honeywell, Inc., 104 F.3d 1215, 1224 (10th Cir.1997) (in turn quoting Fuller v. Norton, 86 F.3d 1016, 1020 (10th Cir.1996)), cert. denied, ___ U.S. ___, 118 S.Ct. 55, 139 L.Ed.2d 19 (1997).
Discussion
The Court finds that the defendant's arguments are the more persuasive and that the plaintiffs' complaint should be dismissed. The plaintiffs' claim that it is futile to seek administrative remedies and that exhaustion should not be required is without merit. In substance, plaintiffs' complaint seeks to challenge the activities and conduct of NASDR in settling the disciplinary complaint which led to the creation of the fund for restitution of defrauded public investors. This function was performed as a part of NASDR's regulatory duties as a properly authorized participant in the comprehensive federal securities regulatory scheme. NASDR is a wholly owned subsidiary of the NASD, a self-regulatory organization operating under the authority and supervision of the federal securities laws.[2] These federal laws provide for oversight and a comprehensive review process of disciplinary proceedings by the SEC. Persons who believe they have been aggrieved by the use of existing SEC-approved NASDR rules providing for the use of offers of settlement and imposition of sanctions may petition the SEC with respect to those rules. 15 U.S.C. § 78s(c). The SEC has plenary oversight and primary jurisdiction to remedy the acts and omissions of self-regulatory organizations such as NASD. Aggrieved persons must exhaust administrative remedies at the SEC before seeking review before a United States Court of Appeals, not a *1249 United States District Court. 15 U.S.C. § 78y.
Plaintiffs' attempt to bring this action, which they have styled as an equitable action seeking a constructive trust, is little more than an attempt to circumvent or attack collaterally in the district court issues which must be first challenged at the SEC level, with further review available at the Court of Appeals level. It is the SEC that is required, in the first instance, to determine whether a self-regulatory organization such as NASD, is discharging properly its duties and responsibilities in compliance with all applicable rules, regulations and federal law.
Plaintiffs also have available to them mechanisms that allow for enforcement of the arbitration award. They may pursue payment of that arbitration award by obtaining a judgment and levying against the assets of HGI and Hanna. They have offered no reason to this Court that sufficiently explains why they have not attempted to enforce the arbitration award. Additionally, plaintiffs have been advised by NASDR that they are within the class of investors that may be entitled to a pro rata distribution from the settlement funds held by NASDR that were obtained from Hanna and others in the separate disciplinary proceeding. Plaintiffs may also complain to the SEC if they feel that NASDR has failed to discharge its duties or has failed to act in a manner consistent with the purposes of the Exchange Act and in accordance with the rules of the SEC. Plaintiffs have not attempted to obtain relief by the use of these other available remedies. Plaintiffs do not explain to the satisfaction of this Court why they should be permitted to recover the full amount of the arbitration award out of the settlement fund to the detriment of other defrauded public investors who may also be entitled to receive distributions from the settlement fund.
Because the Court has determined it is without jurisdiction to entertain plaintiffs' complaint, the Court declines the invitation to consider the remaining issues that have been raised by the parties in their moving papers. The defendant's motion to dismiss should be granted for the foregoing reasons. It is therefore
ORDERED that the defendant's Motion to Dismiss shall be, and is, GRANTED. It is further
ORDERED that the plaintiffs' complaint shall be, and is, DISMISSED.
NOTES
[1] Brian Scanlon, who is to contribute $650,000 to an escrow settlement for restitution to public investors, discussed more fully in subsequent portions of this order, was also a respondent to the arbitration proceeding, but entered into a separate settlement. Defendant's moving papers states that it believes plaintiff released Scanlon as part of their settlement agreement.
[2] NASD is registered with the SEC as a national securities association pursuant to the provisions of the Maloney Act, 15 U.S.C. § 78o-3 et seq, which is an amendment to the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-78kk. The purpose of NASD, through its wholly owned subsidiary NASD Regulation, is to provide self-regulation of the over the counter securities market and its participants. An application for registration by a national securities association, such as NASD, is not approved by the SEC unless its by-laws and rules meet criteria set forth in the Act, 15 U.S.C. § 78o-3(b). Approval of by-laws and regulations by the SEC is a prerequisite to obtaining authority under the Act.
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925 F.2d 415
Appeal of Alexander (Herod)
NO. 90-1476
United States Court of Appeals,Third Circuit.
JAN 16, 1991
1
Appeal From: E.D.Pa.
2
AFFIRMED.
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574 F.3d 406 (2009)
Kenneth J. WOLF and KJW, LLC, Plaintiffs-Appellants,
v.
Ford KENNELLY, Rosenthal Collins Group, LLC and Lawrence Spain, Defendants-Appellees.
No. 08-2203.
United States Court of Appeals, Seventh Circuit.
Argued May 28, 2009.
Decided July 23, 2009.
*407 Jason P. Shaffer, Katten Muchin Rosenman, Chicago, IL, Peter W. Homer (argued), Homerbonner, P.A., Miami, FL, for Plaintiffs-Appellants.
*408 Kenneth F. Berg (argued), Ulmer & Berne, Chicago, IL, Jeffrey Schulman, Wolin, Kelter & Rosen, Chicago, IL, for Defendants-Appellees.
Before BAUER, FLAUM, and KANNE, Circuit Judges.
FLAUM, Circuit Judge.
Ford Kennelly prevailed in a National Futures Association arbitration against several commodities brokers with whom Kennelly had accounts and who, he alleged, ran "boiler room" operations that caused him to incur severe losses. Those brokers then filed separate petitions to vacate in Illinois state court and the Northern District of Illinois. Kennelly sought, unsuccessfully but over a period of several months, to remove the state court case to federal court; and while he was unsuccessful in getting the case into federal court he did persuade the district court to bar Wolf, one of the commodities brokers, from seeking attorneys' fees for his attempted removal. Wolf now appeals that ruling.
For the following reasons, we conclude that clearly established law foreclosed Kennelly's attempts to remove the state court case to federal court and accordingly we reverse the district court's minute order barring the petition for attorneys' fees.
I. Background
Ford Kennelly, an Indiana citizen, sued Ken Wolf, KJW (his broker), Lawrence Spain (another broker) and the Rosenthal Collins Group, LLC ("RCG") in a National Futures Association ("NFA") arbitration. The arbitration panel found in Kennelly's favor, awarding him $1.3 million in damages, with RCG and Wolf jointly and severally liable for $543,386.12, plus interest. RCG filed a petition to vacate that award in the Northern District of Illinois, posting bond in the amount of the entire joint and several award pursuant to NFA rules before doing so. According to Wolf, they also made demands on him to indemnify RCG under an agreement between RCG and KJW. Wolf was not a party to RCG's petition.
On March 25, 2007, Wolf and KJW filed their own petition to vacate in Cook County Circuit Court. Wolf included in his state court petition a count for declaratory relief against RCG under Illinois state law, seeking a declaration that RCG did not have a valid claim for indemnification.
Kennelly responded by seeking to remove Wolf's petition to federal court. Wolf's counsel, in a letter sent to Kennelly's counsel, warned that RCG was an Illinois citizen for purposes of jurisdiction and that 28 U.S.C. § 1441(b), the "forum defendant rule," prevented removal to federal court. Kennelly nonetheless sought to remove the case in a motion filed on April 23, 2007. To cure the removal problems presented by the forum defendant rule, Kennelly asked the district court to realign RCG as a petitioner (instead of a respondent) "according to their actual interests in the litigation." Kennelly also claimed that Wolf's declaratory judgment action against RCG was premature because, if the arbitration award were vacated, "there would be no need for a court to determine whether KJW and Wolf are legally obligated to indemnify RCG." Kennelly also expressed his concern that if the state case were not removed, there was a possibility of inconsistent decisions.
On May 21, 2007, Wolf moved to remand. Wolf argued that because RCG was a respondent, Kennelly's removal violated § 1441(b)'s forum defendant rule and that RCG had not consented to removal. Wolf also opposed realignment as the petitioner in the Illinois state court case. Wolf's motion opposing removal cited *409 American Motorists Ins. Co. v. Trane Co., 657 F.2d 146, 151 (7th Cir.1981), which holds that realignment is only proper "where there is no actual, substantial conflict between the parties that would justify placing them on opposite sides of the lawsuit." Wolf emphasized in his motion that there was a live controversy with RCG over the issue of indemnification. Kennelly opposed the motion to remand the case back to the Illinois state court.
At a status conference on June 25, 2007, the district court appeared persuaded by Kennelly's opposition. The district court stated that "it does seem to me that the real dispute here is between the party that prevailed at the arbitration and the parties that were found by the arbitrator to have violated ... Mr. Kennelly's rights. So with that understanding, I do think removal was proper." The district court said that it was "concerned" about Wolf's argument regarding a substantial dispute about indemnification but suggested that she saw another problem, that Kennelly had not raised in his motion to remove, regarding whether "complete justice can be done in the absence of the Wolf and KJW parties" in RCG's federal case. However, RCG indicated its intention to dismiss its federal petition and litigate in state court if the district court remanded Wolf's case. Wolf and RCG filed a supplemental brief restating that intention on July 12, 2007.
On August 14, 2007, Kennelly argued that Wolf's declaratory judgment action against RCG should be severed and that the district court should regard that part of the case as a "sham orchestrated by Wolf and RCG jointly to keep Kennelly out of federal court." The parties went through mediation without success. The district court held another hearing on September 19, 2007 in which the court signaled once again its intention to deny the motion for remand. Two more months then elapsed. On November 27, 2007, the district court ordered Wolf to respond to the arguments Kennelly had raised in his August 14 brief regarding severance of the indemnification issue.
At some point in late November or early December 2007, it emerged that one of RCG's limited partners was an Indiana citizen. It thus now appeared that RCG could not be realigned as a petitioner because Kennelly was an Indiana citizen and placing the two on opposite sides would destroy the diversity of the suit.
On December 13, 2007, Wolf submitted another brief arguing that American Motorists still applied but that it did not matter whether the district court realigned RCG or not. As RCG stated, sending RCG (an Indiana resident) to the plaintiff's side against Kennelly (also an Indiana resident) would destroy diversity. Wolf also cited case law holding that mere "misjoinder" of a defendant could not cure removal defects, as the standard was the much more imposing "fraudulent joinder." Wolf pointed out that even if misjoinder standards applied, there was no pending motion to sever RCG from the case. Kennelly, in response to Wolf, made such a motion to sever on January 10, 2008.
On February 12, 2008, the district court issued a twelve-page memorandum granting the motion to remand. The district court first found that it must remand if RCG was a respondent in the case. As the district court stated, since jurisdiction did not rest on a federal question, under § 1441(b) the case was "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." RCG was a citizen of Illinois, so this criterion was not met. The district court also found that removal was improper, assuming RCG as a respondent, because courts have interpreted the statutory *410 language providing for removal "by the defendant or the defendants," 28 U.S.C. § 1441(a), as requiring that all defendants consent to removal. RCG was not willing to consent to removal. Next, the district court explained that RCG's realignment as a petitioner was not possible because it would destroy diversity between the parties. The district court also stated that, even if RCG was not a resident of Indiana, realignment would not be proper because of the substantial controversy between Wolf and RCG regarding indemnification. Finally, the district court held that severance of the indemnification dispute was not proper without a showing of fraudulent misjoinder or procedural misjoinder, neither of which Kennelly could prove. Accordingly, the district court remanded the case back to state court.
Wolf then tried to recover attorneys' fees for Kennelly's attempted removal. Wolf mailed Kennelly an offer to confer along with detailed invoices. Receiving no response from Kennelly, Wolf moved the district court for instructions to set a schedule for conferring under Local Rule 54.3(b). Kennelly cross-moved to bar Wolf from filing any motion for fees and costs.
The district court held a status conference on April 14, 2008. The district court granted Kennelly's cross-motion to bar Wolf from filing for fees and costs, stating:
Without reaching that question, I don't thinkI think even if we were to view fee shifting as the norm, I think this case is exceptional. It's not one where removal was clear. Had that been removal was clearly improper. Had that been the case, it would certainly not have taken me months to resolve the dispute that I think was an unfortunately costly one for both sides.
I am not inclined to shift fees in this case. So my instructions would be that you proceed with state court.
In a minute order following the status conference, the district court stated that: "[T]he court directs the parties to proceed with litigation in State court. Fee-shifting is not warranted in this case. Motion to bar therefore also granted."
Wolf now appeals the denial of attorneys' fees.
II. Discussion
In general, we review a district court's decision to award attorneys' fees for abuse of discretion. King v. Ill. State Bd. of Elections, 410 F.3d 404, 411 (7th Cir.2005). As the Supreme Court has pointed out, however, "[a] district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). Our review of the legal issues underlying the claim for attorneys' fees is de novo. See Dupuy v. Samuels, 423 F.3d 714, 718 (7th Cir.2005).
Wolf makes two arguments against the district court's ruling. First, he argues that the district court's ruling on the attorneys' fees issueand here he focuses on the minute orderwas too summary to assure a reviewing court that the district court in fact exercised its discretion. We disagree. While the district court's written ruling was indeed very summary, the minute order essentially only memorialized what had occurred on the record during the earlier status hearing. In that hearing, the district court found that the present case was "not [a case] where ... removal was clearly improper" and therefore denied fees. At the time that the district court made its ruling, it had issued a thorough opinion on the removal issue, noting both parties' positions on that issue. It *411 also had before it both Wolf's motion for scheduling instructions and Kennelly's motion to bar fees. Kennelly's motion to bar fees cited the appropriate cases in this area (including both Martin v. Franklin Corp., 546 U.S. 132, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005) and Lott v. Pfizer, Inc., 492 F.3d 789 (7th Cir.2007)). The district court was thus aware of the proper standard for fees and appeared to use it in reaching its decision. Moreover, the district court cited reasons for its decision, including the fact that the case was "exceptional" and not one where removal was clearly improper, and the unusual amount of time it took the court to resolve the dispute. Because the district court's reasons were supported by the record, the more summary minute order does not constitute an abuse of discretion. See Dugan v. Smerwick Sewerage Co., 142 F.3d 398, 408 (7th Cir.1998) (noting that we have "affirmed decisions refusing sanctions without elaboration when the reasons for doing so are clear from the record").
Wolf's second argument is that the district court abused its discretion because clearly established law foreclosed removal in this case. We agree that at the time of Kennelly's attempted removal the forum defendant rule barred any attempt to remove the case without realigning RCG as a petitioner, and that this circuit's case law foreclosed any attempt to realign RCG.
"An order remanding [a] case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). In Martin v. Franklin Capital, the Supreme Court held that a district court may award attorneys' fees under § 1447(c) only where the removing party lacked an "objectively reasonable basis" for seeking removal. Martin, 546 U.S. at 141, 126 S.Ct. 704. Martin resolved a circuit split over the correct standard for such situations. Compare Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 541 (5th Cir.2004) ("Fees should be awarded only if the removing defendant lacked `objectively reasonable grounds to believe that removal was legally proper.'") with Sirotzky v. N.Y. Stock Exch., 347 F.3d 985, 987 (7th Cir.2003) ("[P]rovided removal was improper, the plaintiff is presumptively entitled to an award of fees.") (emphasis in original). The Supreme Court adopted the Fifth Circuit's approach and pointed out that "[i]f fee shifting were automatic, defendants might choose to exercise this right only in cases where the right to remove was obvious." Martin, 546 U.S. at 140, 126 S.Ct. 704. The Court noted that Congress would not have conferred a right to remove and then discouraged its exercise in all but the obvious cases. Id.
The Supreme Court did not define what sorts of beliefs are "objectively reasonable" in its Martin opinion because the parties in that case agreed that the defendant's basis for removal was reasonable. In Lott v. Pfizer, Inc., 492 F.3d 789 (7th Cir.2007), we decided that "qualified immunity jurisprudence provides appropriate guidance for determining whether a defendant had an objectively reasonable basis for removal." Id. at 793. As we discussed in Lott, the qualified immunity doctrine assumes that state officials are aware of existing case law and holds officials liable only if they violate clearly established and particularized rights. See id. at 792 (citing Brosseau v. Haugen, 543 U.S. 194, 199, 125 S.Ct. 596, 160 L.Ed.2d 583 (2004)). We reasoned that just as the qualified immunity doctrine attempts to protect zealous law enforcement, the removal statute encourages litigants to make liberal use of federal courts, so long as the right to remove is not abused. Id. at 793. We then announced the "general rule" to govern such cases:
*412 if, at the time the defendant filed his notice in federal court, clearly established law demonstrated that he had no basis for removal, then a district court should award a plaintiff his attorneys' fees. By contrast, if clearly established law did not foreclose a defendant's basis for removal, then a district court should not award attorneys' fees.
Id. at 793. Wolf argues that this court's decision in American Motorists foreclosed Kennelly's attempts at removal. In American Motorists we held that "[r]ealignment is proper when the court finds that no actual, substantial controversy exists between the parties on one side of the dispute and their named opponents ..." Am. Motorists, 657 F.2d at 149 (citing Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941)). We stated that in determining whether realignment is proper, courts must focus on "the points of substantial antagonism, not agreement." Id. at 151. This held true even if the parties shared an interest in avoiding liability in the suit altogether. "[A] mere mutuality of interest in escaping liability" does not mandate realignment. Id. We ultimately concluded that realignment was not proper in that case because while the plaintiff insurance company and a defendant insurance company both had an interest in escaping liability for any claims, the dispute over their respective duties to defend was a real and substantial controversy that justified placing the parties on opposite sides of the dispute. Id.
We have subsequently held on the basis of American Motorists that it is "undoubtedly improper" to realign parties for the purpose of preserving jurisdiction if "an actual, substantial controversy exists between a party on one side of the dispute and its named opponent." Krueger v. Cartwright, 996 F.2d 928, 932 n. 5 (7th Cir.1993) (citing Am. Motorists, 657 F.2d at 149). At the time that Kennelly sought to remove KJW's suit to federal court, then, this circuit had a long-standing precedent that realignment is not proper where an "actual, substantial" controversy exists between the parties, even if the parties share an interest in avoiding liability in the suit.
Kennelly counters by alleging, as he did throughout the district court proceedings, that the indemnification dispute was a "sham" fabricated by Wolf and RCG in order to keep the case out of federal court. He alleges, among other factors, that the dispute is dubious because the parties have never produced a written indemnification agreement, RCG has never demanded payment, and the parties have been, in Kennelly's view, less than vigorous in pursuing the indemnification issue. It is true that the two parties ultimately agreed to dismiss the declaratory action, and while this may have given Kennelly some basis to believe, at the time he removed the case, that the indemnification dispute was not a "real" dispute, the district court's opinion on the removal issue ultimately found that the indemnification dispute was "actual" and "substantial" and the merits of that ruling are not on appeal.[1]
Moreover, we stated in American Motorists that "the facts which form the basis for realignment must have been in existence at the time the action was commenced." Am. Motorists, 657 F.2d at 149. *413 Thus, the decision to dismiss the declaratory action at a later stage would not justify the attempt to remove the case at the start of the litigation.
Kennelly also argues that his desired realignment was not foreclosed by law because, even assuming that the dispute between Wolf and RCG for indemnification was concrete, it was insubstantial in relation to their "ultimate interest" in the outcome of the litigation over the arbitration award. In support of this position Kennelly cites Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941), a case in which the Supreme Court held that parties should be aligned according to their "ultimate interests." In that case, the Supreme Court realigned a defendant as a plaintiff despite a million-dollar controversy between them because the million-dollar dispute was "frivolous" and the parties were "colloquially speaking, partners in the litigation." Id. at 74, 62 S.Ct. 15. Kennelly ignores, however, that American Motorists interpreted Chase National Bank and foreclosed his desired realignment. Specifically, American Motorists held that "a mere mutuality of interest in escaping liability is not of itself sufficient to justify realignment." American Motorists, 657 F.2d at 151 (citations omitted). Realignment is only proper where there is no actual, substantial conflict between the parties that would justify placing them on opposite sides of the suit. Id.
Kennelly attempts to distinguish the case but his arguments essentially amount to arguments against the American Motorists test. As the district court recognized, Kennelly ultimately wants this court to abandon American Motorists and join the majority of circuits in adopting the "primary purpose" test, which would have allowed him to realign RCG as a petitioner. American Motorists is a minority view among the circuits. See, e.g., 13B Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & Procedure § 3607 (2007 Supp. at 417-18) (describing circuit split and noting that this circuit's decision in American Motorists places it in the minority of circuits which have adopted the "actual and substantial conflict" test). Whatever the merits of Kennelly's desire for this circuit to revisit the realignment test, however, during this attorneys' fee petition we are only concerned with the state of the law at the time Kennelly sought removal, when American Motorists governed his realignment argument.[2]
Kennelly's final argument that removal was not foreclosed by clearly established law is that when he removed the case he labored under the erroneous impression that RCG was only a resident of Illinois for purposes of jurisdiction. In other words, he argues that but-for RCG's mistake regarding its citizenship he would not have removed the case at all. Kennelly's *414 representation in this regard is plausible, because if he had known RCG was also a citizen of Indiana he would not have pursued removal under the suggested realignment. But the argument is irrelevant if, taking the facts as Kennelly saw them at the time, he did not have an objectively reasonable basis for seeking removal in the first place. Even if RCG was only an Illinois citizen, realignment still would have been foreclosed by American Motors.
III. Conclusion
For the foregoing reasons, we REVERSE the district court's order barring a petition for fees and remand for proceedings in light of this opinion.
NOTES
[1] Kennelly also alleges that Wolf's Illinois state court pleadings were deficient because they failed to include a copy of the supposed indemnity agreement and because the pleadings failed to satisfy Illinois' fact-pleading requirements. Again, however, we note that the district court found that the dispute between RCG and Wolf was an "actual, substantial" controversy, and the validity of that decision or the adequacy of the pleadings is not an issue before us in an attorneys' fees petition.
[2] Kennelly also cites this circuit's decision in Naiditch v. Banque De Gestion Privee-SIB, No. 92 C 5290, 1993 U.S. Dist. Lexis 14681, 1993 WL 424248 (N.D.Ill. Oct. 19, 1993), to support his belief that American Motorists did not foreclose realignment. The Naiditch court cited American Motorists but ultimately departed from its holding. The district court there found that an "actual and substantial" conflict between defendant and another entity rendered "insubstantial in comparison" the conflict between plaintiff and that entity. 1993 U.S. Dist. LEXIS 14681 at *5, 1993 WL 424248. Thus, the court realigned the entity as a plaintiff and characterized its realignment as being supported by American Motorists. 1993 U.S. Dist. LEXIS 14681 at *4, 1993 WL 424248. Apparently, Naiditch read American Motors as endorsing a "primary purpose" test, which is not its test for realignment. At any rate, as we noted in Lott, "[d]istrict court decisions ... do not render the law clearly established." Lott, 492 F.3d at 793.
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Opinion issued November 19, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-12-01156-CV
———————————
CINDI HEDGEPETH, INDIVIDUALLY AND AS REPRESENTATIVE OF
THE ESTATE OF JOHN TIMOTHY HEDGEPETH, Appellant
V.
DIAMOND OFFSHORE DRILLING, INC., Appellee
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Cause No. 2010-61705
MEMORANDUM OPINION
Cindi Hedgepeth appeals a jury award in a wrongful death case under the
Jones Act. See Merchant Marine Act of 1920 (Jones Act), 46 U.S.C.S. §§ 30104–
30106 (LexisNexis 2007 & Supp. 2013). A jury awarded Cindi $280,082 for the
loss of her late husband’s support and household services. Cindi contends the
award is inadequate and the evidence is factually insufficient to support the award.
We affirm.
Background
John Timothy Hedgepeth (Tim) worked as an electrician for Diamond
Offshore Drilling, Inc. In December 2008, Diamond sent Tim to the Ocean
Lexington, an oil rig stationed off the coast of Libya. Diamond arranged Tim’s
travel itinerary, which included a layover in Malta. In Malta, Tim died from
pneumococcal meningitis, a bacterial infection that affected his brain. Tim was 52
years old when he died.
Tim’s widow, Cindi, sued Diamond under the Jones Act. Cindi alleged
Diamond had a legal duty to provide Tim a safe place to work, Diamond breached
its duty, and Diamond’s breach caused Tim’s death. Diamond generally denied the
allegations and claimed Tim’s negligence caused his death.
At trial, Cindi testified about her life with Tim. She testified that when Tim
was working offshore, he worked 30 days on and 30 days off. She also testified
that she and Tim were married 33 years, that Tim spent a lot of time with family
when he was not working, that Tim raised show horses with their oldest daughter,
and that the family frequently went to horse shows.
2
Cindi testified that Tim worked for Diamond on two separate occasions.
Tim started working for Diamond in 1993, then left Diamond in 1996 to work for
Georgia Pacific Paper Mill. Tim earned $50,000 less per year working for Georgia
Pacific, but the paper mill was close to home and Tim wanted more time with his
family. Cindi testified that Tim returned to Diamond in 2006 because Georgia
Pacific changed management and Tim disliked the new owners.
Cindi introduced expert testimony valuing the loss of Tim’s support and
household services. Economist Thomas Mayor testified that he calculated three
numbers: past lost support, future lost support, and lost household services.
Mayor testified that in order to reach a lost support calculation, he first
estimated Tim’s annual net earning capacity. Mayor testified that in order to
determine what Tim may have earned in the future, he looked at past tax returns
and W-2 statements. Mayor testified that he made separate onshore and offshore
calculations, because Tim had worked an onshore job for Georgia Pacific for
several years before working for Diamond. He assumed that if Tim continued
working offshore, he would make the same amount that he made in his last year
working for Diamond. He assumed that if Tim took an onshore job, he would
make the same amount that he made in the last year at Georgia Pacific. Mayor
then added 13 percent to those figures to account for lost fringe benefits, such as
medical insurance benefits and retirement plans. The 13 percent was not based on
3
Tim’s actual fringe benefits, but rather, government statistics showing that the
average value of fringe benefits is 13 percent of wages. On cross-examination,
Mayor testified that information from Diamond indicated that its benefits were
slightly better than average. Mayor deducted amounts attributable to payroll taxes,
federal income tax, and state income tax, based on Tim’s previous tax returns, to
arrive at a net annual income figure of $79,249 for onshore work, and $136,252 for
offshore work.
Mayor testified that he then subtracted from the net annual income figures
an allowance for personal consumption, because part of what Tim earned would
have been spent on items for his own personal consumption and would not have
benefitted the family. Mayor testified that personal consumption items could
include personal food, personal clothing, personal entertainment, and “personal
incidental.” Mayor testified that studies typically show that in an average income
family, the personal consumption allowance of the husband ranges from 20 to 30
percent. However, Mayor applied a 12 percent personal consumption allowance to
the offshore figure, on the basis that studies show that when a family has a higher
income, the personal consumption allowance tends to be smaller. Mayor testified
that, because Tim made roughly $144,000 in his last year of life while working
offshore, the studies would indicate that the personal consumption allowance
should be adjusted based upon the fact that this income was three times the average
4
income. For the same reason, Mayor applied a 16 percent personal consumption
allowance to onshore figures. Mayor testified that the personal consumption
allowances were based on the assumption that Tim “would have been an average
personal consumer.”
On cross-examination, Mayor admitted that he did not attempt to calculate a
personal consumption allowance based on data specific to Tim, and in particular,
did not try to account for expenses associated with showing horses. Mayor
testified that he did not attempt to account for show horse expenses because it was
not clear that the hobby was specific to Tim as opposed to a family hobby. Mayor
testified that, as a jury member in determining the appropriate personal
consumption allowance, he “would want to . . . see if there is anything unusual in
that consumption pattern,” giving the examples of an expensive hobby like African
hunting trips or an expensive health problem that was not covered by health
insurance.
After deducting the personal consumption allowance from the net annual
income figures, Mayor calculated past lost support by multiplying the remainder
by the number of years between the date of Tim’s death and the date of trial, which
was almost three and one half years. This resulted in a past lost support figure of
$221,809, assuming onshore work, or $399,513, assuming offshore work.
5
Mayor testified that the future lost support calculations were “more
complicated,” because they required future projections, determining the present
value of a future stream of lost earnings, and additional assumptions. Mayor
testified that the future lost support calculations assumed:
• “Average typical wage increases” of 1.25 percent a year above the
rate of inflation, based upon the average typical wage increase over
the last 50 years.
• Any money awarded would earn one and a half percent interest
after inflation.
• Tim would work for another 11.7 years after the age of 52, until
the age of 63.7, based upon statistical tables.
Mayor adjusted the future lost support figures by the personal consumption
allowances and concluded that future lost support was $531,534, assuming onshore
work, or $957,379, assuming offshore work.
Mayor testified that combining the past and future lost support yielded a
total lost support of $753,343, assuming onshore work, or $1,356,892, assuming
offshore work.
Mayor also testified about the value of the household services provided by
Tim. According to Mayor, household services can include, among other things,
taking care of the yard, doing work inside, repairing the house, painting a house,
taking care of vehicles, paying bills, contracting for people to take care of the
house, going to the store to pick up things for the family, and taking care of small
children. Mayor testified that, based on government statistics, the national average
6
value of household services performed by a married man without small children
who is employed full-time is $9,632 a year. Accounting for wage rates in
Mississippi, where Tim lived, that figure was $7,705 per year. According to
Mayor, if the man is retired, the figure adjusts to $12,979 a year. Mayor testified
that he did not try to determine whether Tim was an above average, average, or
below average provider of household services, and that he did not know how, on
balance, Tim’s working offshore would affect the level of household services he
provided. Assuming a life expectancy of 79.4 years, Mayor testified that the total
value of lost household services was $280,082.
Mayor testified that the sum of past and future lost support, assuming
offshore work, plus household services, was $1,636,974.
Diamond’s expert, economist Stuart Wood, offered alternative calculations.
Like Mayor, Wood calculated two sets of lost support figures, one assuming that
Tim continued to work offshore, and one assuming that he worked onshore. Wood
based his net annual income figures on the same past income figures as Mayor, but
did not include any amounts for fringe benefits.
Wood testified that the calculation of a personal consumption allowance is a
“complicated thing . . . [which] is based upon the individual consumption patterns
of individual people.” Wood testified that he used a scale published by the U.S.
Department of Labor and another study, which indicate that the allowance for joint
7
consumption in a two-person family is 66 percent. Accordingly, he applied a 33
percent personal consumption allowance to the net annual income figures to
determine lost support. He told the jury that, contrary to Mayor’s testimony, recent
studies show that personal consumption allowances do not significantly decrease
as income rises. Wood thus calculated the amount of past lost support to be
$142,579.48, assuming onshore work, or $225,195.19, assuming offshore work.
Like Mayor, Wood testified that his future lost support calculations included
several assumptions, among them, the assumption that Tim would have worked
another 7.61 years from the date of trial, which was an average based upon Tim’s
demographic characteristics. The future lost support calculations also included
assumptions about economic conditions, the type of industry, and the growth range
of income based upon Tim’s age, and the proper discount to present value, which
Wood based upon the interest rate of United States treasury securities. Based on
these assumptions and a 33 percent personal consumption allowance, Wood
calculated future lost support to be $325,227.76, assuming onshore work, or
$514,192.34, assuming offshore work.
Wood concluded that total lost support, assuming onshore work, was
$467,807.24. Assuming offshore work, Wood calculated total lost support to be
$739,387.53.
8
Regarding household services, Wood testified that “this is a thing that
depends upon the specifics of the individual.” Wood agreed with Mayor that there
were “difficulties [with] trying to annualize for a man who works 50 percent of
time offshore and at home.” Like Mayor, Wood did not base his figure on specific
information about the services provided by Tim, but rather, based his figure on an
average derived from statistical studies. Wood reached his household services
figure by using a general assumption regarding the time and value for Tim’s
household services, based upon a national average of 14 hours devoted to
household services per week at 52 weeks a year, multiplied by the minimum wage.
Using this calculation, Wood arrived at a figure for lost household services of
$57,961.30.
In short, Wood testified that total lost support based on the assumption of
onshore work, plus fringe benefits, and his estimate of household services, was
$682,719.70. The same sum, assuming lost support based on offshore work, was
$954,269.99.
The jury found both Diamond and Tim negligent, assessing 25% against
Diamond and 75% against Tim. 1 The jury awarded $0 for Tim’s pre-death pain,
1
In a cause of action under the Jones Act, a seaman’s contributory negligence does
not bar recovery, but diminishes damages on the basis of comparative negligence
in proportion to the amount of negligence attributable to contributory fault. See
Noble Drilling (US) Inc. v. Fountain, 238 S.W.3d 432, 440 (Tex. App.—Houston
[1st Dist.] 2007, pet. denied).
9
suffering, and mental anguish, and $280,082 for the loss of Tim’s support and
household services. Cindi moved for a new trial, contending the award for support
and household services was inadequate and the evidence was factually insufficient
to support the award. 2 The trial court denied Cindi’s motion. This appeal
followed.
Discussion
On appeal, Cindi contends that the jury’s award of $280,082 for lost support
and household services is supported by factually insufficient evidence.
A. Standard of Review
The Jones Act provides for a wrongful death action for maritime workers
who die from injuries sustained in the course of employment. See 46 U.S.C.S.
§ 30104. When a state court hears an admiralty case, that court occupies
essentially the same position occupied by a federal court sitting in diversity: the
state court must apply substantive federal maritime law but follow state procedure.
Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406 (Tex. 1998). We review a
jury’s award of pecuniary damages under the Jones Act under the traditional
standard of review for factual sufficiency under Texas law, considering and
weighing all of the evidence, not just that evidence which supports the verdict. Id.
2
Cindi does not challenge the award on the basis that the jury awarded $0 for
support, because damages for support and household services were submitted in a
single broad-form question, and Cindi did not object to this submission.
10
at 406–07; see also Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761–
62 (Tex. 2003). We can set aside the verdict only if it is so contrary to the
overwhelming weight of the evidence that the verdict is clearly wrong and unjust.
Ellis, 971 S.W.2d at 407; Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We
conduct a factual sufficiency review in light of the jury instructions. Golden Eagle
Archery, 116 S.W.3d at 762; Crounse v. State Farm Mut. Auto. Ins. Co., 336
S.W.3d 717, 719 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Unless the
record demonstrates otherwise, we presume the jury followed the trial court’s
instructions. Golden Eagle Archery, 116 S.W.3d at 771. We may not pass upon
the witnesses’ credibility or substitute our judgment for that of the jury, even if the
evidence would clearly support a different result. Ellis, 971 S.W.2d at 407.
B. Applicable Law
Recovery of damages under the Jones Act is limited to pecuniary losses. De
Centero v. Gulf Fleet Crews, Inc., 798 F.2d 138, 141 (5th Cir. 1986). In a
wrongful death case under the Jones Act, recoverable items include, among others,
loss of support from past and future earnings, loss of household services, and
recovery for pre-death pain and suffering. Id.
The jury generally has broad discretion to award damages within the range
of evidence presented at trial. Weeks Marine, Inc. v. Salinas, 225 S.W.3d 311,
319–20 (Tex. App.—San Antonio 2007, pet. dism’d) (citing Gulf States Utilities,
11
Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002) and Vela v. Wagner & Brown, Ltd.,
203 S.W.3d 37, 49 (Tex. App.—San Antonio 2006, no pet.)). A jury is entitled to
disbelieve or discount any part of an expert’s testimony even though the basis of
the jury’s specific calculation cannot be determined from the record. Salinas, 225
S.W.3d at 320; see, e.g., Pleasant v. Bradford, 260 S.W.3d 546, 560 (Tex. App.—
Austin 2008, pet. denied) (citing Parallax Corp., N.V. v. City of El Paso, 910
S.W.2d 86, 91–92 (Tex. App.—El Paso 1995, writ denied)). A jury is entitled to
make credibility determinations and weigh competing expert testimony and the
variables and assumptions upon which that testimony is based. Salinas, 225
S.W.3d at 320. A jury “may disregard even uncontradicted and unimpeached
testimony from disinterested witnesses,” so long as the decision to disregard is
reasonable. City of Keller v. Wilson, 168 S.W.3d 802, 820 (Tex. 2005).
Pecuniary loss in a wrongful-death case is not subject to precise
mathematical calculation, and the jury is given significant discretion in
determining this element of damages. Christus Health v. Dorriety, 345 S.W.3d
104, 113 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (citing Thomas v.
Uzoka, 290 S.W.3d 437, 454 (Tex. App.—Houston [14th Dist. 2009, pet. denied).
“[A] jury determining pecuniary loss may look beyond evidence of calculable
financial contributions, and is not necessarily limited by an economist’s testimony
about some of the considerations included in pecuniary loss.” Id.
12
C. Analysis
Here, the jury was asked to “[s]tate the amount of damages you award to
Plaintiff Cindi Hedgepeth” for “[t]he loss of John Timothy Hedgepeth’s Household
Service and Support.” The trial court’s charge instructed the jury, if it found that
Cindi was entitled to an award for the “loss of future support and services,” to
“reduce any loss of support . . . by the amount you determine [Tim] would have
consumed himself.” The jury was also instructed to “consider loss after income
taxes” and to “discount [any award] to present value by considering what return
would be realized on a relatively risk free investment.” Additionally, the trial court
instructed the jury not to reduce the award by the percentage of contributory
negligence it assigned to Tim, if any, because making that reduction was the
court’s responsibility. The jury awarded $280,082.
Cindi acknowledges that the jury is entitled to disregard or discount expert
testimony, but asserts that, because Diamond sponsored Wood’s testimony
regarding lost support and household services, his testimony provides the absolute
floor for the award of lost support and household services. In response, Diamond
contends that the jury was not bound to accept either expert’s testimony, and the
jury’s award is supported because the jury could have concluded that Tim was not
going to continue working offshore and that Tim had a higher personal
13
consumption percentage than assumed by either expert, because of his hobby of
showing horses.
We agree with Diamond that Wood’s testimony did not create an absolute
floor for the jury’s award. Because pecuniary loss is not subject to precise
mathematical calculation, the jury had significant discretion in determining this
element of damages. See Dorriety, 345 S.W.3d at 113. The jury was entitled to
disbelieve or discount any part of either expert’s testimony, to weigh both experts’
testimony and the variables and assumptions upon which each expert’s testimony
was based, and to reject or discount each expert’s testimony based on this review.
See City of Keller, 168 S.W.3d at 820; Salinas, 225 S.W.3d at 320–21.
Both Mayor and Wood testified that their calculations of lost support were
based upon various assumptions. The experts’ assumptions differed, and in many
cases were based upon generalized data or studies, not data unique to Tim. The
jury was entitled to disbelieve or discount the assumptions made by either expert.
See City of Keller, 168 S.W.3d at 820; Salinas, 225 S.W.3d at 320–21.
For example, the jury could have concluded that, based on the fact that Tim
had previously decided to work onshore in order to be closer to his family, he
would do so again, and therefore rejected the experts’ offshore figures. The jury
also could have concluded that a change to an onshore job may have resulted in
less valuable pay and benefits than those Tim received from either Diamond or his
14
previous onshore job at Georgia Pacific. The jury was not required to accept either
expert’s assumption about how long Tim would continue to work. Cindi testified
that Tim was very involved with his family, and had previously taken a $50,000
pay cut to take a job onshore in order to spend more time with them. The jury also
could have concluded that Tim would retire before the date that either expert
assumed, in order to spend more time with his family.
Further, the jury could have determined that neither expert accurately
calculated Tim’s personal consumption allowance, because neither expert based
his allowance on Tim’s actual consumption rate. See Salinas, 225 S.W.3d at 320–
21. The experts’ personal consumption allowance numbers differed greatly—
Mayor applied a 12 percent allowance to offshore work and a 16 percent allowance
to onshore work, while Wood applied a 33 percent allowance to both figures. But
the jury could have disregarded these figures because, although Cindi contends that
showing horses was not a personal expense since her adult daughter showed them
with Tim, the evidence adduced at trial could permit the jury to determine that
Tim’s personal consumption allowance was higher because he showed horses and
even Cindi described this as a “luxury.”
In addition, the jury could have discounted both experts’ figures regarding
the value of lost household services because neither considered actual services
rendered by Tim. Both experts used national averages even though they agreed
15
that there were “difficulties” associated with calculating the value of household
services contributed by a person who was offshore for 30 days at a time. Cindi’s
expert, Mayor, admitted that he didn’t know “how much difference that makes,”
and stated that “[i]t’s a hard–I think it’s a hard issue to determine.” Accordingly,
the jury could have determined that neither expert’s household services figure was
accurate and that a lower figure was warranted.
We do not speculate on how the jury actually arrived at its award, but
conclude based upon all of the foregoing that there is sufficient evidence in the
record from which a rational jury could have determined an award lower than
either expert estimated. See Vela, 203 S.W.3d at 49 (reviewing court does not
speculate on how jury actually arrived at award, but rather, determines whether
jury could have reasonably reached award based upon record evidence). Having
considered all of the evidence, in light of the jury’s significant discretion in
determining pecuniary damages, we conclude that the jury’s award of $280,082 for
loss of support and household services is not so contrary to the overwhelming
weight of the evidence that it is clearly wrong and unjust. See Dorriety, 345
S.W.3d at 113 (jury has significant discretion in determining pecuniary damages
and is not necessarily limited by expert testimony); Salinas, 225 S.W.3d at 320
(jury is entitled to disbelieve or discount any part of an expert’s testimony even
16
though the basis of the jury’s specific calculation cannot be determined from the
record).
We overrule Cindi’s sole issue.
Conclusion
We affirm the trial court’s judgment.
Rebeca Huddle
Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
17
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901 F.2d 1112
U.S.v.Technical Training Designs*
NO. 89-3768
United States Court of Appeals,Fifth Circuit.
APR 19, 1990
1
Appeal From: E.D.La.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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IN THE COURT OF APPEALS OF THE STATE OF IDAHO
Docket No. 40618
LARRY DEAN CORWIN, ) 2014 Unpublished Opinion No. 386
)
Petitioner-Appellant, ) Filed: February 20, 2014
)
v. ) Stephen W. Kenyon, Clerk
)
STATE OF IDAHO, ) THIS IS AN UNPUBLISHED
) OPINION AND SHALL NOT
Respondent. ) BE CITED AS AUTHORITY
)
Appeal from the District Court of the Third Judicial District, State of Idaho,
Canyon County. Hon. Thomas J. Ryan, District Judge.
Judgment dismissing action for post-conviction relief, affirmed.
Larry Dean Corwin, Boise, pro se appellant.
Hon. Lawrence G. Wasden, Attorney General; Russell J. Spencer, Deputy
Attorney General, Boise, for respondent.
________________________________________________
LANSING, Judge
Larry Dean Corwin appeals from the district court’s denial of post-conviction relief. We
affirm.
I.
FACTS AND PROCEDURE
In March of 1998, Corwin was convicted of misdemeanor driving under the influence
(DUI) for an offense committed in Idaho. Under the law in effect at the time of his offense, a
third DUI offense within five years could be charged as a felony. Idaho Code § 18-8005(5)
(1997). Corwin was given warnings to that effect pursuant to I.C. § 18-8005(4)(c) (1997). Later
in 1998, Corwin was again convicted of a DUI offense in the state of Washington.
In 2006, the Idaho Legislature amended I.C. § 18-8005(5) to provide that a third DUI
offense within ten years could be charged as a felony. On June 7, 2007, Corwin again drove
while intoxicated in Idaho. Because of his two prior DUI convictions within ten years, he was
1
charged with felony driving under the influence. Corwin was convicted of the offense at trial
and was sentenced.
Thereafter, Corwin filed a petition for post-conviction relief. He asserted claims, among
others, that application of the 2006 amendment to I.C. § 18-8005(5) in his 2007 case violated
substantive due process and that his trial counsel was ineffective in presenting his defense.
During the pendency of the post-conviction action, Corwin filed a motion for substitution of
counsel to replace the attorney that had been appointed to represent him in the post-conviction
action. This motion was not scheduled for a hearing, and the district court never addressed it.
The district court ultimately summarily dismissed Corwin’s claim of a due process violation in
the criminal proceedings and denied relief after an evidentiary hearing on Corwin’s claim of
ineffective assistance of counsel. Corwin appeals.
II.
ANALYSIS
A. Due Process
Corwin asserts that the use of his 1998 DUI convictions to elevate this charge from a
misdemeanor to a felony violates his right to due process of law and is fundamentally unfair. His
contention is based on notice given to him at the time of his prior Idaho DUI conviction, which
informed him only that a third DUI violation within five years could be charged as a felony. He
asserts that the 2006 amendment to I.C. § 18-8005(5) to provide that a third offense within ten
years could be charged as a felony cannot “retroactively” change this.
The post-conviction court summarily dismissed Corwin’s claim of a violation of due
process based upon this Court’s decision in State v. Lamb, 147 Idaho 133, 206 P.3d 497 (Ct.
App. 2009). In that case, as in the instant case, the defendant had twice been convicted of DUI
and had been warned that a third DUI violation within five years could be charged as a felony,
and the defendant committed a third DUI offense more than five years later, but after the
statutory “look-back” period had been extended to ten years. The defendant asserted that his
statutory warnings in prior cases became part of his plea agreements which, he said, the State
breached by charging the instant offense as a felony. This, he asserted, amounted to a
deprivation of due process. This Court rejected the defendant’s claim, stating:
In Wilson v. State, 133 Idaho 874, 879-80, 993 P.2d 1205, 1210-11 (Ct.
App. 2000), we considered an analogous claim that due process precluded
prosecution of a DUI as a felony because at the time of a prior DUI conviction,
2
the district court had not warned the defendant of a change in the recidivist law
that had not yet occurred. We said, “The due process clause of the United States
Constitution does not require that a defendant be provided notice at the time of
sentencing that his conviction may be used for sentencing enhancement at a later
date should the defendant be convicted of another crime.” Id. at 879, 993 P.2d at
1210 (citing Nichols v. United States, 511 U.S. 738, 748, 114 S. Ct. 1921, 1928,
128 L. Ed. 2d 745, 755 (1994)). We further observed:
[I]t is axiomatic that citizens are presumptively charged
with knowledge of the law once such laws are passed. The entire
structure of our democratic government rests on the premise that
the individual citizen is capable of informing himself about the
particular policies that affect his destiny.
Id. at 880, 993 P.2d at 1211 (quotation marks and citations omitted).
The 2006 amendment to I.C. § 18-8005(5) placed Lamb on notice that the
DUI enhancement law was no longer as had been described to him upon his
earlier convictions. The notion that the trial courts’ warnings given in his prior
DUI cases somehow became part of Lamb’s plea agreements is frivolous. A trial
court’s advisement of the risk of future penalties under a recidivist statute is a
warning designed to deter the defendant from committing future offenses, not a
promise that puts restraints on future prosecutions. See State v. Nickerson, 121
Idaho 925, 928, 828 P.2d 1330, 1333 (Ct. App. 1992). It certainly does not
constitute a promise that the law will, with respect to the defendant, never change.
Lamb has shown no violation of his constitutional right to due process.
Lamb, 147 Idaho at 136-37, 206 P.3d at 500-01.
Here, Corwin contends that Lamb is not controlling because he is making an argument
that was not considered in that case. Specifically, Corwin contends that the “two within five”
statutory provision in effect at the time he committed his first DUI is a “statute of limitation,”
that the five-year statute of limitation expired as to him in 2003, and therefore the 2006 statutory
amendment extending the look-back period was made after the “statute of limitation” had
already expired. Thus, Corwin asserts, the State violated his due process rights by using “null
and void” and “time-barred” evidence of his prior DUI convictions and failed to accord finality
to those proceedings.
Corwin’s argument is erroneous. A statute of limitation creates a time limit within which
a criminal or civil action must be filed with a court. See I.C. § 5-201. Idaho Code § 19-402
provides for a statute of limitation requiring that felony DUI prosecutions be filed within five
years after the offense. The statutory look-back period in I.C. § 18-8005(5) for use of prior
convictions to enhance a DUI charge to a felony is not, by any stretch of the imagination, an
additional “statute of limitation.” There is no such thing as a statute of limitation on evidence
3
under Idaho law. Nor was there anything in Idaho law that rendered evidence of Corwin’s prior
convictions “null and void.” Therefore, contrary to his argument, the State’s reliance upon
Corwin’s 1998 DUI conviction to enhance his 2007 DUI to a felony did not “revive evidence
with a statutory limit once it has expired.” Corwin’s due process challenge is without merit, and
is nothing more than a new, and unconvincing, attempt to establish a constitutional violation in
the application of a recidivist statute. Similar claims have been made and rejected many times
before. See Parke v. Raley, 506 U.S. 20, 27 (1992) (“[W]e have repeatedly upheld recidivism
statutes ‘against contentions that they violate constitutional strictures dealing with double
jeopardy, ex post facto laws, cruel and unusual punishment, due process, equal protection, and
privileges and immunities.’”) (quoting Spencer v. Texas, 385 U.S. 554, 560 (1967)).
Corwin also argues that the use of his 1998 Idaho conviction was “prohibited by the
interest in finality of judgments.” There is no merit in this argument, for the finality of his 1998
judgment was in no way affected by the 2007 prosecution. The 1998 conviction has not been
reopened or otherwise disturbed or modified.
The district court did not err in summarily dismissing Corwin’s post-conviction claim
that the enhancement of his 2007 DUI charge based upon his 1998 conviction violated his
constitutional rights.
B. Conflict
Corwin also argues that his post-conviction counsel denied him effective assistance “due
to a conflict of interest he had in his representation, but kept silent.” Although the nature of the
alleged conflict asserted on appeal is not entirely clear from Corwin’s briefing, his contention
appears to be that his post-conviction attorney was a friend of Corwin’s criminal defense
attorney and therefore was unwilling to effectively present the ineffective assistance of counsel
claim.
Corwin’s claim of error is reviewable in the district court only if he raised this issue of a
possible conflict of interest due to the relationship between his appointed post-conviction counsel
and his defense attorney. Corwin claims that he raised the issue by filing, pro se, a “notice of
conflict” and affidavit in support followed some months later by a motion for substitution of
post-conviction counsel and an affidavit in support. In the notice, motion and affidavits, Corwin
identified a “conflict” between himself and his appointed post-conviction attorney in that counsel
was not adequately communicating with him, that counsel was not doing the things that Corwin
4
wanted to be done when he wanted them to be done, and counsel’s letters to him evidenced
unfamiliarity with the facts of the underlying criminal case. None of Corwin’s filed documents
raised any issues or concerns about a possible conflict stemming from a relationship between
Corwin’s post-conviction counsel and Corwin’s criminal trial attorney. Because Corwin did not
preserve the issue he now raises on appeal, we apply the general rule that issues presented for the
first time on appeal will not be addressed. State v. Fodge, 121 Idaho 192, 195, 824 P.2d 123,
126 (1992); Sanchez v. Arave, 120 Idaho 321, 322, 815 P.2d 1061, 1062 (1991); Person v. State,
147 Idaho 453, 455, 210 P.3d 561, 563 (Ct. App. 2009); Small v. State, 132 Idaho 327, 331, 971
P.2d 1151, 1155 (Ct. App. 1998).
III.
CONCLUSION
As Corwin’s claims have no merit, the court’s judgment denying post-conviction relief is
affirmed.
Chief Judge GUTIERREZ and Judge GRATTON CONCUR.
5
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916 F.Supp. 336 (1996)
UNITED STATES of America,
v.
Joseph MORALES, Defendant.
No. S2 95 Cr. 52 (LAK).
United States District Court, S.D. New York.
February 27, 1996.
*337 Tai H. Park, Assistant United States Attorney, Mary Jo White, United States Attorney, for the United States of America.
David Cooper, for Defendant.
MEMORANDUM OPINION
KAPLAN, District Judge.
The superseding indictment in this case charged a number of defendants with conspiring to smuggle Thai women into the United States illegally and, upon their arrival, to force them to work as prostitutes at a brothel located at 206-208 Bowery, New York, New York, until they had performed sexual acts with customers, for the economic benefit of the smugglers, to an extent sufficient to satisfy the sums they had agreed to pay the smugglers to bring them into the country. All the defendants pleaded guilty to various charges except Joseph Morales, a former New York City Corrections Officer who was employed as chief of security at the brothel. Morales was convicted after trial of participating in conspiracies to kidnap, to violate the civil rights of women held at the brothel, and to import and transport women interstate for the purpose of promoting prostitution as well as with six substantive civil rights and importation counts. The kidnaping conspiracy conviction was set aside when the government consented to defendant's Rule 29 motion addressed to that count. Morales now moves for a new trial on the grounds that the government (1) suppressed material Brady information, and (2) knowingly adduced perjured testimony at trial.
*338 The Brady Claim
The Brady claim arises as a result of testimony by two alleged victims of the scheme at a Fatico hearing held in connection with the sentencing of two of his co-defendants after Morales was convicted. Neither witness testified at Morales' trial. Before proceeding to the details of the testimony and its significance in light of Brady, it is useful to outline the case against Morales and his defense.
The theory of the government's case was that a number of smugglers arranged to bring women into the United States illegally from Thailand in exchange for promises of payment by the women. Some knew before they came that they would be required to pay off their debts by working as prostitutes. Others were misled by promises of legitimate jobs. Once they arrived, however, all were confined at the brothel until they had serviced sexually, for the economic benefit of their smugglers or "bosses," sufficient men to pay the fees for bringing them into the country. (TT[1] 15-16) In substance, then, the government claimed that those who had agreed to work off their debts as prostitutes were prevented from changing their minds while the others were forced into prostitution against their will. Morales' role, as indicated, allegedly was that of chief of security the man in charge of making sure that none of the women left the premises.
Morales' defense was that most of the women were prostitutes in Thailand and that all of them knowingly agreed, in arrangements to which Morales was not a party, to work off their debts as prostitutes and to remain in the brothel until they had done so. Morales contended that he did not prevent any of the women from leaving the brothel. (TT 32-45)
The government's proof at trial consisted principally of the testimony of Siew Geok Adkins, a/k/a Lilly Chan, the madam of the brothel; Jawarit Sillaphanond, a/k/a Lek, one of the smugglers; Sonchay Khounsavanh, a/k/a Sam, a customer of the brothel who, after losing his job elsewhere, worked there briefly before the brothel was closed; and Sunan Chalremsen, one of the alleged victims. The evidence, considered in the light most favorable to the government, established that (1) Chalremsen and others were induced to enter into arrangements pursuant to which they would be smuggled into the country in exchange for a promise to pay the smugglers from their earnings after they arrived here, (2) some, but not all, were misled by promises of legitimate jobs here while others knew they would be engaged in prostitution, (3) upon arrival, all of the women were confined to the brothel until they had serviced sexually enough men to satisfy the smuggling debts, (4) Morales was the chief of security at the brothel and was responsible, both personally and through others he hired and paid, for ensuring that none of the women escaped, (5) Morales on one or more occasions physically prevented women from leaving the brothel, and (6) on one occasion Morales offered to assist Adkins in capturing a woman who had succeeded in escaping.
The two women who testified at the Fatico hearing were Valaiborn Yeampunnai, a/k/a Jang, and Kwanjai Hasubklong, a/k/a Dee. Yeampunnai testified that she was anxious to come to the United States and, in exchange for being smuggled into the country, agreed to have sex with four to five hundred men for the benefit of her smuggler. (FT[2] 9-10) She was brought to 208 Bowery, where she remained for two weeks. She understood that she was not allowed to leave in the absence of her "boss" and that the door of the brothel was locked. (Id. 13) Although she wished to leave, she said she was afraid that she would be killed if she left.[3] (Id. 14-15) She acknowledged also that when first questioned by authorities, she falsely told them that she had been told that she would work in a restaurant when she came to the United States because she was afraid that *339 she would be deported if she admitted having come to work as a prostitute. (Id. 17-19)
Hasubklong's testimony was similar. She admitted having agreed to work as a prostitute in exchange for her passage and entry into the United States. (Id. 42) She was locked in the Bowery brothel, which she could not leave without Adkins' permission. (Id. 44-45) Hasubklong, however, became concerned that the brothel might be raided and that she would be deported because she was a prostitute. In consequence, she asked a customer, whom she later married, to call the police on her behalf and, in the hope of thus avoiding deportation, to tell them she was being forced to work as a prostitute. (Id. 46-47, 55-56) When asked why she did not just walk out of the brothel, she responded, "Where can I go because I don't know anybody." (Id. 56)
Morales contends that the statements of these women, which he assumes the government had at the time of his trial, were Brady material that should have been disclosed. He argues that they support his contentions that he had nothing to do with the arrangements between the women and the smugglers, that the women were not compelled to work as prostitutes but freely chose to do so, that the women agreed to their confinement, and that he did not prevent them from leaving the brothel indeed, they did not seek to do so. He contends also that Hasubklong's testimony was inconsistent with the government's theory that the women who spoke to the police did so to escape the allegedly inhuman conditions at the brothel, showing instead that they did so in an effort to avoid deportation.
In order to establish a Brady violation, the defendant must show, inter alia, that (1) the government suppressed favorable evidence, and (2) the evidence the government suppressed was material. United States v. Payne, 63 F.3d 1200, 1208 (2d Cir. 1995). A defendant, however, cannot satisfy the suppression requirement if the defendant, directly or through counsel, "either knew, or should have known, of the essential facts permitting him to take advantage of [that] evidence." United States v. LeRoy, 687 F.2d 610, 618 (2d Cir.1982), cert. denied, 459 U.S. 1174, 103 S.Ct. 823, 74 L.Ed.2d 1019 (1983). If the defendant has information, but fails to use due diligence to make use of it, the defendant cannot later claim that the government "suppressed" evidence. Id. Here there is no colorable basis for any claim of suppression, even assuming that the government knew at or before trial how Hasubklong and Yeampunnai would testify. Accordingly, there is no need to determine whether the statements of those witnesses were exculpatory or material.[4]
In order to appreciate fully the weakness of the suppression charge, it is helpful to understand how this case evolved. The brothel evidently came to the attention of federal authorities on October 11, 1994 as a result of an inspection conducted by New York City authorities. Agents of the Immigration and Naturalization Service responded to the scene, where they found and interviewed thirty-one Thai women. It appears that three then claimed to have been held against their will while the other twenty-eight declined to be further questioned. (Ng Aff.[5] ¶ 7) On November 6, 1994, six additional women claimed that they were being held against their will and were removed from the brothel. (Id. ¶ 11) Adkins then was arrested and charged. (Id.) The case developed from that point, resulting in the superseding indictment on which Morales ultimately was tried.
*340 Given the nature of the charges, it was perfectly obvious from the outset of this case that testimony of women who had been at the brothel could be vitally important to one side or the other. Indeed, when a newspaper reported on or about February 1, 1995 that a raid on a brothel in Seattle, Washington, had netted Thai women who may have been held against their will, the Assistant United States Attorney promptly investigated the matter and learned that three of the women had stated that they were from New York and claimed that they had not been held against their will. (Park Aff., Apr. 28, 1995, ¶ 5) He promptly informed defense counsel (id. ¶ 5c), one of whom unsuccessfully claimed that his client's Brady rights had been violated because he had not been informed earlier, a delay which allegedly had allowed the three women to disappear (Tr., May 11, 1995, at 47-57). At about the same time, the government advised defense counsel that certain of the alleged victims who initially had told the government that they had not expected to engage in prostitution when they came to the United States had changed their stories. (Park Aff., Feb. 9, 1996, Ex. 1) Moreover, counsel for one of Morales' co-defendants moved in the presence of Morales and his counsel for an order barring the government from interfering with defense efforts to speak with the thirty-one women (Tr., May 11, 1995, at 35), thus evidencing his view that these women were key objects of defense interest. Indeed, he stated that he had interviewed nine of the thirty-one, all of whom had given exculpatory evidence. (Id. 39-40) Accordingly, by mid-May 1995, the defense knew that (1) the charges depended in significant part on what the women were told before they arrived at the brothel and what happened to them when they got there, (2) only three of the thirty-one women at the brothel on October 11, 1994 then claimed to have been held against their will, (3) six more so alleged in early November, (4) three women who had been interviewed in Seattle had said that they had not been held against their will, (5) the government acknowledged that alleged victims had changed their accounts,[6] and (6) nine women interviewed by co-counsel supposedly had exculpated one of Morales' co-defendants.
Against this background, Morales' counsel not surprisingly asked the government to identify witnesses whom it did not intend to call on its case in chief. Taking the request as seeking the names of alleged victims to whom the government had access and whom it did not intend to call, the government promptly supplied a list of seven women including both Hasubklong and Yeampunnai. (Park Aff., Feb. 9, 1996, Ex. 2) Morales' counsel contacted the attorney for one of the seven,[7] who advised that his client would not speak to Morales' counsel because she was afraid of being deported or prosecuted. Assuming that he would meet the same response from all of the others, Morales' counsel made no effort to contact any of them. He called none at trial. He did not raise the question whether the government would immunize the women to testify for the defense as counsel for a co-defendant suggested. (See Tr., May 11, 1995, at 42) Instead, he made a good deal in his summation of the government's failure to call them.[8]
As the government disclosed well before trial that Hasubklong and Yeampunnai were among the women who had been in the brothel, the only possible claim of suppression *341 rests on the failure to tell Morales that Hasubklong and Yeampunnai, if called, would testify as they did at the Fatico hearing, assuming of course that the government then knew that. The Court is persuaded, however, that any failure to do so, in the circumstances of this case, did not amount to suppression.
Morales well knew that women who had been at the brothel had told different stories about what had taken place the government had disclosed that fact. He had the names of these women. He simply chose not to pursue the evidence. Perhaps he believed he would be unsuccessful in obtaining it. Perhaps he believed the evidence would be unfavorable. Perhaps he believed that the missing witness argument he made to the jury would be better than any evidence he was likely to find. But whatever the reason, he cannot now blame the government for the consequences.
United States v. Ruggiero, 472 F.2d 599 (2d Cir.), cert. denied, 412 U.S. 939, 93 S.Ct. 2772, 37 L.Ed.2d 398 (1973), is instructive. The defendant there was denied pretrial disclosure of the grand jury testimony of two prospective witnesses, Lundy and Sheridan, after in camera inspection by the trial court. Neither was called at trial. On appeal, he contended that the failure to turn over the grand jury testimony violated Brady. But the Court of Appeals rejected the argument:
"The purpose of the Brady rule is not to provide a defendant with a complete disclosure of all evidence in the government's file which might conceivably assist him in the preparation of his defense, but to assure that he will not be denied access to exculpatory evidence known to the government but unknown to him. Here the appellant was on notice of the essential facts required to enable him to take advantage of such exculpatory testimony as Lundy and Sheridan might furnish. He was also well aware of the process by which they could be compelled to testify at trial. * * * If appellant wanted their testimony, the obvious and logical course was to subpoena them and put them on the witness stand." Id. at 604-05 (emphasis added).
The Court, moreover, rejected the defendant's argument that he should not be expected to have called the witnesses blind and "guess as to what they will say on the stand ..." Id. at 605. It pointed out that the defense had been free to seek to interview Lundy and Sheridan before trial, and it rejected his contention that his effort to do so had been rebuffed because "neither the government nor the trial judge was so advised." Id. It concluded:
"[D]efense counsel had strong reason to believe that Lundy's testimony would be helpful to the defense and he so argued to the jury. Yet he did not subpoena Lundy to testify, as he had a right to do, and he did not advise the court of any inability to elicit Lundy's testimony. We hold that under the circumstances it was not an abuse of discretion for the trial judge to deny him disclosure of the Lundy-Sheridan grand jury testimony." Id.
There is, to be sure, a difference between Ruggiero and this case in that the trial court there reviewed the grand jury transcripts in camera. But the important point, for purposes of this case, is the Court's reaction to the defendant's failure to pursue the testimony of Lundy and Sheridan. In Ruggiero, the defense had reason to believe that the testimony would be helpful, and the defense here certainly knew that the testimony of these witnesses might be helpful. In Ruggiero, the defense at least tried to interview the witnesses in advance, although it did not inform the government or the court of its lack of success. Here, with one exception, the defense did not even seek to interview the witnesses. In both cases, the defense decided not to call the witnesses. Ruggiero's rejection of the Brady argument therefore strongly supports the government's position that there was no suppression in this case. See also Williams v. United States, 503 F.2d 995, 998 (2d Cir.1974); United States v. Tramunti, 500 F.2d 1334, 1349-50 (2d Cir.), cert denied, 419 U.S. 1079, 95 S.Ct. 667, 42 L.Ed.2d 673 (1974); cf. United States v. Purin, 486 F.2d 1363, 1368 n. 2 (2d Cir.1973), cert denied, 417 U.S. 930, 94 S.Ct. 2640, 41 L.Ed.2d 233 (1974).
*342 United States v. Griggs, 713 F.2d 672 (11th Cir.1983), also is pertinent. The defendant in that case was charged with conducting a fraudulent scheme. He made a pretrial Brady motion, but the government denied the existence of any such material although it provided a list of witnesses it intended to call at trial. The defendant was convicted at trial, although the defense elicited arguably exculpatory testimony from several of the government's witnesses.
The defendant sought a new trial on the ground that the government's failure to disclose before trial the exculpatory statements elicited by the defense on the witness stand violated Brady. The Eleventh Circuit rejected the argument:
"Where defendants, prior to trial, had within their knowledge the information by which they could have ascertained the alleged Brady material, there is no suppression by the government. `Irrespective of whether the statement[s] here [were] exculpatory evidence under Brady, a question we do not reach, there is no Brady violation when the accused or his counsel knows before trial about the allegedly exculpatory information....' United States v. Cravero, 545 F.2d 406, 420 (5th Cir.1976) (Emphasis added).
"Pretrial, defendants were given the list of potential government witnesses and had within their knowledge the names of all former employees of their companies from whom the allegedly exculpatory information was extracted at trial. Accordingly, while the better course may have been for the government to disclose the statements if it had knowledge thereof, no new trial is warranted for failure to do so." Id. at 674. See also United States v. MacDonald, 778 F.Supp. 1342, 1353 (E.D.N.C.1991) (nondisclosure of forensic laboratory notes not Brady violation where government turned over physical evidence for defense testing).
The Court assumes that Brady requires more than giving a defendant pieces of a jigsaw puzzle which, with sufficient effort, can be joined to reveal an exculpatory picture. But it is unnecessary to test the limits of that concept in this case. Here, the possibility indeed, if one believed either the assertions of Morales' co-defendant at the May 11, 1995 motion hearing or Morales' defense, the likelihood that women who had been in the brothel would have had exculpatory evidence was as patent as it could have been. There was nothing difficult about pursuing the evidence. In such a clear situation, the Constitution required no more than the government did.
Alleged Perjury
Morales charges the government also with deliberately presenting perjurious testimony. Specifically, counsel's affidavit states that Khounsavanh, "testified at trial that he had ceased to use drugs as long ago as 1979." (Cooper Aff. ¶ 11) This, counsel says, was false because counsel allegedly has learned "from an excellent source" that Khounsavanh abused controlled substances while cooperating with the government. The basis for the assertion that the government knew it was false is (1) counsel's contention that he confronted the prosecutor with the information and that the prosecutor "did not seem to be surprised" and said that Khounsavanh's abuse "appeared to be no more than smoking marihuana," (id.) a contention that the prosecutor denies (Park Aff., Feb. 9, 1996, ¶ 5), and (2) Khounsavanh's demeanor, which Morales argues put the government on notice that he was using drugs at the time of the trial. The claim is frivolous.
To begin with, Morales has presented no evidence that Khounsavanh's testimony was false. An unsubstantiated statement by an unidentified informant affords no reason even to conduct a hearing as to whether perjury occurred. See United States v. Johnson, 142 F.2d 588, 592 (7th Cir.1944) (affidavit of witness to newly discovered evidence must be produced or its absence explained); United States v. Stahls, 194 F.Supp. 849, 850-51 (S.D.Ind.1961) (same); 3 CHARLES ALAN WRIGHT, FEDERAL PRACTICE AND PROCEDURE: CRIMINAL § 557.1, at 344 (2d ed. 1982); cf. Kyle v. United States, 297 F.2d 507, 512 (2d Cir.1961), cert. denied, 377 U.S. 909, 84 S.Ct. 1170, 12 L.Ed.2d 179 (1964) (Larrison rule applies in cases of recantation or where "it has been proved that false testimony was given at trial"); United States v. Hiss, 107 F.Supp. 128, 136 (S.D.N.Y.1952), *343 aff'd, 201 F.2d 372 (2d Cir.), cert. denied, 345 U.S. 942, 73 S.Ct. 830, 97 L.Ed. 1368 (1953).
Second, Khounsavanh's testimony was not exactly as recounted by Morales' counsel. Khounsavanh testified as follows:
"Q Mr. Khounsavanh, have you ever used any form of drugs. A I used crack.
"Q How long ago? A 1979 to 1980, and I quit, you know.
"Q Anything else? A And some marijuana.
"Q Marijuana? A Yes. And that also quit too." (TT 409)
Khounsavanh thus said he had stopped using crack long ago, but he did not say when he quit using marihuana. In view of the fact that counsel's alleged source did not identify the kind of drugs Khounsavanh allegedly was using and did not even allegedly say that he was using drugs during trial, Khounsavanh's testimony is not necessarily inconsistent with what the alleged source supposedly told counsel.
Third, even if there were an inconsistency between Khounsavanh's testimony and some evidence of substance, there would be no basis for a new trial. The introduction of perjurious testimony requires a new trial only if the prosecution knowingly permitted its introduction, in which case reversal is "virtually automatic," or it was material to the verdict. United States v. Wallach, 935 F.2d 445, 456 (2d Cir.1991).
Here, any false testimony was not material. Khounsavanh's testimony was not the "linchpin" of the government's case against Morales (Def.Mem. 4) that Morales claims. The key witness against Morales was Adkins, the madam of the house, who said that she hired Morales as chief of security and described his activities. (TT 64-67, 78-82, 103-06, 121-22, 128-29, 210-12) Khounsavanh served principally a corroborating purpose. The Court believes that Morales would have been convicted even if the alleged perjury regarding Khounsavanh's drug use, if indeed that occurred, had been revealed. See Wallach, 935 F.2d. at 456.
The assertion that the prosecution knowingly permitted the introduction of false testimony is charitably described as far fetched. The principal support offered for the assertion is the suggestion that "Sam's somewhat odd affect on the stand may be related to his having been under the influence of drugs when he testified." (Cooper Aff. ¶ 11 n. 4) The Court saw no indication from Khounsavanh's demeanor that he was under the influence of drugs. Far more important, however, is this: if Khounsavanh's demeanor should have suggested drug use to the government, it should have suggested drug use to the defense. The fact that Morales' counsel did not cross-examine on that issue is a persuasive refutation of his contention.
Conclusion
For the foregoing reasons, the motion for a new trial is denied in all respects.
SO ORDERED.
NOTES
[1] "TT" refers to the trial transcript.
[2] "FT" refers to the transcript of the Fatico hearing.
[3] She testified also, somewhat inconsistently, that she never asked to leave the brothel because she did not know why she would wish to. (FT 13)
[4] It is worth noting, however, that there is at least one major obstacle to concluding that these witnesses' statements were exculpatory of Morales. Both testified that they were locked into the brothel and could not leave without permission. This is perfectly consistent with Morales' guilt, as Morales' alleged role was to ensure that the door was and remained locked. The fact that the witnesses did not address Morales' role, one way or the other, cannot be regarded as exculpatory in view of the fact that their testimony came at a Fatico hearing that dealt with defendants other than Morales.
[5] Refers to affidavit of Wai Ng, sworn to Dec. 30, 1994, submitted in support of application for search and arrest warrants. A copy of the affidavit is Exhibit 3 to the affirmation of Tai H. Park, dated Apr. 28, 1995, submitted in opposition to pretrial motions by other defendants.
[6] It was not clear from the government's letter whether the women referred to were the same as those whose stories had changed in the October-November period or additional women.
[7] Counsel has not identified which of the seven he tried to contact.
[8] "Look at the proof we had in this case, ladies and gentlemen. 31 women were interviewed by the government in connection with this incident at 208 Bowery, and one of them appeared as a witness here. Where are the rest of them? I don't know. You don't know. But at some point in this case the government knew where they were.
"They were all illegal aliens. They were subject to the authority and control of the immigration authorities. One of these 31 women came to this court to talk about what happened in 208 Bowery, and what did she say about Joe Morales? Well, I saw him twice, once he took some girls out turns out they went on a trip to Statue of Liberty. And another time I saw him, and I don't know what he was doing because I didn't even notice. Must have been something real important, like locking people up." (TT 669)
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206 F.2d 682
HOLSTON et al.v.IMPLEMENT DEALERS MUT. FIRE INS. CO.
No. 14318.
United States Court of Appeals Fifth Circuit.
August 6, 1953.
Donald V. Yarborough, Dallas, Tex., White & Yarborough, Dallas, Tex., for appellants.
Dan Rogers, Dallas, Tex., Dan Rogers, Thompson, Knight, Wright & Simmons, Dallas, Tex., for appellee.
Before HOLMES, BORAH and RIVES, Circuit Judges.
BORAH, Circuit Judge.
1
This is an appeal from an order of the United States District Court for the Northern District of Texas dismissing on motion of the appellee an action brought by the appellants to recover the face amount of a policy of fire insurance which covered, as endorsed, "contents" of a building located in Dallas, Texas.
2
The complaint, which was filed on July 28, 1952, alleged that appellee issued to appellants on November 25, 1947, its fire insurance policy in the sum of $10,000 and that thereafter all premiums becoming due thereon were paid; that on July 31, 1948, while the policy was in full force and effect the building and its contents valued in excess of $10,000 were destroyed by fire; that proof of loss was made in accordance with the terms of the policy and despite compliance with all the requirements of the policy appellee failed and refused to pay the loss.
3
It appearing on the face of the complaint from the insurance policy which was a part of the motion papers filed by defendant that suit was not filed within two years and one day after the cause of action occurred, the District Court on motion dismissed the suit on the ground that it was barred by the limitation period prescribed by the policy.1 Appellants do not deny that the cause of action they allege occurred more than two years and one day before this suit was commenced nor do they deny that their action would be barred if the policy provision is valid. They do not raise these issues but level their attack against the two year and one day period of limitation prescribed by the policy claiming that it is invalid and unenforceable for the reason that it falls within the condemnation of Article 5545, Vernon's Ann.Civ. St., which provides:
4
"No person, firm, corporation, association or combination of whatsoever kind shall enter into any stipulation, contract, or agreement, by reason whereof the time in which to sue thereon is limited to a shorter period than two years. And no stipulation, contract, or agreement for any such shorter limitation in which to sue shall ever be valid in this State. Acts 1891, p. 20; G.L. vol. 10, p. 22."
5
On the basis of this erroneous premise it is next argued that the four year statute of limitation governs the case. Article 5527, Vernon's Ann.Civ.St.2
6
We think it plain that the limitation period prescribed by the policy is not rendered invalid and unenforceable by Article 5545. Obviously, two years and one day is not a shorter period than two years. The clear meaning of the statute is that the plaintiff must be given at least two years after the accrual of his cause of action within which to file suit. The statute simply declares that it is the public policy of the State that a two year period of limitation is a reasonable period. It permits the parties to limit by contract the time within which suit may be brought, provided such period be not shorter than two years, and the provision in the policy limiting the time to sue to two years and one day is valid and binding. Such has been the construction given to the statute by the Texas Courts in upholding its validity. Commercial Standard Insurance Co. v. Lewallen, Tex.Civ.App., 46 S.W.2d 355; Culwell v. St. Paul Fire & Marine Insurance Co., Tex.Civ.App., 79 S.W.2d 914; Southern Surety Co. v. Austin, 5 Cir., 22 F.2d 881; 24 Tex.Jur. 1128; 28 Tex.Jur. 93.
7
Appellants further contend that a contractual period of limitation shorter than the four year statute3 applicable to written contracts generally is invalid as against public policy, even though it is longer than the minimum two year period prescribed by Article 5545. We know of no Texas decision that so holds and certain it is that none has been cited. The public policy of Texas as regards the validity of contractual limitations shorter than the general period of limitations is exemplified in the early case of Merchants Mut. Insurance Co. v. Lacroix, 35 Tex. 249, which was decided before the enactment of Article 5545. There the fire insurance policy in suit provided that all claims under it were barred unless presented within one year from the date of the loss and the court held: "Such a contract in a policy of insurance is not against public policy, nor is it merged in the general limitation laws of the State." The rule that parties may contract for a period of limitation shorter than the general statutory period so long as the contractual period was reasonable was not affected by the enactment of Article 5545. All that article did was to prescribe that a two year period of limitation is a reasonable period. In thus inhibiting parties from contracting for a shorter period within which to sue the statute by clear implication approves the validity of contractual periods of limitation longer than two years. The cases to which we have averted, all of which were decided subsequent to the enactment of this statute, clearly indicate that the public policy permits contractual periods of limitation shorter than four years.
8
Finally, appellants argue that their violation of the provision of the policy which requires suit to be commenced within two years and one day after the cause of action accrued comes within the purview of Article 6.14 of the Insurance Code of Texas4 and their violation of this provision is not available as a defense to appellee because such violation did not contribute to bring about the destruction of the property. We do not at all agree. The statute invoked by appellant has no application to the breach by the insured of the limitation provision of the policy. Its purpose was to prevent insurance companies from avoiding liability under technical provisions of their policies where the act of the insured breaching such a technical provision did not contribute to bring about the loss. The statute is not applicable to all provisions of the insurance policy. It has no application to a breach of those provisions of a policy which are material to the risk, but a violation of which could not, from their very nature, contribute to bring about the destruction of the property. Accordingly we hold that the limitation provision of the policy in suit is not of the class embraced within the act invoked, and is therefore not within its purview. McPherson v. Camden Fire Ins. Co., Tex.Com App., 222 S.W. 211; Citizens State Bank v. American Fire and Casualty Co., 5 Cir., 198 F.2d 57.
9
The judgment of the District Court was right and it is
10
Affirmed.
Notes:
1
The policy provided: "No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within two years and one day next after cause of action occurs."
2
Article 5527 provides in part as follows:
"There shall be commenced and prosecuted within four years after the cause of action shall have [occurred], and not afterward, all actions or suits in court of the following description:
"1. Actions for debt where the indebtedness is evidenced by or founded upon any contract in writing."
3
See footnote 2
4
Art. 6.14, V.A.T.S. Insurance Code, reads as follows:
"No breach or violation by the insured of any warranty, condition or provision of any fire insurance policy, contract of insurance, or applications therefor, upon personal property, shall render void the policy or contract, or constitute a defense to a suit for loss thereon, unless such breach or violation contributed to bring about the destruction of the property. Acts 1951, 52nd Leg. ch. 491." Art. 6.14 is based on Art. 4930. R.S.1925, Acts 1913, p. 194, Acts 1927, 40th Leg. p. 48, ch. 33, § 1, without change.
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42 So.3d 240 (2010)
HUTCHINS
v.
STATE.
No. 2D09-3728.
District Court of Appeal of Florida, Second District.
August 6, 2010.
Decision Without Published Opinion Affirmed.
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657 S.E.2d 210 (2008)
RIVERS
v.
The STATE.
No. S07A1541.
Supreme Court of Georgia.
February 11, 2008.
*211 Gerard Bradley Kleinrock, Decatur, for appellant.
Leonora Grant, Asst. Dist. Atty., Gwendolyn Keyes Fleming, Dist. Atty., Barbara Blaine Conroy, Asst. Dist. Atty., Thurbert E. Baker, Atty. Gen., Elizabeth Anne Harris, Asst. Atty. Gen., Department of Law, for appellee.
SEARS, Chief Justice.
In 2006, a DeKalb County jury convicted Timothy Rivers of malice murder and related offenses arising out of the shooting death of James Mogardo. Rivers admits killing Mogardo but claims he did so in self-defense. Rivers's sole claim on appeal is that he received constitutionally ineffective assistance of counsel because his trial attorney failed to discover and introduce the criminal record of one of the witnesses for the prosecution. Finding no merit in Rivers's claim, we affirm.[1]
1. The evidence presented at trial would have enabled a rational finder of fact to conclude as follows. On the evening of March 4, 2006, Brittnee Heard and Ashley Mata concocted a plan to commit a series of robberies to raise bail money for Heard's boyfriend. They enlisted the assistance of Timothy Rivers, a friend of Heard's boyfriend. The plan was simple. Seventeen-year-old Mata would distract a man in a parking lot with her sexual advances. Rivers would then approach and demand all his money, and Heard would drive the getaway car, her boyfriend's red Saturn.
Rivers and his compatriots put their plan into effect later that night and into the early morning hours of March 5, 2006. They committed two successful robberiesthe first in the parking lot of a nightclub, the second in the parking lot of a restaurantthat netted them a total of $90. However, Heard needed more money to satisfy her boyfriend's bail, so the three set out again.
This time they chose the parking lot of a popular nightclub in a strip mall in DeKalb County. At approximately 3:20 a.m., Mata, who was driving, caught the eye of James Calhoun as he was walking to his car. Mata parked, got out of the car, and approached him. They spoke for a few minutes, but Calhoun was nervous, and he eventually proceeded to his vehicle. He did not leave, *212 however, because his companion for the evening, Mogardo, was still in the club, and Mogardo was driving because Calhoun's license had been suspended.
Later Meta spotted Mogardo. She walked up, introduced herself, and began flirting with him. After a few minutes, the two walked to Calhoun's car. Calhoun was sitting on the passenger side of the front seat. Mata got into the back seat, while. Mogardo took his position in the driver's seat. Mogardo and Meta continued talking for a while, with Calhoun simply observing.
At some point, the conversation stopped, and Calhoun noticed that Mogardo was watching Rivers as he walked towards the car. Mogardo retrieved a handgun from the glove compartment and placed it in his lap. Rivers made hand gestures indicating he wanted to purchase marijuana, and Mogardo rolled down the window a little bit to talk to him. Rivers asked if he could buy some "weed" but then pulled a gun from his sweat-shirt, pointing it at Mogardo's head. Rivers demanded that Mogardo hand over his weapon, and when Mogardo reached for the gun, Rivers began firing. Mogardo returned fire as Rivers backed away from the vehicle, and a gunfight ensued.
Calhoun scrambled out of the car as soon as the shooting started and ran away. Mata crouched down in the back seat until the shooting stopped and then got out and ran back to the getaway car. Rivers limped towards the getaway car but could not make it all the way, and Heard backed up so Mata could help him. Heard then drove Rivers and Meta back to her apartment complex.
At the apartment complex, Heard and Mata, laid Rivers out on the ground, called his girlfriend to come over, and lid the car. They then went inside to change their clothes and call the police. They told the police they were taking out the trash when they came across the wounded Rivers in the parking lot. They claimed that they did not know who Rivers was or how he had gotten there. Though seriously injured, Rivers survived. His victim, Mogardo, was not so fortunate. Mogardo, who was also seriously injured in the melee, later died from his wounds.
The evidence presented at trial was sufficient to enable a rational trier of fact to reject Rivers's self-defense argument and convict him of malice murder, felony murder, aggravated assault, and possession of a firearm during the commission of a felony.[2]
2. In order to prevail on his claim of ineffective assistance of trial counsel, Rivers must show both that his counsel's performance was professionally deficient and that but for counsel's unprofessional errors, there is a reasonable probability that the outcome of the trial would have been different.[3] However, "[i]n ruling on an ineffectiveness claim, this Court need not analyze the deficient performance prong if the Court determines the prejudice prong has not been satisfied."[4]
Rivers contends his trial attorney was deficient in failing to discover and introduce Calhoun's criminal history and active probationary status for impeachment purposes at trial. Even if we assume that trial counsel's performance was professionally deficient, Rivers's ineffective assistance of counsel claim must fail, because he has failed to demonstrate that but for this alleged error, there is a reasonable probability that the jury would have acquitted him on at least one charge. In support of his claim of prejudice, Rivers offers nothing more that his own speculation that had his trial counsel been successful in introducing Calhoun's criminal history and probationary status for impeachment purposes, there is a reasonable probability the jury would have acquitted him on at least one charge. But mere "[s]peculation is insufficient to satisfy the prejudice prong *213 of Strickland."[5] Accordingly, the trial court properly rejected Rivers's ineffective assistance of counsel claim.
Judgment affirmed.
All the Justices concur.
NOTES
[1] Rivers committed his crimes on March 4 and 5, 2006. A DeKalb County grand jury indicted him for malice murder, felony murder, two counts of aggravated assault, and possession of a firearm during the commission of a felony on May 8, 2006. The jury found Rivers guilty of all charges, and the trial court sentenced Rivers on October 19, 2006. The trial court' first vacated the felony murder conviction in light of the malice murder conviction as required by law, OCGA § 16-1-7; Perkinson v. State, 273 Ga. 491(1), 542 S.E.2d 92 (2001); Malcolm v. State, 263 Ga. 369(4), 434 S.E.2d 479 (1993), and merged the aggravated assault convictions into the malice murder conviction. The trial court then sentenced Rivers to life in prison for the malice murder conviction plus five years consecutive for possession of a firearm during the commission of a felony. The trial court later modified the sentence by suspending the five-year prison term for possession of a firearm during the commission of a felony. Rivers filed a motion for new trial on November 16, 2006, and amended it on March 6, 2007. The trial court entered orders denying the new trial motion on April 17, 2007, and June 18, 2007, and Rivers filed a timely notice of appeal. The case was docketed in this Court on June 27, 2007, and submitted for decision on the briefs.
[2] Jackson v. Virginia, 443 U.S. 307, 309, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979); In re Winship, 397 U.S. 358, 361-364, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970).
[3] Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984); Jones v. State, 279 Ga. 854, 855, 622 S.E.2d 1 (2005).
[4] Jackson v. State, 282 Ga. 494, 497, 651 S.E.2d 702 (2007) (quoting Fortson v. State, 280 Ga. 435, 436, 629 S.E.2d 798 (2006)).
[5] Cormier v. State, 277 Ga. 607, 608, 592 S.E.2d 841 (2004). See Strickland, supra, 466 U.S. at 693, 104 S.Ct. 2052 ("Conflict of interest claims aside, actual ineffectiveness claims alleging a deficiency in attorney performance are subject to a general requirement that the defendant affirmatively prove prejudice. . . . Attorney errors come in an infinite variety and are as likely to be utterly harmless in a particular case as they are to be prejudicial. . . . Even if a defendant shows that particular errors of counsel were unreasonable, therefore, the defendant must show that they actually had an adverse effect on the defense.") (emphasis added).
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583 F.2d 364
Joyce KARP, Plaintiff-Appellee,v.NORTH CENTRAL AIR LINES, INC., Defendant, Third-PartyPlaintiff-Appellant,v.MARSILJE AGENCY, INC., Third-Party Defendant-Appellee.
No. 77-2078.
United States Court of Appeals,Seventh Circuit.
Heard April 10, 1978.Decided Aug. 31, 1978.
Robert A. Christensen, Milwaukee, Wis., for defendant, third-party plaintiff-appellant.
Roger L. Pettit, Milwaukee, Wis., for plaintiff-appellee.
Before CUMMINGS and WOOD, Circuit Judges, and SOLOMON, Senior District Judge.*
PER CURIAM.
1
This appeal involves the question whether an airline's failure to follow its own filed priority rules in bumping a passenger unjustly discriminated against the passenger in violation of Section 404(b) of the Federal Aviation Act (49 U.S.C. § 1374(b)).1 The district court so held and awarded the plaintiff passenger $3.00 in actual damages and $2,000 in punitive damages. We affirm with respect to the actual damages and reverse as to the punitive damages.
2
The facts are found in the district court's decision and order which are reported in 437 F.Supp. 87 (D.C.1977). The court found that on March 17, 1973, plaintiff purchased two airline tickets for herself and her 10-month and 21-month-old children to travel from Milwaukee, Wisconsin, to Lansing, Michigan. The younger child was to be held on plaintiff's lap. She obtained a confirmed reservation for two seats for defendant's flight 982 departing at 5:35 p. m. on April 4.
3
Plaintiff arrived at Gen. Billy Mitchell Field in Milwaukee 45 minutes prior to departure time and checked in at the boarding gate 15 minutes prior thereto. She was then told that there was only one remaining available seat on the airplane. Plaintiff explained to defendant's ticket agent that she needed to return to Michigan on that flight because her 10-month-old child had recently undergone surgery in Milwaukee and needed to return home as quickly and easily as possible. The North Central agent thereupon tendered denied boarding compensation to plaintiff and offered to book her and her children on a 6:30 p. m. or 9:00 p. m. flight. Plaintiff refused these alternatives, stating why they were not feasible. Subsequently it was discovered that plaintiff was denied boarding because this April 4 flight was oversold due to an error of Marsilje Travel Associates, Inc.2
4
In the opinion below, the district court held that it is well settled that a private damage action is available to remedy violations of Section 404(b) of the Federal Aviation Act.3 Citing Archibald, supra n. 3, and Nader v. Allegheny Airlines, Inc., 167 U.S.App.D.C. 350, 512 F.2d 527 (1975), reversed on other grounds, 426 U.S. 290, 96 S.Ct. 1978, 48 L.Ed.2d 643, the district court ruled that overbooking is not a Per se violation of Section 404(b). However, the court noted that unchallenged Civil Aeronautics Board regulations require air carriers to file with it "priority rules and criteria for determining which passengers holding confirmed reserved space shall be denied boarding on an oversold flight" (14 C.F.R. § 250.3).4 The defendant airline had filed such priority rules but instead of following them, it followed a first come, first served rule in oversold situations. Since it failed to comply with its filed priority rules, the court held that defendant airline had unjustly discriminated against plaintiff in violation of Section 404(b) of the Federal Aviation Act and therefore awarded plaintiff stipulated actual damages of $3.00 (437 F.Supp. at 90). The district court also awarded plaintiff $2,000 in punitive damages because of defendant's "wanton instruction" to its agents to determine boarding priority on a first come, first served basis instead of following its filed priority rules (437 F.Supp. at 91).
5
We agree with the district court that defendant's failure to follow its filed priority rules under the circumstances of this case did violate Section 404(b) of the Federal Aviation Act. A failure to follow filed priority rules gives an "undue or unreasonable preference or advantage" to unbumped passengers and subjects bumped passengers to an "unjust discrimination or any undue or unreasonable prejudice or disadvantage" under that provision. Nader v. Allegheny Airlines, Inc., supra, 167 U.S.App.D.C. at 361, 512 F.2d at 538; Smith v. Piedmont Aviation, Inc., 567 F.2d 290, 292 (5th Cir. 1977); see also Wills v. Trans World Airlines, Inc., 200 F.Supp. 360 (S.D.Cal.1961).5 To hold otherwise would make the filing requirement pointless and would permit airlines to escape liability if they adhered to unfiled, undisclosed uniform priority rules that were without Board approval.
6
We cannot sustain the punitive damages awarded to plaintiff because "the reason the plaintiff was denied boarding was that four persons holding confirmed tickets were not on the passenger list for that flight due to an error made by Marsilje Travel Associates, Inc." 437 F.Supp. at 89. Defendant's action in bumping plaintiff was in conformity with its usual first come, first served rule. Although that rule had not then been filed with the Civil Aeronautics Board, plaintiff has not shown that defendant's failure to file such a rule with the Board was wanton, oppressive or malicious, as required in order to support punitive damages. Smith v. Piedmont Aviation, Inc., supra6; see Nader v. Allegheny Airlines, Inc., supra, 167 U.S.App.D.C. at 372-374, 512 F.2d at 549-551; Wills v. Trans World Airlines, Inc., supra, 200 F.Supp. at 367-368.
7
The district court's judgment is affirmed with respect to actual damages; its judgment is reversed as to punitive damages.
*
The Honorable Gus J. Solomon, Senior Judge of the District of Oregon, is sitting by designation
1
Section 404(b) of the Federal Aviation Act provides:
"No air carrier or foreign air carrier shall make, give, or cause any undue or unreasonable preference or advantage to any particular person, port, locality, or description of traffic in air transportation in any respect whatsoever or subject any particular person, port, locality, or description of traffic in air transportation to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever."
2
Defendant airline filed a third-party complaint against Marsilje based on its negligence. However, the district court dismissed the third-party complaint against Marsilje, holding that only defendant airline had violated Section 404(b) of the Federal Aviation Act. See 437 F.Supp. at 91. This dismissal is not challenged by defendant airline
3
In support of this proposition, the district court cited Archibald v. Pan American World Airways, Inc., 460 F.2d 14 (9th Cir. 1972), and Fitzgerald v. Pan American World Airways, 229 F.2d 499 (2d Cir. 1956). Defendant does not challenge this proposition
4
On May 30, 1978, the Civil Aeronautics Board proposed new rules pertaining to denied boarding procedures, effective September 3, 1978. 43 Federal Register 248277-248285. Since these regulations were not in effect at the time of the trial, they are not germane to this appeal
5
In Stough v. North Central Airlines, Inc., 55 Ill.App.2d 338, 345, 204 N.E.2d 792 (1st Dist.1965), on which plaintiff relies, the Stoughs did not show that the airlines had departed from filed priority rules, nor was an oversold plane involved
6
Smith v. Piedmont Aviation, Inc., 412 F.Supp. 641 (N.D.Tex.1976), relied upon by the district court for the proposition that punitive damages could be based on a failure to follow written priority rules, was reversed as to punitive damages by the Fifth Circuit. 567 F.2d at 292. A failure to follow priority rules, while constituting a technical violation of the statute's requirements as interpreted by the Board, is not an act "aggravated by evil motive, actual malice, deliberate violence or oppression" (Nader v. Allegheny Airlines, Inc., supra, 167 U.S.App.D.C. at 372, 512 F.2d at 549, quoting Black v. Sheraton Corp. of America, 47 F.R.D. 263, 271 (D.D.C.1969)), at least when the unwritten rule that is being followed does not invidiously discriminate against the plaintiff. Plaintiff's argument that a first come, first served rule in practice discriminates against the infirm is unpersuasive on this record because it assumes without support that such passengers do not recognize the many problems they can encounter at airports and therefore depart for the airport earlier than other passengers. On this record it could just as easily be assumed that a first come, first served rule would help the infirm; therefore there is no proof that application of such a rule constitutes invidious discrimination
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[J-59-2017]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.
VICTORIA BALENTINE, INDIVIDUALLY : No. 119 MAP 2016
AND AS ADMINISTRATRIX OF THE :
ESTATE OF EDWIN OMAR MEDINA- : Appeal from the Order of the
FLORES, DECEASED, : Commonwealth Court dated June 3,
: 2016 at No. 1859 CD 2015 Affirming the
Appellant : Order of the Delaware County Court of
: Common Pleas, Civil Division, dated
: September 2, 2015 at No. 13-11179.
v. :
: ARGUED: September 13, 2017
:
CHESTER WATER AUTHORITY, WYATT :
A. ROLAND, MICHAEL W. ROLAND AND :
CHARLES MATTHEWS, :
:
Appellees :
OPINION
JUSTICE MUNDY DECIDED: August 21, 2018
We granted allowance of appeal in this matter to consider whether the
Commonwealth Court erred in holding that the involuntary movement of a vehicle does
not constitute operation of a motor vehicle for purposes of the vehicle liability exception
to governmental immunity under 42 Pa.C.S. § 8542(b)(1). As explained herein,
because we determine that movement of a vehicle, whether voluntary or involuntary, is
not required by the statutory language of the vehicle liability exception, we reverse the
order of the Commonwealth Court thereby allowing this matter to proceed in the trial
court.
Appellant, Victoria Balentine, is the widow of Edwin Omar Medina-Flores, a
contractor for Metra Industries (Metra), which was hired by the Chester Water Authority
(CWA) to rehabilitate a section of its water distribution system. The project involved
cleaning and lining water mains, including one located on Kerlin Street in Chester,
Pennsylvania. On the afternoon of August 15, 2012, Medina-Flores was working on the
1200 block of Kerlin Street, a two-lane road that runs north to south, with no parking
lanes on either lane of travel. Medina-Flores was inside a four-foot by four-foot ditch
located on the grassy strip between the sidewalk and the curb on the southbound side
of the road, when Charles Mathues,1 an inspector for CWA, approached the worksite in
a southerly direction and parked his CWA vehicle, with the engine running, 10 to 15 feet
from the ditch. Mathues Dep., 11/11/14, at 62-64. Mathues testified that 10 to 12
inches of his vehicle were located in the roadway. Id. at 62. Carlos Bonilla, a Metra
foreman at the jobsite, testified that the CWA vehicle was 80 percent in the roadway.
Bonilla Dep., 11/3/14, at 58. William Pugh, a Metra employee, testified that the CWA
vehicle “was completely in the road.” Pugh Dep., 11/3/14, at 57.
Mathues activated the four-way flashers and the amber strobe light on the roof of
the vehicle, which he then exited. He walked to the front of the vehicle where he laid
some blueprints on the hood. Mathues Dep., 11/11/14, at 64. Approximately five
minutes later, a vehicle owned by Michael Roland and driven by Wyatt Roland struck
the rear of the CWA vehicle, causing it to move forward. Mathues was rolled up onto
the hood and thrown into the roadway. The right front bumper of the CWA vehicle then
struck Medina-Flores as he stood in the ditch. The undercarriage dragged him out of
the ditch, pinning Medina-Flores under the vehicle when it came to a stop. See
1 According to the trial court’s February 5, 2015 order, Mathues’ name is improperly
spelled as Matthews in the caption.
[J-59-2017] - 2
Plaintiff’s Response to Motion for Summary Judgment, 1/15/15, Exhibit D, Police Crash
Reporting Form. Medina-Flores died as a result of the injuries he sustained. Mathues
was also injured in the accident. Mathues Dep., 11/11/14, at 105-08.
On November 8, 2013, Balentine, individually and as administratrix of the Estate
of Medina-Flores, filed a complaint against CWA, Mathues, Wyatt Roland and Michael
Roland. CWA and Mathues filed a timely answer thereto, and on December 16, 2014,
they filed a motion for summary judgment. On February 5, 2015, the trial court granted
the motion and dismissed all claims against CWA and Mathues, having determined that
neither the motor vehicle exception nor the traffic control device exception to
governmental immunity set forth in the Political Subdivision Tort Claims Act (Tort Claims
Act), 42 Pa.C.S. §§ 8541-8542, applied.
On September 2, 2015, Balentine dismissed the action against Michael Roland
and Wyatt Roland, thereby making the February 5, 2015 order granting summary
judgment appealable.2 See Pa.R.A.P. 341(b)(1) (a final order is one that “disposes of
all claims and all parties.”).
On appeal, a divided panel of the Commonwealth Court affirmed the trial court.
Balentine v. Chester Water Authority, 140 A.3d 69 (Pa. Cmwlth. 2016). The majority
recognized that “[b]ecause no Pennsylvania case law addresses whether involuntary
movement of a vehicle constitutes operation for purposes of the governmental immunity
exception, this is a matter of first impression.” Id. at 72. Relying on the fact that the
CWA vehicle was parked at the time of the accident, the majority considered itself
2 Balentine, CWA, and Mathues stipulated that Balentine would dismiss the Roland
Defendants. They further agreed that in the event of a remand to the trial court, the
stipulation would have no effect on any cross-claims filed against the Roland
Defendants by CWA and Mathues and that the Roland Defendants would be included
on any verdict sheet submitted to the jury. See, Stipulation, 9/2/15.
[J-59-2017] - 3
“constrained to conclude as a matter of law, that [the vehicle] was no longer in operation
when the accident occurred.” Id. at 74 (citations omitted). Therefore, the court
concluded that involuntary movement of a vehicle does not constitute ‘operation’ for
purposes of the motor vehicle exception to governmental immunity.” Id. at 75. The
Commonwealth Court also agreed with the trial court that the traffic control device
exception to the Tort Claims Act did not apply.
Senior Judge Friedman filed a concurring and dissenting opinion. Although
Judge Friedman agreed that the traffic device exception did not apply, she concluded
that the CWA vehicle was in operation at the time it struck and killed Medina-Flores. In
reaching this conclusion, Judge Friedman distinguished the cases relied upon by the
majority. Judge Friedman maintained that the majority erred by distinguishing between
voluntary and involuntary movement of a vehicle because “the statute does not qualify
the word ‘operation.’” Id. at 77.
We granted discretionary review to consider whether the Commonwealth Court
erred in affirming the grant of summary judgment and holding that the involuntary
movement of a vehicle does not constitute operation of a motor vehicle for purposes of
the vehicle liability exception to governmental immunity.3 Because this presents a pure
question of law, our standard of review is de novo and our scope of review is plenary.
Shinal v.Toms, 162 A.3d 429, 441 (Pa. 2017).
Section 8541 of the Tort Claims Act sets forth the following general principle:
“Except as otherwise provided in this subchapter, no local agency shall be liable for any
damages on account of any injury to a person or property caused by any act of the local
3 “An appellate court may reverse a grant of summary judgment if there has been an
error of law or an abuse of discretion.” Yenchi v. Ameriprise Fin., Inc., 161 A.3d 811,
818 (Pa. 2017) (citations omitted).
[J-59-2017] - 4
agency or an employee thereof or any other person.” 42 Pa.C.S. § 8541. Section 8542
sets forth the following pertinent exception:
§ 8542. Exceptions to governmental immunity
(a) Liability imposed.--A local agency shall be liable for
damages on account of an injury to a person or property
within the limits set forth in this subchapter if both of the
following conditions are satisfied and the injury occurs as a
result of one of the acts set forth in subsection (b):
(1) The damages would be recoverable under
common law or a statute creating a cause of action if
the injury were caused by a person not having
available a defense under section 8541 (relating to
governmental immunity generally) or section 8546
(relating to defense of official immunity); and
(2) The injury was caused by the negligent acts of
the local agency or an employee thereof acting
within the scope of his office or duties with respect to
one of the categories listed in subsection (b). As
used in this paragraph, “negligent acts” shall not
include acts or conduct which constitutes a crime,
actual fraud, actual malice or willful misconduct.
(b) Acts which may impose liability.--The following acts by
a local agency or any of its employees may result in the
imposition of liability on a local agency:
(1) Vehicle liability.--The operation of any motor
vehicle in the possession or control of the local
agency, provided that the local agency shall not be
liable to any plaintiff that claims liability under this
subsection if the plaintiff was, during the course of
the alleged negligence, in flight or fleeing
apprehension or resisting arrest by a police officer or
knowingly aided a group, one or more of whose
members were in flight or fleeing apprehension or
resisting arrest by a police officer. As used in this
paragraph, “motor vehicle” means any vehicle which
is self-propelled and any attachment thereto,
including vehicles operated by rail, through water or
in the air.
[J-59-2017] - 5
42 Pa.C.S. § 8542(b)(1).
The parties each assert that the appellate precedent of this Commonwealth
supports their position. With respect to the pertinent issue in this case, both parties
rely, in part, on Love v. City of Philadelphia, 543 A.2d 531 (Pa. 1988). In Love, a 73-
year-old woman who was blind in one eye and visually impaired in the other, would
receive transportation to and from a City-administered adult day care center in a City-
owned van. The driver would park the vehicle at the curb in front of Mrs. Love’s home
and would place a portable step at the van doors. He would then assist Mrs. Love
entering and alighting the vehicle. On the afternoon of February 15, 1980, the van was
parked three feet from the curb in front of Mrs. Love’s home when she fell from the
portable step the driver placed next to the van. As a result, Mrs. Love sustained injuries
which led to her placement in a nursing home. Mrs. Love filed a negligence action
against the City, and at the conclusion of a non-jury trial, the court entered a verdict in
her favor in the amount of $375,000. The court concluded that “Mrs. Love’s cause of
action came within the ‘motor vehicle’ exception to the . . . Tort Claims Act.” Id. at 532.
The Commonwealth Court reversed, and this Court granted Mrs. Love’s appeal on the
following issue: “whether the act of entering into or alighting from a motor vehicle
constitutes operation of that vehicle under 42 Pa.C.S. § 8542(b)(1).” Id.
Because the word “operation” is not defined in the statute, this Court recognized
“our responsibility to derive the intent of the General Assembly in using the word. See
Statutory Construction Act of 1971. 1 Pa.C.S. § 1921(a).” Id. This Court noted:
Black’s Law Dictionary defines the word “operate” as follows:
This word, when used with relation to automobiles,
signifies a personal act in working the mechanism of
the automobile . . . (citations omitted).
[J-59-2017] - 6
Black’s further defines “operation,” as: the process of
operating or mode of action.” Black’s Law Dictionary, p. 984
(rev. 5th ed. 1979).
Similar definitions are found in the Oxford Dictionary. See
Oxford English Dictionary, Volume VII, p. 144 (1933). The
American Heritage Dictionary defines “operation” as “[t]o run
or control the functioning of: operate a machine”; and defines
“operation” as “[t]he state of being operative or functioning in
operation.” See The American Heritage Dictionary of the
English Language, p. 920 (7th ed. 1971).
Id. at 532-33.
Upon review of these definitions, this Court concluded:
To operate something means to actually put it into motion.
Merely preparing to operate a vehicle, or acts taken at the
cessation of operating a vehicle are not the same as actually
operating that vehicle. Thus, according to the common and
approved usage of the word “operation,” the van was not in
operation at the time of Mrs. Love’s accident. Getting into or
alighting from a vehicle are merely acts ancillary to the
actual operation of that vehicle.
Id. at 533 (emphasis in original).
Appellant asserts that the critical point to be gleaned from Love is that where
alleged damages are caused by the movement of the defendant’s vehicle, immunity
does not apply. Appellant supports this position by relying on the decision of the
Commonwealth Court in Cacchione v. Wieczorek, 674 A.2d 773 (Pa. Cmwlth. 1996). In
Cacchione, homeowners brought an action against the City of Erie for damages they
sustained when its employee, Tom Cacchione, Jr., parked a City-owned truck in front of
their house with the engine running and exited the vehicle. The truck later rolled
backwards crashing into their home, causing them physical and mental injuries, as well
as property damage. The City filed a motion for judgment on the pleadings asserting
that the alleged facts did not establish that the truck was in operation at the time of the
collision. The court denied the motion, but amended the order certifying the matter for
[J-59-2017] - 7
interlocutory appeal. The Commonwealth Court granted the City’s petition for
permission to appeal. The court began its analysis by acknowledging the
aforementioned definition of the term “operation” in Love. It then considered several
cases in which it held that “under the Love definition of ‘operation,’ the parked or
temporarily stopped vehicle cannot be considered in operation under the vehicle
exceptions to governmental and sovereign immunity.” Id. at 775. Among the cases
cited were Rubenstein v. Southeastern Pennsylvania Transportation Authority, 668 A.2d
283 (Pa. Cmwlth. 1995) (bus stopped at regularly scheduled stop); City of Philadelphia
v. Melendez, 627 A.2d 234 (Pa. Cmwlth. 1993) (unlawfully parked vehicle blocking view
of traffic); First National Bank of Pennsylvania v. Commonwealth, Department of
Transportation, 609 A.2d 911 (Pa. Cmwlth. 1992) (DOT vehicle temporarily parked on
or near berm of highway); Pennsylvania State Police v. Robinson, 554 A.2d 172 (Pa.
1989) (state police car stopped in passing lane of highway). The court noted that the
injuries in these cases “were not allegedly caused by any movement of the entire
vehicles or parts of the vehicles when or after the vehicles were parked or temporarily
stopped.” Cacchione, 647 A.2d at 775 (emphasis in original).
However, the Cacchione court noted:
Where, as here the injury was caused by the movement of
the entire vehicle, or moving parts of the vehicle, this Court
has consistently held that the vehicle was in operation at the
time of the injury for the purpose of deciding whether the
case falls within the vehicle exception.
Id. Accordingly, the court concluded that “[b]ecause the injury in this matter was caused
by the movement of the entire truck, the truck was in operation at the time of the injury.”
Id.
[J-59-2017] - 8
Appellant points to deposition testimony supporting the conclusion that in the
instant matter the movement of the vehicle caused the injury to Medina-Flores. Metra
employee Pugh testified as follows:
Q: Based on your observations at the accident scene the
[CWA] vehicle moved into Mr. Flores, correct?
A: Yes.
Q: And that movement is what caused his death;
correct?
A: Yes.
Pugh Dep., 11/3/14, at 64.
Metra foreman Bonilla also testified:
Q: And the reason this happened [the death of Medina-
Flores] is because the [CWA vehicle] was moved into
his body: correct?
A: Yes.
Bonilla Dep., 11/3/14, at 65.
Appellant also finds support in Bottoms v. Southeastern Pennsylvania
Transportation Authority, 805 A.2d 47 (Pa. Cmwlth. 2002), where the Commonwealth
Court reviewed Cacchione and Sonnenberg v. Erie Metropolitan Transportation
Authority, 586 A.2d 1026 (Pa. Cmwlth. 1991). In Sonnenberg, the plaintiff filed an
action against the Authority for injuries sustained while exiting the rear door of a bus
when the door suddenly closed, hitting her in the back and locking her in a position from
which she could not extricate herself. The trial court entered summary judgment in the
Authority’s favor based on its conclusion that the bus was not in operation at the time
the plaintiff was injured. The Commonwealth Court reversed and held that “[t]he
movement of parts of a vehicle or an attachment to a vehicle, is sufficient to constitute
[J-59-2017] - 9
‘operation’ for purposes of the vehicle liability exception to the Code.” Id. at 1028. With
respect to Cacchione and Sonnenberg, the Bottoms court noted, “for the vehicle liability
exception to apply, the vehicle owned or possessed by a Commonwealth or local
agency must be in operation. To be in operation, generally the entire vehicle is moving,
but a moving part, such as a bus door has been found to be ‘in operation.’” Bottoms,
805 A.2d. at 50 (emphasis in original). The court added, “[w]e do not require that the
entire vehicle be in motion and a driver in the seat in order for a vehicle to be ‘in
operation.’” Id. Relying on these cases, Appellant argues, “Pennsylvania Courts have
consistently held that the operation of a motor vehicle results in the movement of all or
part of the vehicle. Therefore, where the alleged damages are caused by the
movement of the defendant’s vehicle . . . immunity shall not apply.” Appellant’s Brief, at
11.
Appellant finds further support in Mickle v. City of Philadelphia, 707 A.2d 1124
(Pa. 1998). In Mickle, a plaintiff who was being transported to the hospital in a City fire
rescue van sustained injuries when the rear left wheels of the van came off. Plaintiff
filed suit against the City, which moved for summary judgment asserting immunity.
Plaintiff filed a cross-motion for summary judgment asserting the vehicle exception. The
trial court entered summary judgment in favor of the plaintiff. “While acknowledging that
the firefighter did not drive in a negligent manner the court found that Mickle’s injuries
are causally related to the movement or operation of the City vehicle and as such, fall
under the exception.” Id. at 1125. On appeal, the Commonwealth Court affirmed, as
did this Court. We noted:
Negligence related to the operation of a vehicle
encompasses not only how a person drives but also whether
he should be driving a particular vehicle in the first place.
The motor vehicle exception does not say that liability may
be imposed only where the operator’s manner of driving is
[J-59-2017] - 10
negligent. Rather, it requires that the injury is caused by a
negligent act with respect to the operation of a motor vehicle.
Id. Relying on Mickle, Appellant asserts that because the injury was caused by the
CWA vehicle illegally parked on the roadway with the engine running, her claim is
proper. Appellant’s Brief, at 15.
Appellees also cite appellate decisions in support of their position. Initially they
note that in Love, this Court held that “to operate something means to actually put it in
motion. Merely preparing to operate a vehicle, or acts taken at the cessation of
operating a vehicle, are not the same as actually operating the vehicle.” Love, 543 A.2d
at 533. Because the CWA vehicle was parked, they assert there was no operation of
the vehicle by Mathues that caused the movement of the vehicle.
Appellees rely on First National Bank of Pennsylvania v. Commonwealth,
Department of Transportation, 609 A.2d 911 (Pa. Cmwlth. 1992), where a driver collided
with a DOT vehicle parked on or near the berm of a road. The administrator of the
estate of a passenger killed in the accident brought an action against the Department.
The trial court entered summary judgment against the estate based on the motor
vehicle exception to sovereign immunity.4 The Commonwealth Court affirmed, stating
that in Love, this Court “defined the word ‘operation,’ as used in the motor vehicle
exception to mean actual motion of a vehicle.” Id. at 914. Noting that the DOT vehicle
was parked on the side of the road and that the “[d]ecedent’s injuries were not caused
by any moving part of the DOT vehicle,” id., the vehicle was not in operation.
Appellees find further support for their position in City of Philadelphia v.
Melendez, 627 A.2d 234 (Pa. Cmwlth. 1993). While Melendez was exiting her driveway
she collided with a vehicle owned by a third party. Melendez asserted that the City was
4 Exceptions to sovereign immunity and governmental immunity are given similar
construction. Snyder v. Harmon, 562 A.2d 307, 312 (Pa. 1989).
[J-59-2017] - 11
negligent because one of its employees had parked a City-owned vehicle in an unsafe
manner blocking her view of traffic. The City argued that the vehicle was parked and
thus was not in operation. The court denied the City’s motion for summary judgment,
and the Commonwealth Court granted the City leave to appeal the interlocutory order.
Relying on Love and First National, the court concluded that where the vehicle was
already parked at the time of the accident, it was not in operation.
With respect to the principles that guide our analysis, this Court has recognized:
As questions of governmental immunity are legislative in
nature, we begin by considering the dictates found in the
Statutory Construction Act. 1 Pa.C.S.A. §§ 1501 et seq. The
objective of all interpretation and construction of statutes is
to ascertain and effectuate the intention of the General
Assembly. 1 Pa.C.S.A. § 1921(a). The best indication of the
legislature’s intent is the plain language of the statute. When
the words of a statute are clear and unambiguous, we may
not go beyond the plain meaning of the language of the
statute “under the pretext of pursuing its spirit.” Id. § 1921(b).
Therefore, only when the words of a statute are ambiguous,
should a reviewing court seek to ascertain the intent of the
General Assembly through considerations of the various
factors found in Section 1921(c). Id. § 1921(c); see generally
Bayada Nurses Inc. v. Com. Dept. Labor and Indus., 607 Pa.
527, 8 A.3d 866, 880–81 (2010). Additionally, we are mindful
that, in interpreting the Tort Claims Act, exceptions to the
absolute rule of immunity expressed in the statute “must be
narrowly interpreted given the expressed legislative intent to
insulate political subdivisions from tort liability.” Mascaro v.
Youth Study Ctr., 514 Pa. 351, 523 A.2d 1118, 1123 (1987).
Dorsey v. Redman, 96 A.3d 332, 340-41 (Pa. 2014).
The vehicle liability exception to governmental immunity refers only to
“operation,” and not to “motion.” Se 42 Pa.C.S. § 8542(b)(1). It was Love rather than
the statute itself that defined “to operate something” as “to actually put it into motion.”
Love, 543 A.2d at 533. For thirty years, this definition has impeded the development of
consistent and logical case law. Where accidents occur involving vehicles that are
[J-59-2017] - 12
stopped or parked, the courts have held that immunity applies. See, e.g., White v. Sch.
Dis. of Phila., 718 A.2d 778 (Pa. 1988) (where school bus driver stopped vehicle to
allow student to alight, then signaled to student to cross street, and student was struck
by oncoming car, bus not in physical operation); Melendez, supra; First National Bank,
supra However, where the parked vehicle resumes movement, Cacchione, supra, and
where a moving part of a parked vehicle is active, see, e.g. Sonnenberg, 586 A.2d 1026
(Pa. Cmwlth. 1991), the Commonwealth Court has held that the exception to immunity
is triggered.
In light of Love and its progeny, Appellants have been placed in the position of
arguing that the voluntary or involuntary motion of a vehicle in the possession or control
of a local agency, is a necessary element of negligent operation of a vehicle.
Concomitantly, Appellees argue that only voluntary motion can lead to imposition of
liability. Inherent in whether the Commonwealth Court erred by holding that involuntary
movement does not constitute operation of a motor vehicle, lies the more fundamental
question regarding the relationship between motion and operation.
This issue was first raised by Justice Papadakos in his dissenting opinion in
Love, where he noted:
Under the majority’s interpretation, one can only be
operating a vehicle if he actually puts it in motion or drives it.
If the legislature so intended, I am sure it is capable of
making such a distinction by using the appropriate language.
The legislature used the term operation of a vehicle and this
includes conduct which is generally within the intended use
of the vehicle and entails the use of the vehicles appurtenant
parts.
...
Moreover, the term operation cannot be construed without
regard to the facts of this case and the duties of the operator
with respect to the vehicle and the Appellant.
[J-59-2017] - 13
Love, 543 A..2d at 524 (Papadakos, J. dissenting).
Justice Newman elaborated on this concept in a dissenting opinion in Warrick v.
Pro Cor Ambulance, Inc., 739 A.2d 127 (Pa. 1999), where she observed:
The process of operating a vehicle encompasses more than
simply moving the vehicle. When a person “operates” a
vehicle, he makes a series of decisions and actions, taken
together, which transport the individual from one place to
another. The decisions of where and whether to park, where
and whether to turn, whether to engage brake lights, whether
to use appropriate signals, whether to turn lights on or off,
and the like, are all part of the “operation” of a vehicle.
...
The term “operation” reflects a continuum of activity, the
boundaries of which this Court should define. “Operation”
does not mean simply moving forward or backwards, but
instead includes the decision making process that is
attendant to moving the vehicle. Had the legislature
intended that recovery was permissible only when the
vehicle was actually in motion, the legislature would not have
used a word that implies a process, such as the term
“operation.” Moreover, the term “operation” of a motor
vehicle occurs in other statutory provisions and in those
cases, we have not required that the term “operation” means
that the automobile actually be in motion. For example, in
the context of the offense of driving under the influence
(DUI), 75 Pa.C.S. § 3731, to find that a motor vehicle is in
operation requires evidence that the driver was in actual
physical control of the vehicle, but not that the vehicle was
actually “in motion.” Commonwealth v. Wilson, 660 A.2d
105, 107 (Pa. Super. 1995). See also Commonwealth v.
Wolen, 685 A.2d 1384 (Pa. 1996) (recognizing that a finding
of “actual physical control” does not require that car is
actually moving).
Id. at 128-29 (Newman, J. dissenting).
By defining operation as motion, this Court and the Commonwealth Court have
created precedent that is contrary to Section 1922(1) of the Rules of Construction,
which provides that in ascertaining the intention of the General Assembly, we may
[J-59-2017] - 14
presume that it “does not intend a result that is absurd, impossible of execution or
unreasonable.” 1 Pa.C.S. § 1922(1). Section 8542 states, “a local agency or any of its
employees” may be liable for “the operation of any motor vehicle in the possession or
control of the local agency.” 42 Pa.C.S. § 8542(b)(1). Significantly, Section 8542 does
not require the vehicle to be in motion to impose liability, and we “should not add, by
interpretation, a requirement not included by the General Assembly.” Commonwealth v.
Giulian, 141 A.3d 1262, 1268 (Pa. 2016). Where a government vehicle obstructs a
roadway, in whole or in part, we can assume, absent evidence to the contrary, that a
government agent operated the vehicle to arrive at that positon.
The approach set forth in the Warrick dissent, as advocated for by Amicus Curiae
Pennsylvania Association for Justice, does not contradict the “intent of the Tort Claims
Act to insulate local government agencies from liability.” See Appellees’ Brief, at 21.
Under the Tort Claims Act, before a court may address the underlying merits of an
action against the government, the plaintiff must first state a claim upon which relief may
be granted by pleading facts alleging: (1) that the government would have been liable
under common law or statute for the injury; (2) that the injury was caused by the
negligent act of the government or its agent acting within the scope of his duties; and (3)
that the negligent act falls within one of the exceptions to immunity enumerated in
subsection 8542(b) of the Judicial Code, 42 Pa.C.S. § 8542(b). See also Lindstrom v.
City of Corry, 763 A.2d 394, 397 (Pa. 2000). Accordingly, the plaintiff must plead
sufficient facts to demonstrate not only that a government employee operated the
vehicle, but also that the injury was caused by the employee’s negligent act. See id. If
the plaintiff alleges operation of a government vehicle but fails to establish a prima facie
case of negligence, he will fail to state a claim upon which relief may be granted,
insulating the government from liability. However, if a plaintiff establishes that his injury
[J-59-2017] - 15
was caused by an illegally parked government vehicle, but the movement of the vehicle
itself did not cause the injury, the government would not avoid liability simply because
the government vehicle was not “in motion” at the time of the injury. For the General
Assembly to have intended the abrogation of governmental immunity based on the
random factor of motion is an absurd or unreasonable result. See 1 Pa.C.S. § 1922(1).
In her dissenting opinion in Warrick, Justice Newman recognized that operation
of a vehicle “reflects a continuum of activity,” 739 A.2d at 129 (Newman, J. dissenting),
which entails “a series of decisions and actions, taken together, which transport the
individual from one place to another. The decisions of where and whether to park,
where and whether to turn, whether to engage brake lights, whether to use appropriate
signals, whether to turn lights on or off, and the like, are all part of the ‘operation’ of a
vehicle.” Id. at 128 (Newman, J. dissenting). This definition, which we adopt today,
creates a reasonable standard that comports with the intent of the General Assembly
and avoids the illogical results that have flowed from the emphasis on motion in Love
and its progeny. 5
5 The dissenting opinion properly notes the stabilizing influence of the doctrine of stare
decisis. Dissenting Opinion, slip op. at 3. However, in overruling Love, we recognize
that “while stare decisis serves invaluable and salutary principles, it is not an inexorable
command to be followed blindly when such adherence leads to perpetuating error.”
Stilp v. Commonwealth, 905 A.2d 918, 967 (Pa. 2007). As a former Chief Justice of this
Court noted over ninety years ago, “If, after thorough examination and deep thought, a
prior judicial decision seems wrong in principle or manifestly out of accord with modern
conditions of life, it should not be followed as a controlling precedent, where departure
therefrom can be made without unduly affecting contract rights or other interests calling
for consideration.” Robert von Moschzisker, Stare Decisis in Courts of Last Resort, 37
HARV. L. REV. 409, 414 (1924). Because Love has led to inconsistent and illogical
decisions, it is indeed wrong in principle and therefore properly abandoned in favor of
an interpretation of Section 8542(b)(1) of the Judicial Code that does not limit
“operation” of a vehicle to one that is in motion.
[J-59-2017] - 16
Turning to the instant matter, a CWA employee operated a CWA vehicle and
parked it in the roadway. The CWA vehicle was hit from behind by another vehicle as it
sat on the roadway, and the CWA vehicle struck Medina-Flores fatally injuring him.
Balentine has pled facts sufficient to establish a prima facie cause of action in
negligence based on acts that constitute the operation of a vehicle. Accordingly, the
vehicle liability exception to governmental immunity applies in this case.
For these reasons, the order of the Commonwealth Court is reversed and the
case is remanded for proceedings consistent with this opinion.
Justices Todd, Dougherty and Wecht join the opinion.
Justice Baer files a concurring opinion in which Justice Donohue joins.
Justice Wecht files a concurring opinion in which Justice Todd joins.
Chief Justice Saylor files a dissenting opinion.
[J-59-2017] - 17
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} |
448 B.R. 896 (2011)
In re PILGRIM'S PRIDE CORPORATION, et al., Debtors.
No. 08-45664(DML).
United States Bankruptcy Court, N.D. Texas, Fort Worth Division.
March 2, 2011.
*898 Clayton E. Bailey, David William Parham, Elliot D. Schuler, Baker & McKenzie LLP, Gary T. Holtzzer, Martin A. Sosland, Stephen A. Youngman, Weil, Gotshal & Manges LLP, Dallas, TX, David H. Gilliland, Clark, Thomas, & Winters, Austin, TX, Victoria Vron, Weil Gotshal & Manges LLP, Elisa R. Behar Lemmer, New York, NY, James J. Niemeier, McGrath North Mullin & Kratz PC LLO, Omaha, NE, Jerrell Keith Stanley, Fairchild Price Haley & Smith, LLP, Nacogdoches, TX, Guantao Law Firm, James J. Frost, for Debtors.
MEMORANDUM OPINION
D. MICHAEL LYNN, Bankruptcy Judge.
Before the court are Debtors' Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921 (the "Debtors' MSJ") and North Carolina Claimants' Motion for Partial Summary Judgment against Reorganized Debtors for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act (the "N.C. Growers' MSJ" and, with the Debtors' MSJ, the "Motions"). The Motions address claims filed by the Growers (as defined below) in Debtors' Chapter 11 cases.[1]*899 The claims assert various theories of liability, including under the Packers and Stockyards Act (the "PSA"), 7 U.S.C. §§ 181 et seq. The Motions address only the claims made under the PSA.
The parties filed briefs in support of the Motions, and, as appropriate, responses and replies to the responses, together with supporting briefs. The parties have also submitted extensive evidentiary appendices in support of their respective positions. Finally, Debtors have filed (1) objections to portions of the record submitted by the Growers,[2] and (2) a motion to exclude the testimony of Growers' expert, Dr. C. Robert Taylor ("Taylor"),[3] and the Growers have filed three motions to supplement the evidentiary record.[4] To the extent the court has not previously ruled on the Objection to N.C. Growers' Documents, the Objection to PSA Response Documents, the Taylor Motion, and the Growers' Third Motion to Supplement either at the Hearing (as defined below) or in the Letter Ruling (as defined below), the court now rules in favor of the Growers.
On January 19, 2011, the court held a hearing on, inter alia, the Motions (the "Hearing") during which the parties presented oral argument. Thereafter, on January 24, 2011, the court issued a letter ruling (the "Letter Ruling") stating that it would grant the Debtors' MSJ in part and deny it in part and would deny the N.C. Growers' MSJ. The Letter Ruling further stated that the court would explain the reasoning underlying the Letter Ruling in a memorandum opinion to be issued later. This memorandum opinion is intended to provide that explanation.
This matter is subject to the court's core jurisdiction. 28 U.S.C. §§ 1334 and 157(b)(2)(B). This memorandum opinion represents the court's findings and conclusions. FED. R. BANKR.P. 7052 and 9014.
I. Background
Debtors are among the largest producers and wholesalers of chicken products in *900 the United States. On December 1, 2008, Debtors commenced chapter 11 cases in this court. The Growers are chicken farmers who raised chickens under contract to supply certain of Debtors' processing plants.[5] Three of these plantsEl Dorado, Arkansas, Farmerville, Louisiana, and Douglas, Georgiawere idled in the second calendar quarter of 2009, resulting in termination of Debtors' contracts with the growers (including certain of the Growers) supplying those plants. Others of the Growers that supplied plants of Debtors in North Carolina were the subject of motions to reject their contracts[6] pursuant to section 365(a) of the Bankruptcy Code[7] or had their contracts terminated prepetition pursuant to a clause allowing Debtors to terminate on the basis of economic necessity.[8] One of the Growers, James Pate ("Pate"),[9] was a supplier to Debtors' Enterprise, Alabama plant and was also the subject of a motion to reject his growing contract.[10]
Debtors claim that all of these steps were taken to stem losses caused by dramatic increases in their costs and a drop in demandand hence the pricefor chicken. The Growers, on the other hand, as the principal basis for their claims under the PSA, insist that Debtors, by contracting the supply of chicken, were engaged in a scheme to manipulate the market and improperly increase the price of chicken to consumers. The N.C. Growers' MSJ is alternatively based on the theory that Debtors improperly selected which growers to terminate in North Carolina based on the level of technology used in their chicken houses (cf. Pilgrim's Pride, 403 B.R. at 431); in furtherance of this argument, the Growers posit that Debtors misled this court and the Grain Inspectors, Packers and Stockyard Administration ("GIPSA") respecting the rankings used for selecting contracts for termination.
Finally, the Growers argue that when Debtors acquired North Carolina facilities through the acquisition of Gold Kist, Inc. ("GK"), they wrongfully forced growers serving those facilities to execute new contracts with them that allowed Debtors to terminate the contracts on the basis of economic necessity. In support of this claim, the Growers point to representations by Debtors that they would honor "all existing grower contracts" and to certain alleged strong-arm conduct by Debtors' employees in obtaining growers' signatures on the new contracts.
*901 II. Discussion
A. Standard for Summary Judgment
Rule 56(a) of the FEDERAL RULES OF CIVIL PROCEDURE provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED.R.CIV.P. 56(a). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact ... the court may ... (3) grant summary judgment if the motion and supporting materialsincluding the facts considered undisputedshow that the movant is entitled to it...." FED. R.CIV.P. 56(e). Rule 56 thus "mandates the entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
"[T]he [initial] burden on the moving party may be discharged by `showing' ... that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2505. Once the moving party has carried this initial burden, its opponent must establish that there exists a "genuine" issue of fact, something which requires "more than simply show[ing] that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party must rather come forward with "specific facts" showing that a genuine issue for trial exists. Id. at 587, 106 S.Ct. 1348. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In determining whether the nonmoving party has properly shown that a genuine issue for trial exists, the court should "construe all facts and inferences in the light most favorable to the nonmoving party...." Murray v. Earle, 405 F.3d 278, 284 (5th Cir.2005).
B. The PSA
The PSA was enacted in 1921 as a statute specially crafted to address problems unique to the meat packing industry. See Armour & Co. v. United States, 402 F.2d 712, 721 (7th Cir.1968) ("The main Congressional motivation [behind the PSA] was not the deficient reach of the Sherman, Clayton, Interstate Commerce Commission and Federal Trade Commission Acts, but the felt need for specialized regulation of the many-tiered packing industry, with its unique problems arising from marketing and distributing livestock and poultry, including all the complications arising from packer ownership of stockyards."); see also Wheeler v. Pilgrim's Pride Corp., 591 F.3d 355, 358 (5th Cir.2009) (en banc) (discussing Wilson & Co. v. Benson, 286 F.2d 891 (7th Cir.1961), in which the Court of Appeals for the Seventh Circuit stated that "the legislative history of the PSA supported a wider power to prohibit unfair methods of competition than did antecedent anti-trust legislation").
The operative section for purposes of the Motions is section 202, codified (and hereafter referred to) as 7 U.S.C. § 192, which provides:
§ 192. Unlawful practices enumerated It shall be unlawful for any packer or swine contractor with respect to livestock, *902 meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to:
(a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or
(b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect whatsoever, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect whatsoever; or
(c) Sell or otherwise transfer to or for any other packer, swine contractor, or any live poultry dealer, or buy or otherwise receive from or for any other packer, swine contractor, or any live poultry dealer, any article for the purpose or with the effect of apportioning the supply between any such persons, if such apportionment has the tendency or effect of restraining commerce or of creating a monopoly; or
(d) Sell or otherwise transfer to or for any other person, or buy or otherwise receive from or for any other person, any article for the purpose or with the effect of manipulating or controlling prices, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce; or
(e) Engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce;
(f) Conspire, combine, agree, or arrange with any other person (1) to apportion territory for carrying on business, or (2) to apportion purchases or sales of any article, or (3) to manipulate or control prices; or
(g) Conspire, combine, agree, or arrange with any other person to do, or aid and abet the doing of, any act made unlawful by subdivision (a), (b), (c), (d), or (e).
The Growers in their claims allege that Debtors have violated subsections (a), (b) and (e) of this provision.
1. Section 192(e)
Unlike section 192(a) and (b), section 192(e) by its terms requires a showing that the alleged violator of the PSA engaged in a course of business "for the purpose or with the effect of manipulating the market or creating a monopoly." For the reasons stated below in section II.B.3 of this memorandum opinion, the court concludes that Debtors did not act to advance a forbidden purpose. The evidence does not support a conclusion that prices were manipulated by reason of Debtors' conduct. Rather, the evidence supports Debtors' assertion that the plant closings and the culling of growers had little or no impact on the supply of chicken, and hence, on prices.
Moreover, just as is true of section 192(a) and (b), actions justifiable for legitimate business reasons do not violate section 192(e), especially where the challenged actions benefit competition. See Pickett v. Tyson Fresh Meats, Inc., 420 F.3d 1272, 1280 (11th Cir.2005). That is the case with Debtors' conduct here. Certainly there is no evidence that Debtors sought to create a monopoly in the protein industry. The competition in Debtors' industry has been and remains robust.
2. Effect on Competition
While subsections (a) and (b) do not contain typical antitrust language of *903 the sort found in subsection (e),[11] courts have consistently imposed an antitrust overlay on subsections (a) and (b) as well. See, e.g., Wheeler, 591 F.3d at 362 ("[T]he clear antitrust context in which the PSA was passed, the placement of [subsections (a) and (b)] among other subsections that clearly require anticompetitive intent or effect, and the nearly ninety years of circuit precedent" require a plaintiff to prove an anticompetitive effect to sustain a claim under subsection (a) or (b).); Armour, 402 F.2d at 722 ("[I]n [7 U.S.C. § 192(a)] Congress gave the [Secretary of Agriculture] no mandate to ignore the general outline of long-time antitrust policy by condemning practices which are neither deceptive nor injurious to competition nor intended to be so by the party charged."). Thus, in order to support their claims, the Growers must show that the conduct of Debtors that they complain of has an anticompetitive effect. See Wheeler, 591 F.3d at 362. A showing that Debtors' conduct gave them an advantage over their competitors would satisfy this element. See, e.g., Armour, 402 F.2d at 719 ("Lawful price differentiation is a legitimate means for [encouraging competition]. It becomes illegal only when it is tainted by the purpose of... attempting to destroy competition or a competitor, thus substantially lessening competition...."). Alternatively, the Growers might show an anticompetitive effect on their own level. See, e.g., Been v. O.K. Indus., Inc., 495 F.3d 1217, 1233-34 (10th Cir.2007) (genuine issue of material fact existed with respect to whether company violated 7 U.S.C. § 192(a), where "[g]rowers [were] paid the same under [company's] pricing system during periods of reduced production as they [were] during periods of average and above average production," allowing company "to reduce production (to reap the benefits of higher prices on the wholesale market), [without having to] pay its growers the higher prices that a reduction in supply would demand in a competitive market"). Finally, the Growers might provide evidence that Debtors' actions adversely impacted consumers. See, e.g., id. at 1233 ("[W]ithout competition from other buyers, a monopsonist will lower prices paid to sellers, which over time results in higher consumer prices," and therefore "a seller [who] show[s] that the buyer's practices threaten to injure competition by arbitrarily decreasing prices paid to sellers with the likely effect of increasing resale prices" has a cause of action under 7 U.S.C. § 192(a)).
The Growers assert that they have met this requirement by showing that Debtors sought to constrict the supply of chicken on the commodity market through curtailment of production in geographic areas where Debtors stood in the position of a monopsonist.[12]See Brief in Support of *904 Response to Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921 (the "Growers' Response Brief") at 21-25 (section 192(e)), 26-30 (section 192(a)), 57-59 (section 192(b)). The result, the Growers claim, was an increase in the price of chicken to consumers.[13]See id. Hence, according to the Growers, Debtors closure of plants, chosen with the purpose of reducing supply, and the termination of growers to a similar end, harmed consumers and so competition. See id.
The evidentiary support for the Growers' argument is, however, thin at best. The Growers largely rely on Taylor's expert report. See Appendix in Support of Response to Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violations of Packers and Stockyards Act, 1921 (the "Appendix to Growers' Response"), exh. 32. That report, in turn, is not based on proven facts but rather on inferencesfor example, Taylor states that, given Debtors' share of the commodity chicken market prior to the plant closings, the closings would automatically effect a sufficient constriction of supply to force up the price of chicken. See id. at 644.
The court doubts that Taylor's report and the bits and pieces of other anecdotal evidence the Growers point to would be sufficient, in light of the substantial record offered to support it, to defeat the Debtors' MSJ. The court need not decide the Debtors' MSJ on that basis, though. Rather, the Debtors' MSJ must be granted based upon Debtors' proof that the plant closings and selection of grower contracts for termination or rejection were undertaken for a valid business purpose and were more beneficial than detrimental to competition.
3. Valid Purpose
Courts have held that, where the alleged anti-competitive effect is collateral to a valid business purpose, there is no violation of section 192. See IBP, Inc. v. Glickman, 187 F.3d 974, 978 (8th Cir.1999) (right of first refusal under beef marketing agreement, which allowed company "to have a more reliable and efficient method of obtaining a supply of cattle," did not violate PSA, since "[t]he [PSA] was designed to promote efficiency, not frustrate it" (quoting Jackson v. Swift Eckrich, Inc., 53 F.3d 1452, 1458 (8th Cir.1995))); Griffin v. Smithfield Foods, Inc., 183 F.Supp.2d 824, 828 (E.D.Va.2002) (company's "series of acquisitions of competing packers and its development of sources of supply of its raw materials," which the evidence suggested were not motivated by anything other than "considerations of quality control and efficiency," did not give rise to PSA claim). Some courts have ruled that effects beneficial to competition may offset negative effects of a business-justified course of conduct, thus excusing what otherwise might be a violation of the statute. See Pickett, 420 F.3d at 1280 ("If a packer's course of business promotes efficiency and aids competition in the cattle market, the challenged practice cannot, by definition, adversely affect competition."); Armour, 402 F.2d at 725 (competitive justifications *905 for coupon plan "negate[d] its being unjust, undue, or unreasonable" under 7 U.S.C. § 192(a) and (b)).
In the case at bar, the evidence is overwhelming that Debtors were incurring huge losses that could best be stemmed by reducing their production of chicken for the commodity market. See generally Brief in Support of Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921 (the "Debtors' MSJ Brief") at 6-22; Appendix in Support of Motion for Summary Judgment on Alleged Violations of Packers and Stockyards Act, 1921 (the "Appendix to Debtors' MSJ"), exh. B, at 471-473, exh. M, at 982-984. The evidence is that Debtors selected for closing plants, the idling of which would eliminate the worst losses they were suffering. See Debtors' MSJ Brief at 52-56; Appendix to Debtors' MSJ, exh. B, at 477, exh. I, at 741-743 (Siler City); exh. E, at 599 (Clinton); exh. E, at 599, exh. M, at 1025 (Douglas); exh. K, at 826, exh. E, at 599, exh. M, at 1026 (El Dorado); exh. E, at 599, exh. M, at 1027 (Farmerville). The plants selected were poor performers and/or required immediate, substantial investment. See id. Thus, Debtors clearly had a valid business purpose for their actions. It would not be possible for a reasonable jury to conclude otherwise.
The same is true of their culling of growers. While confusion accompanying the selection of North Carolina growers for termination may have led to termination of some growers that, under Debtors' methodology, should have been retained,[14] all growers that were terminated were below average performers,[15] and their termination to bring supply to the remaining North Carolina plants into line with the plants' requirements was rational and not a violation of section 192.
Moreover, Debtors' actions were reasonably necessary to Debtors' survival. Had Debtors not put a stop to their losses, it is likely that their business would either have failed entirely or would have had to be cut back even more at a future date. See Appendix to Debtors' MSJ, exh. B, at 473, exh. M, at 950-955, 982-984. Indeed, as it was, Debtors' losses were sufficient to force them into bankruptcy. As the Growers' counsel admitted at the Hearing, competition was clearly benefited by Debtors' survival and continued participation in the market place. Consequently, the court concludes that Debtors' actions were justified by business imperatives. As these actions aided in Debtors' survival, they had off-setting beneficial effects for competition of the sort important to the Pickett and Armour Courts.
Nor have the Growers presented evidence sufficient to rebut Debtors' contention that Debtors acted out of necessity. The Growers were required to do more than "show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. *906 Taylor's expert report, conclusory in content as opposed to presenting "specific facts," id. at 587, 106 S.Ct. 1348, is not sufficient to block summary judgment. Other than Taylor's report, the Growers principally rely on an email sent by William Snyder, Debtors' chief restructuring officer. See Growers' Response Brief at 10, 22, 58. This email suggests Debtors did not wish to sell the Farmerville plan to a competitor. See Appendix to Growers' Response, exh. 40, at 746. Snyder explained the email during his deposition. See Appendix to Debtors' MSJ, exh. Y, at 2036-2045. While the explanation is somewhat confusing, the email (together with other bits and pieces of evidence suggesting Debtors were wary of aiding a competitor), without more, is not sufficient to controvert Debtors' evidence.
For the foregoing reasons, Debtors' MSJ must be GRANTED except as specified below.
Although this effectively disposes as well of the N.C. Growers' MSJ, the court would note that the Growers' conclusions respecting Debtors' motivations in selecting growers for termination require leaps in logic bordering on paranoia. The Growers would have the court believe that Debtors willfully misled it and GIPSA in order to maintain contracts with a handful of technologically advanced but underperforming growers, while terminating the contracts of slightly more efficient growers with less technologically advanced facilities. To reach such a conclusion, the court would need hard evidence rather than the dark suggestion that it should infer such motivation from facts more easily explained by innocent mistakes. The court thus concludes the N.C. Growers' MSJ must be DENIED.
4. Economic Necessity Language
Paragraphs C and D of Debtors' growers' contract[16] contain language that allows Debtors to terminate the contract on the basis of economic necessity.[17]See Appendix to Growers' Response, exh. 57, at 847. It was on the basis of this language that Debtors terminated their contracts with growers in North Carolina prior to commencement of their chapter 11 cases. See N.C. Growers' Brief at 4.
The Growers have two complaints regarding the economic necessity language. First, they argue that the provisions of the grower contract allowing Debtors to terminate for economic necessity violate a federal regulation, 9 C.F.R. § 201.100(a)(1), which requires that a poultry contract "clearly specify ... conditions for the termination of the contract."[18]See Growers' Response Brief at 30-37. Because "economic necessity" is vague and because Debtors' representatives did not call to the attention of growers or explain to them the provisions in question, the Growers insist that Debtors violated section 192(a) by failing to comply with 9 C.F.R. § 201.100(a)(1). See id.
However, it is clear that Congress did not intend in enacting the PSA to interfere with the freedom of parties to formulate their own contracts. See Jackson *907 v. Swift Eckrich, Inc., 53 F.3d 1452, 1458 (8th Cir.1995) ("[T]he purpose behind [7 U.S.C. § 192] was not to so upset the traditional principles of freedom of contract."); Armour, 402 F.2d at 720 ("[T]he Senate Committee Report makes it clear that [7 U.S.C. § 192(a)] was promoted primarily by fear of monopoly and predation, but even so, caution was expressed against stifling the initiative of the industry." (citing S.REP. No. 429, at 1, 3 (1920))).
Moreover, if "economic necessity" is a term that is not readily definable, it is something that is certainly recognizable at least as it was applied in the case at bar. For Debtors to avoid total collapse, it was economically necessary for them to constrict their production. That, in turn, required that they reduce the number of chickens supplied to them. See Appendix to Debtors' MSJ, exh. B, at 471-473, exh. M, at 982-984; see generally Debtors' MSJ Brief at 6-22; see, similarly, Pilgrim's Pride, 403 B.R. at 428-29 (Debtors' management determined that, in order to save $800,000 or more per week, Debtors should limit two production lines at their Live Oak, Florida plant to a single shift, requiring Debtors to reject executory contracts with certain growers). The court thus does not find the economic necessity language objectionable per se nor does it consider this language to have been invoked short of Debtors indeed being in extremis.
As to the contention that the contract does not "clearly specify" under what conditions it may be terminated for economic necessity, the term is repeated twice in the contract, both in reference to its term (paragraph C) and in the provision relating to termination (paragraph D). See Appendix to Growers' Response, exh. 57, at 847. In the world of commerce, where two businessesthe grower and the integrator are entering into a binding agreement, this is sufficient specificity to pass muster.
The court can find no cases interpreting section 201.100(a)'s language. The plain language of that provision, however, does not support Growers' interpretation of it. Section 201.100(a)(1) requires a poultry dealer to furnish a grower with "a true written copy of the contract, which shall clear specify: (1) The duration of the contract and conditions for the termination of the contract...." 9 C.F.R. § 201.100(a)(1) (emphasis added). Though this section plainly requires Debtors to clearly state the grounds by which Debtors could terminate the contracte.g., economic necessitynothing in its language mandates that Debtors specify every condition which would fall within the term "economic necessity," as Growers assert. See Growers' Response Brief at 33.
It is reasonable that section 201.100(a)'s language should not so require, as such a rule would essentially prohibit integrators from contracting for the right to respond flexibly to unforeseen economic conditions. While section 201.100(a) certainly prohibits Debtors from including a condition in a poultry contract if that condition is so vague so as to provide a grower with no idea whatsoever of what might constitute grounds for termination, the term "economic necessity" does not constitute such a condition. The use of the word "necessity" implies not just any less-than-desirable set of economic circumstances, but rather refers precisely to the type of situation Debtors found themselves in here, where they faced a choice between production cutbacks and corporate extinction. See Appendix to Debtors' MSJ, exh. B, at 473, exh. M, at 950-955, 982-984; see generally Debtors' MSJ Brief at 6-22. For these reasons, the court cannot conclude Debtors did not "clearly specify" the conditions under *908 which the Growers' contracts could be terminated.
The Growers' second argument is more persuasive. They argue that Debtors, by initially representing that they would honor the GK contracts and then using strong-arm tactics to cause North Carolina growers to sign contracts containing the economic necessity language, violated the PSA. See Growers' Response Brief at 52-54. Since such economic necessity language is not standard in the industry, the Growers argue that Debtors gained an advantage over their competitors through unfair and deceptive practices. See id.
There is sufficient evidence in the summary judgment record to support the Growers' contentions respecting both Debtors' undertaking to honor GK's grower contracts and the use of strong-arm tactics at the instance of Debtors' management to cause growers in North Carolina to sign new contracts containing the economic necessity language. See Growers' Response Brief at 52-54; Appendix to Growers' Response, exh. 49, at 791, exh. 57, at 847-856, exh. 51, at 798-803, exh. 8, at 130-131, 133, exh. 10, 145-146, exh. 12, at 198-199, 208, exh. 16, at 271, exh. 18, at 303-304, exh. 13, at 222-224. On the other hand, while the record reflects other integrators also utilized economic necessity language, it cannot be said to be common throughout the industry. Not only do Debtors offer few examples of like language,[19] but the language in the GK contract, which Debtors argue is equivalent to their economic necessity language, is distinctly different. See Reorganized Debtors' Reply Brief in Support of Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921 at 6-7. Section A(l) of the GK contract provides:
Gold Kist agrees to sell and deliver to [Grower] ... flocks ..., as such Flocks are available for placement ... under prevailing market and production conditions....
See Appendix to Growers' Response, exh. 58, at 857.
The difference between this provision and the "economic necessity" language used by Debtors is that this provision does not allow termination of a grower's contract, and, at least arguably, would not permit GK to pick and choose among growers for delivery of flocks. Debtors' "economic necessity" language therefore provides greater flexibility for Debtors, as opposed to other integrators, in responding to the vagaries of the economy. If that flexibility was obtained by wrongful techniquesi.e., misleading or strong-arming growersDebtors obtained a potential competitive advantage in violation of section 192(a).
III. Conclusion
Since the Hearing, the court has ruled on the record respecting the remaining PSA claims of the Growers.[20] Counsel for Debtors is accordingly directed to prepare and submit a judgment respecting the Growers' PSA claims consistent with that ruling and this memorandum opinion.
NOTES
[1] Debtors are Pilgrim's Pride Corporation ("PPC"), PFS Distribution Company, PPC Transportation Company, To-Ricos, Ltd., To-Ricos Distribution, Ltd., Pilgrim's Pride Corporation of West Virginia, Inc., and PPC Marketing, Ltd.
[2] Debtors filed their Reorganized Debtors' Objections to North Carolina Growers' Documents Affixed to the Appendix in Support of their Motion for Partial Summary Judgment for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act (the "Objection to N.C. Growers' Documents"), docket no. 6168, on December 22, 2010. On December 29, 2010, Debtors filed their Reorganized Debtors' Objections to Certain Documents Affixed to the Appendix in Support of Response to Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921 and Motion to Strike (the "Objection to PSA Response Documents"), docket no. 6198.
[3] Debtors filed their Reorganized Debtors' Motion to Exclude the Testimony of Dr. C. Robert Taylor (the "Taylor Motion"), docket no. 6201, on December 29, 2010.
[4] On January 18, 2011, the court entered the Order Granting Growers' Motion to Supplement Appendix in Support of Response to Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violation of the Packers and Stockyards Act, 1921 (the "Order Granting Motion to Supplement"), docket no. 6341, in which the court granted Growers' motion to supplement with respect to certain pages from the depositions of PPC's former Chief Operating Officer, Robert A. Wright, and PPC's former Chief Executive Officer, Joseph C. "Clint" Rivers, and denied it with respect to an affidavit of Growers' expert Dr. C. Robert Taylor. The Order Granting Motion to Supplement disposed of Growers' first two motions to supplement the evidentiary record. On January 24, 2011, Growers filed their Growers Third Motion to Supplement Appendix and Motion to Supplement Brief in Support of Response to Reorganized Debtors' Motion for Partial Summary Judgment on Alleged Violation of the Packers and Stockyards Act, 1921 (the "Growers' Third Motion to Supplement").
[5] For a discussion of the relationship between Debtors and chicken farmers (growers), see In re Pilgrim's Pride, 403 B.R. 413 (Bankr. N.D.Tex.2009).
[6] On October 27, 2009, the court entered the Order Pursuant to 9019 of the Federal Rules of Bankruptcy Procedure Authorizing and Approving Settlement Resolving Certain Grower Claims (the "Rejection Order"), docket no. 3864, which granted a motion by Debtors for authority to compromise and settle certain growers' claims. Among other things, the Rejection Order rejected, as of the commencement of Debtors' bankruptcy cases, grower contracts between Debtors and certain growers.
[7] 11 U.S.C. §§ 101 et. seq.
[8] It is the court's understanding that several growers who had seen their growing contracts terminated prepetition on the basis of economic necessity were also included in the Rejection Order by Debtors for the sake of thoroughness.
[9] Pate filed administrative expense claims both individually and on behalf of his deceased spouse, Ruthie Pate.
[10] See Motion Pursuant to Section 365(a) of the Bankruptcy Code and Bankruptcy Rule 6006 Authorizing the Debtors to Reject Certain Broiler Grower Agreements, docket no. 2591. Pate's growing contract was one of the contracts rejected by the Rejection Order.
[11] Compare subsections (a) and (b), which respectively prohibit "[e]ngag[ing] in or us[ing] any unfair, unjustly discriminatory, or deceptive practice or device" and "[m]ak[ing] or giv[ing] any undue or unreasonable preference or advantage to any particular person or locality in any respect whatsoever, or subject[ing] any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect whatsoever," with subsection (e), which prohibits "[e]ngag[ing] in any course of business or do[ing] any act for the purpose or with the effect of manipulating or controlling prices, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce...." (emphasis added).
[12] BLACK'S LAW DICTIONARY defines "monopsony" as "[a] market situation in which one buyer controls the market." BLACK'S LAW DICTIONARY 1023 (9th ed. 2009). As Debtors had, at most, a dominant position in the areas surrounding the closed plants, they do not meet this definition. At the Hearing, the Growers argued that an entity could be found to be a monopsonist if it dominated the purchasing in a given area. After the Hearing, at the court's invitation, counsel for the Growers submitted a letter in support of this argument in which Been v. O.K. Indus., Inc., 495 F.3d 1217 (10th Cir.2007) was cited. Given the court's conclusion that Debtors had a valid purpose in reducing the supply of chickento stem serious lossesthe court need not decide whether the Growers are correct in their broader definition of "monopsonist."
[13] There is dispute about whether the price to consumers in fact did increase and whether any such increase was in any way attributable to Debtors' reductions in supply.
[14] See Brief in Support of North Carolina Claimants' Motion for Partial Summary Judgment against Reorganized Debtors for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act (the "N.C. Growers' Brief") at 8-15.
[15] See Reorganized Debtors' Brief in Support of Response to North Carolina Growers' Motion for Partial Summary Judgment for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act (the "Debtors' Response Brief to N.C. Growers' MSJ") at 10; Appendix in Support of Reorganized Debtors' Response to North Carolina Claimants' Motion for Partial Summary Judgment for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act (the "Appendix to Debtors' Response to N.C. Growers' MSJ"), exh. K, attachments 2 and 3, at 665-701.
[16] The court does not find paragraphs C and D of Debtors' contract easily reconcilable and even sees some ambiguity in paragraph D ("Termination") standing alone. The parties, however, agree that paragraph D allows for termination by Debtors on the grounds of economic necessity, and the court will read that provision accordingly.
[17] It is not clear whether all of Debtors' grower contracts contain this language.
[18] The language Growers cite from 9 C.F.R. 201.100(a)(1) was in effect through January 3, 2010. Language almost identical to former section 201.001(a)(1) is presently found at 9 C.F.R. § 201.100(c)(1).
[19] The record reveals only two other integrators whose contracts provide for termination based on economic necessity.
[20] A motion to reconsider that ruling is pending. See Growers' Motion for Reconsideration of Judgment on Partial Findings, docket no. 6478.
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252 F.2d 685
Richard Lee GILPIN, Appellant,v.UNITED STATES of America, Appellee.
No. 13327.
United States Court of Appeals Sixth Circuit.
February 28, 1958.
1
Alvin D. Pauley, Cincinnati, Ohio, for appellant.
2
Richard M. Colasurd, Asst. U. S. Atty., Toledo, Ohio (Sumner Canary, U. S. Atty., Cleveland, Ohio, on the brief), for appellee.
3
Before SIMONS, Chief Judge, MARTIN, Circuit Judge, and MATHES, District Judge.
4
MATHES, District Judge.
5
Appellant has applied to this Court for leave to appeal in forma pauperis from a judgment of conviction in the District Court. [28 U.S.C. § 1915(a).]
6
In aid of this application, appellant asks this Court to review and set aside as "unwarranted" (Johnson v. United States, 1957, 352 U.S. 565, 566, 77 S.Ct. 550, 1 L.Ed.2d 593) the District Court's certificate denying an appeal at public expense because "not taken in good faith" within the statutory provision that: "An appeal may not be taken in forma pauperis if the trial court certifies in writing that it is not taken in good faith" [28 U.S.C. § 1915(a)].
7
Following conviction by verdict of the jury of the offense of receiving and storing a stolen motor vehicle in violation of 18 U.S.C. § 2313, appellant moved for a new trial upon the grounds: that the verdict is not supported by substantial evidence and is contrary to the evidence; that certain evidence was erroneously admitted over appellant's objection; and that there was error in the charge to the jury. At the hearing, appellant asked and received permission personally to argue the motion for a new trial, although his two court-appointed counsel who had served him through the trial were also present.
8
After his motion for a new trial had been denied, appellant made application in due form to the District Court for leave to appeal in forma pauperis. In an effort to establish the claimed good faith and merit of the appeal, appellant repeated the grounds advanced upon the motion for a new trial, and added as further ground of appeal the accusation that his court-appointed counsel were "remiss, negligent and incompetent": in failing to adduce evidence, in cross-examining witnesses for the prosecution, and in summation to the jury.
9
Following denial by the District Court of his application to appeal in forma pauperis, appellant asked Judge Stewart of this Court to certify under 28 U.S.C. § 753(f) "that the appeal is not frivolous but presents a substantial question," and to order accordingly that a transcript of the proceedings at the trial be furnished appellant at public expense. Judge Stewart reviewed the record from the District Court and denied the application. See: 28 U.S.C. § 1915(b); Miller v. United States, 1942, 317 U.S. 192, 601, 63 S.Ct. 187, 87 L.Ed. 179; United States v. Stevens, 3 Cir., 1955, 224 F.2d 866, 868; cf. Griffin v. People of State of Illinois, 1956, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891.
10
This Court has since appointed counsel now of record to represent appellant, and it appeared upon oral argument that present counsel has been unable after extensive correspondence with appellant to develop any showing of claimed error, by appellant's affidavit or otherwise, other than that presented to the District Court, and later to Judge Stewart, and now to us. Indeed, appellant has never specified with any particularity: wherein the evidence is alleged to be insufficient to sustain the verdict, or what evidence is claimed to have been erroneously admitted, or what occurred to his prejudice in the summation or the charge to the jury. [Cf. Farley v. United States, 1957, 354 U.S. 521, 77 S.Ct. 1371, 1 L.Ed.2d 1529].
11
In the circumstances then it is clear that there was available to appellant, without a complete stenographic transcript of the trial, ample and "appropriate means * * * of making manifest the basis of his claim that the District Court committed error in certifying that the desired appeal was not pursued in good faith." Johnson v. United States, supra, 352 U.S. at page 566, 77 S.Ct. at page 551.
12
The challenged certificate was made by the judge of the District Court who presided at the trial. The record before the District Court, and now here, includes a transcript of the proceedings upon the motion for a new trial. This transcript discloses that upon the argument of that motion appellant had only mild criticism for his appointed counsel, commenting that "although they made a fine closing address to the jury * * * they didn't stress the evidence enough to give me a fair trial to the jury."
13
A cognizable issue as to effective assistance of counsel is not tendered by mere general criticism of an attorney's conduct of the defense. In order to present a colorable showing of lack of effective assistance of counsel, a defendant must descend to particulars and allege what the attorney did or failed to do that constituted malrepresentation. See: Taylor v. United States, 9 Cir., 1956, 238 F.2d 409, 413-414; Adams v. United States, 1955, 95 U.S.App.D.C. 354, 222 F.2d 45, 47.
14
Serving without fee at the appointment of this Court, counsel has filed an able brief in support of appellant's contentions, but the certificate of the District Court "must be given effect at least to the extent of being accepted by appellate courts as controlling in the absence of some showing that the certificate is made without warrant * * *." (Wells v. United States, 1943, 318 U.S. 257, 259, 63 S.Ct. 582, 584, 87 L.Ed. 746; see: Parsell v. United States, 5 Cir., 1955, 218 F.2d 232, 236; Higgins v. Steele, 8 Cir., 1952, 195 F.2d 366, 368; cf. Higgins v. Binns, 9 Cir., 1953, 204 F.2d 327).
15
Nothing appearing to persuade us that the not-in-good-faith certificate of the District Court was not fully warranted, appellant's application to set it aside is denied, and appellant's application here for leave to appeal in forma pauperis is also denied.
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869 S.W.2d 706 (1994)
315 Ark. 627
Michael Jihad AKBAR, Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 93-966.
Supreme Court of Arkansas.
January 31, 1994.
*707 John Ogles, Jacksonville, for appellant.
Gil Dudley, Asst. Atty. Gen., Little Rock, for appellee.
DUDLEY, Justice.
Michael Jihad Akbar was found guilty of first degree murder and aggravated assault. His punishment was set at life imprisonment for the murder and six years imprisonment for the assault. He appeals from the murder conviction and argues that the evidence of intent to cause the victim's death was insufficient to support the verdict. We affirm the judgment of conviction.
The standard of review is clear. In determining sufficiency of the evidence, the appellate court reviews the evidence most favorably to the appellee, and considers only the evidence that tends to support the verdict. Gardner v. State, 296 Ark. 41, 754 S.W.2d 518 (1988). The appellate court does not weigh the evidence, but rather determines whether evidence that supports the verdict of guilt is substantial. Salley v. State, 303 Ark. 278, 796 S.W.2d 335 (1990). Evidence is substantial if it is forceful enough to compel a conclusion one way or another. Trotter v. State, 290 Ark. 269, 719 S.W.2d 268 (1986).
The law concerning murder is equally clear. "A person commits murder in the first degree if, with a purpose of causing the death of another person, he causes the death of another person." Ark.Code Ann. § 5-10-102(a)(2) (Repl.1993). The culpable mental state is "purposely" causing the death of another. "A person acts purposely with respect to his conduct or a result thereof when it is his conscious object to engage in conduct of that nature or to cause such a result." Ark.Code Ann. § 5-2-202(1) (Repl. 1993). Intent is seldom capable of proof by direct evidence. Usually, it must be inferred from the circumstances of the killing. Starling v. State, 301 Ark. 603, 786 S.W.2d 114 (1990). The intent necessary for first degree murder may be inferred from the type of weapon used, from the manner of its use, and the nature, extent, and location of the wounds. Williams v. State, 304 Ark. 509, 804 S.W.2d 346 (1991). It is axiomatic that one is presumed to intend the natural and probable consequences of his actions. Furr v. State, 308 Ark. 41, 822 S.W.2d 380 (1992).
Direct evidence is not required to support a conviction. Circumstantial evidence can provide the basis, but it must be consistent with the defendant's guilt, and inconsistent with any other reasonable conclusion. Trotter v. State, 290 Ark. 269, 719 S.W.2d 268 (1986). Whether the evidence excludes any other hypothesis is for the jury to determine. Cigainero v. State, 310 Ark. 504, 838 S.W.2d 361 (1992).
There is substantial evidence, both direct and circumstantial, to support the verdict in this case. Wendy Montgomery testified that she was near the Straight Up Club in Little Rock on the evening Kevin Cohn was killed. She testified that appellant drove his sports car past the club and then returned *708 to the front of the club. Other testimony established that the car was a Datsun 280 ZX automobile with a T top, and all of the top was removed except for the permanent center part. This would allow a driver, without difficulty, to reach out of the open side window and the area above the open side window where the top would normally be. Ms. Montgomery testified that she saw another man, Jerry Craig, in the back seat of appellant's car. She saw Craig stick his hand outside the car and "throw up" a "Crip" gang sign, by making a "C" with his thumb and forefinger. She testified that members of the "Eight Ball Posse" which is a "set" of a rival gang named the "Bloods" were present in the club's parking lot. She testified that someone in the crowd became angry and hit appellant's car with a beer bottle. Next, she saw appellant bend over, pull something from under the car seat, shoot a pistol into the air, and then begin firing into the crowd. She heard six or seven rapidly fired shots. She testified that she did not see anyone else, either in the car or in the crowd, fire a weapon. Very soon afterwards, she saw Cohn lying on the ground. Appellant fled the scene in his car.
Charles Thomas, a member of the Eighth Street Posse set of the Bloods gang, testified that he was outside the club the night of the shooting. Cohn told him there were some Crips in a nearby parking lot. One member of the Crips was wearing his cap pointed to the left, which indicates membership in the Bloods, but Thomas knew that this person was, in fact, a Crip. He stated that such an act was "perpetrating" and can cause trouble. He recognized appellant in this group. Thomas testified that he urged his group to stay out of trouble and to ignore the perpetrating. Thomas corroborated Ms. Montgomery's testimony that subsequently a rider in appellant's car threw up a Crip sign. He testified that appellant made the sign. He explained that making a Crip sign to members of the Bloods can cause trouble because the Bloods consider it to be disrespectful. He confirmed that someone hit appellant's car with a beer bottle. He testified that he saw appellant begin shooting out the window of the car. He testified that, after the first shot, Cohn knocked him down, and that the second shot hit Cohn as he was attempting to get up and run from the attack. Thomas ran to Cohn after Cohn fell to the ground, and covered him with his body. Thomas heard eight or nine shots. He testified that appellant fled the scene in his car.
Tony Farr, the manager and part owner of the Straight Up Club, also testified that he saw the group standing on the parking lot and observed the bottle being thrown at appellant's car. Although he is not acquainted with appellant and could not identify him in court, Farr stated that he saw a person's hand come out of the driver's side of the car, appellant's side, and fire a pistol into the crowd. He subsequently recognized the victim, Cohn, lying on the ground. He saw appellant's car flee the scene.
David Yarberry and Barbara Polite are both crime scene specialists for the Little Rock Police Department. They found two Remington Peters .380 caliber shell casings at the scene. One of them was bent, as if it had been run over by a car.
The medical examiner testified that Cohn was killed by a bullet wound to the chest. The bullet removed from Cohn's chest was deformed. The testimony indicated the deformed projectile removed from Cohn was consistent with a .380 caliber bullet, although it was not identified definitely as that caliber.
Appellant admitted that he was driving his car at the place and time of the shooting, but contended that passengers in his car were the ones who fired the shots.
In summary, appellant admitted that he was driving the car from which the shots were fired. Wendy Montgomery saw appellant get a pistol out from under the drivers seat. Three witnesses, Ms. Montgomery, Charles Thomas, and Tony Farr, testified that they saw appellant begin rapidly firing the pistol. All three were positive they saw the hand that fired the gun come out of the driver's window, where appellant was sitting, and not from anywhere else in the car. Charles Thomas saw the victim, Kevin Cohn, as he was hit by the second shot. Cohn died as a result of the shot to his chest. A large caliber bullet was removed from Cohn's chest. This evidence of guilt, both direct and *709 circumstantial, is sufficient to support a conviction for first degree murder. The evidence of the type of weapon used, the manner of its use, and the nature, extent, and location of the wound, infer an intent to commit first degree murder.
Appellant has been sentenced to life imprisonment. Accordingly, pursuant to Rule 4-3(h) of the Rules of the Supreme Court and Court of Appeals, an examination of all rulings adverse to appellant has been made, and there is no reversible error in those rulings.
Affirmed.
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188 F.2d 625
88 U.S.App.D.C. 158
BENTON,v.UNITED STATES.
No. 10688.
United States Court of Appeals District of Columbia Circuit.
Argued Nov. 28, 1950.Decided Jan. 25, 1951.
[88 U.S.App.D.C. 159] Mr. Denis K. Lane, Washington, D.C., with whom Mr. George J. Boden, Washington, D.C., was on the brief, for appellant.
Mr. Jerome Powell, Asst. U.S. Atty., Washington, D.C., with whom Messrs. George Morris Fay, U.S. Atty., and Joseph M. Howard and William S. McKinley, Asst. U.S. Attys., all of Washington, D.C., were on the brief, for appellee.
Before EDGERTON, FAHY, and WASHINGTON, Circuit Judges.
FAHY, Circuit Judge.
Appellant was convicted by a jury of taking indecent liberties with a child under the age of sixteen years, in violation of Sec. 22-3501(a), D.C. Code (1940, Supp. VII). He resided in an apartment near that of the child and her mother, though under separate roofs. It is not disputed that at the time in question the child, a girl twelve years of age, was in appellant's apartment and did a dance there when only he and she were present. She said he then took the liberties complained of, with his hand upon parts of her person. He denies that this occurred. There is also disagreement in their testimony as to the reason for her coming to his apartment. She says he called her from his window when she was below on the street. He denies this, saying she came to the apartment inquiring for his daughter, whom she knew and with whom she testified she was on friendly terms. Each claims the other was the instigator of the dance. After she had told her mother, the latter called the child's married sister who asked a neighbor across the hall what she should do about it. The police were then called.
Thus it seen that the testimony upon which the conviction rests came from the child and was denied by the accused. The Government at the close of its case tendered the mother to the defendant if he wished to call her.1 A short recess was taken, after which the evidence was concluded by the testimony of the defendant and others he called. The mother and married sister were not called. Four days after the verdict a motion for a new trial was made, resting primarily upon an affidavit of the mother. In it she states she was present when the child came home on the evening in question. The child had testified that when she came home she was crying. The affidavit of her mother says her daughter first came in through the living room and there was nothing unusual about her appearance until she came out of the bathroom, went into the kitchen, and, crying bitterly, told the mother of the alleged incident. The affidavit also states, 'When I [88 U.S.App.D.C. 160] asked Gertrude why she went to Mr. Benton's apartment, she said that she was looking for Barbara Jean, the daughter of Mr. Benton. At the time, Gertrude had been angry for a time with this little girl, Barbara Jean, and had not been on speaking terms with her. * * * ' This is at variance in two respects with the testimony of Gertrude on the trial. As we have shown, she testified that she was called by appellant to come, and that she was friendly with his daughter, Barbara Jean. The mother's affidavit concludes, ' * * * and in my opinion, my conscience does not allow me to believe that anything happened to my girl on that night. I heard what Mr. Benton said, and I heard what my daughter said.'
The trial court thought that the child had testified truthfully and denied the motion for a new trial. Ordinarily we would not disturb the action of the trial court on such a motion. But we think the situation is exceptional. When in such a case as this the additional evidence brought to the court's attention is that of the mother, who saw and talked to the child shortly after the alleged incident, and this evidence varies substantially from that given by the child, upon which the conviction rests almost entirely,2 we think a fair trial requires that the mother's testimony be made available to the jury.3 Cf. Helwig v. United States, 6 Cir., 1947, 162 F.2d 837, 840. Under Rule 33 of the Federal Rules of Criminal Procedure, 18 U.S.C.A., we think a new trial should have been granted 'in the interest of justice,' so that the mother's testimony could be heard and considered along with that of the others called to testify. The motion for a new trial having been filed within five days after verdict, it need not be treated as grounded upon newly discovered evidence and judged by the standards applicable to a motion so grounded. The provision of Rule 33 permitting a new trial if required in the interest of justice, though temperately to be utilized, is broader in scope than the limitations which have been held applicable where the motion is based on newly discovered evidence. The special factors to which we have referred are adequate to bring this case within the provision upon which we rely.
Reversed and remanded.
1
Although the Government had subpoenaed the mother it did not call her as a witness
2
See People v. Pazell, 399 Ill. 462, 70 N.E.2d 212, 214, where the Supreme Court of Illinois in reversing a conviction for taking indecent liberties with a child under a statute similar to Sec. 22-3501(a) stated, ' * * * We are not unmindful of the danger of resting a conviction upon the testimony of a child of tender years and the judgment will not be permitted to stand unless the testimony is corroborated or otherwise strong and convincing. * * * ' See, also, 3 Wigmore (3d ed.) § 924a
3
See People v. Freeman, 244 Ill. 590, 91 N.E. 708, where the Illinois Supreme Court in reversing a similar conviction for lack of evidence noted as one factor the testimony of the mother of the child that she would not have had the defendant arrested but for the threats of her brother-in-law
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-7453
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
BERNARD GIBSON, SR., a/k/a Bernard Willis,
Defendant – Appellant.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Peter J. Messitte, Senior District
Judge. (8:94-cr-00454-PJM-2)
Submitted: February 10, 2011 Decided: February 18, 2011
Before WILKINSON and DAVIS, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Bernard Gibson, Sr., Appellant Pro Se. Sandra Wilkinson,
Assistant United States Attorney, Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Bernard Gibson, Sr., appeals the district court’s
order denying his self-styled Fed. R. Crim. P. 36 motion. We
have reviewed the record and find no reversible error.
Accordingly, we affirm the district court’s order. See United
States v. Gibson, No. 8:94-cr-00454-PJM-2 (D. Md. Oct. 8, 2010).
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.
AFFIRMED
2
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397 U.S. 564 (1970)
BACHELLAR ET AL.
v.
MARYLAND.
No. 729.
Supreme Court of United States.
Argued March 2, 1970
Decided April 20, 1970
CERTIORARI TO THE COURT OF SPECIAL APPEALS OF MARYLAND.
Anthony G. Amsterdam argued the cause for petitioners. With him on the brief was Fred E. Weisgal.
H. Edgar Lentz, Assistant Attorney General of Maryland, argued the cause for respondent. With him on the brief were Francis B. Burch, Attorney General, and Edward F. Borgerding, Assistant Attorney General.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
A jury in Baltimore City Criminal Court convicted petitioners of violating Md. Ann. Code, Art. 27, § 123 (1967 Repl. Vol.),[1] which prohibits "acting in a disorderly manner to the disturbance of the public peace, upon any public street . . . in any [Maryland] city . . . ."[2] The *565 prosecution arose out of a demonstration protesting the Vietnam war which was staged between 3 and shortly after 5 o'clock on the afternoon of March 28, 1966, in front of a United States Army recruiting station located on a downtown Baltimore street. The Maryland Court of Special Appeals rejected petitioners' contention that their conduct was constitutionally protected under the First and Fourteenth Amendments and affirmed their convictions. 3 Md. App. 626, 240 A. 2d 623 (1968). The Court of Appeals of Maryland denied certiorari in an unreported order. We granted certiorari, 396 U. S. 816 (1969). We reverse.
The trial judge instructed the jury that there were alternative grounds upon which petitioners might be found guilty of violating § 123. The judge charged, first, that a guilty verdict might be returned if the jury found that petitioners had engaged in "the doing or saying or both of that which offends, disturbs, incites or tends to incite a number of people gathered in the same area." The judge also told the jury that "[a] refusal to obey a policeman's command to move on when not to do so may endanger the public peace, may amount to disorderly conduct."[3] So instructed, the jury returned *566 a general verdict of guilty against each of the petitioners.
Since petitioners argue that their conduct was constitutionally protected, we have examined the record for ourselves. When "a claim of constitutionally protected right is involved, it `remains our duty . . . to make an independent examination of the whole record.' " Cox v. Louisiana (I), 379 U. S. 536, 545 n. 8 (1965). We shall discuss first the factual situation that existed until shortly before 5 o'clock on the afternoon of the demonstration, since the pattern of events changed after that time. There is general agreement regarding the nature of the events during the initial period.
Baltimore law enforcement authorities had advance notice of the demonstration, and a dozen or more police officers and some United States marshals were on hand when approximately 15 protesters began peacefully to march in a circle on the sidewalk in front of the station. The marchers carried or wore signs bearing such legends as: "Peasant Emancipation, Not Escalation," "Make Love not War," "Stop in the Name of Love," and "Why are We in Viet Nam?" The number of protesters increased to between 30 and 40 before the demonstration ended. A crowd of onlookers gathered nearby and across the street. From time to time some of the petitioners and other marchers left the circle and distributed leaflets *567 among and talked to persons in the crowd. The lieutenant in charge of the police detail testified that he "overheard" some of the marchers debate with members of the crowd about "the Viet Cong situation," and that a few in the crowd resented the protest; "[o]ne particular one objected very much to receiving the circular." However, the lieutenant did not think that the situation constituted a disturbance of the peace. He testified that "[a]s long as the peace was not disturbed I wasn't doing anything about it."
Clearly the wording of the placards was not within that small class of "fighting words" that, under Chaplinsky v. New Hampshire, 315 U. S. 568, 574 (1942), are "likely to provoke the average person to retaliation, and thereby cause a breach of the peace," nor is there any evidence that the demonstrators' remarks to the crowd constituted "fighting words." Any shock effect caused by the placards, remarks, and peaceful marching must be attributed to the content of the ideas being expressed, or to the onlookers' dislike of demonstrations as a means of expressing dissent. But "[i]t is firmly settled that under our Constitution the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers," Street v. New York, 394 U. S. 576, 592 (1969); see also Cox v. Louisiana (I), supra; Edwards v. South Carolina, 372 U. S. 229 (1963); Terminiello v. Chicago, 337 U. S. 1 (1949), or simply because bystanders object to peaceful and orderly demonstrations. Plainly nothing that occurred during this period could constitutionally be the ground for conviction under § 123. Indeed, the State makes no claim that § 123 was violated then.
We turn now to the events that occurred shortly before and after 5 o'clock. The petitioners had left the marchers after half past 3 to enter the recruiting station. There they had attempted to persuade the sergeant in *568 charge to permit them to display their antiwar materials in the station or in its window fronting on the sidewalk. The sergeant had told them that Army regulations forbade him to grant such permission. The six thereupon staged a sit-in on chairs and a couch in the station.[4] A few minutes before 5 o'clock the sergeant asked them to leave, as he wanted to close the station for the day. When petitioners refused, the sergeant called on United States marshals who were present in the station to remove them. After deputizing several police officers to help, the marshals undertook to eject the petitioners.[5]
There is irreconcilable conflict in the evidence as to what next occurred. The prosecution's witnesses testified that the marshals and the police officers "escorted" the petitioners outside, and that the petitioners thereupon sat or lay down, "blocking free passage of the sidewalk." The police lieutenant in charge stated that he then took over and three times ordered the petitioners to get up and leave. He testified that when they remained sitting or lying down, he had each of them picked up bodily and removed to a patrol wagon. In sharp contrast, defense witnesses said that each petitioner was thrown bodily out the door of the station and landed on his back, that petitioners were not positioned so as to block the sidewalk completely, and that no police command was given to them to move away; on the contrary, that as some of them struggled to get to their feet, they were held down by the police officers until they were picked up and thrown into the patrol wagon. The evidence is clear, however, that while petitioners were on the sidewalk, they began to sing "We Shall *569 Overcome" and that they were surrounded by other demonstrators carrying antiwar placards. Thus, petitioners remained obvious participants in the demonstration even after their expulsion from the recruiting station.[6] A crowd of 50-150 people, including the demonstrators, was in the area during this period.
The reaction of the onlookers to these events was substantially the same as that to the earlier events of the afternoon. The police lieutenant added only that two uniformed marines in the crowd appeared angry and that a few other bystanders "were debating back and forth about Bomb Hanoi and different things and I had to be out there to protect these people because they wouldn't leave." Earlier too, however, some of the crowd had taken exception to the petitioners' protest against the Vietnam war.
On this evidence, in light of the instructions given by the trial judge, the jury could have rested its verdict on any of a number of grounds. The jurors may have found that petitioners refused "to obey a policeman's command to move on when not to do so [might have endangered] the public peace." Or they may have relied on a finding that petitioners deliberately obstructed the sidewalk, thus offending, disturbing, and inciting the bystanders.[7] Or the jurors may have credited petitioners' *570 testimony that they were thrown to the sidewalk by the police and held there, and yet still have found them guilty of violating § 123 because their anti-Vietnam protest amounted to "the doing or saying . . . of that which offends, disturbs, incites or tends to incite a number of people gathered in the same area." Thus, on this record, we find that petitioners may have been found guilty of violating § 123 simply because they advocated unpopular ideas. Since conviction on this ground would violate the Constitution, it is our duty to set aside petitioners' convictions.
Stromberg v. California, 283 U. S. 359 (1931), is the controlling authority. There the jury returned a general verdict of guilty against an appellant charged under a California statute making it an offense publicly to display a red flag (a) "as a sign, symbol or emblem of opposition to organized government," (b) "as an invitation or stimulus to anarchistic action," or (c) "as an aid to propaganda that is and was of a seditious character." Id., at 361. This Court held that clause (a) was unconstitutional as possibly punishing peaceful and orderly opposition to government by legal means and within constitutional limitations. The Court held that, even though the other two statutory grounds were severable and constitutional, the conviction had to be reversed, because the verdict "did not specify the ground upon which it rested. As there were three purposes set forth in the statute, and the jury were instructed that their verdict might be given with respect to any one of them, independently considered, it is impossible to say under which clause of the statute the conviction was obtained. If any one of these clauses, which the state court has held to be separable, was invalid, it cannot be determined upon this record that the appellant was not convicted under that clause. . . . [T]he necessary conclusion from the manner in which the case was sent to the jury is that, if any *571 of the clauses in question is invalid under the Federal Constitution, the conviction cannot be upheld." 283 U. S., at 368. See also Williams v. North Carolina, 317 U. S. 287 (1942); Terminiello v. Chicago, supra; Yates v. United States, 354 U. S. 298 (1957); Street v. New York, supra.
On this record, if the jury believed the State's evidence, petitioners' convictions could constitutionally have rested on a finding that they sat or lay across a public sidewalk with the intent of fully blocking passage along it, or that they refused to obey police commands to stop obstructing the sidewalk in this manner and move on. See, e. g., Cox v. Louisiana (I), supra, at 554-555; Shuttlesworth v. Birmingham, 382 U. S. 87, 90-91 (1965). It is impossible to say, however, that either of these grounds was the basis for the verdict. On the contrary, so far as we can tell, it is equally likely that the verdict resulted "merely because [petitioners' views about Vietnam were] themselves offensive to some of their hearers." Street v. New York, supra, at 592. Thus, since petitioners' convictions may have rested on an unconstitutional ground, they must be set aside.
The judgment of the Maryland Court of Special Appeals is reversed and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
NOTES
[1] The trial in the Criminal Court was de novo upon appeal from a conviction in the Municipal Court of Baltimore. The Criminal Court judge sentenced each petitioner to 60 days in jail and a $50 fine.
[2] The statute was amended in 1968 but without change in the operative language involved in this case. See Md. Ann. Code, Art. 27, § 123 (c) (Supp. 1969).
[3] Both elements of the instruction were based on the Maryland Court of Appeals' construction of § 123 in Drews v. Maryland, 224 Md. 186, 192, 167 A. 2d 341, 343-344 (1961), vacated and remanded on other grounds, 378 U. S. 547 (1964), reaffirmed on remand, 236 Md. 349, 204 A. 2d 64 (1964), appeal dismissed and cert. denied, 381 U. S. 421 (1965). The instruction was "that disorderly conduct is the doing or saying or both of that which offends, disturbs, incites or tends to incite a number of people gathered in the same area. It is conduct of such nature as to affect the peace and quiet of persons who may witness it and who may be disturbed or provoked to resentment because of it. A refusal to obey a policeman's command to move on when not to do so may endanger the public peace, may amount to disorderly conduct."
The trial judge refused to grant petitioners' request that the jury be charged to disregard any anger of onlookers that arose from their disagreement with petitioners' expressed views about Vietnam. For example, the judge refused to instruct the jury that "if the only threat of public disturbance arising from the actions of these defendants was a threat that arose from the anger of others who were made angry by their disagreement with the defendants' expressed views concerning Viet Nam, or American involvement in Viet Nam, you must acquit these defendants. And if you have a reasonable doubt whether the anger of those other persons was occasioned by their disagreement with defendants' views on Viet Nam, rather than by the conduct of the defendants in sitting or staying on the street, you must acquit these defendants."
[4] Petitioners' conduct in the station is not at issue in this case, since the State did not prosecute them for their conduct in that place.
[5] The local police officers were deputized as marshals because their local police powers did not extend to the federally operated recruiting station.
[6] The defense evidence indicated that petitioners were on the sidewalk after their removal from the recruiting station for only five minutes. A prosecution witness testified that they were there for 15 or 20 minutes.
[7] Maryland states in its brief, at 41-42, that "[o]bstructing the sidewalk had the legal effect under these circumstances of not only constituting a violation of . . . § 123 . . . but also of Article 27, § 121 of the Maryland Code, obstructing free passage." Had the State wished to ensure a jury finding on the obstruction question, it could have prosecuted petitioners under § 121, which specifically punishes "[a]ny person who shall wilfully obstruct or hinder the free passage of persons passing along or by any public street or highway . . . ."
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
ROBERT F. COOPER, JR., )
)
Plaintiff, )
)
v. ) Civil No. 12-1340 (RMC)
)
GREGORY JACKSON, et al., )
)
Defendants. )
)
OPINION
Pro se Plaintiff Robert Cooper, Jr., brought this suit regarding events that
occurred decades ago. Because some of his claims were barred by statutes of limitations, those
claims were dismissed. See Order [Dkt. 3]. Mr. Cooper seeks reconsideration and reversal of
the order dismissing those claims. Defendants oppose reconsideration and also seek dismissal of
the remaining claims on res judicata grounds. Both matters are fully briefed. As explained
below, Mr. Cooper’s motion for reconsideration will be denied and Defendants’ motion to
dismiss will be granted.
I. FACTS
In 1981, Mr. Cooper was employed as a Metropolitan Police Department (MPD)
police officer. Midway through his probationary first year, in June 1981, he was dismissed. He
brought suit in federal court in that year challenging his dismissal and seeking reinstatement. See
Mot. to Dismiss [Dkt. 12], Ex. 1 [Dkt. 12-1] (Cooper v. Barry, Civ. No. 81-2883, slip op. at 1
(D.D.C. Sept. 27, 1989)). In a January 13, 1984 opinion, the district court ordered MPD to
reinstate him, finding that the dismissal violated Mr. Cooper’s rights to Due Process under the
1
Fifth Amendment. Id. MPD required Mr. Cooper to undergo a reinstatement physical exam on
May 30, 1985 and a reinstatement psychiatric exam on October 2, 1985; MPD reinstated Mr.
Cooper on December 22, 1986.
Upon reinstatement, Mr. Cooper was required to undergo another physical exam,
including a drug test. He tested positive for marijuana, and MPD recommended his termination.
Id. at 2. Mr. Cooper unsuccessfully challenged this recommendation before MPD’s Adverse
Action Panel, also known as MPD’s Trial Board. Id. MPD adopted the Panel’s recommendation
of termination, and Mr. Cooper appealed to the Chief of Police. The Chief denied the appeal on
February 15, 1989. Id. Mr. Cooper was terminated on March 11, 1989. Id.
Mr. Cooper continued to challenge his termination. Much litigation ensued, as
described below, with courts sometimes ruling in favor of Mr. Cooper and other times ruling in
favor of the MPD. In the end, Mr. Cooper’s termination was upheld.
The additional litigation regarding Mr. Cooper’s termination proceeded as
follows: After his termination on March 11, 1989, Mr. Cooper requested a hearing before the
Office of Employee Appeals (OEA). He alleged that MPD tampered with his urine sample,
rendering faulty results, and thus MPD should not have been allowed to use the urine sample as
evidence for his termination. See Mot. to Dismiss, Ex. 2 [Dkt. 12-2] (Metropolitan Police Dep’t
v. D.C. Office of Employee Appeals, 2008 CA 8607, slip op. at 2 (D.C. Super. Ct. Feb. 7, 2012)).
Mr. Cooper also raised constitutional claims. The OEA rejected Mr. Cooper’s arguments and
affirmed the ruling of the Trial Board. Id.
While the OEA appeal was pending, Mr. Cooper filed in federal district court a
motion for contempt and to enforce the 1984 judgment requiring reinstatement. Mr. Cooper
alleged that MPD acted improperly by requiring him to take a physical exam and that he was
2
treated unfairly as a “marked man.” Cooper, Civ. No. 81-2883, slip op. at 3. The district court
denied the motion, noting that Mr. Cooper was in fact reinstated as ordered. Id. Further, the
court explained the OEA, as the relevant administrative body, was the proper forum for
addressing Mr. Cooper’s claims. Id. at 5-6.
Mr. Cooper appealed the OEA ruling to the full OEA Board. He again raised his
claim that MPD should not have used his urine sample as evidence. He did not appeal the denial
of his constitutional claims. The OEA Board determined that MPD had not established a proper
chain of custody and remanded the case for consideration of the irregularities in the custody
chain. On remand, the administrative judge reversed the ruling of the Trial Board. MPD
appealed, and the ruling of the administrative judge was affirmed. MPD then filed a petition in
D.C. Superior Court, asking that the OEA decision requiring reinstatement be vacated and that
the Trial Board’s first decision terminating Mr. Cooper’s employment be affirmed. Metropolitan
Police Dep’t, 2008 CA 8607, slip op. at 3. The D.C. Superior Court vacated the OEA decision
and remanded the case to the Trial Board for reimposition of the original order that terminated
Mr. Cooper. Id. at 9. The Superior Court concluded that the OEA had erred in reversing the
Trial Board’s ruling because the OEA had transgressed its appellate authority. The Trial Board’s
decision to admit the urine specimen was supported by substantial evidence, and the OEA was
not permitted to substitute its judgment on appeal. Id. at 7-9. In sum, on February 7, 2012, the
Superior Court affirmed Mr. Cooper’s 1989 termination. Id. 1
Subsequently, on August 8, 2012, Mr. Cooper brought this suit against Gregory
Jackson, D.C. Superior Court Judge; Peter Nickles, former D.C. Attorney General; Frank
1
Mr. Cooper moved for reconsideration of the Superior Court’s ruling, but his motion was
denied. See Mot. for Recons. [Dkt. 8], Ex. 2 (Metropolitan Police Dep’t, 2008 CA 8607, slip op.
(D.C. Super. Ct. Apr. 23, 2012)). Mr. Cooper did not appeal.
3
McDougald, Assistant Attorney General; Nadine Wilburn, Chief Counsel of the D.C. Labor and
Employment Division; Andrea Comentale, Chief of the D.C. Personnel and Labor Relations
Section; Cathy Lanier, Chief of the D.C. MPD; Jack Raher, Chief Psychiatrist of the Board of
Police and Fire Surgeons; James Wellhouse, Psychiatrist employed by the Board of Police and
Fire Surgeons; Robert Noyes, MPD Captain; Thomas Carroll, MPD Inspector; Robert Boggs,
MPD Captain; and William Ritchie, MPD Captain (collectively, Defendants). He alleges that
Defendants (1) violated the 1984 federal court opinion and order requiring Defendants to
reinstate him; (2) improperly required him to undergo a physical exam in May 1985 and
psychiatric exam in October 1985; (3) labeled him a “sociopath” and a “con man” pursuant to the
examinations; and (4) improperly required him to undergo a second physical exam in 1987. He
further alleges that psychiatric records that he discovered on November 6, 1991 “revealed
defendants’ predisposition to effecting complainant’s disqualification and dismissal.” Compl.
[Dkt. 1] at 8. Mr. Cooper claims defamation, libel, employment discrimination, harassment,
retaliation, and violations of the Fourth, Fifth, Seventh, and Fourteenth Amendments.
The Court sua sponte dismissed Mr. Cooper’s claims for defamation, libel, and
constitutional violations because those claims were barred by statutes of limitations. See D.C.
Code § 12-301(4) (one-year statute of limitations applies to defamation and libel claims); Carney
v. Am. Univ., 151 F.3d 1090, 1096 (D.C. Cir. 1998) (three-year statute of limitations applies to
constitutional claims under 42 U.S.C. § 1983). Those claims were untimely, as the latest actions
alleged in the Complaint occurred or were discovered in 1991, more than twenty years ago.
Mr. Cooper moves for reconsideration of the claims for defamation, libel, and
4
violations of the Fourth, Seventh, and Fourteenth Amendments. 2 Defendants oppose and move
for dismissal of the remaining claims of discrimination, harassment, and retaliation based on res
judicata.
II. LEGAL STANDARDS AND ANALYSIS
A. Motion for Reconsideration
Mr. Cooper moves for reconsideration of the order dismissing his claims for
claims for defamation, libel, and constitutional violations due to the applicable statutes of
limitations. Federal Rule of Civil Procedure 54(b), which governs Mr. Cooper’s motion,
provides that “any order or other decision, however designated, that adjudicates fewer than all
the claims or the rights and liabilities of fewer than all the parties . . . may be revised at any time
before the entry of judgment adjudicating all the claims and all the parties’ rights and liabilities.”
Fed. R. Civ. P. 54(b). Relief under Rule 54(b) is available “as justice requires.” DL v. District of
Columbia, 274 F.R.D. 320, 324 (D.D.C. 2011). “[A]sking ‘what justice requires’ amounts to
determining, within the court’s discretion, whether reconsideration is necessary under the
relevant circumstances.” Cobell v. Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005).
Circumstances that may be relevant include whether the court has “patently misunderstood a
party, has made a decision outside the adversarial issues presented to the Court by the parties,
has made an error not of reasoning, but of apprehension, or where a controlling or significant
change in the law or facts [has occurred] since the submission of the issue to the Court.” Ficken
v. Golden, 696 F. Supp. 2d 21, 35 (D.D.C. 2010) (quoting Cobell v. Norton, 224 F.R.D. 266, 272
(D.D.C. 2004)) (alterations in original). A court’s discretion under Rule 54(b) is limited by the
law of the case doctrine and is “subject to the caveat that, where litigants have once battled for
2
Mr. Cooper titled his motion for reconsideration as “Motion to Reinstate Claims.” He did not
move to revive the Fifth Amendment claim, and that claim stands dismissed. See Mot. for
Recons. at 1.
5
the court’s decision, they should neither be required, nor without good reason permitted, to battle
for it again.” Singh v. George Washington Univ., 383 F. Supp. 2d 99, 101 (D.D.C. 2005).
Mr. Cooper has not met the standard for reconsideration. He has not shown that
the Court misunderstood him, made a decision outside the issues presented, or made an error of
apprehension. See Ficken, 696 F. Supp. 2d at 35. Nor has he pointed to any significant change
in the law or facts. Id. Instead, Mr. Cooper argues that the statutes of limitations should be
tolled because he has been involved in the extensive litigation described above. This argument
fails because pending administrative proceedings and litigation do not toll limitations periods.
“The pendency of a grievance, or some other method of collateral review of an employment
decision, does not toll the running of the limitations period.” Del. State Coll. v. Ricks, 449 U.S.
250, 261 (1980). In other words, where a plaintiff may concurrently pursue claims independent
of internal grievance procedures, such as those under 42 U.S.C. § 1983 or Title VII, 42 U.S.C.
§ 2000e et seq., courts do not toll the limitations period for those claims. See, e.g., Foster v.
Gonzales, 516 F. Supp. 2d 17, 24 (D.D.C. 2007). Mr. Cooper’s motion for reconsideration will
be denied.
B. Motion to Dismiss
1. Rule 12(b)(6) Standard
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)
challenges the adequacy of a complaint on its face, testing whether a plaintiff has properly stated
a claim. Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a) requires that a complaint
contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(1). A complaint must be sufficient “to give a defendant fair notice of what
the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (internal citations omitted). Although a complaint does not need detailed factual
6
allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief “requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Id. The facts alleged “must be enough to raise a right to relief above the
speculative level.” Id. Rule 8(a) requires an actual showing and not just a blanket assertion of a
right to relief. Id. at 555 n.3.
A court must treat a complaint’s factual allegations as true, “even if doubtful in
fact.” Twombly, 550 U.S. at 555. But a court need not accept as true legal conclusions set forth
in a complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
“While legal conclusions can provide the framework of a complaint, they must be supported by
factual allegations. When there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at
679.
In deciding a motion under Rule 12(b)(6), a court may consider the facts alleged
in the complaint, documents attached to the complaint as exhibits or incorporated by reference,
and matters about which the court may take judicial notice. Abhe & Svoboda, Inc. v. Chao, 508
F.3d 1052, 1059 (D.C. Cir. 2007) (internal quotation marks and citation omitted); see Covad
Commc’ns Co. v. Bell Atlantic Co., 407 F.3d 1220, 1222 (D.C. Cir. 2005) (permitting judicial
notice of facts contained in public records of other proceedings).
2. Res Judicata
Defendants move for dismissal of Mr. Cooper’s claims of discrimination,
harassment, and retaliation pursuant to the doctrine of res judicata. Res judicata, also called
claim preclusion, is an affirmative defense that is generally pleaded in an answer, but also may
7
be properly brought in a pre-answer motion to dismiss under Rule 12(b)(6). Hemphill v.
Kimberly-Clark Corp., 530 F. Supp. 2d 108, 111 (D.D.C. 2008). “[U]nder res judicata, ‘a final
judgment on the merits of an action precludes the parties or their privies from relitigating issues
that were or could have been raised in that action.’” Drake v. FAA, 291 F.3d 59, 66 (D.D.C.
2002) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980) (emphasis added)); see I.A.M. Nat’l
Pension Fund v. Indus. Gear Mfg. Co., 723 F.2d 944, 947 (D.C. Cir. 1983). That is, res judicata
bars a subsequent suit “if there had been prior litigation (1) involving the same claims or cause of
action, (2) between the same parties or their privies, and (3) there has been a final valid judgment
on the merits.” Porter v. Shah, 606 F.3d 809, 813 (D.C. Cir. 2010). 3 Two cases involve the
same cause of action if they share the same “nucleus of facts.” Drake, 291 F.3d at 66
(quoting Page v. United States, 729 F.2d 818, 820 (D.C. Cir. 1984)). To determine whether two
cases share the same nucleus of facts, courts consider “whether the facts are related in time,
space, origin, or motivation[;] whether they form a convenient trial unit[;] and whether their
treatment as a unit conforms to the parties’ expectations or business understanding or usage.”
Stanton v. D.C. Court of Appeals, 127 F.3d 72, 78 (D.C. Cir. 1997).
Res judicata advances the “purpose for which civil courts have been established,
the conclusive resolution of disputes within their jurisdictions.” Montana v. United States, 440
U.S. 147, 153 (1979). “To preclude parties from contesting matters that they have had a full and
fair opportunity to litigate protects their adversaries from the expense and vexation attending
multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by
minimizing the possibility of inconsistent decisions.” Id. at 153-54. In short, the doctrine
3
“A privy is one so identified in interest with a party to the former litigation that he . . .
represents precisely the same legal right in respect to the subject matter of the case––in other
words, a person who or entity that is in privity with the party.” Wilson v. Fulwood, 772 F. Supp.
2d 246, 261 (D.D.C. 2011) (internal quotation marks and citation omitted).
8
embodies the principle “that a party who once has had a chance to litigate a claim before an
appropriate tribunal usually ought not to have another chance to do so.” SBC Commc’ns. Inc. v.
FCC, 407 F.3d 1223, 1229 (D.C. Cir. 2005). Thus, a plaintiff is required to present in a single
suit all claims for relief that he may have arising out of the same transaction or occurrence. U.S.
Indus. Inc. v. Blake Constr. Co., Inc., 765 F.2d 195, 205 (D.C. Cir. 1985).
Administrative proceedings have preclusive effect when “the administrative
tribunal ‘is acting in a judicial capacity and resolves issues of fact . . . which the parties have had
an adequate opportunity to litigate,’ and there is an opportunity for judicial review of adverse
decisions.” Bers v. United States, 666 F. Supp. 1, 2 (D.D.C. 1987) (quoting United States v.
Utah Constr. & Mining Co., 384 U.S. 394, 422 (1965)). In Bers, the plaintiff claimed that he
was dismissed in retaliation for whistleblowing. The court found that the claim was barred by
res judicata because the plaintiff had the opportunity to litigate it in prior administrative
proceedings before the Merit Systems Protection Board. Id. at 2-3.
Mr. Cooper litigated his claims before administrative tribunals––the Trial Board
and the OEA––and, finally, in D.C. Superior Court. While his claims for discrimination,
harassment, and retaliation may be different than the precise claims he already litigated, he had
the opportunity to litigate all such claims in the administrative fora and in Superior Court. The
Superior Court issued a final judgment against him on the merits. Res judicata bars this suit
because there has been prior litigation involving the same nucleus of operative facts, between the
same parties or their privies, resulting in a final valid judgment. See Porter, 606 F.3d at 813.
Res judicata precludes Mr. Cooper from relitigating issues that were or could have been raised in
the prior action. See Drake, 291 F.3d at 66. Accordingly, Defendants’ motion to dismiss will be
granted.
9
III. CONCLUSION
Mr. Cooper’s motion for reconsideration [Dkt. 8] will be denied. Further, because
res judicata bars Mr. Cooper’s other claims, the Court will grant Defendants’ motion to dismiss
[Dkt. 12]. The Complaint will be dismissed with prejudice. A memorializing Order
accompanies this Memorandum Opinion.
Date: April 23, 2013
/s/
ROSEMARY M. COLLYER
United States District Judge
10
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55 F.Supp. 193 (1944)
KEN-RAD TUBE & LAMP CORPORATION, OWENSBORO, KY.,
v.
BADEAU.
No. 132.
District Court, W. D. Kentucky, Owensboro Division.
May 9, 1944.
*194 Thomas E. Sandidge and Wilbur K. Miller, both of Owensboro, Ky., and Max O'Rell Truitt and Carl McFarland, both of Washington, D. C., for plaintiff.
Francis M. Shea, Asst. Atty. Gen., Eli H. Brown, III, U. S. Atty., of Louisville, Ky., and Joseph A. Fanelli, Sp. Asst. to Atty. Gen., for defendant.
SWINFORD, District Judge.
This case is before me on the plaintiff's motion for a permanent injunction and on the defendant's motion to dismiss the complaint. The record is complete and it is finally submitted for determination on its merits.
The plaintiff, the Ken-Rad Tube and Lamp Corporation, of Owensboro, Kentucky, seeks to permanently enjoin the defendant, Carroll Badeau, from placing in effect, in any of its plants, an order of the National War Labor Board pertaining to certain wage readjustments in the plaintiff's plants and to permanently enjoin the defendant from seizing, holding possession of or operating any properties of the plaintiff.
The plaintiff is, and has been for many years, successfully engaged in the manufacture of radio tubes and incandescent lamps, with plants located at Owensboro and Bowling Green, Kentucky, and Tell City, Huntingburg and Rockport, Indiana. It employs approximately five thousand people.
The defendant, Carroll Badeau, who is a Colonel in the United States Army and acting under orders from his superiors, has seized possession of the plaintiff's properties.
The entire plant and properties of the plaintiff, in so far as this lawsuit is concerned, have been, were at the time of the seizure, and are now and will continue to be admittedly devoted exclusively to the manufacture of essential war materials.
The source of the authority claimed by the defendant for his action in seizing the property is an order of the President of the United States, dated April 13, 1944 and addressed to the Secretary of War. The order is preceded by the following recital:
"Whereas after investigation I find and proclaim that there is a threatened interruption of the operation of the plants and facilities of Ken-Rad Tube and Lamp Corporation and Ken-Rad Transmitting Tube Corporation, located at Owensboro, Kentucky, as a result of a labor disturbance, and that the war effort would be unduly impeded or delayed by such interruption:
*195 "Now, therefore, by virtue of the power and authority vested in me by the Constitution and laws of the United States, including section 9 of the Selective Training and Service Act of 1940, as amended, as President of the United States and Commander in Chief of the Army and Navy of the United States, it is hereby directed as follows:"
It is contended by the plaintiff that the seizure is without authority of law; that the order of the President was based primarily upon a report to him of the War Labor Board that the labor conditions in the plaintiff's plants were in an unsettled state and that production would be hampered, retarded or stopped by labor disputes and threatened strikes; that all of this was caused by the fact that the plaintiff had refused to put into effect an order of the War Labor Board.
The plaintiff admits that it declined to abide by the order of the War Labor Board but states that the order was void and of no effect, because of the failure of the Board to accord the plaintiff a hearing, the unlawful assumption of the rule-making power by the Board, the unlawful reduction of the beginner's training period, the unlawful retroactive effect of the order, the unlawful participation of employee representatives in the Board's order, and the imposition of confiscatory wage rates, which did not comply with the provisions of the Act that any order of the Board shall be fair and equitable.
To summarize the plaintiff's position in this respect, it reasons that since the order of the President, directing the seizure of the plants, was based upon a fear of threatened strikes and the threatened strikes were the result of the failure of the plaintiff to abide by an order of the War Labor Board and the order of the War Labor Board was invalid because of the above enumerated reasons, then the order of the President was invalid and there could, therefore, be no seizure.
I do not think that the determination of this case depends upon whether or not the order of the War Labor Board was valid or invalid.
The decision must be based upon either constitutional or statutory authority vesting in the President a legal right to issue such an order. If he had that right, by statute, or in the absence of adequate statute, the right under the Constitution, the plaintiff has failed in the case and its complaint should be dismissed. Or if it be determined from the record that, even though he might have had the right, he acted arbitrarily and without cause in issuing such an order, then the prayer of the plaintiff's complaint should be sustained and an equitable order entered.
It is my judgment that this case, and all others like it, may be reduced to a simple formula: Did the President act arbitrarily in ordering the facilities to be taken over by the Army? Proof that he did so act shall be upon him who asserts it.
If this seems to be an extreme view it should be called to the attention of those who so claim that, with the country at war, fighting for its very existence, extremities are commonplace. No war hysteria should prompt the adoption of basically unsound legal reasoning; neither should blind complacency or a false sense of the country's security cause the courts of the land to grant to those charged with preserving the nation less than the full measure of constitutional and legislative authority.
Before going into the determination of this case on its merits it is necessary to consider and pass upon certain defenses. It is first contended that the suit here is one against the United States, to which the United States has not consented. In support of this position the defendant cites: State of New Mexico v. Lane, 243 U.S. 52, 37 S.Ct. 348, 61 L.Ed. 588; State of Louisiana v. Garfield, 211 U.S. 70, 29 S.Ct. 31, 53 L.Ed. 92; State of Minnesota v. Hitchcock, 185 U.S. 373, 22 S.Ct. 650, 46 L.Ed. 954; Naganab v. Hitchcock, 202 U.S. 473, 26 S.Ct. 667, 50 L.Ed. 1113. I do not believe any of these cases warrant the court in dismissing this proceeding. While I, of course, acknowledge the general rule as laid down in each of these cases, it is a well-recognized exception that where the government acquires property from a party to a pending suit, its rights in such property are subject to the results of the litigation the same as would be those of an individual. See Ward et al. v. Congress Const. Co., 7 Cir., 99 F. 598; Philadelphia Co. v. Stimson, 223 U.S. 605, 32 S.Ct. 340, 56 L.Ed. 570; Miguel v. McCarl, 291 U.S. 442, 54 S.Ct. 465, 78 L.Ed. 901; Payne v. Central Pacific R. Co., 255 U.S. 228, 41 S.Ct. 314, 65 L.Ed. 598.
In the case of Work v. Louisiana, 269 U.S. 250, 46 S.Ct. 92, 94, 70 L.Ed. 259, the Secretary of the Interior was proceeded *196 against for injunctive relief by the State of Louisiana to prevent the rejection of a claim to lands upon what was alleged to be an erroneous interpretation of the law. The opinion stated: "It is clear that if this order exceeds the authority conferred upon the Secretary by law and is an illegal act done under color of his office, he may be enjoined from carrying it into effect. Noble v. Union River [Logging] R. Co., 147 U.S. 165, 171, 172, 13 S.Ct. 271, 37 L.Ed. 123; Garfield v. Goldsby, 211 U.S. 249, 261, 262, 29 S.Ct. 62, 53 L.Ed. 168; Lane v. Watts, 234 U.S. 525, 540, 34 S.Ct. 965, 58 L. Ed. 1440; Payne v. Central Ry. Co., 255 U.S. 228, 238, 41 S.Ct. 314, 65 L.Ed. 598; Santa Fé Pacific Railroad Co. v. Fall, 259 U.S. 197, 199, 42 S.Ct. 466, 66 L.Ed. 896; [State of] Colorado v. Toll, 268 U.S. 228, 230, 45 S.Ct. 505, 69 L.Ed. 927. A suit for such purposes is not one against the United States, even though it still retains the legal title to the lands, and it is not an indispensable party. Garfield v. Goldsby, supra, [211 U.S. at] pages 260, 262, (29 S.Ct. 62), [53 L.Ed. 168]; Lane v. Watts, supra, [234 U. S. at] page 540 (34 S.Ct. 965), [58 L.Ed. 1440]."
In the recent case of Ickes v. Fox, 300 U.S. 82, 57 S.Ct. 412, 81 L.Ed. 525, it was sought to enjoin the Secretary of the Interior from enforcing an order, the wrongful effect of which was to deprive respondents of vested property. The question was made that the United States was an indispensable party but the Supreme Court held that such a suit could be maintained without the presence of the United States and that its decision rested upon the authority of many cases from that Court. Certain cases were cited among which were some of those to which I have referred.
It is further contended that the suit should be dismissed for lack of indispensable parties. It is urged that Carroll Badeau, the defendant, had no choice other than to comply with the order of the President and that he was acting purely in a ministerial capacity and that if the injunction would lie, it should have been brought against his superiors, even to the extent of making the President a party.
I think the action here is one in which the rights of the parties may be determined, where the injunction is sought against the agent with as much propriety as if it were sought to restrain the principal, had he been within the jurisdiction of the court. Osborn v. President, etc., of Bank, 9 Wheat. 738, 22 U.S. 738, 6 L.Ed. 204.
In the case of Ryan v. Amazon Petroleum Corp., 5 Cir., 71 F.2d 1, 4, and more particularly identified as the now historic "Hot Oil" case, the Circuit Court of Appeals said: "1. The Secretary of the Interior is not personally doing or threatening the acts of trespass and of prosecution which are sought to be enjoined. Although the actors may be authorized and incited by him so that he would be a proper codefendant if he were within the court's reach, the court has power to stop the trespassing by those within its jurisdiction irrespective of their claim that they are acting for others. Osborn v. [President, etc., of] Bank of United States, 9 Wheat. 738, 6 L.Ed. 204; State of Colorado v. Toll, Supt., 268 U.S. 228, 45 S.Ct. 505, 69 L.Ed. 927. This is not a bill to cancel the Secretary's Regulations, but only to test their efficacy to protect defendants in their alleged trespasses against complainants' rights. There is no more need to make the Secretary a party for this purpose than to make the President a party because he promulgated the Code or the Congress because it enacted the statute."
It should be pointed out that in this case, or cases, since it embraced also the Panama Refining Company case, the Supreme Court reversed the Circuit Court of Appeals in its decision, but not on the jurisdictional grounds to which the language above quoted is addressed. 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446.
I conclude that the jurisdiction of the court must be sustained.
We now come to the determination of the case on its merits. I must confess that the position of the plaintiff is somewhat obscure and it is not entirely clear to me just what it is seeking to have done. The original complaint asks, among other things, that the defendant be permanently enjoined from "holding possession of or operating any properties of the plaintiff". In the brief which was filed after the oral arguments, the plaintiff seems to undertake to convey to the court the idea that it has no serious objection to the using of the property so long as the present occupant does not put into effect and force the order of the President as it directs a compliance with the wage increase and back-pay provisions of the order of the War Labor Board.
It must be obvious to the plaintiff that these two things cannot be separated in a proceeding of this kind, and it cannot expect *197 to resort to the general equity powers of the court on its prayer for general equitable relief. If the President, by reason of the statutes or by his constitutional powers, has authority, and is justified in the exercise of that authority, to take over the plants, he would certainly have authority to determine and designate the basis on which it was to be operated.
This plant is at present being operated by the Government with Government funds The method of the Government in operating any business which it has the right to operate cannot be questioned on the basis of a complaint which attacks its right to operate the business at all.
The War Labor Disputes Act by section 3, 50 U.S.C.A.Appendix, § 1503, amends section 9 of the Selective Training and Service Act of 1940. For the purpose of clarity I think it is best to quote this section in full:
"Sec. 3. Section 9 of the Selective Training and Service Act of 1940 is hereby amended by adding at the end thereof the following new paragraph:
"`The power of the President under the foregoing provisions of this section to take immediate possession of any plant upon a failure to comply with any such provisions, and the authority granted by this section for the use and operation by the United States or in its interests of any plant of which possession is so taken, shall also apply as hereinafter provided to any plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials which may be required for the war effort or which may be useful in connection therewith. Such power and authority may be exercised by the President through such department or agency of the Government as he may designate, and may be exercised with respect to any such plant, mine, or facility whenever the President finds, after investigation, and proclaims that there is an interruption of the operation of such plant, mine, or facility as a result of a strike or other labor disturbance, that the war effort will be unduly impeded or delayed by such interruption, and that the exercise of such power and authority is necessary to insure the operation of such plant, mine, or facility in the interest of the war effort: Provided, That whenever any such plant, mine, or facility has been or is hereafter so taken by reason of a strike, lockout, threatened strike, threatened lock-out, work stoppage, or other cause, such plant, mine, or facility shall be returned to the owners thereof as soon as practicable, but in no event more than sixty days after the restoration of the productive efficiency thereof prevailing prior to the taking of possession thereof: Provided further, That possession of any plant, mine, or facility shall not be taken under authority of this section after the termination of hostilities in the present war, as proclaimed by the President, or after the termination of the War Labor Disputes Act; and the authority to operate any such plant, mine, or facility under the provisions of this section shall terminate at the end of six months after the termination of such hostilities as so proclaimed."
If this is a constitutional enactment and there is no showing that the President acted arbitrarily, coupled with the acknowledged fact that the plants in question were engaged exclusively in the manufacture of essential war materials, the defendant's position must be sustained.
It is not claimed that this act is unconstitutional. The record fails to disclose any grounds upon which the court could find that the President, in issuing the order, acted arbitrarily or without cause. He was not bound by the findings of the War Labor Board. Even though they might have been based upon erroneous procedure or wrongful construction of facts, the President may have had other facts on which he determined his course. It is certain that there is ample evidence in the record that there was a threatened strike and a serious threat to production by reason of that fact, but even had the record not contained this, it is my judgment that section 9 does not confine the President to any one field of information but that he may make his own independent investigation and, subject to the determination by the courts that his action was not arbitrary, may act to prevent a cessation of operations of any plant or business or other agency which might be utilized to contribute to the war effort.
I further conclude that without an act of the Congress there was sufficient authority by the terms of the Constitution itself to justify the action of the President in this case. The President has no power to declare war, that belongs exclusively to Congress. But when war has been declared and is actually existing, his functions as Commander in Chief become of the highest importance and his operations *198 in that connection are entirely beyond the control of the legislature. There devolves upon him, by virtue of his office, a solemn responsibility to preserve the nation and it is my judgment that there is specifically granted to him authority to utilize all resources of the country to that end.
The Constitution is nothing more than a charter of rights and authority from the people to their Government. That Government consists of the individuals who, as officials, are in charge of its affairs at a given time. In order to determine what the people had in mind when they made this specific grant of power we must necessarily consider it in the light of circumstances as they existed at the time of the grant. We must recall that at that time the nation was very weak. Its preservation from invasion or occupation by a foreign power was uppermost in the minds of the people. Although the government was weak it ruled a vast and rich country, which attracted the dictators and excited the avarice of war lords of that day as it does now. It should be borne in mind that while modern instruments of warfare make America more vulnerable than in times past, then what is now the territorial United States was actually occupied by armies of foreign powers. I mention these things merely to emphasize that it must surely have been uppermost and foremost in the minds of the writers of the Constitution, of those whom they represented and those who later adopted it, that the President, as Commander in Chief of the Army and Navy of the United States, was not to have to resort to a lengthy procedure in order to defend, at a moment's notice, the very agencies which he might be seeking to use.
Charged with the grave responsibility of preserving a government which guarantees the property rights of individuals, the Chief Executive, as Commander in Chief, must not be hampered in the prosecution of the war effort. His exercise of authority to this end is subject only to the review by the courts that his actions are not arbitrary or without reasonable justification. With this limitation there need be no fear that constitutional government, as we know it in these United States, will be abolished, destroyed or impaired.
The prosecution of the war is the business of the executive branch of the government. What is necessary to that end must rest in the authority of the officials of that branch of the government. Their decisions must, in many instances, be based upon facts which they cannot make public or submit to debate. There has never been a time in the history of the world when such a policy was more properly applied than in this present emergency, with the United States engaged in prosecuting a defensive war on many fronts scattered over all parts of the world and with implements of modern warfare subjecting her territories and mainland to imminent danger of actual invasion in the course of a few hours, and with a part of her possessions occupied by enemy forces. It is sheer folly to say or pretend that the Government should admit of the slightest delay, for any cause, of the production of the war materials made by the plants involved in this lawsuit.
This position is not only substantiated by reason and principle but is merely a restatement of what has always been accepted as the correct judicial interpretation of the functions of the President in times of war or emergency.
It is well said in a recent case, Alpirn v. Huffman, D.C., 49 F.Supp. 337, 341: "Defensive measures which, a century ago, might have awaited deliberation and the orderly course of judicial process, must now be taken resolutely and immediately. Science has changed not alone the methods of formal warfare, but also and especially the relationship to it of the civilian population."
In the old case of United States v. Russell, 80 U.S. 623, 627, 13 Wall. 623, 20 L.Ed. 474, the court said: "Private property, the Constitution provides, shall not be taken for public use without just compensation, and it is clear that there are few safeguards ordained in the fundamental law against oppression and the exercise of arbitrary power of more ancient origin or of greater value to the citizen, as the provision for compensation, except in certain extreme cases, is a condition precedent annexed to the right of the government to deprive the owner of his property without his consent. Extraordinary and unforeseen occasions arise, however, beyond all doubt, in cases of extreme necessity in time of war or of immediate and impending public danger, in which private property may be impressed into the public service, or may be seized and appropriated to the public use, or may even be destroyed without the consent of the owner. Unquestionably such extreme cases may arise, as where the property taken is imperatively necessary in time of war to construct defences for the preservation of *199 a military post at the moment of an impending attack by the enemy, or for food or medicine for a sick and famishing army utterly destitute and without other means of such supplies, or to transport troops, munitions of war, or clothing to reinforce or supply an army in a distant field, where the necessity for such reinforcement or supplies is extreme and imperative, to enable those in command of the post to maintain their position or to repel an impending attack, provided it appears that other means of transportation could not be obtained, and that the transports impressed for the purpose were imperatively required for such immediate use."
Who can say that at this time such an emergency, as contemplated by the language of this opinion, does not now exist? See also, Mitchell v. Harmony, 54 U.S. 115, 13 How. 115, 14 L.Ed. 75; Marbury v. Madison, 5 U.S. 137, 1 Cranch 137, 2 L. Ed. 60; State of Mississippi v. Johnson, 71 U.S. 475, 4 Wall. 475, 18 L.Ed. 437. The case of Alpirn v. Huffman, supra, is an excellent opinion and has an accumulation of authorities on this and related points of law.
The Attorney General of the United States has recently made the following pertinent statement in an opinion on a similar situation. I quote: "The fact that the initial impact of these disturbances is on the production or distribution of essential civilian goods is not a reason for denying the Chief Executive and the Commander in Chief of the Army and Navy the power to take steps to protect the Nation's war effort. In modern war the maintenance of a healthy, orderly and stable civilian economy is essential to successful military effort. The Congress has recognized this fact by enacting such statutes as the Emergency Price Control Act of 1942 [50 U.S.C.A. Appendix, § 901 et seq.]; the Act of Oct. 2, 1942, entitled `An Act to Amend the Emergency Price Control Act of 1942 and to aid in preventing inflation, and for other purposes, [50 U.S.C.A.Appendix, § 961 et seq.];' the Small Business Mobilization Law of June 11, 1942 [50 U.S.C.A.Appendix, § 1101 et seq.]; and the War Labor Disputes Act [50 U.S.C.A.Appendix, § 1501 et seq.]."
In addition to the long and unbroken chain of authorities for what I believe to be a most rational view of the situation presented by the record in this case, the Supreme Court in the now famous case, (decided June 21, 1943) of Kiyoshi Hirabayashi v. United States, 320 U.S. 81, on page 93, 63 S.Ct. 1375, on page 1382, 87 L.Ed. 1774, of the opinion said: "The war power of the national government is `the power to wage war successfully.' See Charles Evans Hughes War Powers Under the Constitution, 42 A.B.A. Rep. 232, 238. It extends to every matter and activity so related to war as substantially to affect its conduct and progress. The power is not restricted to the winning of victories in the field and the repulse of enemy forces. It embraces every phase of the national defense, including the protection of war materials and the members of the armed forces from injury and from the dangers which attend the rise, prosecution and progress of war. Prize Cases, [(The Amy Warwick), 2 Black 635, 17 L.Ed. 459], supra; Miller v. United States, 11 Wall. 268, 303-314, 20 L.Ed. 135; Stewart v. Kahn, 11 Wall. 493, 506, 507, 20 L.Ed. 176; Selective Draft Law Cases, (Arver v. United States), 245 U.S. 366, 38 S.Ct. 159, 62 L.Ed. 349, L.R.A. 1918C, 361, Ann.Cas. 1918B, 856; McKinley v. United States, 249 U.S. 397, 39 S.Ct. 324, 63 L.Ed. 668; United States v. Macintosh, 283 U.S. 605, 622, 623, 51 S.Ct. 570, 574, 75 L.Ed. 1302. Since the Constitution commits to the Executive and to Congress the exercise of the war power in all the vicissitudes and conditions of warfare, it has necessarily given them wide scope for the exercise of judgment and discretion in determining the nature and extent of the threatened injury or danger and in the selection of the means for resisting it. Ex parte Quirin, supra, 317 U.S. [1] 28, 29, 63 S.Ct. [2] 10, 87 L.Ed. [3]; cf. Prize Cases, supra, 2 Black 670, 17 L.Ed. 459; Martin v. Mott, 12 Wheat. 19, 29, 6 L.Ed. 537. Where, as they did here, the conditions call for the exercise of judgment and discretion and for the choice of means by those branches of the Government on which the Constitution has placed the responsibility of war-making, it is not for any court to sit in review of the wisdom of their action or substitute its judgment for theirs."
I am of the opinion that the President's order was valid, that the motion for permanent injunction should be denied and the defendant's motion to dismiss should be sustained.
Since I conclude that the order of the President does not rest upon the validity of *200 the order of the War Labor Board, it is not necessary or proper that I should pass upon the question which the plaintiff poses as the "unlawfulness of the War Labor Board order".
The United States must, of course, compensate the plaintiff for the use of the property and a determination of the validity of the War Labor Board order would more appropriately arise in the determination of what is to be just and adequate compensation.
Proper orders should be submitted in conformity with this opinion.
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 11a0673n.06
No. 10-3328
FILED
UNITED STATES COURT OF APPEALS Sep 14, 2011
FOR THE SIXTH CIRCUIT
LEONARD GREEN, Clerk
THOMAS A. NERSWICK, )
) ON APPEAL FROM THE UNITED
Plaintiff-Appellant, ) STATES DISTRICT COURT FOR
) THE SOUTHERN DISTRICT OF
v. ) OHIO
)
CSX TRANSPORTATION, INC.; JIM DUGGER; )
CHRIS MINGES )
)
Defendants-Appellees. )
)
)
)
)
)
Before: DAUGHTREY, COOK, and KETHLEDGE, Circuit Judges
KETHLEDGE, Circuit Judge. Thomas Nerswick claims that Jim Dugger and Chris Minges,
two privately employed police officers of CSX Transporation, Inc., arrested him without probable
cause and then took too long to present him to a magistrate. The district court granted the
defendants’ motion for summary judgment. Nerswick’s evidence fails to raise a genuine issue of
material fact on his claims, so we affirm.
I.
We view the facts in the light most favorable to Nerswick. Boykin v. Van Buren Township,
479 F.3d 444, 449 (6th Cir. 2007).
No. 10-3328
Nerswick v. CSX Transportation
On June 9, 2006, Nerswick was told that two large pieces of metal had fallen off a truck on
the road outside his business. Nerswick removed the metal pieces from the road—“in the interests
of traffic safety”—and then sold them to Garden Street Iron & Metals, a nearby recycling center, for
$310.00.
Garden Street thereafter contacted a CSXT employee, R.W. Godbey, to report that it had
purchased two aluminum pieces that appeared to be CSXT rerailers. (A rerailer is an aluminum
device used by a railroad to place derailed cars back on the tracks.) Another CSXT employee, T.J.
Grace, then contacted officers Dugger and Minges and reported that two rerailers had been stolen
from the railroad and recently sold to Garden Street.
That same day, Dugger, Minges, and Godbey visited Garden Street. There, Godbey
identified the rerailers as CSXT property. Dave Holbrook, the Garden Street employee who had
purchased the rerailers from Nerswick, provided the officers with a copy of Nerswick’s driver’s
license and showed them a video (without audio) of the transaction. According to Holbrook, he had
suspected that the rerailers were railroad property, so he told Nerswick of that possibility and
obtained a copy of Nerswick’s identification before purchasing them. Holbrook also told the officers
that Nerswick said that he had taken the aluminum “from a building he owned.” (Dugger Decl. ¶ 12;
Holbrook Decl.)
On June 12, 2006, the officers sought a warrant for Nerswick’s arrest on a charge of receiving
stolen property. To obtain the warrant, Dugger signed an affidavit stating that Nerswick had sold
CSXT rerailers to Garden Street without the railroad’s permission and that the same rerailers had
been reported stolen by Grace. Dugger also submitted a criminal complaint to the Hamilton County
-2-
No. 10-3328
Nerswick v. CSX Transportation
Municipal Court deputy clerk, stating that, based on witness statements and “personal observations
of video tapes,” Nerswick had sold CSXT property that Nerswick had reason to believe was stolen.
(Nerswick Br. at 7.) The deputy clerk signed the warrant.
On June 13, 2006, Dugger and Minges met Nerswick and his brother James, an officer with
the Ohio Department of Public Safety, outside Nerswick’s office. Nerswick asserted his innocence,
but the officers arrested him anyway and took him to the CSXT police building. There, they
questioned Nerswick for more than two hours. Nerswick’s brother was present throughout the
questioning. Dugger and Minges then handcuffed Nerswick and transported him to the Hamilton
County Justice Center.
The next day, a judge of the Hamilton County Municipal Court found sufficient probable
cause to hold over Nerswick for a grand jury to consider the charge. On June 26, 2006, the grand
jury declined to indict Nerswick. Nerswick then brought this lawsuit, raising claims under 42 U.S.C.
§ 1983 and various state-law torts.
II.
We review de novo the district court’s grant of summary judgment to the defendants. Binay
v. Bettendorf, 601 F.3d 640, 646 (6th Cir. 2010).
Nerswick’s primary argument is that the officers arrested him without probable cause, in
violation of the Fourth Amendment. “An arrest pursuant to a facially valid warrant is normally a
complete defense to a federal constitutional claim for false arrest or false imprisonment,” unless the
defendant intentionally misled the court or omitted “material information” in seeking the warrant.
Voyticky v. Village of Timberlake, 412 F.3d 669, 677, 677 n.4 (6th Cir. 2005). Here, as privately
-3-
No. 10-3328
Nerswick v. CSX Transportation
employed police officers, Dugger and Minges were vested by Ohio law with the powers of municipal
policemen. See Ohio Rev. Code § 4973.18. It is undisputed that they arrested Nerswick pursuant
to a facially valid warrant. Nerswick’s claim is that the officers made false statements or material
omissions in obtaining that warrant. His only evidence in support of that claim, however, is that in
seeking the warrant, the officers swore they had “video tapes” (plural) supporting Nerswick’s guilt,
when in fact they had only a single tape of him selling the rerailers at Garden Street. (Nerswick Br.
at 27.) But that discrepancy was not “material,” since there is no reason to think it affected the
deputy clerk’s decision to issue the warrant. The district court was therefore correct to grant
summary judgment on Nerswick’s federal false-arrest and false-imprisonment claims.
Nerswick also presents a raft of state law claims—for false arrest, false imprisonment,
malicious prosecution, and negligence—that turn on the underlying question of probable cause.
Probable cause exists where an officer has “reasonably trustworthy information” that the suspect has
committed a crime. Gardenhire v. Schubert, 205 F.3d 303, 315 (6th Cir. 2000) (quoting Beck v.
Ohio, 379 U.S. 89, 91 (1964)).
Nerswick contends that probable cause was absent here because the officers did not acquire
written statements from various witnesses until after his arrest. But the relevant question is what the
officers knew at the time of the arrest. See Anderson v. Creighton, 483 U.S. 635, 641 (1987). At
that time, the undisputed facts show that the officers had been told that the rerailers sold to Garden
Street were the same ones that Grace had reported stolen. In addition, a Garden Street employee,
Holbrook, had identified Nerswick as the seller of the rerailers and produced supporting
documentary and video evidence. Moreover, Holbrook had told the officers that he informed
-4-
No. 10-3328
Nerswick v. CSX Transportation
Nerswick that the rerailers might be railroad property, and that Nerswick gave a false answer when
asked how he acquired them. This information was sufficient for the officers to believe that
Nerswick had sold CSXT property knowing or with reason to know the property was stolen—the
exact offense for which they obtained a warrant and arrested Nerswick.
Nerswick responds that the officers conducted a hasty investigation and failed to obtain
corroborating evidence of his guilt. Once an officer obtains probable cause, however, he has no
further obligation to continue the investigation and may instead pursue arrest of the suspect.
Crockett v. Cumberland College, 316 F.3d 571, 581 (6th Cir. 2003). Moreover, this case is unlike
those cited by Nerswick because Dugger and Minges had no substantial evidence of Nerswick’s
innocence at the time of his arrest. Compare Gardenhire, 205 F.3d at 315-16. Nerswick has
therefore failed to raise a genuine issue of material fact as to his contention that the officers arrested
him without probable cause.
Nerswick’s remaining claim against the officers is that they failed to present him to a judicial
officer promptly after his arrest. Section 2935.13 of the Ohio Revised Code states that “[u]pon the
arrest of any person pursuant to a warrant, he shall forthwith be taken before the court or magistrate
issuing the same[.]” Similarly, Ohio Criminal Rule 4(E)(1)(c)(iii) states that “[an] arrested person
shall . . . be brought without unnecessary delay before a court of record therein, having jurisdiction
over such an offense[.]”
Here, the record shows that, after arresting Nerswick, Dugger and Minges questioned him
at the CSXT office for approximately two hours before transporting him to the Hamilton County
Justice Center. Nerswick says that detention violated § 2935.13. As the district court correctly
-5-
No. 10-3328
Nerswick v. CSX Transportation
noted, however, each of the cases cited by Nerswick involved a much greater delay between arrest
and presentation than the one he experienced here. See Shobe v. Seneca County Sherriff’s Office,
No. 4:07 CV 1783, 2008 WL 440582 (N.D. Ohio Feb. 13, 2008) (seven days); Leger v. Warren, 57
N.E. 506 (Ohio 1900) (five days); Sayre v. Chilcott, No. 48802, 1985 WL 9011 (Ohio Ct. App. May
16, 1985) (six days). We see no basis to hold that the two-hour delay here was unlawful.
Nor has Nerswick created a genuine issue of material fact as to an alleged “ulterior motive”
for the officers’ investigation. Nerswick asserts that his brother James’s affidavit demonstrates such
a motive. But that affidavit merely states that the officers asked Nerswick how he obtained CSXT’s
rerailers. Those questions were legitimate. Thus, the officers are entitled to summary judgment on
this claim.
Only Nerswick’s claims against CSXT remain. Our determination that the officers did not
violate Nerswick’s constitutional rights defeats his § 1983 failure-to-train claim against CSXT. See
Boykin v. Van Buren Township, 479 F.3d 444, 450 (6th Cir. 2007). Similarly, without a wrongful
act by its agent, CSXT cannot be vicariously liable to Nerswick under state law. See Comer v. Risko,
833 N.E.2d 712, 716-17 (Ohio 2005). The district court was therefore correct to grant summary
judgment to CSXT as well.
The district court’s judgment is affirmed.
-6-
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Citation Nr: 1602955
Decision Date: 01/29/16 Archive Date: 02/05/16
DOCKET NO. 07-28 368 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in North Little Rock, Arkansas
THE ISSUES
Entitlement to a total disability rating based on individual unemployability due to service-connected disabilities (TDIU).
REPRESENTATION
Appellant represented by: The American Legion
WITNESSES AT HEARING ON APPEAL
The Veteran and his spouse
ATTORNEY FOR THE BOARD
N. Sangster, Associate Counsel
INTRODUCTION
The Veteran served on active duty from March 1965 to March 1975.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from a May 2006 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in North Little Rock, Arkansas, which, in part, continued the 50 percent disability evaluation for PTSD.
In December 2008, the Veteran and his wife testified before the undersigned Acting Veterans Law Judge at a Travel Board hearing at the RO. A copy of the transcript has been associated with the claims file. The appeal was then remanded in May 2011 for additional development. Thereafter, in September 2013, the Board denied a rating higher than 50 percent prior to October 19, 2010, for PTSD but granted a 70 percent rating since October 19, 2010. The Board also remanded the Veteran's claim for a TDIU for further development.
The issue of entitlement to a TDIU prior to October 19, 2010 is addressed in the REMAND portion of the decision below and is REMANDED to the Agency of Original Jurisdiction (AOJ).
FINDING OF FACT
In resolving all doubt in the Veteran's favor, his service-connected disabilities have rendered him unemployable since October 19, 2010.
CONCLUSION OF LAW
The criteria for a TDIU have been met since October 19, 2010. 38 U.S.C.A. §§ 1155, 5107 (West 2014); 38 C.F.R. §§ 3.321, 3.340, 3.341, 4.16 (2015).
REASONS AND BASES FOR FINDING AND CONCLUSION
When any impairment of mind or body sufficiently renders it impossible for the average person to follow a substantially gainful occupation, that impairment will be found to be causing total disability. 38 C.F.R. § 3.340 (2015). If the total rating is based on a disability or combination of disabilities for which the Schedule for Rating Disabilities provides an evaluation of less than 100 percent, it must be determined that the service-connected disabilities are sufficient to produce unemployability without regard to advancing age. 38 C.F.R. § 3.341 (2015). In evaluating total disability, full consideration must be given to unusual physical or mental effects in individual cases, to peculiar effects of occupational activities, to defects in physical or mental endowment preventing the usual amount of success in overcoming the handicap of disability and to the effects of combinations of disability. 38 C.F.R. § 4.15 (2015).
If the schedular rating is less than total, a total disability evaluation can be assigned based on individual unemployability if the Veteran is unable to secure or follow a substantially gainful occupation as a result of service-connected disability, provided that the Veteran has one service-connected disability rated at 60 percent or higher; or two or more service-connected disabilities, with one disability rated at 40 percent or higher and the combined rating is 70 percent or higher. The existence or degree of nonservice-connected disabilities will be disregarded if the above-stated percentage requirements are met and the evaluator determines that the Veteran's service-connected disabilities render him incapable of substantial gainful employment. 38 C.F.R. § 4.16(a).
If the Veteran does not satisfy the threshold minimum rating requirements, he may still receive a TDIU on an alternative extra-schedular basis under the special provisions of 38 C.F.R. § 4.16(b) , provided, however, it is shown that he is indeed unemployable on account of his service-connected disability or disabilities.
The central inquiry is, "whether the Veteran's service-connected disabilities alone are of sufficient severity to produce unemployability." Hatlestad v. Brown, 5 Vet. App. 524, 529 (1993).
The Veteran is service connected for posttraumatic stress disorder (PTSD), rated as 50 percent disabling prior to October 19, 2010, and as 70 percent disabling thereafter; a right leg condition (residuals of a gunshot wound), rated as 10 percent disabling since April 26, 1988; a right knee condition, rated as 10 percent disabling since April 23, 2007; tinnitus, rated as 10 percent disabling since September 9, 2014; and a left hearing loss disability, rated as 10 percent since September 9, 2014. His combined disability rating was 60 percent effective May 26, 2000 and 80 percent effective October 19, 2010. He has met the schedular requirements for a TDIU, under section 4.16(a), since October 19, 2010.
The Board finds the Veteran is entitled to a TDIU as of October 19, 2010. The Veteran's medical records show, in October 2010, the Veteran presented with depressed mood, lack of interest, decreased sleep, and lack of energy. He also had nightmares and intrusive thoughts. He had passive thoughts of death. Examination revealed a dysphoric mood and mildly dysphoric affect. There were no hallucinations, paranoid or grandiose thoughts, or suicidal or homicidal ideation.
Additional records from December 2010 show the Veteran reported decreased frequency of nightmares, but had struck out at his wife while sleeping, which had not occurred previously. He denied any suicidal ideation. On examination, the Veteran was appropriately dressed and groomed. Speech was clear and coherent, but somewhat loud. Mood was nondepressed and affect was full. There were no perceptual disturbances. Thought processes were linear and goal directed. No delusions, hallucination, or suicidal or homicidal ideation was noted. The Veteran's GAF score was 55. Additional records dated May 2011 also revealed a GAF score of 55.
A VA examination was conducted in July 2011. He reported having a disorderly conduct charge in 2008 arising from an incident with a man in his church and a police officer. He denied any current charges or probation. He denied harming his wife since 2006, but reported pulling a knife on her and their sons in 2010. The Veteran used to go fishing but now spent most of his time watching television. The examiner noted that the Veteran had significant anger and judgment problems that exacerbated his general level of assaultiveness. On examination, the Veteran was appropriately groomed and dressed. His speech and psychomotor activity were unremarkable. His mood was agitated and irritable, and his affect was full. He was fully oriented, and able to complete serial 7's and spell a word forward and backward. His thought processes were unremarkable, but thought content was noted to be angry and aggressive. There were no delusions present. There was no obsessive or ritualistic behavior. The Veteran reported some suicidal ideation but denied any intent. Memory was fully intact. His GAF score was 48. She noted that the Veteran's typical line of work was a concrete finisher. She observed that the Veteran's last supervisor wrote "do not rehire" on the Veteran's evaluation/separation papers. The Veteran and his wife reported that this was due to almost daily conflicts with other employees. The examiner opined that it was just as likely as not that the Veteran was unemployable at this time. She stated that the Veteran's difficulty working was not due exclusively to his PTSD, but also his physical health decline and argumentative, aggressive style with others. The examiner concluded that the Veteran did not have total occupational or social impairment due to PTSD, but there were deficiencies in judgment, thinking, mood, and family relations.
As noted above, the Board remanded this issue for further development - namely, another VA examination to determine the effect of all of his service-connected disabilities on his employability. To this end, the Veteran was provided VA examinations in May and June 2014.
At his May 2014 VA psychiatric examination, the examiner stated that the Veteran continued to meet the full criteria for a diagnosis of PTSD as well as cocaine dependence in remission and alcohol abuse in remission, both secondary to his PTSD. She also stated that the Veteran had depression secondary to PTSD and exhibited adult antisocial thinking and behavior exacerbated by his PTSD that he continues to deny prior to his military service beginning 1965. The examiner observed that since the last July 2011 VA examination, the Veteran's anger/irritability, isolation to avoid conflicts, and capacity to concentrate and remember have increased so that he was no longer driving as much and no longer handled any financial affairs. Although there had been no legal charges, the police were called to his house by the family for his agitated outbursts. He reported little to no tolerance for anyone making mistakes. The examiner observed that the Veteran appeared to have had criminal/antisocial thinking patterns, exacerbated by his drug use history, for a long time and he had not altogether yet become abstinent. Since the July 2011 VA examination, the examiner stated that the Veteran seemed to have declined in the areas of social and leisure functioning. She commented that it appeared that the Veteran's physical health had declined as evidenced by several medical hospitalizations. Based on the chronicity of his PTSD, which was exacerbated by declining physical health, the examiner opined that the Veteran would be unemployable. She noted that the Veteran's typical line of work was as a concrete finisher and he was placed on a "no hire list" by his last employer, which was reportedly due to almost daily conflicts with the other employees. The examiner stated that it was as least as likely as not that the Veteran was unemployable at this time as he was determined to be at his last July 2011 VA PTSD examination. She further opined that it was as least as likely as not that the PTSD symptoms, which have worsened over time, render the Veteran unemployable.
Regarding his right knee disorder, the Veteran also had a VA examination in May 2014. The Veteran reported complaints of increasing weakness of the right knee; numbness and tingling of the right leg. The examiner observed that the Veteran had intermittent numbness in his foot. He stated that exacerbated with driving, it may affect the Veteran's ability to work in the trucking industry.
At the June 2014 VA examination regarding the Veteran's right leg condition, the examiner observed that the Veteran was ambulatory without cane or any other assistive device. He had normal motor strength in the right leg and foot and had a very small area of reported decreased sensation to light touch on the extreme lateral aspect of the right midfoot only (otherwise, sensation to light touch was intact on right lower extremity at knee and below as well as remainder of right foot at this time). The examiner concluded that the Veteran had no current evidence of major functional limitations in his right leg associated with the former gunshot wound of the right lower extremity in 1965.
Resolving all doubt in the Veteran's favor, a TDIU rating as of October 19, 2010, is warranted. Both the July 2011 and May 2014 VA mental health examiners opined that the Veteran's PTSD symptoms rendered him unemployable. In addition, the evidence of record shows that the Veteran is unable to obtain and maintain employment because he has been placed on a "no hire list" due to his PTSD symptoms. Moreover, his complaint of numbness and tingling in his right lower extremity hinders him from driving. The Board also notes that a February 2015 rating decision rendered the Veteran incompetent to handle disbursement of funds. Accordingly, the Board concludes that a TDIU is warranted effective October 19, 2010.
ORDER
A TDIU is granted as of October 19, 2010, subject to the statutes and regulations governing the payment of VA compensation.
REMAND
The Board must remand the issue of entitlement to a TDIU prior to October 19, 2010 for additional development.
As noted above, if the Veteran does not satisfy the threshold minimum rating requirements, he may still receive a TDIU on an alternative extra-schedular basis under the special provisions of 38 C.F.R. § 4.16(b) , provided, however, it is shown that he is indeed unemployable on account of his service-connected disability or disabilities. That said, in this alternative circumstance the Board would be precluded from granting a TDIU on this special extra-schedular basis in the first instance, having instead to refer the matter to the VA Under Secretary for Health or the Director of the Compensation and Pension Service for this special consideration. See Barringer v. Peake, 22 Vet. App. 242 (2008).
Accordingly, the case is REMANDED for the following action:
1. Please refer this claim for a TDIU prior to October 19, 2010, to the Director, Compensation and Pension Service for extra-schedular consideration, to determine whether the Veteran is unemployable by reason of service-connected disabilities.
2. If any benefit sought on appeal remains denied, a supplemental statement of the case should be furnished to the Veteran and his representative, and they should be afforded a reasonable opportunity to respond.
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 2014).
______________________________________________
KELLI A. KORDICH
Acting Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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697 F.2d 299
U. S.v.Forman
81-1492
UNITED STATES COURT OF APPEALS Second Circuit
5/12/82
1
S.D.N.Y.
AFFIRMED
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70 F.3d 1268
Starrv.Howard**
NO. 95-60120
United States Court of Appeals,Fifth Circuit.
Oct 19, 1995
1
Appeal From: S.D.Miss., No. 2:94-CV-288-PS
2
DISMISSED.
**
Conference Calendar
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108 P.3d 671 (2005)
198 Or. App. 513
Ali JAMSHIDNEJAD, Guardian Ad Litem for David Jamshidnejad, a Minor Child, Appellant-Cross-Respondent,
v.
CENTRAL CURRY SCHOOL DISTRICT, Tom Denning, and Robert Snyder, Respondents-Cross-Appellants.
01CV0321; A118486.
Court of Appeals of Oregon.
Argued and Submitted October 29, 2004.
Decided March 23, 2005.
*673 Manuel C. Hernandez, Bandon, argued the cause for appellant-cross-respondent. With him on the briefs was Hernandez and Associates, L.L.C.
Paul A. Dakopolos, Salem, argued the cause for respondents-cross-appellants. With him on the briefs was Garrett, Hemann, Robertson, Jennings, Comstock & Trethewy, P.C. With him on the cross-reply brief was Tracy A. Prall.
Before EDMONDS, Presiding Judge, and WOLLHEIM and SCHUMAN, Judges.
SCHUMAN, J.
Defendant suspended plaintiff Jamshidnejad from middle school for four days after an allegedly disruptive occurrence involving offensive petitions.[1] Plaintiff then brought this action, claiming "outrageous conduct" and violations of various constitutional rights under 42 USC section 1983.[2] The trial court granted defendant's motion for summary judgment. Plaintiff appeals, assigning error only to the trial court's grant of summary judgment as to the constitutional claims, and defendant cross-appeals, assigning error to the trial court's denial of its motion for enhanced prevailing party fees. Only one issue merits discussion: plaintiff's claim for damages based on an asserted violation of his free speech rights. On that issue, we reverse and remand. In light of that disposition, the cross-appeal is moot and we therefore dismiss it. On all other claims at issue in the appeal, we affirm.
The relevant undisputed facts are as follows. In March 2001, when plaintiff was an eighth-grade student at Riley Creek Middle School in Curry County, his principal, Denning, discovered a number of petitions. One sought the firing of Denning and another declared that Denning was "gay." A third petition, the subject of plaintiff's free speech claim, declared that a teacher at the school, Ms. Weinhold, was "the devil." Although it is undisputed that plaintiff was present when the "devil petition" was created and that he wrote a list of synonyms for "devil," the extent of any other participation by him in its creation, if any, is unclear from the record. The principal drafter of the petition was plaintiff's schoolmate, J. Plaintiff wrote the list of synonyms for "devil" on a page that is separate from the petition itself; the petition does not contain any of the synonyms; and we cannot discern whether or not the list was circulated with the petition.
After Denning discovered the "devil petition," he showed it to Weinhold, who became upset and left school. Several students whose names appeared on the petitions were questioned, and some stated that they had been coerced into signing. Plaintiff denied participating in any coercion, although he stated that he was present when the petitions *674 were circulated. After an investigation, the Gold Beach Police Department concluded that plaintiff was involved in creating the petitions and in asking or coercing others to sign them.
On March 19, 2001, Denning met with plaintiff, plaintiff's father, and the investigating officer to discuss the petitions. At the end of the conversation, Denning suspended plaintiff from school for the rest of that week, which consisted of the four days preceding the upcoming spring break. Denning reported that many students were upset by the effect of the petition on Weinhold and blamed plaintiff. He advised that plaintiff should stay away from school for his own safety. Plaintiff complied. A transcript of the meeting also indicates that Denning discussed his concern about plaintiff's alleged involvement in creating the petitions and about reports that plaintiff coerced students into signing them.[3]
Plaintiff brought this action under 42 USC section 1983 against the school district, its superintendent, and Denning for infringement of his rights to due process, equal protection, and free speech under the federal constitution; for "outrageous conduct," by which we assume that he meant intentional infliction of emotional distress; and for "denial of free public education." After the court dismissed plaintiff's claims, defendant moved for an enhanced prevailing party fee. The court denied that claim.
In arguing the First Amendment issue the only issue on appeal that merits discussion the parties cited relevant federal cases involving free speech in schools[4] but focused their legal analysis on whether or not plaintiff's speech dealt with a "matter of public concern," and it was on that basis that the trial court decided in favor of defendants: "I think I can assume, basically, [counsel], all the facts that you're claiming here and the free speech that we're talking about here was not a matter of public concern." The trial court subsequently granted defendant's motion for summary judgment on all claims and denied defendant's motion for prevailing party fees.
The parties' arguments and the court's rationale presume an entirely erroneous interpretation of the First Amendment, namely, that it protects speech regarding matters of public concern and nothing more. It is true that, in one case, Connick v. Myers, 461 U.S. 138, 146, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983), the Court held that a public employer committed no First Amendment violation by firing a public employee who, in her capacity as such, expressed herself on a matter of purely private concern. That is a far cry from an exhaustive statement of the First Amendment's scope. In fact, the Court immediately added:
"We do not suggest, however, that [the employee's] speech, even if not touching upon a matter of public concern, is totally beyond the protection of the First Amendment. `The First Amendment does not protect speech and assembly only to the extent it can be characterized as political. "Great secular causes, with smaller ones, are guarded."' United Mine Workers v. Illinois State Bar Association, 389 U.S. 217, 223, 88 S.Ct. 353, 356, 19 L.Ed.2d 426 (1967), quoting Thomas v. Collins, 323 U.S. 516, 531, 65 S.Ct. 315, 323, 89 L.Ed. 430 (1945). We in no sense suggest that speech on private matters falls into one of the narrow and well-defined classes of expression which carries so little social value, such as obscenity, that the State can prohibit and punish such expression by all persons in its jurisdiction.''
Connick, 461 U.S. at 147, 103 S.Ct. 1684. Thus, the First Amendment has long protected offensive artistic speech, FCC v. Pacifica *675 Foundation, 438 U.S. 726, 98 S.Ct. 3026, 57 L.Ed.2d 1073 (1978); semi-nude dancing, Barnes v. Glen Theatre, Inc., 501 U.S. 560, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991); personal invective short of "fighting words," Gooding v. Wilson, 405 U.S. 518, 92 S.Ct. 1103, 31 L.Ed.2d 408 (1972); advertising, Virginia Pharmacy Board v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976); and a host of other forms of expression having no relationship to matters of public concern beyond the public concern generated by government's attempt to stifle it.
The fact that the court reached its decision based on an erroneous rationale, however, does not mean that we must reverse. We can affirm nonetheless if we can determine from the record that the court was "right for the wrong reason." Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or. 634, 659, 20 P.3d 180 (2001). In the present case, that means that we may affirm if, on de novo review of the record, we find undisputed assertions of material fact that would compel the conclusion that plaintiff was either suspended for reasons unrelated to speech; or that, if he was suspended for speech, it was unprotected speech because it was disruptive or potentially disruptive. ORCP 47 C; Pangle v. Bend-LaPine School District, 169 Or.App. 376, 10 P.3d 275, rev. den., 332 Or. 558, 34 P.3d 1176 (2001).[5] We conclude that, on the record as it now exists, disputed questions of fact exist with respect to each of the theories that might support affirmance.
We begin with the question of why plaintiff was suspended. Tautologically, if he was suspended for reasons apart from speech, then his First Amendment claim must fail. Defendant argues that the purpose of the suspension was not to punish plaintiff for his contribution to the petitions but to protect him from retaliation by his fellow students and to punish him for coercive acts.
We note initially that, even if the purpose was to protect plaintiff from retaliation for speech, that fact does not insulate defendant from liability under the First Amendment. If the speech was lawful, then defendant has an obligation to protect the speaker and cannot meet that obligation by silencing or punishing him. Gregory v. City of Chicago, 394 U.S. 111, 120-21, 89 S.Ct. 946, 22 L.Ed.2d 134 (1969) (Black, J., concurring). Thus, the question whether defendant sent plaintiff home for his own protection collapses into the question whether the speech was itself lawful, which we address below.
The transcript of the March 19 meeting among plaintiff, plaintiff's father, Denning, and a police officer indicates that Denning suspended plaintiff for several reasons, one of which was reported coercion.
"And also we're seriously looking at the ones that ahh we've got four or five well three or four students that are saying that they were threatened. In other words, you sign this or we're going to beat you up. And they named [plaintiff and J]. I, I think are the two that threatened and so that's what we're going to be talking to them this morning to get, we want to get the truth. There's a lot of rumors and things going around and that's why we're calling the kids in one by one and we're letting parents be here if they want to be part of it. We're trying to find the truth."
The transcript also contains the following exchange between Denning and plaintiff's father concerning whether plaintiff was being sent home for coercing other students into signing the petition:
"[Denning:] Okay and also there were the kids were saying that [plaintiff] threatened them and so ...
"[Plaintiff's father:] That's the part he's saying he did indicate willing to take *676 even though I told might even have to even take lie detector test.
"[Denning]: Ahh ha.
"[Plaintiff's father]: I'm not, I'm just trying to be fair.
"[Denning]: Yeah, well I understand and that's what we're what we're trying to be to [sic]. We're going to be calling all the kids in today. We've got a list of fifteen names and we're going to call them in and do the same thing with them, call their parents. It's going to take a while though. And so we're going to find out exactly what happened but we did talk to them after the meeting on Friday and ahh they specifically said [plaintiff] and [J] threatened them. An and different people at different times said that. So that's what we have to find out and get them on tape because maybe their stories will change. Ahh when it comes down to it when its being interviewed by a police officer. And that's what we want to find out. And if [plaintiff] you know we could change the consequence if we find out he didn't threaten anybody then it would change everything completely. But right now we've got kids that are telling us that he did threaten them and that's what we want to find out and get to the bottom of it."
That exchange supports Denning's contention that he sent plaintiff home based at least in part on reports of threatening behavior. Plaintiff, however, contends that he was suspended due to his role in creating the petition, and that theory is supported by numerous statements by Denning at the same meeting:
"[I'm punishing plaintiff and J] right now and then if we find out anyone else wrote [the petitions] then it will be the same thing for them. We've got kids lined up to talk to all morning today. So it's [plaintiff] and [J] right now and possibly more later. Ahh the kids that signed willingly they're going to miss a few recesses or something ahh but the ones that wrote the petition are the ones we're cracking down on right now.
"* * * * *
"[R]ight now [plaintiff is] mainly being suspended, he and [J] are suspended because on Friday they both admitted that they wrote worked together [sic] on these documents.
"* * * * *
"Well see the thing is you have every right to do a petition, you know, `We * * * want to get rid of Mr. Denning as principal.' * * * [Y]ou know that's your right to do that. But I think where you start accusing people of being the devil, that's where you guys crossed the line."
We conclude that, on the record before the trial court, a disputed issue of fact exists as to whether plaintiff was suspended for conduct and not for speech. We therefore cannot affirm the trial court's grant of summary judgment to defendant on the ground that, as a matter of law, the suspension did not implicate free speech at all.
Nonetheless, we could affirm the trial court if we could conclude that, as a matter of law, even if the suspension was speech related, the speech was unprotected. Examining that theory requires us to determine what speech in fact could have served as the basis for the suspension. In other words, to determine whether defendant acted lawfully in suspending plaintiff for his speech, we need to know the speech that defendant reacted to. The record in that regard is not clear. Denning, the principal, asserted at the meeting with plaintiff and his father that plaintiff had admitted "helping" his classmate write the petition. Denning thus concluded that, although plaintiff "didn't actually write it, he was part of the authorship of that." At another point, Denning stated that plaintiff and J "worked together on these documents." Plaintiff, however, states that he merely "stood by the table" while J wrote the petition and that he also wrote down a list of synonyms for "devil"[6] because the two boys did not know how to spell the word "devil" itself. Thus, at the time defendant suspended plaintiff, it was undisputed that plaintiff *677 did not himself write the text of the petition but that he did write a list of words.
Furthermore, the dissent's assertion to the contrary notwithstanding, the record does not disclose that the list of words was ever circulated. It is on a sheet of paper separate from the sheet declaring the teacher to be the devil, threatening to beat students who do not agree, and containing student signatures. That sheet contains the word "devil" and no synonyms. Plaintiff's list contains no signatures or anything else to indicate that it was circulated, and his affidavit is ambiguous.
The record, therefore, indicates that plaintiff's contribution to the petition consisted of writing the list of synonyms. The record does not demonstrate that the list was ever shown to any students, and it does not demonstrate that what was shown to students contained anything that plaintiff wrote. Put another way, a finder of fact could conclude that, at the time defendant suspended plaintiff, defendant knew only that plaintiff had provided the petition's author with an unused and undisclosed list of synonyms for the word "devil."
We must therefore determine whether defendant could punish plaintiff for that writing without violating his First Amendment rights. Pangle is the most instructive case. There, we held that a student's speech, published in a newsletter, was not constitutionally protected. We summarized the circumstances under which punishment for student speech in a school setting is constitutionally permissible. Drawing together the principles announced by the United States Supreme Court in Tinker v. Des Moines Independent Community School Dist., 393 U.S. 503, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969), Bethel School Dist. No. 403 v. Fraser, 478 U.S. 675, 106 S.Ct. 3159, 92 L.Ed.2d 549 (1986), and Hazelwood School District v. Kuhlmeier, 484 U.S. 260, 108 S.Ct. 562, 98 L.Ed.2d 592 (1988), we distilled the required analysis and applied it to the speech at issue in that case:
"[W]e observe that the United States Supreme Court did not hold in Tinker, Fraser and Kuhlmeier, that the `protected' or `unprotected' content of the expression was the determinative issue. Rather, the Court determined whether a school district could discipline for the expression in those cases based on the interests inherent in the school's educational mission. * * *
"Thus, the task confronting us in this case is to focus on the issue of any disruption, actual or potential, that the dissemination of [the newsletter] caused to school's educational mission. The importance of maintaining a structured and safe environment is underscored by the compulsory nature of public education in this state. * * * When children are within the school environment, parents must rely on school personnel to provide a safe and non-disruptive learning environment. As the court noted in Fraser, there is an `obvious concern on the part of parents, and school authorities acting in loco parentis, to protect children[.]' School personnel act in a surrogate parent role, insofar as student safety on high school campuses is concerned. Fraser, 478 U.S. at 684[, 106 S.Ct. 3159]. The exercise of appropriate discipline to deter disruptive forces within the school environment is as consistent with First Amendment rights as are constitutional limitations on free speech in other environments, such as constraints on yelling `Fire!' in a crowded movie theater."
Pangle, 169 Or.App. at 394-95, 10 P.3d 275. We emphasized that Supreme Court decisions permit schools to curtail not only speech that causes actual disruption but also expressive activity that carries the potential to disrupt the educational environment:
"It does not necessarily follow that expression by a student in a school environment is protected to the same extent that the expression would be protected if made by an adult in a non-school setting. Kuhlmeier, 484 U.S. at 266[, 108 S.Ct. 562]; Fraser, 478 U.S. at 682[, 106 S.Ct. 3159]. As the Court has said, `[t]he undoubted freedom to advocate unpopular and controversial views in schools and classrooms must be balanced against the society's countervailing interest in teaching students the boundaries of socially appropriate behavior.' Fraser, 478 U.S. at 681[, 106 S.Ct. 3159]. For that reason, it is untenable to *678 argue that the use of vulgar or threatening language not resulting in actual disruption is not subject to discipline. As the Court indicated in Tinker, the question is whether the expression will motivate `actually or potentially disruptive conduct by those participating in it.' 393 U.S. at 505[, 89 S.Ct. 733]. Finally, `[a] school need not tolerate student speech that is inconsistent with its `basic educational mission,' even though the government could not censor similar speech outside the school.' Kuhlmeier, 484 U.S. at 266[, 108 S.Ct. 562] (citation omitted)."
Pangle, 169 Or.App. at 395, 10 P.3d 275. Thus, summary judgment was proper in this case only if undisputed facts show that plaintiff actually contributed to the devil petition and that his contribution was disruptive or capable of causing disruption to the school's mission of fostering a learning environment and "teaching students the boundaries of socially appropriate behavior."[7]
We noted in Pangle that "our analysis must engage with the unique set of factual circumstances present in this case." 169 Or.App. at 394, 10 P.3d 275. The same is true here. Whether plaintiff's speech was disruptive or capable of disruption depends on an array of considerations including the nature of the speech, its content, and the challenge it posed to the school's interests. That analysis is heavily fact-bound. Federal case law indicates certain matters that are relevant to determining whether a student's speech undermines the school's educational goals. For example, the court may look to whether, by their impermissible speech, older students model behavior that contravenes the school's interest in creating a beneficial educational environment; whether the speech is hostile or offensive to certain listeners in particular; and whether students' reactions to the speech exacerbated its unwanted effects. See Fraser, 478 U.S. at 682-86, 106 S.Ct. 3159 (applying those considerations to determine whether, under the facts of that case, a student's speech interfered with the work of the school or infringed on the rights of others).
From the record in the present case, we cannot determine whether plaintiff's speech, that is, the list of devil synonyms, was employed in creating the petition or circulated with it and if so, whether it was disruptive or capable of disruption under the relevant standard. The facts surrounding the nature of the petition, its authorship, and its dissemination are in dispute. Plaintiff argues that he did not compose any of the petitions, that his list of devil synonyms was separate from the petitions, and that, in any case, "there was no disruption of the school or classroom." Defendant contends that plaintiff coauthored the devil petition and that coercion associated with plaintiff and the petition caused actual disruption, as did the uproar and investigation upon its discovery by Denning. Defendant also argues that facts in the record reflecting events that occurred after Denning discovered the petitions, including the investigation, the reported reaction of the students, and the reaction of Weinhold, amount to the type and quantum of disruption that justifies imposing discipline for plaintiff's speech, but disputed issues of fact prevent us from gauging the extent, if any, of plaintiff's contribution to those events and reactions.
In short, it is possible that defendant legitimately suspended plaintiff for reasons unrelated to speech; it is possible that, if defendant suspended plaintiff for speech, the suspension was lawful because plaintiff's speech was disruptive or potentially disruptive of the school environment; but, on this record, viewing the facts and inferences drawn from them in the light most favorable to plaintiff, we cannot rule out the possibility that defendant suspended plaintiff for suggesting, orally and in writing, to the author of an offensive petition, that the author substitute a synonym for the word "devil," and that the author rejected the suggestion. *679 For that reason, we conclude that the trial court erred in granting defendant's motion for summary judgment insofar as it applied to plaintiff's claim for a violation of his rights under the First Amendment.
On appeal, reversed and remanded on plaintiff's 42 USC section 1983 claim for violation of his rights under the First Amendment to the United States Constitution; otherwise affirmed. Cross-appeal dismissed as moot.
EDMONDS, P.J., concurring in part, dissenting in part.
I agree with the majority's disposition of all of plaintiff's claims with the exception of its reversal of summary judgment on plaintiff's claim under 42 USC section 1983 that the school district violated his freedom of expression under the First Amendment to the United States Constitution when it sent him home from school for his involvement in the preparation and circulation of petitions asserting that one of his middle school teachers was the "devil." I would hold that, based on the evidence before it, the school district acted constitutionally because plaintiff's expression adversely affected or could have disrupted the educational mission of his school.
This case comes to us on appeal from the grant of summary judgment by the trial court under ORCP 47 C. That rule provides that a court is authorized to enter summary judgment on behalf of a party if "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Factual disputes that are not material to a judgment as a matter of law do not preclude summary judgment under the rule. Here, while there are reasonable competing inferences as to whether plaintiff was, in fact, suspended from school because of his involvement with the petitions, there is, based on his own admissions, no genuine issue of material fact regarding the entitlement of the school district to lawfully discipline him, including suspending him from school.
To preclude summary judgment, the governing law required plaintiff to make out a legally cognizable section 1983 claim that the school district violated his protected right of free speech under the First Amendment. Plaintiff makes the following allegations in that regard:
"5
"On or about March 19, 2001, plaintiff was questioned by police and Mr. Tom Denning, Principal of Riley Creek School, regarding his knowledge of a petition in which a teacher was identified as `the Devil.'
"6
"At the end of this interview, Plaintiff was summarily suspended from attending school for the remainder of the week, a period of 4 days. No written notice was provided to Plaintiff's parents and no opportunity for a hearing on the matter was provided.
"7
"Plaintiff was accused, during the interview, of signing the petition and having assisted in writing a portion of said petition. There were no advocations of violence or disobedience in the petition. The petition had been written approximately 5 months prior to its discovery by school administration.
"8
"Plaintiff was sanctioned for his participation in writing/signing the petition."
Defendants moved for summary judgment regarding plaintiff's allegations, relying, in part, on evidence that plaintiff admitted that he participated with another student (J) in drafting the petitions, admitted to authoring a document containing a number of names for the devil intended to be included with the circulation of the other petitions, admitted that he was with J when classmates were approached to sign the petitions, and admitted to personally signing the petitions. Plaintiff responded to defendants' evidence with his own affidavit, in which he averred, in part:
*680 "I wrote a number of synonyms or names for the devil. * * * I did not publish, post or otherwise circulate this piece of paper anywhere except with [J]. This document was included with a number of petitions drafted at least in part by [J]."
Later in his affidavit, plaintiff averred, "I did not write any petition. I `signed' the petitions."
In other words, plaintiff effectively conceded at the time of summary judgment that he was at least to some extent a co-actor with J, but he claimed, nonetheless, that his actions constituted protected expression. Consequently, whatever issues of fact there are about the extent of plaintiff's involvement, it is uncontradicted that his actions went beyond expressing his personal opinion. It is also uncontradicted that the district had evidence at the time of the alleged suspension that some students and the teacher named in the petitions were affected by the petitions.[1] The police interviewed a number of students and reported to the district that there were four students interviewed who said that they were coerced by J into signing the petitions. There is also no question of fact regarding the content of the petitions that were circulated. Copies of the petitions were made part of the record, and their contents speak for themselves. Besides plaintiff's list of synonyms for the devil, the petitions, in substance, name a specific teacher, single her out, proclaim that "we will agree that she is the devil," list "all the people who hate her," and provide that those who do not sign the petitions "are subjected to be beaten till you turn blue and black."
Based on those uncontradicted facts in the summary judgment record demonstrating plaintiff's participation with J, the only remaining question is a legal one: whether the contents of the petitions, including the part authored personally by plaintiff, are protected expression in a school setting under the First Amendment. We decided a similar issue in Pangle v. Bend-LaPine School District, 169 Or.App. 376, 10 P.3d 275 (2000), rev. den., 332 Or. 558, 34 P.3d 1176 (2001), in which a school district disciplined a student for writing articles in a publication that he circulated to fellow students on his high school campus. In resolving that issue, we turned to United States Supreme Court precedent and derived from those cases the following bright-line principles. First, students do not lose their constitutional right to freedom of speech merely because they express themselves in a school environment. However, the First Amendment rights of students to express themselves in a school environment are not automatically co-extensive with the rights of adults in other settings. Rather, such rights exist in light of the special characteristics of the school environment. Tinker v. Des Moines Independent Community School Dist., 393 U.S. 503, 506, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969). Thus, it follows that students cannot be "punished merely for expressing their personal views on the school premises * * * unless school authorities have reason to believe that such expression will `substantially interfere with the work of the school or impinge upon the rights of other students.'" Hazelwood School District v. Kuhlmeier, 484 U.S. 260, 266, 108 S.Ct. 562, 98 L.Ed.2d 592 (1988) (quoting Tinker, 393 U.S. at 509, 89 S.Ct. 733). On the other hand, "[a] school need not tolerate student speech that is inconsistent with its basic educational mission, even though the government could not censor similar speech outside the school." Id. (internal quotation marks and citation omitted).
When the same principles are applied to this case, it becomes clear that plaintiff's expression, made in a school environment, was not protected expression under the First Amendment. The test is one of the objective reasonableness of the school district's disciplinary action. Framed properly, the question is whether the school district had reason to believe, based on the information in its possession at the time that it took its action, that plaintiff's expression in conjunction with that of his co-actor disrupted or potentially could have disrupted the middle school's educational mission for its students. With that focus in mind, the most obvious characteristic of plaintiff's expression was that it went beyond *681 the expression of plaintiff's personal opinion about his teacher on school grounds. Rather, the district could reasonably believe that plaintiff's expression was aimed at encouraging other students to express hatred for an authority figure in the school and to declare her to be the "devil." The petitions informed other students that they could suffer the consequence of being "beaten till you turn blue and black" in the event of their failure to sign the petitions.[2] Whether the petitions were intended to be a joke, as plaintiff later claimed, or were intended to promote verbal abuse and disrespect for their teacher, the potential disruptive effect of plaintiff's expression on the school's educational mission is the same.[3] Based on the information that it had at the time, the school district had reason to be believe that plaintiff's expression could substantially interfere with the work of the school and impinge upon the rights of other students to be free from disruptive influences on their own academic pursuits.[4] It follows that the trial court correctly granted summary judgment on plaintiff's section 1983 claim, as well as on his other claims.
Apparently, the majority and I arrive at different legal conclusions because we apply different standards of review to the contents of the summary judgment record. The majority sifts through the summary judgment record with lawyer-like deftness and seizes on issues of fact, that in its view, create jury questions and therefore preclude summary judgment. Those issues of fact cause it to conclude that the record is unclear about "the speech that defendant reacted to." 198 Or.App. at ___, 108 P.3d at 676. It explains, "Put another way, a finder of fact could conclude that, at the time defendant suspended plaintiff, defendant knew only that plaintiff had provided the petition's author with an unused and undisclosed list of synonyms for the word `devil.'" 198 Or.App. at ___, 108 P.3d at 677.
As a matter of law, there are at least two layers of standards of review that must be applied in this case. The first layer concerns a substantive rule of law and focuses on the information available to the district at the time it made its alleged decision to suspend plaintiff. The question is not what a factfinder could find at trial was plaintiff's actual involvement, but whether there was information reported to the school district at the time that could lead it to reasonably believe that plaintiff was involved with J in the reported misconduct. Plaintiff does not contest that the district received a police report before it allegedly suspended plaintiff that memorialized an investigation about whether students had been coerced into signing petitions calling for the removal of the school principal and a teacher. According to the report, during a meeting with "the involved students," "it was learned [J] and plaintiff were the two that created the documents" and that "[b]oth boys stated that they meant no harm in the petitions." Plaintiff was also interviewed and made the following statements to the police investigator:
"[J] wrote all the documents.
"I helped [J] with them.
"[J] wrote them though, I did not.
"I wrote the Devil names."
The police report also related a conversation that occurred with plaintiff when his father was present. According to the report, "[plaintiff] stated he was present when [J] wrote the petitions, but did not participate in the writing of them. [Plaintiff] stated that J was behind all of this."
*682 In addition to the information in the police report, the trial court had before it the evidence from the affidavits of the parties, which purported to frame contested and uncontested issues of fact. Plaintiff's affidavit filed in the summary judgment proceeding did not controvert the statements in the district's affidavit that he participated with J in drafting the petitions, that the list of the names for the devil was intended to be included in the circulation of the petitions to other students, that he signed the petitions himself, and that he was with J when they solicited classmates to sign the petitions. Rather, he said that he "did not publish, post or otherwise circulate this piece of paper [the list of names for the devil] anywhere except with [J]." (Emphasis added.) He also admitted in his affidavit that the list he wrote "was included with a number of petitions drafted at least in part by [J]," and he reiterated his position that he did not write the petitions.
ORCP 47 C is the governing procedural rule of law in this case, and thus provides another layer of review. It operates by precluding summary judgment when there exist genuine issues of material fact, providing, in part, that "[n]o genuine issue as to a material fact exists if, based upon the record before the court viewed in a manner most favorable to the adverse party, no objectively reasonable juror could return a verdict for the adverse party on the matter that is the subject of the motion for summary judgment." Thus, under the rule, plaintiff's concessions as to the extent of his participation with J are viewed in the manner most favorable to him. But even so, his concessions amount to admitted participation with J in the preparation and circulation of petitions, including the list that he personally prepared. No reasonable factfinder could find otherwise on this record. In that light, the legal question whether the district had reason to believe at the time that it disciplined plaintiff that his expression had interfered with, or could have substantially interfered with, the educational mission of the school or had impinged or could have impinged on the rights of other students is easily answered. In sum, the factual disputes plucked from the record by the majority do not create a genuine issue of material fact because of plaintiff's concessions regarding his participation with J.
I dissent.
NOTES
[1] This action was brought on behalf of David Jamshidnejad, a minor, by Ali Jamshidnejad, guardian ad litem. References to "plaintiff" in this opinion are to David Jamshidnejad. We refer to Central Curry School District, Tom Denning, and Robert Snyder collectively as "defendant."
[2] 42 USC section 1983 provides, in part:
"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State * * * 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[.]"
Section 1983 claims may be brought in state court. See Rogers v. Saylor, 306 Or. 267, 760 P.2d 232 (1988).
[3] After the spring break, reports circulated at school that plaintiff claimed to have a gun, that he told another student that she was on a "hit list," and that he brought a bullet to school. The charges were subsequently investigated and plaintiff was disciplined. Plaintiff's claim for violation of his free speech rights does not encompass those post-spring break events and the discipline imposed for them.
[4] Hazelwood School District v. Kuhlmeier, 484 U.S. 260, 108 S.Ct. 562, 98 L.Ed.2d 592 (1988); Bethel School Dist. No. 403 v. Fraser, 478 U.S. 675, 106 S.Ct. 3159, 92 L.Ed.2d 549 (1986); Tinker v. Des Moines Independent Community School Dist., 393 U.S. 503, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969).
[5] In Pangle, we noted that the appropriate standard of review in a section 1983 case is the same as it would be if the case were tried in federal court, and that "[w]hen a federal district court upholds a restriction on speech as constitutional, the Ninth Circuit Court of Appeals conducts a de novo review unless the district court has made specific findings on disputed fact issues[.]" 169 Or.App. at 394, 10 P.3d 275. The trial court in this case made no such findings. We take the mandate to conduct "a de novo review" to mean that we afford no deference to the trial court's implicit findings.
[6] "Satan, Beelzebub, [illegible], Lucifer, old gooseberry, old nick, old scratch, Serpent, archfiend, dastard: all names for `the devil.'"
[7] Plaintiff argues (and defendant disputes) that the devil petition caused no actual disruption until Denning notified others of its contents during his investigation. This argument is misplaced; the proper inquiry is whether the petition was disruptive or capable of disruption; the absence of actual disruption is not dispositive. Pangle, 169 Or.App. at 395, 10 P.3d 275 ("[T]he question is whether the expression will motivate actually or potentially disruptive conduct by those participating in it.") (Internal quotation marks and citation omitted.).
[1] After the principal found the petitions in J's possession, he showed them to the teacher named in the petitions. After reading them, she left school crying.
[2] Plaintiff was asked during his deposition whether he was trying to redress a grievance with his teacher by participating in the preparation and circulation of the petitions. He answered, "I don't believe so." He was also asked if he was trying to effect some change in school policy by his actions by signing the petitions. He responded, "I don't believe so."
[3] It is not necessary that expression be defamatory, threatening, obscene, or provocative for it to interfere with the educational mission of a school environment. For instance, the inoffensive "passing of notes" among students in a middle school classroom during class is the kind of expression that could reasonably be potentially disruptive to an environment meant to be conducive to learning and therefore constitutionally subject to discipline under the applicable law.
[4] At a minimum, plaintiff's expression aided in the disruption of the school's educational mission for J.
| {
"pile_set_name": "FreeLaw"
} |
FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT August 2, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 19-8000
(D.C. Nos. 2:18-CV-00048-ABJ &
KAREN MICHELLE COX, 2:15-CR-00180-ABJ-1)
(D. Wyo.)
Defendant - Appellant.
_________________________________
ORDER DENYING CERTIFICATE OF APPEALABILITY*
_________________________________
Before LUCERO, PHILLIPS, and EID, Circuit Judges.
_________________________________
Karen Cox, a federal prisoner proceeding pro se,1 seeks a certificate of
appealability (COA) to appeal the district court’s denial of her 28 U.S.C. § 2255 petition.
We conclude that reasonable jurists could not debate that the district court erred when it
denied Cox’s § 2255 petition. Thus, we deny Cox a COA.
BACKGROUND
In 2016, a jury convicted Cox of Conspiracy to Distribute 50 Grams or More of
Methamphetamine in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A) and 846. The district
*
This order is not binding precedent, except under the doctrines of law of the
case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive
value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
1
We liberally construe the pleadings of pro se litigants. United States v.
Pinson, 584 F.3d 972, 975 (10th Cir. 2009).
court sentenced Cox to 121 months’ imprisonment followed by five years’ supervised
release. Cox appealed her sentence on June 17, 2016, and we affirmed. United States v.
Cox, 684 F. App’x 706 (10th Cir. 2017).
In 2018, Cox filed a § 2255 petition in the district court requesting that her
sentence be vacated. As grounds, she claimed that both her trial and appellate counsel
were ineffective. The district court denied her petition and denied her a COA. Cox now
seeks a COA from this court.
DISCUSSION
A COA is a jurisdictional prerequisite for appellate review of a denial of a § 2255
petition. United States v. Parker, 720 F.3d 781, 785 (10th Cir. 2013). To obtain a COA,
a petitioner must make “a substantial showing of the denial of a constitutional right.” 28
U.S.C. § 2253(c)(2). This standard requires that a petitioner “demonstrate that reasonable
jurists would find the district court’s assessment of the constitutional claims debatable or
wrong.” Slack v. McDaniel, 529 U.S. 473, 484 (2000).
Cox seeks a COA to appeal whether her trial and appellate counsel were
ineffective.2 To prove an ineffective assistance of counsel claim, Cox must show two
2
In addition to her ineffective assistance of counsel claims, Cox gives two
other reasons why she believes the district court erred in denying her § 2255 petition.
First, she claims that, were her sentence to be reduced beneath the mandatory
minimum under the “safety valve” provision (18 U.S.C. § 3553(f)), she would also be
eligible for a further reduction under Amendment 794. We agree with the district
court’s holding that it lacked jurisdiction to reduce her sentence under § 3553(f) in a
§ 2255 petition. See United States v. Addonizio, 442 U.S. 178, 185 (1979).
Second, Cox seeks to appeal the denial of her motion to strike the
government’s response to her § 2255 petition for being overlong in violation of
District of Wyoming Local Rule 7.1(b)(2)(B). The district court has complete
2
things. First, she must show that counsel’s performance was deficient, meaning that it fell
“below an objective standard of reasonableness.” Strickland v. Washington, 466 U.S.
668, 688 (1984). Second, Cox must demonstrate that counsel’s deficient performance
prejudiced her, which requires her to show “a reasonable probability that, but for
counsel’s unprofessional errors, the result of the proceeding would have been different
. . . a probability sufficient to undermine confidence in the outcome.” Id. at 694. A
failure to demonstrate either deficiency or prejudice is fatal to an ineffective assistance of
counsel claim. Id. at 700.
I. Ineffective Assistance of Trial Counsel
Cox attacks the performance of her trial counsel on multiple fronts. She alleges
that her counsel was ineffective throughout pre-trial proceedings, during trial, and at
sentencing. We consider these arguments in full and, ultimately, hold that no reasonable
jurist would argue that Cox is entitled to relief on any of these claims.
Cox first claims that her attorney was ineffective because he failed to advise her of
the possible benefits of pleading guilty. A defendant claiming that his attorney’s advice
was deficient in this regard must point to particular failings in that advice. See United
States v. Robles, 546 F. App’x 751, 753 (10th Cir. 2013). Cox fails to allege any specific
deficiency in the advice her attorney gave her concerning the benefits of accepting a plea.
discretion to grant or deny a motion to strike for length. See Baum v. Great Western
Cities, Inc., of New Mexico, 703 F.2d 1197, 1212 (10th Cir. 1983) (“A trial court’s
denial of motions or objections to rulings will not be disturbed on appeal unless it
affirmatively appears that the trial court abused its discretion.”). We do not identify
an abuse of that discretion here.
3
Nor does Cox identify what advice she should have received. Accordingly, no
reasonable jurist would debate the merits of Cox’s claim.
Second, Cox argues that her trial counsel was ineffective for failing to negotiate a
plea with the prosecutor. But Cox acknowledges that her attorney conveyed to her a plea
offer extended by the government for eight years’ imprisonment. Cox refused this deal,
claiming factual innocence regarding the dates charged in the indictment. The existence
of this offer, secured by counsel and conveyed to the client, makes it clear that Cox’s trial
attorney did negotiate a plea deal, contrary to Cox’s claim.
Cox also claims that on the eve of trial the government presented her counsel with
a second plea offer, which counsel never relayed to her. She argues her counsel was
ineffective for failing to inform her of this offer. Defense counsel’s failure to
communicate a second formal deal to the defendant would constitute deficient
performance. Missouri v. Frye, 566 U.S. 134, 145 (2012). But Cox later states that she
had received the second offer, and rejected it because “she had already made up her mind
to proceed to trial . . . .” Reply to United States’ Resp. to Def.’s Mot. Under 28 U.S.C.
§ 2255 at 3. Taking Cox’s allegations as true, these factual inconsistencies foreclose any
reasonable argument that she is entitled to relief on her claim of deficient performance by
trial counsel at the pleading stage.
Cox next claims trial counsel was ineffective for failing to investigate her case.
Cox claims that her attorney failed to follow the leads she provided, failed to request GPS
data related to two government informants, and did not hire a private investigator.
4
Assuming without deciding that Cox’s counsel was deficient in this regard, we fail to see
how Cox was prejudiced by any such deficiency.
To establish prejudice, Cox must demonstrate that any additional investigation
would have uncovered exculpatory evidence, and she must show that this evidence would
have impacted the outcome of her trial. Hatch v. Oklahoma, 58 F.3d 1447, 1457 (10th
Cir. 1995), overruled on other grounds by Daniels v. United States, 254 F.3d 1180, 1188
n. 1 (10th Cir. 2001) (en banc). Mere speculation that additional investigation might
have discovered exculpatory evidence is insufficient. United States v. Clark, 596 F.
App’x 696, 701 (10th Cir. 2014).
Aside from the speculative assertion that additional investigation could have
exonerated her, Cox fails to detail what evidence she believes any additional
investigation would have unearthed, or to explain how such evidence would have
impacted her trial. The closest Cox comes is her suggestion that following up on her
leads might have provided alibis for the dates charged in the indictment. But Cox does
not explain how these leads could have possibly established an alibi sufficient to defend
against a charge of a conspiracy spanning nearly fifteen months. Accordingly, Cox fails
to demonstrate that she was prejudiced by any potentially deficient failure to investigate.
Cox also claims that her counsel was ineffective throughout trial. Specifically,
Cox claims that her counsel failed to call alibi witnesses and failed to effectively cross-
examine government witnesses.3 For these claims, Cox must assert with particularity
3
Cox also alleges that her attorney failed to keep her apprised of his overall
trial strategy. Tactical decisions at trial are a matter for counsel’s discretion, and we
5
what evidence would have been elicited if her counsel had called the additional witnesses
or conducted the additional cross-examination. See Pickens v. Gibson, 206 F.3d 988,
1003 (10th Cir. 2000). When evaluating her attorney’s trial strategy, we apply a
“presumption that counsel’s conduct [fell] within the wide range of reasonable
professional assistance . . . the presumption that, under the circumstances, the challenged
action ‘might be considered sound trial strategy.’” Strickland at 689. It is the petitioner’s
burden to “show[] that counsel’s action or inaction was not based on a valid strategic
choice.” Bullock v. Carver, 297 F.3d 1036, 1047 (10th Cir. 2002) (quoting Wayne R.
LaFave et al., Criminal Procedure § 11.10(c) at 715 (West 2d 1999)). It is inarguable
that Cox fails to meet this standard. Cox does not detail what evidence any additional
witnesses would have provided, and she also fails to explain how additional cross-
examination would have worked in her favor. Thus, she has failed to demonstrate
deficient performance.
Finally, Cox challenges her trial counsel’s conduct at sentencing. Cox claims that
her attorney’s failure to object to certain facts laid out in the presentence investigation
report (PSR) and his failure to explain to her the PSR and the guideline range for her
sentence constitutes deficient performance. But the record shows that, at her counsel’s
apply a heavy measure of deference to counsel’s judgments. Newmiller v. Raemisch,
877 F.3d 1178, 1198 (10th Cir. 2017). To establish ineffectiveness on the grounds of
failure to communicate, a defendant must demonstrate “a complete breakdown in
communication” between her and her attorney. United States v. Rhodes, 157 F.
App’x 84, 87 (10th Cir. 2005) (quoting United States v. Soto Hernandez, 849 F.2d
1325, 1328 (10th Cir. 1988)). Cox has not alleged that there was such a complete
breakdown and has therefore not made a substantial showing of ineffectiveness for
failure to keep her apprised.
6
request, the sentencing court recessed so that counsel could explain the PSR to her.
When asked by the judge if she had reviewed and understood the PSR, she answered in
the affirmative. Accordingly, Cox’s claim of deficient performance at sentencing must
fail.
In sum, Cox fails to make a substantial showing that her counsel was ineffective,
such that reasonable jurists could debate the district court’s denial of relief. We therefore
hold that Cox is not entitled to a COA to appeal the district court’s decision regarding
ineffective assistance by trial counsel.
II. Ineffective Assistance of Appellate Counsel
Cox also claims that her appellate counsel was ineffective. She makes two claims
in that regard. First, Cox argues that her appellate counsel did not communicate with her
or allow her to participate meaningfully in her appeal. To be sure, an attorney has a duty
to communicate with his or her client. But Cox offers no specifics about how much or
little she and her appellate counsel communicated. Nor does Cox explain how counsel’s
failure to communicate during the appeal process fell “outside the wide range of
professionally competent assistance.” Strickland, 466 U.S. at 691. Further, she fails to
identify how her active participation in appellate counsel’s briefing of the case would
have changed the outcome of her appeal. Id. at 694. Though we will liberally construe a
pro se litigant’s brief, we cannot act as their advocate or fashion their arguments for
them. United States v. Pinson, 584 F.3d 972, 975 (10th Cir. 2009). Thus, without any
explanation of her claim that appellate counsel’s lack of communication with her was
7
deficient or how it actually prejudiced her appeal to this Court, we cannot discern a
substantial showing of the denial of a constitutional right.
Cox’s second argument regarding ineffective assistance by her appellate counsel
centers on the issue he chose to raise on appeal. The sole issue on Cox’s direct appeal
related to Federal Rule of Evidence 403, specifically, that the trial judge erred by
admitting cumulative and unfairly prejudicial evidence of methamphetamine sales that
occurred before the dates charged in the indictment, but which the court found intrinsic to
the charged conspiracy. United States v. Cox, 684 F. App’x 706 (10th Cir. 2017). Cox
argues that her appellate counsel should instead have raised two other arguments: (1) that
the prior methamphetamine sales were not intrinsic to the charged conspiracy, and (2)
that the trial judge erred in denying her a sentence departure under the “safety valve”
provision of 18 U.S.C. § 3553(f).
When considering an ineffective assistance of appellate counsel claim for failure
to raise an issue on appeal, we look to the merits of the omitted issues. Hooks v. Ward,
184 F.3d 1206, 1221 (10th Cir. 1999). Appellate counsel’s constitutional performance is
judged by the same deficient and prejudicial standard as at trial. Id. Cox therefore must
show deficiency (that her attorney’s choice not to raise an issue was unreasonable,
because it was obvious from the trial record) and prejudice (a reasonable probability that
either of her proposed arguments would have led to a different outcome). Barnett v.
Hargett, 174 F.3d 1128, 1135 (10th Cir. 1999). In other words, Cox must show that it
was objectively unreasonable to have raised the Rule 403 issue over other potential
8
arguments, and that but for counsel’s choice there was a reasonable probability that she
would have prevailed on appeal. Bush v. Carpenter, 926 F.3d 644, 684 (10th Cir. 2019).
Other than insisting that counsel should have challenged findings that the admitted
testimony was intrinsic to the conspiracy, Cox does not outline how the outcome would
have differed had counsel pursued that argument. At trial, Cox’s counsel objected to
testimony (relating to methamphetamine sales predating the dates listed on the indictment
by several months) as violating Federal Rule of Evidence 404(b)’s prohibition of
evidence of prior crimes or bad acts. The trial judge overruled this objection, holding that
the earlier sales were “inextricably intertwined with the conspiracy.” United States v.
Cox, 684 F. App’x at 707 (quoting to the record at trial). Trial counsel conceded that the
testimony may have been admissible, even if not intrinsic to the charged conspiracy, as
Fed. R. Evid. 404(b)(2) evidence of a common plan or design. Id. Because trial counsel
conceded that the evidence could be admitted for limited purposes even if found to be
extrinsic to the charged conspiracy, there would be nothing to gain by arguing on appeal
that the testimony was improperly admitted as “inextricably intertwined.” See United
States v. Jackson, 88 F.3d 845, 847 (10th Cir. 1996) (“So long as the evidence is
admissible under some legally correct theory, no error occurred.”) Reasonable jurists
could not debate that appellate counsel was deficient for failing to argue for the
testimony’s inadmissibility under one theory, when it had been conceded at trial that it
would be admissible under another theory. There has not been, therefore, a substantial
showing of appellate counsel’s deficient performance regarding this first proposed issue.
9
Cox also claims that her appellate counsel should have raised that the District
Court erred in denying Cox’s sentence departure under the “safety valve” provision. For
Cox to have qualified for the safety valve, she would have needed to have convinced the
sentencing judge that she had “truthfully provided to the government all information and
evidence” she had regarding the conspiracy. 18 U.S.C. § 3553(f)(5). Cox claimed to
have fulfilled this element based on a single conversation with Wyoming investigators
which took place before criminal charges were brought. The trial court did not accept her
claim. Cox claims that the court denied her safety valve departure because she initially
pleaded not guilty. The record indicates, however, that the court based its decision on
inconsistencies between what she told the investigators and what was proven at trial.
Accordingly, Cox’s appellate counsel would not have had a reasonable probability of
success had he chosen to raise this issue on appeal.
CONCLUSION
For the reasons stated above, we deny Cox’s application for a COA and dismiss
this appeal.
Entered for the Court
Gregory A. Phillips
Circuit Judge
10
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143 F.Supp. 671 (1955)
Mrs. Madeliene Twinam THOMAS
v.
J. R. CHAMBERLAIN, Raymond Patterson, John Cuneo, F. R. Kollmansperger, John Crabtree, S. C. Klaus, Mrs. H. P. Dunlap, W. D. Frazier, Roy Smith, Walter Robinson, W. D. Moon, Selmon T. Franklin, Rev. J. C. Bonner, Mrs. Ruth Farris, Earl Williams and J. Marvin Smith.
Civ. No. 2240.
United States District Court E. D. Tennessee, S. D.
August 5, 1955.
*672 Frank M. Gleason, Rossville, Ga., Roberts & Weill, Chattanooga, Tenn., for plaintiff.
*673 E. K. Meacham, J. W. Anderson, Chattanooga, Tenn., for defendants.
DARR, Chief Judge.
According to the complaint, this action is for damages instituted under authority of the law as announced at 28 U.S. C.A. § 1343 and 42 U.S.C.A. § 1981 et seq. However, the jurisdictional grounds are found in the Judicial Code as cited, but the basic rights sought are codified at sections 1983 and 1985(3) of Title 42 U.S.C.A. Thus the suit is under a portion of the Civil Rights Acts.
Specifically the suit is against the members of the Chattanooga Housing Commission and the Building Inspector of that City as individuals under the provisions of section 1983 of Title 42, which authorizes such a recovery against any 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 * * *." It is alleged in the complaint that the wrongful action was jointly and severally and, therefore, a conspiracy is charged, which would fall under Title 42 U.S.C.A. § 1985(3). But it is immaterial for a decision on the motion to determine whether the conduct was individual or in concert.
The case is presently before the Court upon defendants' motion for summary judgment. In addition to the pleadings and exhibits, affidavits have been filed by defendants, J. R. Chamberlain, Chairman of the Commission, and J. Marvin Smith, Building Inspector, in support of the motion. The plaintiff has filed an opposing affidavit, together with certain correspondence sent to her rental agent by the defendant Inspector.
On April 21, 1953, the Board of Commissioners for the City of Chattanooga passed Ordinance No. 4104, which set up certain minimum standards to be met by housing units located within the city as to safety, sanitation, health, and fire hazard. The Ordinance established a Housing Commission which was to act upon cases arising thereunder. It was made the duty of the City Building Inspector to inspect housing units and make an initial determination whether or not they came up to the required standards. If a particular unit did not he was to give written notification of that fact to the owner, among others, with a statement of the particulars in which the unit was substandard. The notice was to include an order that the unit be vacated, repaired or demolished within a designated time. The Inspector was also authorized to post a notice upon the unit itself which should state that it had been found unfit for habitation and was to remain posted until the dwelling had been repaired, vacated, or demolished, in accordance with notice given the owner.
If the owner failed to comply within the time provided the Inspector was required to notify the owner to appear before the Commission on a specified date to show cause why the unit should not be repaired, vacated, or demolished in accordance with the deficiencies contained in the Inspector's notification. At the hearing the Commission was required to hear and consider evidence offered by the Inspector and by the owner and prepare written findings of fact as to whether the Ordinance was in fact violated. If so, the Commission was authorized to issue a final order commanding the owner to repair, vacate, or demolish within a certain time. Upon his failure to do so the Commission was given the right to accomplish the vacation, repair, or demolition of the dwelling as the facts warranted under the standards provided in the Ordinance. However, the owner might appeal any such final order to the City Board of Commissioners within 10 days after its issuance and, if he did so, he was given the right to a hearing de novo before that body.
Generally stated the complaint alleges ownership in the plaintiff of a particular dwelling within the City; that on March *674 8, 1954, the Inspector placed a condemnation sign upon it and ordered plaintiff's rental agent to cease collecting rents, all without notice and without affording plaintiff a hearing. That as a result plaintiff was deprived of her property without due process of law and was denied equal protection of the law. Further that such acts were not in accordance with the provisions of the Ordinance and that in so doing the defendants were acting under color of law, thereby entitling plaintiff to recover money damages from them individually under the provisions of said section 1983 or 1985(3) of Title 42 U.S.C.A. It is also alleged parenthetically that the Ordinance itself is unconstitutional.
The Inspector has filed a separate answer. The remaining defendants have answered jointly. In substance the answers assert the validity of the Ordinance and good faith compliance with its terms, including a preliminary examination of the property by the Inspector and determination of its substandard condition, notification to the plaintiff, her failure to comply with the notice, and hearings before the Commission at which the plaintiff was represented and as a result of which she agreed through counsel to make the necessary repairs. It is also denied that the Commission ever took possession of the premises or issued any final order concerning it.
The pleadings, considered alone, raise disputed issues of fact. There are some cases which hold that facts set forth in the pleadings cannot be controverted by affidavits and documentary evidence so as to warrant the granting of summary judgment, even though they clearly show that there is in reality no genuine issue as to any material fact. But, as this Court has pointed out on numerous occasions, reason and the great weight of authority are to the contrary. Sufficient to cite, Moore's Federal Practice, 2nd Ed., volume 6, sections 56.04(1), 56.11(3), 56.15(2), and the numerous cases so holding there discussed.
The authority for the Ordinance came from a grant to municipalities by the State of Tennessee, through exercise of police powers, to adopt ordinances requiring repair or demolition of dwellings which are unfit for occupancy due to dilapidation, defects increasing the fire hazard, lack of sanitary conditions, or which are for other such reasons detrimental to the health, safety or morals of the public. Williams' Tennessee Code, section 3647.42 et seq. Further, that the abatement of such dwellings as constituting nuisances has been held to be a valid exercise of the police power. Theilan v. Porter, 82 Tenn. 622; Jackson v. Bell, 143 Tenn. 452, 226 S.W. 207.
The plaintiff's right to recover is not affected by the validity or invalidity of the Ordinance. Sections 1983 and 1985(3) of Title 42 U.S.C.A., under which the plaintiff sues, predicate liability upon deprivation of federal rights by virtue of acts under color of law, not upon the validity or invalidity of the law under color of which the defendants acted; and because no presumption of improper motive may be ascribed to ministerial official acts solely by reason of the unconstitutionality of the statute under which they were taken. Thus it has been expressly held by the Tennessee courts that an official, whose duty it is to carry out the provisions of an act, is authorized to treat it as prima facie valid and is not liable for any acts committed thereunder by reason of its unconstitutionality. Bricker v. Sims, 195 Tenn. 361, 259 S.W.2d 661, citing Roberts v. Roane County, 160 Tenn. 109, 23 S.W.2d 239 and Beaver v. Hall, 142 Tenn. 416, 217 S.W. 649. This rule is for retrospective action of ministerial officials, as in this case. Prospective conduct of such officials would be different.
Therefore, in deciding the present motion, the Court must determine only whether there exists a genuine issue as to any material fact, the material facts being such as would legitimately tend to show that the defendants acted under color of law, thereby subjecting *675 the plaintiff to deprivation of her federal rights.
After careful consideration of all of the record, the Court finds that no such issue exists, that the undisputed facts show a substantial compliance with the Ordinance and that there has been no violation of any of plaintiff's federal rights.
It was the Inspector's duty to examine housing units suspected of being substandard and to make an initial determination of that fact. The plaintiff admits this was done. She merely contends the exact date of the inspection is uncertain; that the determination made was unjustified; and that she did not receive notice in accord with the provisions of the Ordinance. The Ordinance did require the Inspector to give the owner written notice of his findings, including a recital of the particulars in which the unit was substandard with an order that it be repaired, vacated, or demolished within a certain time. Although plaintiff denies receipt of such notice she did in fact receive notice that the Inspector had taken such action for she admits in her affidavit that she received his letter of February 8, 1954, a copy of which is attached as an exhibit to his answer. The letter called plaintiff's attention to the fact that the dwelling had been condemned on June 20, 1953, for her failure to have it repaired, and notified her to be present at the meeting of the Commission on February 17, 1954, to show cause for her failure to do so.
That she had actual notice of the proceedings is further substantiated by Exhibit No. 5 to the Commissioners' answer, which are certified extracts of the minutes of the Commission meeting for that date. They reveal the Inspector reported having been advised by the plaintiff's rental agent, Light Realty Company, that the plaintiff did not intend to have the property repaired and that the Commission postponed action for an additional two weeks and instructed the Inspector to notify the plaintiff's attorney to be present at that time. Exhibit No. 3 to the Inspector's answer is a copy of a letter dated February 23, 1954, written by him to the plaintiff in which she was notified of the postponement and advised to be present at the meeting of March 3, 1954. Plaintiff's affidavit does not deny that such notice was given. The minutes of the March 3rd meeting, also made an exhibit to the answer of the Commission members, reveal that a report was made by the Commission Chairman that plaintiff's attorney had advised him that the plaintiff had agreed to bring her property up to housing standards. Although the plaintiff has challenged the accuracy of the minutes of another meeting held on October 21, 1953, at which the Commission considered other property belonging to the plaintiff not here involved, the accuracy of the minutes of March 3rd is not questioned. Neither has her attorney filed an affidavit denying they constitute a correct statement of what transpired.
The plaintiff not only had actual notice of the proceedings before any action was taken by the Commission, but the hearing originally set was delayed for an additional two weeks when the plaintiff did not appear at the February 17, 1954 meeting, at which she had been notified to be present. Under the circumstances, if the plaintiff failed to receive the preliminary Inspector's notice she was certainly not prejudiced. Much less does that fact amount to a violation of her federal rights or tend to show the defendants acted under color of law.
In addition to the matters already discussed, the plaintiff's affidavit contains certain other statements in opposition to the motion. It is asserted the defendants failed to act under the Ordinance and that their action was unjustified. Considered alone such statements are insufficient to raise issues as to such facts since they amount to nothing more than mere statements of conclusions. However, additional statements are asserted in an attempt to support these conclusory allegations. Thus plaintiff claims she received no prior notice that a condemnation *676 notice was being placed on her property, that the notice placed thereon differed in some respects from the wording required by the Ordinance and that the members of the Commission took an active part in the placing of the notice.
As to these matters, the Ordinance does not require an owner be notified that such notice was to be placed on his property. The only notice required was the notice of the Building Inspector's findings and order, and of any hearing thereon before the Commission. The latter was given and, as pointed out, failure to give the former resulted in no injury to the plaintiff. Neither has the plaintiff shown she was misled or prejudiced in any way by the variance in specific wording of the notice from that required by the Ordinance, and the Court can see no reason for a different result because a member of the Commission may have assisted the Inspector in placing it upon the premises. Clearly it was placed there because the Ordinance required it. At least the record contains nothing from which the existence of any other or improper motive might be presumed. The fact that the plaintiff was represented by counsel before the Commission at several hearings and appeared at least once in person and made no complaint about proper notice concerning the property in question amounts to a waiver of the regularity of former proceedings.
Nor does plaintiff's charge that the Building Inspector ordered her rental agency to cease collecting rents raise any issue of action under color of law or deprivation of federal rights in view of section 1-A of the Ordinance which makes it unlawful for any owner or party in interest of a dwelling to knowingly rent a dwelling which is unfit for human habitation. As to plaintiff's claim that the condemnation of her property was unjustified because the minutes of the Commission show it was inspected from a fire hazard standpoint and not from a health standpoint, it is noted: First, a reading of the minutes referred to discloses the premises were inspected from a health as well as fire hazard standpoint; second, the Ordinance authorizes condemnation upon the basis of either; third, the Commission did not issue a final order concerning the property.
There could be no federal question arising because of the asserted errors in the minutes of the October 21 meeting of the Commission and the variance of dates contained in some of defendant's documentary evidence as to whether the Inspector's examination of the premises occurred on July 20 or June 20, 1953.
In addition it is probably true that the plaintiff would be required to exhaust her administrative remedies before she could say that the state officials had deprived her of a federal right. Her administrative remedies were simple and adequate. She did not await the decision of the Commission and, if it had been adverse, she could have appealed to the City Board of Commissioners for a hearing de novo.
The federal courts are properly reluctant to interfere with the administrative acts of local officers for, under most circumstances, the conduct of such officials is to be regulated by state procedure. The federal courts should not be called upon to determine whether state officials have properly exercised police authority until the exhaustion of administrative remedies. How can a United States Court determine whether the federal rights of a citizen of the United States have been invaded by a state until all the administrative remedies offered by the state have been exercised? Decisions by administrative bodies are not res judicata and would in no wise affect the right of a United States citizen to institute a suit under the Civil Rights Acts.
From a consideration of the entire record, the Court concludes that there is no credible evidence showing disputed factual questions and the defendants should not be compelled to bear the useless burden of submitting the undisputed issues to a trial on the merits.
*677 The motion of the defendants is sustained.
There will be an order in accord herewith.
This opinion will serve as the findings of fact and conclusions of law.
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731 N.W.2d 730 (2007)
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Donovan Michael JUSTICE, Defendant-Appellant.
Docket No. 133339. COA No. 274953.
Supreme Court of Michigan.
May 30, 2007.
On order of the Court, the application for leave to appeal the January 8, 2007 order of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the question presented should be reviewed by this Court.
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972 F.2d 1342
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.SHEET METAL WORKERS'S INTERNATIONAL ASSOCIATION, LOCAL UNIONNO. 104, Petitioner-Appellant and Cross-Appellee,v.BRISCO SHEET METAL, Respondent-Appellee and Cross-Appellant.
Nos. 91-15981, 91-15982.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted July 16, 1992.Decided Aug. 19, 1992.
Before WALLACE, Chief Judge, and SCHROEDER and POOLE, Circuit Judges.
1
MEMORANDUM*
OVERVIEW
2
Appellant and Cross-Appellee Sheet Metal Workers' International Association, Local Union No. 104 ("the Union") appeals the district court's decision striking inclusion of an "interest arbitration clause"1 in a collective bargaining agreement between the Union and the Redwood Empire Chapter, Sheet Metal and Air Conditioning Contractors National Association, ("SMACNA") which was allegedly binding upon Brisco Sheet Metal, Inc. ("Brisco") as a signatory employer to the agreement. Brisco cross appeals, arguing that the agreement is not binding because Brisco never assigned all its collective bargaining rights to SMACNA; therefore, SMACNA was not empowered to enter into any agreements on its part beyond agreements regarding trust fund issues. Assuming, arguendo, that Brisco did assign its collective bargaining rights to SMACNA, this Court has already resolved that, absent proper notice to the contrary, an employer that had assigned its collective bargaining rights to SMACNA would be bound by the interest arbitration clause. Sheet Metal Workers Intern. v. Simpson Sheet Metal, 954 F.2d 554, 555 (9th Cir.1992). Given that Brisco did not give such notice, the issue before this Court is whether Brisco did indeed assign its collective bargaining rights to SMACNA. We have jurisdiction, 28 U.S.C. § 1291, and we affirm.
FACTS AND PROCEEDINGS BELOW
3
Brisco and the Union entered into a collective bargaining agreement ("CBA") in 1987 expiring on June 30, 1989. Under the plain language of the agreement Brisco assigned its collective bargaining rights to SMACNA. The CBA also included an interest arbitration clause. When negotiations were under way between the Union and SMACNA for a new agreement to succeed the CBA to expire in 1989, they were unable to reach complete agreement. Under the interest arbitration clause, the disputed contractual issues were submitted to "interest arbitration". The interest arbitration panel imposed a three-year CBA binding on the Union and SMACNA which included an interest arbitration clause.
4
Brisco stated that it was not bound by the new interest arbitration clause because it was a non-mandatory term to which it did not consent. In the alternative, it argued that it was not bound because it did not assign its collective bargaining rights to SMACNA. While negotiating the 1987-89 agreement, counsel for Brisco and the Union exchanged letters regarding the nature of SMACNA's representation, in essence agreeing that Brisco would represent itself as to all matters except trust fund matters. Brisco also asserts that it was given oral assurances that it would be permitted to represent itself.
5
The contract ultimately signed on May 29, 1987 by Brisco and the Union provided in Article XIII, Section 5 and Item 41, Section B of the Addendum that by executing the agreement, the employer authorized SMACNA to act as its collective bargaining representative for all matters relating to the agreement. There was no addendum regarding Brisco's self-representation.
6
The Union filed a petition to enforce the 1989 arbitration award. The District Court for the Northern District of California, Judge D. Lowell Jensen presiding, initially granted summary judgment to the union. See Sheet Metal Workers' Intern. Assoc. v. Brisco Sheet Metal, C89-4233-DLJ, Order of 3/20/91. The district court held that, under the parol evidence rule, extrinsic evidence which would vary or modify the terms of the contract could not be considered unless to interpret vague or ambiguous terms Id. at 7-8. The court found that the contract was clear and unambiguous. Id. at 8.
7
Brisco filed a motion for reconsideration. The district court granted in part and denied in part the motion. The district reaffirmed that its application of the parol evidence rule was correct. Sheet Metal Workers' Intern. Assoc. v. Brisco Sheet Metal, C89-4233-DLJ, Order of 5/28/91 AT 5 [ER AT 54]. However, it held that given the holding American Metal Products v. Sheet Metal Workers, 794 F.2d 1452 (9th Cir.1986), as applied in Sheet Metal Workers' International Association, Local 104 v. Simpson Sheet Metal, No. C89-4312-DLJ, the court could not confirm a new interest arbitration clause unless the record indicated the consent of the parties to be bound by such a clause. Order of 5/28/91 at 7. Brisco would not be bound by the clause.
8
On appeal of the Simpson case, this Court held the employer in that case was bound by the new interest arbitration clause not because it was imposed by an arbitration panel, but because the employer had assigned its bargaining authority to SMACNA. Sheet Metal Workers International Association, Local 104 v. Simpson Sheet Metal, 954 F.2d 554, 556 (9th Cir.1992)
9
These appeals followed. Notices of appeal were timely filed.
STANDARD OF REVIEW
10
This court reviews a district court's interpretation of a contract de novo. Hotel Employees Health Trust v. Elks Lodge, 1450, 827 F.2d 1324, 1327 (9th Cir.1987).
DISCUSSION
11
The issue remaining for decision is whether extrinsic evidence of the parties' intention should be considered in determining the terms of the CBA. Article XIII, Section 5 of the CBA clearly states:
12
By execution of the Agreement the Employer authorizes Redwood Empire Contractors Association to act as its collective bargaining representative for all matters relating to this agreement.
13
Item 41, Section B of the Addendum also states:
14
The Sheet Metal Workers' International Association Local Union 104 and Redwood Empire Sheet Metal and Air Conditioning Contractors' Association, Inc., SMACNA Chapter, are hereby designated as the respective Labor and Management collective bargaining agents for all persons and firms bound by this Agreement....
15
Parol evidence is not admissible to contradict a clear contract term. Hotel Employees Health Trust v. Elks Lodge, 1450, 827 F.2d 1324 at 1327. As stated in United States v. Triple A Mach. Shop, Inc.,:
16
Evidence of a collateral agreement is admissible if: 1) it does not contradict a clear and unambiguous provision of the written agreement, and 2) the parties did not intend the written agreement to be a complete and exclusive statement of their agreement.
17
United States v. Triple A Mach. Shop, Inc., 857 F.2d 579, 585 (9th Cir.1988). The provisions here are clear and unambiguous.
18
The cases Brisco cites in support of the proposition that extrinsic evidence should be considered, Certified Corp. v. Hawaii Teamsters & Allied Workers, 597 F.2d 1269 (9th Cir.1979) and Cappa v. Wiseman, 469 F.Supp. 437 (N.D.Cal.1979) are inapposite in that they involved an ambiguous contract, see Cappa v. Wiseman, 469 F.Supp. at 440, or oral modification of a contract, see Certified Corp. v. Hawaii Teamsters & Allied Workers, 597 F.2d at 1270. The district court correctly applied the parol evidence rule.
19
Brisco further argues that there was no "meeting of the minds", and, therefore, no binding contract. This contention is equally unpersuasive. This is not a situation in which the parties ascribed different meanings to the written terms of the contract. Cf. Warehousemen's Local # 206 v. Continental Can Co., 821 F.2d 1348, 1350 (9th Cir.1987) ("It thus falls to the company to demonstrate that, although its agreement with the union has the outward appearance of a valid contract, there was no meeting of the minds because the parties understood entirely different things by the written terms of the agreement."). Brisco simply failed to include material terms in the agreement. It is bound by the clear and unambiguous terms to which it did assent.
20
The decision of the district court upon reconsideration to strike the interest arbitration clause from the newly negotiated contract is REVERSED. The remainder of the district court's decision is AFFIRMED.
*
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
1
"An interest arbitration clause requires the signatories to a CBA [collective bargaining agreement] to submit disputes over new contract terms to arbitration." Sheet Metal Workers Intern. v. Simpson Sheet Metal, 954 F.2d 544, 555 n. 1 (9th Cir.1992)
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523 S.W.2d 496 (1975)
HOWARD GAULT & SON, INC., Appellant,
v.
The FIRST NATIONAL BANK OF HEREFORD, Texas, et al., Appellees.
No. 8523.
Court of Civil Appeals of Texas, Amarillo.
May 19, 1975.
*497 Jack Hazlewood, Amarillo, for appellant.
Witherspoon, Aikin, Langley, Woods, Kendrick & Gulley, Thomas W. Kendrick, Shuval & Saul, Andrew J. Shuval, Hereford, for appellees.
ELLIS, Chief Justice.
This suit was instituted by Howard Gault & Son, Inc., plaintiff-appellant, against three defendants, T. B. Thomas, Jr., The First National Bank of Hereford, Texas, and Pitman Grain Company, upon a claim involving the plaintiff's alleged failure to receive the proceeds derived from the sale of grain grown on land owned by the plaintiff, sold by defendant Thomas to defendant Pitman who delivered its check therefor to Thomas who negotiated the check at defendant Bank. The trial court entered a take-nothing judgment in favor of the Bank and Pitman and awarded plaintiff judgment against defendant Thomas for the amount of the proceeds of the check together with certain sums on other claims by the plaintiff against Thomas. The judgment against Thomas was set aside and he was granted a new trial. By this appeal the plaintiff-appellant challenges the take-nothing judgment entered by the trial court in favor of the Bank and Pitman. Appeal dismissed.
Defendant Thomas and plaintiff Howard Gault & Son, Inc., hereinafter referred to as Gault, entered into a written agreement whereby Thomas would farm certain land owned by Gault. The parties were to share certain expenses and benefits with respect to the farming operations. Gault contended that all proceeds from the crops grown were to be delivered to it, and that the accounting between the parties would be accomplished at the end of each year in accordance with the terms of their agreement. A grain crop was harvested and a portion thereof sold to defendant Pitman Grain Company, hereinafter referred to as Pitman, who issued a check payable to "Thomas and Gault." Thomas received the check and negotiated it by endorsement,
"Thomas and Gault
T. B. Thomas,"
to defendant, The First National Bank of Hereford, hereinafter referred to as the Bank. The amount of this check was deposited to the personal account of Thomas and the Bank deducted the sum of $13,591.93, the amount of the check, from the account of Pitman. Later Thomas used approximately $10,000.00 of the proceeds of the check to pay a personal note which he owed to the Bank. Gault obtained a writ of garnishment against the Bank as to the sum of $3,573.20 which remained on deposit in Thomas' account with the Bank.
In the suit against the Bank, Pitman and Thomas, Gault alleged, among other matters, that Thomas was not authorized to negotiate the check and not entitled to the proceeds thereof independently of the accounting pursuant to their farming agreement. In addition, it was alleged that the endorsement was not effective; therefore, the Bank was not authorized to pay out the funds to Thomas and Pitman was still liable to it for the price of the grain. Gault also included in its suit against Thomas a claim for recovery on promissory notes, expenses and advances in the amount of $41,218.19 reduced by Thomas' share of farm income of $29,855.72 pursuant to the *498 farming agreement with a resultant balance allegedly owed to Gault by Thomas of $11,362.40 plus the $13,591.93 amount representing the proceeds from the sale of the grain.
Originally, an interlocutory judgment by default was entered against Thomas and later set aside when it was determined that he had timely filed a general denial in answer to Gault's petition and Thomas was permitted to participate in the trial before a jury. Thomas represented himself in the trial. At the time Gault rested its case, Pitman's motion for an instructed verdict was granted. The cause as to the Bank and Thomas was submitted to the jury who returned a verdict to the effect that Thomas was not indebted to Gault and that the Bank did not act in bad faith in accepting the check in question. Gault filed a motion for judgment non obstante veredicto as to both defendants. The trial court denied the motion as to the Bank and granted such motion as to Thomas, entering judgment against Thomas for the sum of $20,837.02, which included the $13,591.93 proceeds from the check. Thomas filed a motion to set aside the judgment against him and for a new trial, and Gault filed a motion seeking a new trial as to the Bank and Pitman in the event Thomas was awarded a new trial. Thomas' motion to set aside the judgment and for new trial was granted. Gault's motion for new trial as to Pitman and the Bank was overruled. Gault seeks to appeal only from that portion of the judgment relating to the Bank and Pitman.
By the pleadings on which this cause went to trial Gault bases his claim of the $13,591.93 against the three defendants upon three theories of recovery. The claim is made against the Bank upon a theory of conversion; against Thomas, along with other claims, upon breach of contract; and against Pitman for non-payment for the grain received. Each of the claims is predicated upon the assumption that Thomas was not authorized to negotiate the check in question or directly receive the proceeds therefrom. It is noted that Gault alleges liability against the Bank and Pitman as being both "joint" and "joint and severally" for the sum of $13,591.93; however, the claim of liability for the same $13,591.93 against Thomas is only alleged to be jointly with the other defendants.
Initially, the question arises as to whether this court has jurisdiction over this appeal since it appears from the record that one of the parties has not been disposed of by the judgment. In order for this court to have jurisdiction of the appeal, it must be brought from a final judgment since this proceeding does not come within any exceptions to the general rule which would authorize an appeal from an interlocutory order. See 3 Tex.Jur.2d, Rev. Appeal & Error § 73 (1974); Articles 1822 and 2249, Vernon's Ann.Civ.St. A judgment is considered final only if it determines the rights of the parties and disposes of all of the issues involved so that no future action by the court will be necessary in order to settle and determine the entire controversy. Wagner v. Warnasch, 156 Tex. 334, 295 S.W.2d 890 (1956); Lubell v. Sutton, 164 S.W.2d 41 (Tex.Civ.App.Texarkana 1942, writ ref'd). Further, when there are several defendants to a suit ordinarily no final judgment can be rendered against one until it is rendered against all, regardless of how independent their respective defenses may be. Sisttee v. Holland, 374 S.W.2d 803 (Tex.Civ.App.Tyler 1964, no writ); Wootters v. Kauffman, 67 Tex. 488, 3 S. W. 465, 468; Texas Bank & Trust Co. of Dallas v. Clay, et al., 257 S.W.2d 774 (Tex.Civ.App.Texarkana 1953, no writ). The granting of the new trial as to Thomas necessarily indicates that all of the parties have not been disposed of by the trial court, and no order of severance has been entered in this case. Also, it has been held that when a new trial is granted as to some of the parties, the original judgment becomes interlocutory. Long v. Garnett, *499 45 Tex. 400 (1876). In the absence of severance no appeal will lie for the party against whom an interlocutory judgment has been entered until it is a final judgment disposing of the whole case. Pan American Petroleum Corp. v. Texas Pacific Coal & Oil Co., 159 Tex. 550, 324 S.W. 2d 200 (1959); Sears v. Mund Boilers, Inc., 328 S.W.2d 199 (Tex.Civ.App.Texarkana 1959, writ ref'd).
The judgment entered in this case disposes of only the two parties, Pitman and the Bank, and orders a separate new trial as to Thomas. The controversy involves the liability as to the same subject matter, the proceeds of the $13,591.93 check. Severance cannot be accomplished by implication, but there must be an order for a severance in order that a final appealable judgment may be rendered. See Permian Mud Service, Inc. v. Sipes, 357 S.W.2d 803 (Tex.Civ.App.Eastland 1960, no writ) and authorities cited therein. Further, our Supreme Court has stated, ". . . we do not think the finality and hence the appealability of a judgment should be made to turn upon whether the action is severable as to issues, as to parties, or as to causes of action." Pan American Petroleum Corp. v. Texas Pacific Coal & Oil Co., supra. Also, see Myers v. Smitherman, 279 S.W.2d 173 (Tex.Civ. App.San Antonio 1955, no writ).
In the instant case, the trial court unquestionably had jurisdiction of all the parties related to this controversy and who had an interest in the subject matter of the litigation. No severance was sought or ordered. Therefore, in order for the judgment to be final in the sense that it is appealable, it must determine the whole case, dispose of all matters and determine the rights of all parties. The judgment entered here does not dispose of all the parties and issues and is interlocutory and not appealable. See McCormick v. Hines, 503 S.W.2d 333 (Tex.Civ.App.Amarillo 1973, no writ); Offer v. Bell, 397 S.W.2d 278 (Tex.Civ.App.San Antonio 1965, no writ); Pan American Petroleum Corp. v. Texas Pacific Coal & Oil Co., supra.
A party against whom an interlocutory judgment has been rendered has the right of appeal when and not before the same is merged in a final judgment disposing of the whole case. Transport Ins. Co. v. Wheeler, 420 S.W.2d 635 (Tex. Civ.App.Houston [14th Dist.] 1967, writ ref'd n. r. e.); Myers v. Smitherman, supra. The proper procedure for an appellate court to follow where a party has attempted a premature appeal is for such court to dismiss such appeal on its own motion. Clayton Mfg. Co. v. Flake Uniform & Linen Service, Inc., 451 S.W.2d 934 (Tex.Civ.App.Fort Worth 1970, no writ); Pan American Petroleum Corp. v. Texas Pacific Coal & Oil Co., supra; Duke v. Gilbreath, 10 S.W.2d 412 (Tex. Civ.App.Eastland 1928, writ ref'd); Plaster v. Texas City, 380 S.W.2d 137 (Tex.Civ.AppTyler 1964, no writ).
In view of the foregoing, it is our opinion that the judgment sought to be appealed from is interlocutory in nature and no appeal will lie to this court based upon the actions taken. Accordingly, this appeal should be dismissed without prejudice to the rights of a party to perfect its appeal from any final appealable judgment subsequently entered in this cause.
This court being without jurisdiction, the appeal is dismissed.
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627 F.Supp. 94 (1985)
Duane A. BOOTZ, Plaintiff,
v.
Richard CHILDS, et al., Defendants.
No. 83 C 4626.
United States District Court, N.D. Illinois, E.D.
May 22, 1985.
*95 *96 Andrew J. Bootz, Mount Prospect, Ill., for plaintiff.
Richard T. Wimmer, Klein, Thorpe & Jenkins, Chicago, Ill., for City of Des Plaines and unknown police officers.
John F. Early, Early, Collison, Tousey & Regan, Elgin, Ill., for J. Slonina.
*97 MEMORANDUM OPINION
GRADY, District Judge.
This is a civil rights action under 42 U.S.C. § 1983, for defamation, illegal arrest, conspiracy and unlawful surveillance. Discovery was completed as of April 15, 1984. Defendants have now moved for summary judgment, and for attorneys' fees under 42 U.S.C. § 1988.
BACKGROUND
Plaintiff Duane A. Bootz is a resident of the City of DesPlaines, Illinois, and was formerly employed as a short-order cook at Denny's Restaurant in DesPlaines. Defendants are DesPlaines police officers Richard C. Childs, K. Randolph, J. Stephens, Richard Rozkuszka, and J. Slonina, DesPlaines police chief Leroy Alfano, and the City of DesPlaines.
Plaintiff alleges that defendants have maliciously conspired and engaged in a course of conduct designed to embarrass, harass and discredit plaintiff, and get him fired from his job at Denny's. Specifically, plaintiff alleges that defendant Childs and other DesPlaines police officers harassed him at his place of employment by complaining about his cooking and refusing to eat food cooked by him. In particular, plaintiff cites an incident during the early morning hours of June 30, 1983, when defendant Childs insisted that someone other than plaintiff cook his food because plaintiff had previously put something in Childs' food. Later that day, at approximately 11:00 p.m., plaintiff was riding his bicycle home from work[1] and saw defendant Childs parked in a squad car, apparently watching plaintiff's home. Plaintiff waved hello, and then proceeded into his house. At midnight, as plaintiff was waiting outside his house for a ride to go on a camping trip, Childs arrested plaintiff for riding his bicycle without a headlight and for failing to stop at a stop sign while on a bicycle. Plaintiff was held at the DesPlaines police station for an hour before he was allowed to speak with his attorney (who is also plaintiff's father) and post bond. After leaving the police station, plaintiff got into a car to go home, and was followed by defendant Rozkuszka to a shopping center parking lot where plaintiff and his family confronted Rozkuszka and asked him for identification. Defendant refused to identify himself, but did tell plaintiff that he had received orders to follow plaintiff.
Plaintiff also alleges that defendant police officers maliciously informed plaintiff's employer, friends and neighbors of plaintiff's prior criminal arrests and convictions in order to embarrass and discredit him. Plaintiff admits that he has a criminal record, although the exact nature of that record is unclear. Plaintiff's Memorandum in Opposition to Defendant's Memorandum in Support of Their Motion for Summary Judgment, Transcript of Dep. of Duane A. Bootz, at 91-93. In addition, plaintiff claims that defendant Slonina cited plaintiff for parking his motor home at his residence in violation of a DesPlaines city ordinance regulating taxis.
Aside from these factual allegations, plaintiff does not clearly state what constitutional violations he believes occurred. Plaintiff appears to claim that defendants' defamatory statements regarding his job performance and prior criminal record damage his reputation and were intended to cause plaintiff to lose his job. Further, plaintiff asserts that his arrest on June 30, 1983, was unlawful because it was done without a warrant, and that defendants maliciously prosecuted plaintiff for the bicycle violations and parking violation. Plaintiff also alleges that no one else has been similarly arrested and prosecuted for bicycle violations, and so plaintiff may be bringing a claim for selective prosecution as well. The "super-strict" surveillance of plaintiff's home and whereabouts on June 30 supposedly infringed on plaintiff's Fourth Amendment rights, and there is *98 some indication that plaintiff believes that all the defendants conspired to commit these various acts. Finally, defendants City of DesPlaines and Leroy Alfano allegedly ordered or acquiesced in the police officers' actions.
Defamation Claims
Defendants have moved for summary judgment on plaintiff's defamation claims, arguing that the police officers' statements concerning plaintiff were not defamatory because they were true, and to the extent that any statements were defamatory, they did not deprive plaintiff of any constitutional rights.
It is axiomatic that in order for a statement to be defamatory, it must be false. See Zaret v. Joliet Park District, 91 Ill. App.3d 225, 227, 47 Ill.Dec. 654, 415 N.E.2d 659, 660 (3d Dist.1980). Plaintiff has not specified the content of defendants' statements, other than to allege that Childs and other DesPlaines police officers informed plaintiff's employer, friends and neighbors about his past criminal record, nor has any evidence been presented as to the exact nature of plaintiff's record. We are therefore unable to determine at this time whether all of defendants' statements were truthful and not defamatory.
Regardless of this factual question, however, we find that summary judgment for defendants is appropriate on plaintiff's defamation claims since it is clear that plaintiff has not suffered a constitutional injury. Defamatory statements by state officials that damage an individual's reputation alone are clearly not cognizable under 42 U.S.C. § 1983 as a civil rights violation, even though a state tort claim for defamation may exist. Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976). Under the "stigma plus" test, the stigma caused by the defamation must occur in conjunction with, or "plus," the loss of some right or governmental benefit, or a change in plaintiff's legal status, without due process of law. Id.; Hadley v. County of DuPage, 715 F.2d 1238, 1246-47 (7th Cir.1983), cert. denied, 465 U.S. 1006, 104 S.Ct. 1000, 79 L.Ed.2d 232 (1984); see also Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971) (defamatory action of "posting" that an individual is an alcoholic, thereby depriving the individual of the right to purchase liquor, is unconstitutional).
Plaintiff's claims that defendants' statements concerning his criminal record embarrassed and discredited him therefore clearly do not state a cause of action under § 1983. Plaintiff also alleges that defendants' statements to his employer were made with the intent of causing plaintiff to lose his job. Plaintiff's employment as a short-order cook at a privately-owned restaurant, however, is not a governmental right or benefit, nor has plaintiff alleged that the defamation caused a change in plaintiff's legal status.[2] Moreover, defendants have submitted the deposition testimony of plaintiff's supervisor at Denny's Restaurant, who stated that plaintiff was not fired but instead voluntarily left Denny's to take a higher paying job at a factory. Defendants' Memorandum in Support of Their *99 Motion for Summary Judgment, Transcript of Dep. of Meta Wade, at 24-27. Plaintiff has not refuted Wade's testimony, and in fact, his amended complaint does not actually allege that defendants' defamatory actions led to his loss of employment but simply claims that defendants maliciously intended to "jeopardize[]" his job. Amended Complaint, ¶¶ 8c, 15, 16.
There is no deprivation of liberty if an employee is not fired. Lawson v. Sheriff, 725 F.2d at 1139. Plaintiff has thus not suffered any injury due to the alleged defamation other than stigma to his reputation, which is not sufficient to sustain a cause of action under § 1983. Summary judgment is accordingly granted for all defendants on those portions of plaintiff's amended complaint based on defamation.
Illegal Arrest and Malicious Prosecution Claims
Defendants have moved for a complete dismissal of plaintiff's complaint as to his allegedly illegal arrest and malicious prosecution because plaintiff invoked his Fifth Amendment right against self-incrimination during his deposition, and refused to state whether he committed the bicycle violations. In support of their argument, defendants refer to an Illinois appellate court case holding that plaintiffs in a civil action may not invoke the Fifth Amendment and still maintain their lawsuit. Galante v. Steel City National Bank of Chicago, 66 Ill.App.3d 476, 23 Ill.Dec. 421, 384 N.E.2d 57 (1st Dist.1978), cert. denied, 444 U.S. 841, 100 S.Ct. 80, 62 L.Ed.2d 53 (1979). The plaintiffs in Galante appeared at their depositions and refused to answer any questions except to give their names. Id., 66 Ill.App.3d at 478-79, 23 Ill.Dec. at 423-24, 384 N.E.2d at 59-60. In those circumstances, the court ruled that the plaintiffs could not use their Fifth Amendment privilege as both a sword and a shield by prosecuting a civil suit but refusing to comply with legitimate discovery requests. Default judgment was entered for the defendants, and the case was dismissed.
There is no indication in this case that plaintiff generally refused to comply with discovery. The only time plaintiff refused to answer questions at his deposition was when defendants' attorney asked whether plaintiff had committed the traffic violations for which he was arrested. Defendants' Memorandum in Support of Their Motion for Summary Judgment, Transcript of Dep. of Duane Bootz, at 120.[3] Plaintiff was obviously not trying to completely frustrate the discovery process as were the plaintiffs in Galante. Instead, he invoked the Fifth Amendment solely in order to avoid giving testimony which could have incriminated him in the state court proceedings concerning his traffic violations.
Dismissal of a civil suit where a plaintiff abuses both the discovery process and the use of the Fifth Amendment, as in Galante, is justifiable because the plaintiff has not properly invoked the privilege against self-incrimination. Application of the remedy is more troublesome, however, where dismissal will operate to penalize a plaintiff for properly asserting protections guaranteed under the Constitution.
Our threshold inquiry must be to determine whether plaintiff was entitled to invoke the Fifth Amendment. The Self-Incrimination Clause states that no person "shall be compelled in any criminal case to be a witness against himself...." United *100 States Const. amend. V (emphasis added). The privilege, therefore, only applies to statements that would give rise to criminal sanctions, not civil liability. See United States v. Ward, 448 U.S. 242, 248, 100 S.Ct. 2636, 2641, 65 L.Ed.2d 742 (1980); Patrick v. United States, 524 F.2d 1109, 1118-19 (7th Cir.1975) (collection of gambling tax liability is merely a method of enforcing a civil obligation and does not give rise to Fifth Amendment privilege against self-incrimination). Traffic violations under Illinois law are "quasi-criminal" offenses that are "not violations of the general criminal laws, but are, rather, a hybrid class of regulatory and penal offenses encompassing violations of state statutes, municipal ordinances and regulations relating to the operation and use of motor vehicle, etc." Committee Comments, Supreme Court Rule 501, Rules on Trial Court Proceedings in Traffic and Conservation Offenses, Municipal Ordinance Offenses and Certain Misdemeanors, Ill.Rev.Stat. ch. 110A, § 501 at 8 (Smith-Hurd 1976). Riding a bicycle without a headlamp and failing to stop at a stop sign are petty offenses, punishable by a fine. See Ill.Rev.Stat. ch. 95½, §§ 11-202, 11-1204(b), 11-1507.[4]
Under the long-standing ruling of Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886), the Self-Incrimination Clause applies in quasi-criminal cases:
As, therefore, suits for penalties and forfeitures, incurred by the commission of offenses against the law, are of this quasi criminal nature, we think that they are within the reason of criminal proceedings for all the purposes of the fourth amendment of the constitution, and of that portion of the fifth amendment which declares that no person shall be compelled in any criminal case to be a witness against himself....
Id., at 634, 6 S.Ct. at 534. Following Boyd, the Illinois courts have held the privilege against self-incrimination applies to municipal ordinance violations where a fine may be imposed. See Hoban v. Rochford, 73 Ill.App.3d 671, 677, 29 Ill.Dec. 531, 535, 392 N.E.2d 88, 92 (1st Dist.1979); City of Chicago v. Lord, 3 Ill.App.2d 410, 122 N.E.2d 439 (1st Dist.1954), aff'd, 7 Ill.2d 379, 130 N.E.2d 504 (1955) (violation of a municipal ordinance punishable by a fine is a "criminal" case, allowing police officers to arrest offenders without warrants and subject to the protections against unreasonable search and seizure and self-incrimination).[5] The Supreme Court has recently warned against interpreting Boyd too broadly, and declined to apply the privilege in a case imposing civil penalties for violations of the Federal Water Pollution Control Act. United States v. Ward, supra, 448 U.S. at 253, 100 S.Ct. at 2643. The Court found that the federal penalty was not criminal enough in nature to trigger the protections of the Fifth Amendment because the proceeds from the penalty were used to repair the damage due to water pollution, and was therefore more analogous to a civil damage award than a criminal fine; it was the only punishment authorized under the Act, unlike the statute in Boyd which included fines and imprisonment; and most importantly, there was overwhelming evidence that Congress intended to create only a civil penalty, with little evidence of a countervailing punitive purpose. Id., at 254, 100 S.Ct. at 2644.
In the case of a traffic violation in Illinois, there is no remedial purpose to the fine imposed and it is simply intended as a *101 punishment; imprisonment in addition to fines may be imposed on habitual traffic offenders; and there is no evidence that the Illinois courts and legislature intended to characterize traffic violations as only civil proceedings. Further, the police are authorized to arrest and detain traffic violators, and may require the posting of bail as a condition of release. See Ill.Rev.Stat. ch. 110A, § 526; City of Chicago v. Lord, supra, 3 Ill.App.2d at 419, 122 N.E.2d at 443. In light of these considerations, and given that the Illinois courts have already held that the Fifth Amendment privilege against self-incrimination is applicable in municipal ordinance violations, we are inclined to hold that the Fifth Amendment is similarly applicable to traffic violations, and that plaintiff legitimately invoked his right in this case.[6]
Where the Fifth Amendment applies, the Supreme Court has admonished that sanctions that would make use of the privilege "costly" may not be imposed, because that would effectively destroy the right to remain silent. Spevack v. Klein, 385 U.S. 511, 515, 87 S.Ct. 625, 628, 17 L.Ed.2d 574 (1967); Griffin v. California, 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965). Three circuits have held that automatic dismissal of a civil complaint when a plaintiff invokes the Fifth Amendment is just such an impermissible sanction. See Attorney General of U.S. v. Irish People, Inc., 684 F.2d 928, 953 (D.C.Cir.1982), cert. denied, 459 U.S. 1172, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983); Campbell v. Gerrans, 592 F.2d 1054-58 (9th Cir.1979); Wehling v. CBS, 608 F.2d 1084, 1087 (5th Cir.1979). These courts have held that where a plaintiff properly invokes the Fifth Amendment, the case may not be dismissed unless the defendant can show a substantial need for the specific information requested and there are no other less burdensome means of preventing unfairness to the defendant. Irish People, Inc., 684 F.2d at 953; Wehling, 608 F.2d at 1088; see also Black Panther Party v. Smith, 661 F.2d 1243, 1271 (D.C.Cir.1981), judgment vac., 458 U.S. 1118, 102 S.Ct. 3505, 73 L.Ed.2d 1381 (1982); Parker v. Baltimore & Ohio Railroad Co., 555 F.Supp. 1177, 1180 (D.C.D.C. 1983). These decisions explain that dismissal for failure to comply with discovery, pursuant to Fed.R.Civ.P. 37, is inappropriate because Fifth Amendment testimony is privileged and Rule 26 explicitly excludes privileged matters from discovery. See Fed.R.Civ.P. 26(b)(1) ("Parties may obtain discovery regarding any matter, not privileged. ..."); Irish People, Inc., 684 F.2d at 953; Wehling, 608 F.2d at 1086-87; Campbell, 592 F.2d at 1057-58. Nor is it accurate to characterize a plaintiff's decision to file suit a "voluntary" waiver of Fifth Amendment rights, since plaintiffs are often "compelled" to initiate civil actions to protect their rights. Black Panther Party, 661 F.2d at 1271; Comment, Plaintiff as Deponent: Invoking the Fifth Amendment, 48 U.Chi.L.Rev. 158, 162-64 (1981). The Fifth Circuit noted that "a civil plaintiff has no absolute right to both his silence and his law suit. Neither, however, does the civil defendant have an absolute right to have the action dismissed anytime a plaintiff invokes his constitutional privilege." Wehling, 608 F.2d at 1088. The balancing test, weighing the plaintiff's Fifth Amendment right against the defendant's substantial need for critical information, accommodates both of those interests.
The Seventh Circuit Court of Appeals has not yet directly addressed the question of whether and when a plaintiff may use the Fifth Amendment privilege without risking dismissal of his or her civil suit. The court has held that final judgment may not be entered against a defendant solely *102 because he invokes the privilege in answering a plaintiff's complaint. National Acceptance v. Bathalter, supra, 705 F.2d at 931-32. An adverse inference may be drawn at trial from the defendant's refusal to answer, but judgment may not be based on that silence alone, without requiring the plaintiff to present a prima facie case. Id.
Following this rationale, we believe that dismissal of plaintiff's case here, where he has properly invoked his Fifth Amendment privilege, is too great a cost. Defendants have not shown that they have a substantial need for the privileged information, which amounts to a request that plaintiff admit that he committed the alleged traffic violations. According to National Acceptance, if plaintiff persists in refusing to testify, defendants may be able to use that silence against him, which could be particularly damaging since plaintiff bears the burden of showing that his arrest and prosecution were without probable cause. See discussion infra. Defendants should also be able to assemble information as to the existence of probable cause from the testimony of defendant Childs, the arresting officer, and other defendants involved in plaintiff's arrest and prosecution. Because plaintiff's Fifth Amendment right against self-incrimination outweighs defendants' need for admissions of guilt as to the traffic violations involved, dismissal of plaintiff's case is not an appropriate response to his use of the Fifth Amendment at his deposition.
As for the substantive elements of plaintiff's claims for false arrest and malicious prosecution, plaintiff must show that he was arrested without probable cause. The actual existence of probable cause is an absolute bar to a § 1983 action regardless of whether the arresting officer acted maliciously or in bad faith. Terket v. Lund, 623 F.2d 29, 31 (7th Cir.1980). A state court finding of probable cause, either at a preliminary hearing or at trial, collaterally estops plaintiff from relitigating the issue in a civil rights suit. Guenther v. Holmgren, 738 F.2d 879, 884-85 (7th Cir.1984), cert. denied, ___ U.S. ___, 105 S.Ct. 1182, 84 L.Ed.2d 329 (1985); see also Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980). If probable cause does not exist, then plaintiff must show that under clearly established legal standards in effect at the time of the arrest, his arrest was unlawful. Moore v. The Marketplace Restaurant, Inc., 754 F.2d 1336, 1344 n. 10 (7th Cir.1985).[7]
No evidence as to the existence or non-existence of probable cause has been presented, and therefore summary judgment must be denied. At the time this motion was taken under advisement, state court proceedings concerning plaintiff's traffic violations were still pending. If the question of probable cause was fully litigated and the state court concluded that there was probable cause to believe that plaintiff committed the violations for which he was arrested and prosecuted, then summary judgment for defendants on the claims of malicious prosecution and illegal arrest would be appropriate.[8] Since there is no evidence to that effect before us, defendants' motion for summary judgment on plaintiff's illegal arrest and malicious prosecution claims is denied.
Selective Prosecution Claims
Plaintiff complains that defendants selectively enforced the bicycle traffic ordinances by applying the ordinances only against plaintiff. Plaintiff's Memorandum in Opposition to Defendants' Motion for Summary Judgment, at 7-8. Plaintiff argues that no one else was arrested for bicycle violations in 1983, and that his arrest, detention and prosecution for such *103 violations amounted to a purposeful and invidious denial of plaintiff's equal protection rights.
As the Supreme Court has recently reiterated, "[i]n our criminal justice system, the Government retains `broad discretion' as to whom to prosecute." Wayte v. United States, ___ U.S. ___, ___, 105 S.Ct. 1524, 84 L.Ed.2d 547 (1985). A selective prosecution violates the Equal Protection Clause only when it is motivated by a discriminatory purpose and is shown to have a discriminatory effect. This discrimination must be based on an unjustificable classification, such as race, religion or other arbitrary classification. Id.; see also Oyler v. Boles, 368 U.S. 448, 456, 82 S.Ct. 501, 505, 7 L.Ed.2d 446 (1962). While plaintiff contends that defendants arrested him due to a desire to harass or injure plaintiff personally, he has not alleged that his arrest was due to any invidious class-based discrimination. Plaintiff is a white male. He has failed to state a claim based on selective prosecution, and those portions of his complaint are dismissed, with prejudice.
Surveillance Claims
Plaintiff also claims that defendants' "super-strict" surveillance of his home and car the night of June 30, 1983, violated his constitutional rights. The only surveillance incidents plaintiff refers to are defendant Childs' "stake-out" of plaintiff's home between 10:00 p.m. and midnight that night, and defendant Rozkuszka's "tail" on plaintiff's car after plaintiff left the DesPlaines police station. Amended Complaint, ¶¶ 9, 10.
Police surveillance tactics are constitutional so long as they do not intrude on a person's reasonable expectation of privacy. See Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1968); Smith v. Maryland, 442 U.S. 735, 99 S.Ct. 2577, 61 L.Ed.2d 220 (1979). Therefore, surveillance of an individual's home from a public area and the following of an automobile on public streets and highways are permitted. United States v. Knotts, 460 U.S. 276, 280-82, 103 S.Ct. 1081, 1084-85, 75 L.Ed.2d 55 (1983) ("A person traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another.") Plaintiff has not alleged that defendants illegally entered his home or otherwise intruded on his privacy. Therefore, plaintiff has suffered no infringement of his Fourth Amendment rights.[9]
Otherwise lawful surveillance may give rise to a civil rights action, but only if the surveillance affected plaintiff's conduct in exercising his constitutional rights, thereby causing an injury. Laird v. Tatum, 408 U.S. 1, 92 S.Ct. 2318, 33 L.Ed.2d 154 (1972); Alliance to End Repression v. City of Chicago, 742 F.2d 1007, 1009-10 (7th Cir.1984); Ghandi v. Police Department of City of Detroit, 747 F.2d 338, 347 (6th Cir.1984); Kraus v. Village of Barrington Hills, 571 F.Supp. 538, 542-43 (N.D.Ill.1982) (Grady, J.). Plaintiff must show that his rights, such as his First Amendment rights to speech or association, were limited or "chilled" by a specific present objective harm due to the surveillance or threat of a specific future harm. Laird, 408 U.S. at 14, 92 S.Ct. at 2326.
Plaintiff makes no mention of any change in his conduct which resulted from defendants' actions, nor do we see how the limited surveillance on that one evening could have unconstitutionally chilled plaintiff's rights. There are no allegations that the surveillance went beyond the activities of June 30 or were otherwise excessive or abusive. Plaintiff's surveillance claims are therefore dismissed, with prejudice.
Conspiracy Claims
Although plaintiff does not specifically invoke 42 U.S.C. § 1985(3),[10] he does *104 allege that defendants' conduct "was in furtherance of a plan of the defendants, and in conspiracy with the Chief of Police of the City of DesPlaines, and with the police department of the City of DesPlaines, and of the City of DesPlaines," to harass, embarrass and discredit plaintiff, and get him fired from his job. Amended Complaint, ¶ 15. In order to state a claim under § 1985(3), a conspiracy must have been motivated by racial or other class-based animus. Griffin v. Breckenridge, 403 U.S. 88, 100-02, 91 S.Ct. 1790, 1797-98, 29 L.Ed.2d 338 (1971); Bell v. City of Milwaukee, 746 F.2d 1205, 1233 (7th Cir. 1984). Moreover, the class distinction must be one that is as invidious as those that have been historically suspect, such as race, national origin, sex or religion. D'Amato v. Wisconsin Gas Co., 760 F.2d 1474, 1485-86 (7th Cir.1985) (class-based discrimination against the handicapped is not actionable under § 1985(3)).
Plaintiff alleges that defendants' actions were due to their malicious intent against him personally, but he has not set forth any facts which indicate a class-based as opposed to individually-based animus that would give rise to a cause of action under § 1985(3). Accordingly, plaintiff's conspiracy claims are dismissed with prejudice.
Claims Against Defendants Alfano and the City of DesPlaines
The only causes of action remaining are plaintiff's allegations of malicious prosecution and illegal arrest. We will address the supervisory liability of defendants Alfano and the City of DesPlaines for these claims.
It is well established that supervisory personnel and municipalities cannot be held responsible under § 1983 for the actions of subordinate employees solely on a theory of respondeat superior. Liability may only be imposed where there are official policies, customs or practices which violate constitutional rights, or the supervisor was personally involved in the alleged unconstitutional actions. Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Bell v. City of Milwaukee, supra, 746 F.2d at 1269; Owens v. Haas, 601 F.2d 1242, 1247 (2d Cir.1980). In addition, the Seventh Circuit has recently held that "[a] complaint that tracks Monell's requirement of official policy with bare allegations cannot stand when the policy identified is nothing more than acquiescence in prior misconduct," and now requires that plaintiffs plead some facts which indicate the existence of an unconstitutional policy or practice. Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir. April 17, 1985).
Other than the conspiracy allegations, see discussion supra at 103-04 plaintiff alleges only that defendants Alfano and the City of DesPlaines "engaged in a course of conduct which violates the civil and constitutional rights of the Plaintiff" (Amended Complaint, ¶ 6); acquiesced in the "super-strict" surveillance of plaintiff's home (¶ 9); and instructed police officers to follow plaintiff (¶ 10). There are no other facts in the complaint as to the individual actions of defendant Alfano, nor are there allegations that a city policy or practice caused plaintiff's injuries. Furthermore, plaintiff has not come forward with any *105 evidence following discovery to further implicate Alfano and the city, while Alfano has submitted his affidavit denying any knowledge of or involvement in the incidents alleged in plaintiff's complaint. Defendants' Motion for Summary Judgment on Plaintiff's First Amended Complaint, Affid. of Leroy Alfano. Summary judgment is therefore granted in favor of defendants Alfano and the City of DesPlaines on plaintiff's remaining claims and they are dismissed from this case.
CONCLUSION
Summary judgment is granted in favor of all defendants on plaintiff's defamation claims. Plaintiff's selective prosecution, surveillance, and conspiracy claims are dismissed with prejudice for failure to state a cause of action. Summary judgment is granted in favor of defendants Alfano and the City of DesPlaines on plaintiff's remaining claims for illegal arrest and malicious prosecution, and they are dismissed from this case entirely. Defendants' motion for attorneys' fees pursuant to 42 U.S.C. § 1988 is taken under advisement until the close of this case.
This case will now be considered ready for trial on plaintiff's claims for illegal arrest and malicious prosecution.
NOTES
[1] Plaintiff was riding a bicycle because his driver's license had been suspended following his arrest in October 1982 by defendant Childs for driving under the influence. Plaintiff's Memorandum in Opposition to Defendants' Motion for Summary Judgment, Exh. B, Affid. of Duane A. Bootz, ¶ 2. Plaintiff is apparently not challenging any aspect of that arrest in this lawsuit.
[2] Defendants imply that under no circumstances may an employee who loses a privately-held job sue a state official for constitutional defamation. Defendants' Memorandum in Support of Their Motion for Summary Judgment, at 4. While constitutional defamation actions are generally brought by public employees, see Hadley, 715 F.2d at 1244-45, the Constitution does protect against unreasonable governmental interference with the "liberty right" to hold specific private employment and follow a chosen line of work. Greene v. McElroy, 360 U.S. 474, 492, 79 S.Ct. 1400, 1411, 3 L.Ed.2d 1377 (1959); Phillips v. Bureau of Prisons, 591 F.2d 966, 970 (D.C.Cir.1979). See also Lawson v. Sheriff of Tippecanoe County, Inc., 725 F.2d 1136, 1138 (7th Cir.1984) ("This liberty right must not be confused with the right to a job ... but if a state excludes a person from a trade or calling, it is depriving him of liberty, which it may not do without due process of law."). If the defamatory actions of state officials caused a person to be excluded from a chosen private profession or trade, as in a state licensing procedure or governmental approval system, then a claim for constitutional defamation may arise. Cf. Margoles v. Tormey, 643 F.2d 1292, 1297-99 (7th Cir.1981), cert. denied, 452 U.S. 939, 101 S.Ct. 3082, 69 L.Ed.2d 954 (1981).
[3] Plaintiff's deposition testimony went as follows:
Q Were you riding a bicycle on June 30, 1983?
A June, yes, I did.
Q Were you riding a bicycle after darkness without lights?
MR. BOOTZ: I would advise the deponent to decline to answer on the grounds of self incrimination under the Fifth Amendment.
BY MR. WIMMER:
Q Were you riding a bicycle on or about June 30, 1983, in disobeyence of a stop sign?
MR. BOOTZ: I would advise the deponent in like manner.
Defendants' Memorandum in Support of Their Motion for Summary Judgment, Transcript of Dep. of Duane A. Bootz, at 120.
[4] Three or more convictions in one year for the same traffic offense is a Class C misdemeanor, punishable by up to 30 days in jail or a fine. Ill.Rev.Stat. ch. 95½, § 11-202. Plaintiff alleges in his memorandum that he is being prosecuted under this habitual traffic offender statute, but he has alleged no facts to support this claim.
[5] A number of other states have held that the Fifth Amendment does not apply in cases of traffic or municipal ordinance violations. See Owens v. State, 178 Ind.App. 406, 382 N.E.2d 1312 (1978); People v. Ferency, 133 Mich.App. 526, 351 N.W.2d 225 (1984); People v. Amitrano, 59 Misc.2d 471, 299 N.Y.S.2d 275 (1969). These holdings, however, appear to be based on state law explicitly classifying traffic offenses as civil proceedings. See Amitrano (reluctantly finds that Fifth Amendment is inapplicable solely because of New York Court of Appeals ruling that traffic violations are civil cases).
[6] The fact that the right was invoked during a deposition in a civil proceeding is immaterial, as it is settled that the Fifth Amendment may be used in civil cases as well as criminal cases, and in discovery proceedings as well as at trial. National Acceptance Co. of America v. Bathalter, 705 F.2d 924, 926 (7th Cir.1983). Neither is this a case where we must evaluate the actual possibility of future criminal prosecution, as the traffic violation prosecution is proceeding concurrently with this case. See In re Folding Carton Antitrust Litigation, 609 F.2d 867, 871-72 (7th Cir.1979).
[7] The Seventh Circuit in Moore adopted the objective standard for qualified immunity set out by the Supreme Court in Harlow v. Fitzgerald, 457 U.S. 800, 818-19, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982), for § 1983 actions against police officers.
[8] Plaintiff has not alleged any additional facts which would give rise to a claim for the use of excessive force or the existence of harsh conditions during his detention. See Turket v. Lund, 623 F.2d at 31.
[9] Plaintiff does not complain that defendant Childs or any other police officer entered his property except to arrest him for the bicycle violations. The legitimacy of that entry is determined by whether there was probable cause to arrest plaintiff.
[10] Section 1985(3) reads:
If two or more persons in any State ... conspire ... for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State ... from giving or securing to all persons within such State ... the equal protection of the laws ... in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property or deprived of having or exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.
42 U.S.C. § 1985(3).
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238 F.2d 874
A. D. IRWIN, Petitioner,v.COMMISSIONER OF INTERNAL REVENUE, Respondent.A. O. LEIGHTON and Gertrude Leighton, Petitioners,v.COMMISSIONER OF INTERNAL REVENUE, Respondent.
No. 11913.
No. 11914.
United States Court of Appeals Third Circuit.
Argued October 4, 1956.
Decided November 23, 1956.
Paul I. Guest, Philadelphia, Pa., for petitioners.
Carolyn R. Just, Washington, D. C., John N. Stull, Acting Asst. Atty. Gen., Robert N. Anderson, I. Henry Kutz, George F. Lynch, Attys., Dept. of Justice, Washington, D. C., for respondent.
Before McLAUGHLIN, KALODNER and STALEY, Circuit Judges.
STALEY, Circuit Judge.
1
These petitions for review present the much litigated question of the determination of the point of time when income becomes sufficiently definite to be the proper subject of accrual.
2
Petitioners A. D. Irwin and A. O. Leighton are partners engaged in the construction business under the partnership name of Irwin & Leighton. On December 5, 1936, the partnership entered into a contract with the United States to construct a library building at Howard University in Washington, D. C., for the total consideration of $817,225. The work was to be completed on November 11, 1937; a contractual clause provided for liquidated damages in the event of delay caused by the partnership. There was a loss of 230 days in the course of construction which the partnership contended was due to the fault of the government. The partnership claimed that these losses were occasioned by added work ordered by the contracting officer of the government, delay by the government architect in approving plans, delay in making the old building available for demolition, and a strike caused by Howard University using non-union employees near the site of the library construction. Time extensions were granted by the government after the contracting officer reviewed the facts relevant to each delay; this procedure was in accordance with the contract and relieved the partnership of liability under the liquidated damages clause.
3
The income of the partnership is computed on the accrual completed contract basis.1 Pursuant to this method of accounting, items of income must be accrued when the right to receive the income becomes sufficiently certain and definite, notwithstanding the fact that the money is not actually received. Spring City Foundry Co. v. Commissioner of Internal Revenue, 1934, 292 U.S. 182, 184-185, 54 S.Ct. 644, 78 L.Ed. 1200. In 1938, the construction was completed and the library building turned over to the government. In that year, the partnership accrued as an item of gross income an account receivable of $72,649.87, being composed of the following sums:
4
$44,449.87 — payment on the contract
made by the government
on February 24, 1939,
leaving a balance of $2,500.
2,500.00 — reserve withheld by the
government until final inspection
of electrical work.
25,700.00 — partnership's estimate of
the damage attributable
to government delay.
5
In its computation of the last item of income, the partnership estimated its expense for the delays at $100 a day for 257 days. The claim for this item was presented to the government for the first time in June or July of 1939. After futile attempts at settlement, the partnership in 1940 brought an action in the Court of Claims for an amount in excess of $40,000. On March 4, 1946, the Court of Claims awarded the partnership $12,915.66. Irwin & Leighton v. United States, 1946, 65 F.Supp. 794, 106 Ct.Cl. 398. The award included the reserve of $2,500 withheld by the government. The partnership did not include as income in 1946 the award of the Court of Claims and, instead, claimed a bad debt deduction of $15,248.34, being the difference between its 1938 accrual of $25,700 and $10,415.66, the amount of the Court of Claims award compensating for the time delay. The Tax Court decided that the $2,500 item was properly accrued in 1938 as income but held, however, that the accrual of $25,700 in 1938 was improper because it was extremely uncertain. It decided also that the award of the damages of the Court of Claims ($10,415.66) was includible as partnership income for 1946 and that the partnership's bad debt deduction in 1946 of $15,284.34 was improper.
6
The petitioners concede that the bad debt deduction was properly disallowed but contend that at least $10,415.66 of the accrual of $25,700 as gross income in 1938 was proper. The latter amount represents sums in excess of the contract price and is the partnership's estimate of the expense caused it by the government's delays. Whatever right the partnership had, or whatever liability the government had, is based not upon any specific contractual clause, but rather upon the breach of that contract. See Restatement, Contracts, § 315 (1932). Such rights or liabilities must normally be determined either by a settlement between the parties or by judicial decision.
7
In Lucas v. American Code Co., 1930, 280 U.S. 445, 450, 50 S.Ct. 202, 203, 74 L.Ed. 538, the Supreme Court approved the rule that
8
"* * * a loss occasioned by the taxpayer's breach of contract is not deductible in the year of the breach, except under the special circumstances where, within the tax year, there is a definite admission of liability, negotiations for settlement are begun, and a reasonable estimate of the amount of the loss is accrued on the books."
9
See also Dixie Pine Products Co. v. Commissioner of Internal Revenue, 1944, 320 U.S. 516, 519, 64 S.Ct. 364, 88 L.Ed. 270; H. Liebes & Co. v. Commissioner of Internal Revenue, 9 Cir., 1937, 90 F.2d 932, 938; Breeze Corporations, Inc., v. United States, 1954, 117 F.Supp. 404, 408, 127 Ct.Cl. 261. This rule applies as well to the accrual of income. Kentucky & Indiana Terminal R. Co. v. Commissioner of Internal Revenue, 6 Cir., 1931, 54 F. 2d 738, 740, certiorari denied, 1932, 286 U.S. 557, 52 S.Ct. 639, 76 L.Ed. 1291.
10
The petitioners urge that the government acknowledged liability in the following letter to the partnership, dated May 14, 1937:
11
"This will acknowledge your letter of May 5 notifying the Department of the delay and additional expense being caused you, in connection with your contract for the construction of the Library Building at Howard University, by not receiving approved mechanical shop drawings, etc., which are being held up on account of the expectancy of restoring Alternate No. 35.
12
"As soon as a definite decision has been made concerning Alternate No. 35, the air-conditioning installation, the Department will request you to submit an itemized claim showing the extent of delay and additional expense."
13
We cannot find in this letter, however, an unequivocal admission of any liability for delay on the part of the government. At best, the letter indicates that the government would be willing to consider a claim to be asserted at some time in the future. Such willingness to consider a claim of breach by one of the parties to the contract is certainly not tantamount to that definite admission of liability which the law requires for proper accrual.
14
The petitioners contend that their income will not be clearly reflected if the 1938 accruals are not permitted, inasmuch as all their work was completed in that year. However, the year in which the work was done is not determinative of the right to accrue as income a contingent claim. Guaranty Trust Co. v. Commissioner of Internal Revenue, 1938, 303 U.S. 493, 498, 58 S.Ct. 673, 82 L.Ed. 975. Nor under the circumstances here would the petitioners have been under the legal obligation to return the amount as income in 1938. Keasbey & Mattison Co. v. United States, 3 Cir., 1944, 141 F. 2d 163, 166-167.
15
This case does not fall within the principles of Continental Tie & Lumber Co. v. United States, 1932, 286 U.S. 290, 52 S.Ct. 529, 76 L.Ed. 1111, so urgently pressed as controlling authority. There the court held that the income was properly accruable in 1920 because that was the year in which the Transportation Act definitely fixed the right of the taxpayer to receive it, and all that remained was the purely ministerial act of the Interstate Commerce Commission of determining the amount of the award. The difference between that case and the one under consideration is what Judge Learned Hand called "the distinction between the liquidation of a determined right, and the determination of a disputed right." Commissioner of Internal Revenue v. Brooklyn Union Gas Co., 2 Cir., 1933, 62 F.2d 505, 507.
16
The decision of the Tax Court will be affirmed.
Notes:
1
Section 43 of the Revenue Act of 1938, 26 U.S.C.A. (I.R.C.1939) § 43, provides, in part:
"The deductions and credits * * * provided for in this title shall be taken for the taxable year in which `paid or accrued' or `paid or incurred', dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. * * *" 52 Stat. 473.
Treas.Reg. 101 in effect for 1938 provides, in part:
"Art. 42-4. Long Term Contracts. — Income from long-term contracts is taxable for the period in which the income is determined, such determination depending upon the nature and terms of the particular contract. As used in this article the term `long-term contracts' means building, installation, or construction contracts covering a period in excess of one year. Persons whose income is derived in whole or in part from such contracts may, as to such income, prepare their returns upon either of the following bases:
* * * * *
"(b) Gross income may be reported for the taxable year in which the contract is finally completed and accepted if the taxpayer elects as a consistent practice so to treat such income, provided such method clearly reflects the net income. If this method is adopted there should be deducted from gross income all expenditures during the life of the contract which are properly allocated thereto, taking into consideration any material and supplies charged to the work under the contract but remaining on hand at the time of completion."
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J-S24008-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
STEVEN MUTZ :
:
Appellant : No. 2783 EDA 2019
Appeal from the Judgment of Sentence Entered September 6, 2019
In the Court of Common Pleas of Lehigh County Criminal Division at
No(s): CP-39-CR-0000204-2019
BEFORE: BENDER, P.J.E., STABILE, J., and STRASSBURGER, J.*
MEMORANDUM BY BENDER, P.J.E.: FILED JULY 08, 2020
Appellant, Steven Mutz, appeals from the judgment of sentence of time-
served to 90 days’ incarceration, imposed after he was convicted of disorderly
conduct under 18 Pa.C.S. § 5503(a)(2). Appellant solely challenges the
sufficiency of the evidence to sustain his conviction. We affirm.
The trial court summarized the facts of Appellant’s case, as follows:
On January 7, 2019, around 8:30 to 8:45 AM, Rebecca
Holder, Director of Operations for Billy’s Downtown Diner, was
heading to the diner’s Allentown location at 840 West Hamilton
Street, Allentown, when she received a phone call from one of the
servers, Yesica Hernandez. Ms. Hernandez advised Ms. Holder
that [Appellant had] entered the restaurant, handed her a bag of
books and stated it would only stop ticking if he made it stop
ticking. [Appellant] then left the restaurant.
Ms. Holder subsequently arrived at the restaurant around
9:45 to 10:00 AM. She observed [Appellant] walking down
Hamilton Street in front of the restaurant, and told the host to call
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-S24008-20
the police. Ms. Holder then saw [Appellant] approaching the front
door. At this time, she went to the door and told [Appellant] he
could not enter the restaurant. [Appellant] said he was coming in
and he wanted his books back. Both parties were speaking in a
normal tone at this point. Ms. Holder advised [Appellant] that she
called the police, and that he could get his books when they
arrived. [Appellant] became agitated, got very close to her and
was screaming about wanting to get his books. Ms. Holder
admittedly yelled back at [Appellant]. The interaction lasted
about 2-3 minutes[,] during which time guests of the restaurant
were waiting to enter and exit, but were unable to do so. Guests
dining inside the restaurant were standing at the windows looking
outside at what was going on. Additionally, some guests asked
Ms. Holder if she needed “back up.” The police arrived and took
[Appellant] to the side of the restaurant. Thereafter, police
charged [Appellant].
Trial Court Opinion (TCO), 11/27/19, at 1-2 (footnotes omitted).
After a jury trial on September 6, 2019, the court found Appellant guilty
of disorderly conduct. He was immediately sentenced as set forth supra.
Appellant filed a timely notice of appeal, and he also timely complied with the
court’s order to file a Pa.R.A.P. 1925(b) statement. The court filed its Rule
1925(a) opinion on November 27, 2019. Herein, Appellant raises a single
issue for our review: “Whether the evidence was sufficient to sustain
[Appellant’s] conviction[] for disorderly conduct - noise[?]” Appellant’s Brief
at 7.
To begin, we note our standard of review of a challenge to the sufficiency
of the evidence:
In reviewing a sufficiency of the evidence claim, we must
determine whether the evidence admitted at trial, as well as all
reasonable inferences drawn therefrom, when viewed in the light
most favorable to the verdict winner, are sufficient to support all
elements of the offense. Commonwealth v. Moreno, 14 A.3d
133 (Pa. Super. 2011). Additionally, we may not reweigh the
-2-
J-S24008-20
evidence or substitute our own judgment for that of the fact
finder. Commonwealth v. Hartzell, 988 A.2d 141 (Pa. Super.
2009). The evidence may be entirely circumstantial as long as it
links the accused to the crime beyond a reasonable doubt.
Moreno, supra at 136.
Commonwealth v. Koch, 39 A.3d 996, 1001 (Pa. Super. 2011).
Appellant was convicted of disorderly conduct under section 5503(a)(2),
which states: “A person is guilty of disorderly conduct if, with intent to cause
public inconvenience, annoyance or alarm, or recklessly creating a risk
thereof, he … makes unreasonable noise[.]” 18 Pa.C.S. § 5503(a)(2).
According to Appellant, the Commonwealth failed to prove the mens rea of
this offense. He insists that the evidence was insufficient to demonstrate
that he was acting with the purpose of causing a public
inconvenience, annoyance, or alarm. Rather, as his statements
made clear, he was yelling at the manager to get her to give him
the books that he had left at the business establishment. The fact
that he may have yelled and raised his voice, while annoying, was
not sufficient to sustain the criminal charge.
Appellant’s Brief at 9.
Appellant’s argument is unconvincing. As the trial court stressed:
There was evidence that [Appellant’s] volume was inappropriate
for the place where it occurred: outside a packed restaurant
during its busy time. There was evidence that the public heard
him to the point where diners got up and stood at the window to
see what was going on. His volume was such that other diners
asked M[s.] Holder if she needed assistance. Finally, it is clear
that [Appellant] caused public inconvenience[,] as the incident
prevented diners from exiting and entering the establishment.
TCO at 3. Ms. Holder’s testimony supports the trial court’s conclusion that
Appellant intentionally caused — or at least recklessly disregarded the risk of
causing — public inconvenience, annoyance, or alarm by screaming at Ms.
-3-
J-S24008-20
Holder in the entranceway of the busy restaurant. See N.T. Trial, 9/6/19, at
12, 15-16. Therefore, the evidence was sufficient to sustain his conviction for
disorderly conduct. See Commonwealth v. Troy, 832 A.2d 1089, 1094 (Pa.
Super. 2003) (“The specific intent requirement of [the disorderly conduct]
statute ‘may be met by a showing of a reckless disregard of the risk of public
inconvenience,’ annoyance, or alarm, even if the appellant’s intent was to
send a message to a certain individual, rather than to cause public
inconvenience, annoyance, or alarm.”) (citation omitted).
Judgment of sentence affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/8/2020
-4-
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90 Ga. App. 595 (1954)
83 S.E.2d 576
TRAVELERS INSURANCE CO. et al.
v.
HAMMOND.
35104.
Court of Appeals of Georgia.
Decided July 12, 1954.
Rehearing Denied July 29, 1954.
Burt DeRieux, Marshall, Greene & Neely, for plaintiffs in error.
Harris, Chance & McCracken, Kimball & Pierce, contra.
*597 NICHOLS, J.
1. Findings of fact made by the Board of Workmen's Compensation are, in the absence of fraud, conclusive on the courts where there is any evidence to support them. Liberty Mutual Ins. Co. v. Haygood, 81 Ga. App. 726 (59 S. E. 2d 731); Shealy v. Benton, 82 Ga. App. 514 (61 S. E. 2d 582); American Mutual Liability Ins. Co. v. Duncan, 83 Ga. App. 863 (65 S. E. 2d 59); Code § 114-710.
2. An agreement fixing compensation between the employer and employee, approved by the Board of Workmen's Compensation, and not appealed from, is res judicata as to the matters therein determined, and the parties are precluded from thereafter contradicting or challenging the matters thus agreed upon. Lumbermen's Mutual Cas. Co. v. Cook, 195 Ga. 397, 399 (24 S. E. 2d 309); Hartford Accident &c. Co. v. Carroll, 75 Ga. App. 437, 444 (43 S. E. 2d 722).
3. A change of condition, within the rule that after entering an award the Board of Workmen's Compensation may increase or decrease the compensation allowed thereunder due to a change of condition, means a change of the physical condition of the claimant subsequent to the first award. It is true that mere proof by the claimant that he was, prior to the original award, injured in a greater degree than that found by the board, or stipulated by the parties in a settlement agreement approved by the board, and that his original injury has continued in the same degree and to the same extent as it was at the time of the original agreement, does not justify an increased award based on change of condition, no change having occurred subsequently to the agreement, or award. Moore v. American Liability Ins. Co., 67 Ga. App. 259 (19 S. E. 2d 763); Fralish v. Royal Indemnity Co., 53 Ga. App. 557 (186 S. E. 567); American Mutual Liability Ins. Co. v. Hampton, 33 Ga. App. 476 (127 S. E. 155).
4. Where, however, as here, an original settlement agreement based upon a 60% disability is agreed upon between the parties and approved by the Board of Workmen's Compensation, which agreement, by its express *596 terms, is disclosed by the last line thereof to be subject to a change in condition, and thereafter, on a hearing based upon a change of condition, there is some evidence, although slight, that the claimant's physical condition has become worse since the settlement agreement (the evidence being virtually undisputed that the claimant is, as of the latter hearing, totally and permanently disabled); an award finding the claimant totally and permanently disabled under evidence strongly supporting that finding plus some evidence that his condition has worsened since the original award, is binding upon the courts in the absence of fraud, and the employer and its insurance carrier are precluded from denying that, at the time of the first hearing, the claimant suffered a disability greater than 60%.
The judge of the superior court did not err in affirming the award based on change of condition.
Judgment affirmed. Gardner, P. J., Townsend, Carlisle, and Quillian, JJ., concur. Felton, C. J., dissents.
FELTON, C. J., dissenting. I dissent from the judgment of affirmance for the reason that the majority opinion is based on a misinterpretation of the record. The majority opinion states that the new agreement of January 10, 1951, "specified that the claimant was 60% disabled". This agreement is as follows: "It is agreed between the parties to the above case as follows: 1. On July 19, 1948, Ernest Hammond, while employed by R. D. Cole Manufacturing Company, earning eighty ($80) dollars a week, sustained injuries as the result of an accident which arose out of and in the course of his employment; and under agreement filed with and approved by the board claimant has been paid compensation *598 at the rate of twenty ($20) dollars a week for and during a period of one hundred twenty-four (124) weeks. 2. Claimant has received medical and surgical treatment at the hands of Dr. Lawson Thornton and Dr. Philip Warner and these doctors feel that if claimant's subjective complaints are as serious as the claimant professes them to be that another operation on claimant's back is advisable. Upon the other hand, claimant prefers not to have another operation by the above-named doctors and has expressed the desire to effect settlement of his case on a sixty per cent permanent partial disability basis. Wherefore an award is prayed approving this agreement under which defendants would pay claimant compensation at the rate of twelve ($12) dollars a week for the remainder of three hundred weeks from the date of his accident or until there was a change in his condition." At the hearing of this case before the single director the claimant testified that Dr. Lawson Thornton told him that he could expect a second operation to reduce his disability to sixty percent. He also testified that he had been totally disabled since his injury but felt worse since the above agreement. It thus appears without dispute that at the time of the settlement agreement the claimant was 100% disabled under the legal definition of the term as used in the workmen's compensation act, to wit, total loss of earning capacity, and that the purpose of the agreement was to arrive at an equitable settlement. The basis of the settlement was not the fact that the claimant was 60% disabled but that he was willing to settle on that basis for the reason that he refused to have an operation which would probably reduce his disability to 60%, which necessarily meant that at the time of the settlement his disability was more than 60%. It was 100%, as shown conclusively by the evidence. The agreement shows that there was no stipulation that the claimant's disability at that time was 60% but that the settlement was on a 60% basis by reason of the facts above stated. Since the claimant's disability since the injury has always been 100%, there could not possibly be a change in condition for the worse, as the law defines the term, and the fact that the claimant became or felt worse physically could not have the effect of increasing his disability to more than 100%. There is no provision of law for payment of more than 100% disability, so the finding in this case is contrary to facts and the law.
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130 Ill. App.2d 596 (1970)
264 N.E.2d 511
JAMES Q. McGRATH Individually and as Admr., Plaintiff-Appellant,
v.
ALFRED J. ROHDE et al., Defendants-Appellees.
No. 69-128.
Illinois Appellate Court Second District.
November 30, 1970.
*597 Treacy & Clifford, of Chicago, for appellant.
Rathje, Woodward, Dyer & Burt, of Wheaton, for appellees.
Judgment affirmed.
Mr. PRESIDING JUSTICE DAVIS delivered the opinion of the court:
The plaintiff, James Q. McGrath, individually and as administrator of the estates of Bonnie and Matthew McGrath, deceased, and as father and next friend of Michael and Julia McGrath, minors, brought this suit against Alfred J. Rohde and William Link to recover for the alleged wrongful deaths of Bonnie and Matthew McGrath, and for injuries to Michael, Julia and himself. The trial court directed a verdict for the defendants at the close of the plaintiffs' case and the plaintiffs have appealed.
The plaintiffs contend that the trial court erred in excluding the testimony of a reconstruction expert, as a witness, and in refusing to admit his testimony relative to certain measurements.
On the day of the occurrence, James Q. McGrath, individually, herein called the plaintiff, was driving his station wagon, with four of his children as passengers, on the Lake Street extension of the expressway system. He testified that he was driving at a speed of about 60 m.p.h. in the outside or right-hand lane; that he passed a car which was travelling in the inside or left-hand lane; that he then passed a second car by moving to the inside lane, overtaking the car, and returning to the outside lane without any contact; and that at this point, he was about two *598 hundred feet from a bridge with a railing or abutment, which crossed over a railroad track. The last he recalled before the accident was seeing the headlights of the car he had passed in his rear view mirror; the next thing he remembered was regaining consciousness at the hospital.
Although the benefit of the Dead Man's Act (Ill. Rev. Stat. 1965, ch. 51, par. 2) was available to the plaintiff in his capacity as administrator, he called the defendant, Rohde, as an adverse witness, under section 60 of the Civil Practice Act. Ill. Rev. Stat. 1965, ch. 110, par. 60.
Rohde testified that he was driving his car at a speed of approximately 45 to 50 m.p.h. when the plaintiff passed him (his was the second car which the plaintiff testified that he had passed); that as soon as the plaintiff's car had passed him, he took his foot off the accelerator and started applying his brakes because the plaintiff had come very close to his car in passing; that he was five or six car lengths from the bridge at that time; that the plaintiff's car then struck the railing or bridge abutment, was thrown into the air and pivoted clockwise, and that he (Rohde) turned his car to the left to try to avoid the plaintiff's car, but struck it while it was still in the air.
Rohde further testified that the right front portion of his car struck the plaintiff's car at the right rear side, and that within one to five seconds thereafter, the defendant Link's car struck the plaintiff's car on its left front door.
The plaintiff then called a reconstruction expert to testify and to reconstruct the accident, to the end that the expert would conclude that the defendant Rohde had struck the rear of the plaintiff's car causing it to collide with the bridge abutment. The trial court excluded this testimony on the ground that there was an eyewitness the defendant Rohde who had testified; and that the expert testimony should, thus, be barred.
The expert witness, as indicated by the offer of proof, would have testified that he had examined photographs of the plaintiff's car which indicated damage to the rear bumper and tailgate at distances above the ground, which would suggest that the plaintiff's car was struck by protusions found on the front of a car similar to that driven by the defendant Rohde. He would have concluded from certain photographs, his examination of a car similar to that of the defendant Rohde's, and from scientific principles and reasoning, that the damages to the rear bumper and tailgate of the plaintiff's car were caused by the defendant's car hitting it prior to the time that it hit the bridge abutment.
We conclude that the trial court was correct in excluding the testimony of the reconstruction expert and in directing a verdict for the defendant. In Plank v. Holman (1970), 46 Ill.2d 465, the Supreme Court reaffirmed that reconstruction expert testimony may be admissible where it is *599 necessary to rely on knowledge and application of principles of physics, engineering and other sciences beyond the ken of the average juror. But "* * * reconstruction testimony may not be used as a substitute for eyewitness testimony where such is available." Also see: Miller v. Pillsbury Co. (1965), 33 Ill.2d 514, 515, 516.
1 The course followed by the plaintiff's car and the sequence of events were fully testified to by the defendant, as an eyewitness. The facts were not such that they required the aid of expert testimony for comprehension. (Ficht v. Niedert Motor Service, Inc. (1962), 34 Ill. App.2d 360, 371.) While it is permissible, under certain circumstances, to allow expert opinion testimony even though there is an eyewitness (see: Plank v. Holman (1969), 108 Ill. App.2d 216, 226, rev'd on other grounds (1970), 46 Ill.2d 459), the use of such testimony should be the exception and not the rule. Abramson v. Levinson (1969), 112 Ill. App.2d 42, 50.
2 Unless the testimony of the eyewitness is incredible, unbelievable or contrary to accepted, natural or scientific laws, or unless the testimony of an expert is found necessary, in addition to the testimony of an eyewitness, because it is essential in the fact finding process to rely on the knowledge and application of principles of science beyond the ken of the average juror, such expert testimony should be rejected. Plank v. Holman (1970), supra; Abramson v. Levinson, supra.
3 The plaintiffs argue that they are not bound by the testimony which they offered under section 60 of the Civil Practice Act. This contention is only partially true. A party who calls an adverse witness under section 60 is not bound to vouch for the veracity of such witness, and he may introduce competent evidence in direct contradiction to the witness's testimony, but he is bound by the testimony of such witness to the extent that it stands uncontradicted and unrebutted. Kapraun v. Kapraun (1957), 12 Ill.2d 348, 355; In re Estate of Donovan (1951), 409 Ill. 195, 209, 210.
4 But such rule of law would not preclude the section 60 testimony of the defendant Rohde from being that of an eyewitness. The plaintiffs may rebut or impeach such testimony, but they must do so by other competent testimony. This section 60 testimony had the same effect as any other competent eyewitness testimony offered and admitted on behalf of either the plaintiffs or the defendant as part of their or his case. This testimony, in itself, was sufficient to render inadmissible the testimony of the expert reconstruction witness.
The plaintiffs also contend that the expert should have been permitted to testify as to the measurements on cars of the same year and model as those involved in the accident, which indicated where the *600 damage was done and where the protrusions appeared on the respective cars. These measurements, however, were offered as a basis for the subsequent opinion which was to have been given by the expert. Even if they had been admitted for their independent value, the court would have had no occasion to rule differently than it did on the motion for a directed verdict. The evidence still would not have warranted submission of the case to the jury. Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill.2d 494, 510.
We are satisfied that there was no error in the trial which was prejudicial to the plaintiffs' rights. Ziegler v. Smith (1967), 86 Ill. App.2d 215, 224. Accordingly, the judgment should be affirmed.
Judgment affirmed.
MORAN and ABRAHAMSON, JJ., concur.
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Cite as 2017 Ark. App. 271
ARKANSAS COURT OF APPEALS
DIVISION III
No. CR-16-693
Opinion Delivered MAY 3, 2017
MATTHEW A. TACKETT
APPELLANT APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT, FIRST
V. DIVISION
[NO. 60CR-14-705]
STATE OF ARKANSAS
APPELLEE HONORABLE JAMES LEON
JOHNSON, JUDGE
AFFIRMED
N. MARK KLAPPENBACH, Judge
Appellant Matthew Tackett appeals his conviction for first-offense driving while
intoxicated (DWI) following a bench trial in Pulaski County Circuit Court.1 Appellant argues
that the trial court erred in finding that the State was not required to prove a culpable mental
state in order to obtain a conviction for first-offense DWI committed in May 2013,
necessitating reversal and remand. Appellant argues that the supreme court decision in Leeka
v. State, 2015 Ark. 183, 461 S.W.3d 331, interpreted the DWI statute to require the
establishment of a culpable mental state (purposely, knowingly, or recklessly). The State
counters that the trial court determined that a culpable mental state was not required but
nonetheless found appellant to have acted “recklessly” with regard to DWI such that the State
proved a culpable mental state, mandating affirming appellant’s conviction. We affirm.
1
Tackett was also convicted of refusal to submit to a chemical test, careless and
prohibited driving, not wearing a seat belt, parking on the highway, and failing to have proof
of insurance. Tackett does not appeal those convictions.
Cite as 2017 Ark. App. 271
A brief examination of the trial court proceedings and the evidence is in order prior
to our analysis of the issue presented on appeal. At approximately 4:30 a.m. on May 12,
2013, an Arkansas State Trooper was on patrol in North Little Rock and came upon
appellant’s vehicle parked, with the engine running, on the southbound on-ramp of Highway
67. Appellant was behind the wheel, unresponsive and either unconscious or asleep. He was
not wearing a seat belt. As appellant regained consciousness and interacted with the trooper,
appellant exhibited many signs typical of intoxication: slurred speech, bloodshot and watery
eyes, unsteadiness on his feet, and a strong odor of intoxicants about his person. Appellant
testified that he had consumed alcohol (vodka) and a pain medication (hydrocodone with
acetaminophen) that night but said that he did not remember getting in the car, driving,
interacting with the trooper, or being arrested.
Appellant’s attorney argued that because appellant claimed that he had no memory of
driving, he lacked the required mental state in order to convict him of DWI. Defense counsel
pointed to Leeka v. State, 2015 Ark. 183, 461 S.W.3d 331, in which the supreme court had
interpreted the criminal code to require that for purposes of DWI as defined in 2013, a
culpable mental state had to be proved. In Leeka, the supreme court held that Ark. Code
Ann. § 5-65-103 (the DWI statute) did not contain an express requirement of a culpable
mental state, but pursuant to Ark. Code Ann. § 5-2-203(b), a culpable mental state was
nonetheless required.2 Defense counsel argued that the Leeka case, which had considered a
2
Arkansas Code Annotated section 5-2-203(b) provides in relevant part that “if the
statute defining an offense does not prescribe a culpable mental state, a culpable mental state
2
Cite as 2017 Ark. App. 271
2013 DWI conviction, controlled the present case. The State responded by arguing that the
DWI statute had recently been amended in 2015 to specifically designate DWI a strict-liability
offense. The State added that even if a culpable mental state was required, appellant had acted
in a reckless manner in drinking and driving, satisfying that element. Defense counsel replied
that, although it might have been reckless to drink and take medication, appellant could not
have acted recklessly in operating a vehicle when he had no awareness of driving.
The trial court, with consent of both the State and the defense, delayed a ruling on this
issue for a week and permitted each side an opportunity to file a brief. After taking the
respective arguments into consideration, the trial court ruled that the State was not required
to establish a culpable mental state in this case and found that appellant was guilty of DWI.
At sentencing, the trial judge began by stating that he wanted “to make sure my record
is clear” and to explain the basis for finding appellant guilty of DWI. The trial court stated
that proof of a culpable mental state was not required in this DWI case, that appellant’s case
was distinguishable from the facts in Leeka, but even so, appellant’s actions “by themselves
were reckless.” Defense counsel replied, “I completely understand, Your Honor.” The
sentencing order was filed of record, and this timely appeal followed.
Appellant argues on appeal that the trial court erred in rejecting his contention that a
culpable mental state was required to be proved to establish that appellant committed DWI
in May 2013. Appellant has failed to demonstrate reversible error in the trial court’s denial
is nonetheless required and is established only if a person acts purposely, knowingly, or
recklessly.”
3
Cite as 2017 Ark. App. 271
of his motion to dismiss the DWI charge.
The Omnibus DWI Act was enacted in 1983, and this Act proclaimed it unlawful in
this state for a person who is intoxicated to operate or be in actual physical control of a motor
vehicle. See Ark. Code Ann. § 5-65-103(a)(1). In 2015, our legislature saw fit to explicitly
state its intention to make DWI a strict-liability offense, not requiring proof of a culpable
mental state, in response to the April 2015 Leeka opinion. The legislature stated in Act 6 that
it “intended and still intends to keep driving while intoxicated a strict liability offense.” Act
299 accomplished the legislature’s intent by adding a new subsection (c) to Ark. Code Ann.
§ 5-65-103, which states that “[a]n alcohol-related offense under this section is a strict liability
offense.” The effective date of this legislative amendment was July 22, 2015. Appellant’s
charges of DWI arose from alleged criminal behavior in 2013.
Appellant questions whether the trial court erred in deciding that, in May 2013, DWI
was a strict-liability offense and in failing to apply the Leeka holding to his case. We need not
answer that question, although we can readily distinguish the facts in this case from those in
Leeka.3 The trial court here found in the alternative that appellant did have a culpable mental
3
In Leeka, the defendant’s toxicology report indicated the presence of the drug
zolpidem, a sleep medication more commonly known by its brand name, Ambien. No other
intoxicants were found in the toxicology report, and Leeka’s breathalyzer test showed a 0.00
alcohol level. The State and defense in Leeka stipulated to a medical-opinion letter in which
a doctor opined that Leeka “experienced a complex sleep behavior . . . namely sleep-driving,
which is a known adverse reaction to Ambien.” In contrast, in the present appeal, Tackett
admitted to the consumption of alcohol and prescription pain medication, and there was no
medical evidence to suggest that Tackett’s pain medication caused the same complex sleep
behavior that Ambien is believed to cause.
4
Cite as 2017 Ark. App. 271
state in this case, namely that he acted recklessly. Given this finding, we need not discuss
whether there was error in the trial court’s denial of his motion to dismiss.4 When a party
appealing from a ruling leaves an alternate, independent ground unchallenged, the circuit
court’s ruling must be affirmed. See Pugh v. State, 351 Ark. 5, 89 S.W.3d 909 (2002); Pearrow
v. Feagin, 300 Ark. 274, 778 S.W.2d 941 (1989); May v. State, 2016 Ark. App. 605, at 5, 509
S.W.3d 14, 17; Bovee v. State, 2011 Ark. App. 158. Nonetheless, we hasten to add that
appellant’s admitted consumption of alcohol and prescription pain medication that led to his
driving his vehicle supported a finding that this constituted reckless behavior.
Affirmed.
WHITEAKER and BROWN , JJ., agree.
Llewellyn J. Marczuk, Deputy Public Defender, by: Clint Miller, Deputy Public
Defender, for appellant.
Leslie Rutledge, Att’y Gen., by: Adam Jackson, Ass’t Att’y Gen., for appellee.
4
Appellant argues in his reply brief that our court should reject the alternative basis to
affirm because he properly preserved his argument for appellate review. We agree that his
appellate argument is preserved for review, but this does not negate the existence of an
alternative basis on which to deny dismissal of the DWI charge.
5
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-12850 ELEVENTH CIRCUIT
Non-Argument Calendar JULY 13, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 3:09-cr-00051-MMH-MCR-1
UNITED STATES OF AMERICA,
lllllllllllllllllllllPlaintiff-Appellee,
versus
FREDERICK CAMPBELL,
lllllllllllllllllllllDefendant-Appellant.
________________________
No. 10-12851
Non-Argument Calendar
________________________
D.C. Docket No. 3:09-cr-00051-MMH-MCR-2
UNITED STATES OF AMERICA,
lllllllllllllllllllllPlaintiff-Appellee,
versus
ALEX LEE CAMPBELL,
llllllllllllllllllll lDefendant-Appellant.
________________________
No. 10-13914
Non-Argument Calendar
________________________
D.C. Docket No. 3:09-cr-00051-MMH-MCR-4
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellee,
versus
SONIA ANTIONETTE DODD,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
________________________
(July 13, 2011)
Before EDMONDSON, MARCUS and KRAVITCH, Circuit Judges.
PER CURIAM:
In this consolidated appeal, co-defendants Frederick Campbell (“Frederick”)
and Alex Lee Campbell (“Alex”) appeal their convictions and 195-month sentences
for conspiracy to distribute 1,000 kilograms or more of marijuana, in violation of 21
U.S.C. §§ 841(a)(1), (b)(1)(A), and 846; possession of marijuana with the intent to
distribute, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(A); and possession of
firearms in furtherance of a drug trafficking crime, in violation of 18 U.S.C. §
924(c)(1)(A). They raise four arguments on appeal: (1) they had a reasonable
expectation of privacy in a package delivered to 7635 Praver Drive East (“Praver
house”), and thus had standing to challenge the search of that package; (2) the search
of the package by an employee of United Parcel Service (“UPS”) violated the Fourth
Amendment; (3) they had standing to challenge the search of the Praver house; and
(4) there was insufficient evidence that the conspiracy involved more than 1,000
kilograms of marijuana, thus requiring the reversal of their convictions and sentences.
In this same consolidated appeal, Sonia Antionette Dodd (“Dodd”) appeals her
175-month sentence for conspiracy to distribute 100 kilograms or more of marijuana,
in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B), and 846. On appeal, Dodd raises
four arguments: (1) the government breached her plea agreement; (2) the district court
was biased against her, which violated her due process rights; (3) her sentence was
substantively unreasonable; and (4) the court erred by failing to provide a written
statement of reasons justifying its sentence. After thorough review, we affirm in part,
dismiss in part, and reverse and remand in part, for the district court to correct a
clerical error in the judgments pertaining to Frederick and Alex.
3
In reviewing the denial of a motion to suppress, we review a district court’s
factual findings for clear error and its “application of the law to those facts de novo.”
United States v. Segura-Baltazar, 448 F.3d 1281, 1285 (11th Cir. 2006). “We review
the district court’s application of the [S]entencing [G]uidelines de novo,” and a
district court’s drug quantity calculation for clear error. United States v. Baker, 432
F.3d 1189, 1253 (11th Cir. 2005) (de novo review); United States v. Mertilus, 111
F.3d 870, 873 (11th Cir. 1997) (clear error review). We review de novo the question
of whether the government breached a plea agreement. United States v. Copeland,
381 F.3d 1101, 1104 (11th Cir. 2004). We also review the validity of a sentence
appeal waiver de novo. United States v. Bushert, 997 F.2d 1343, 1352 (11th Cir.
1993).
However, when a claim -- like a motion to suppress -- has been waived before
the district court, we decline to review it. United States v. Lewis, 492 F.3d 1219,
1221 (11th Cir. 2007) (en banc). Unlike waived claims, unpreserved arguments are
reviewed for plain error. Id. Plain error review requires a defendant to show (1) an
error, (2) that is plain, (3) that affected the defendant’s substantial rights, and (4) that
“seriously affect[ed] the fairness, integrity, or public reputation of the judicial
proceedings.” United States v. Hasson, 333 F.3d 1264, 1276 (11th Cir. 2003). An
error is plain if it is “clear or obvious, rather than subject to reasonable dispute.”
4
Puckett v. United States, ___ U.S. ___, 129 S. Ct. 1423, 1429 (2009). Plain error
review in the context of a sufficiency argument requires us to affirm a conviction
“unless there is a manifest miscarriage of justice [because] the evidence on a key
element of the offense is so tenuous that a conviction would be shocking.” See
United States v. Schier, 438 F.3d 1104, 1107 (11th Cir. 2006) (quotation omitted).
A sufficiency argument is only properly preserved where the defendant’s argument
in support of a judgment of acquittal is based on the same grounds as the defendant’s
argument on appeal. See United States v. Straub, 508 F.3d 1003, 1010-11 (11th Cir.
2007). In the context of an alleged plea agreement breach, the question of whether
the defendant’s substantial rights were affected is not whether the defendant would
have entered into the plea, but rather, whether her sentence was affected by the
government’s breach. Puckett, 129 S.Ct. at 1432-33, 1433 n.4. A codefendant’s
objection is insufficient to preserve a defendant’s argument where the defendant fails
to object to the alleged error himself. See United States v. Gray, 626 F.2d 494, 501
(5th Cir. 1980).1
First, we reject the Campbells’s argument that they had a reasonable
expectation of privacy in a package delivered to the Praver house, and thus had
1
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit issued before October 1,
1981.
5
standing to challenge the search of that package. In challenging a search under the
Fourth Amendment, the defendant bears the burden of establishing “both a subjective
and an objective expectation of privacy” in the area or object searched.
Segura-Baltazar, 448 F.3d at 1286. “The subjective component requires that a person
exhibit an actual expectation of privacy, while the objective component requires that
the privacy expectation be one that society is prepared to recognize as reasonable.”
Id. (quotation omitted). Although possession or ownership is one factor courts may
consider when determining whether a defendant has a legitimate expectation of
privacy in an object, it “is not a proxy for determining whether the owner had a
Fourth amendment interest, for it does not invariably represent the protected Fourth
Amendment interest.” United States v. Salvucci, 448 U.S. 83, 91 (1980).
A defendant may have a reasonable expectation of privacy in a package even
where the package is not addressed in the defendant’s name, provided that he
establishes a connection between himself and the addressee. United States v.
Richards, 638 F.2d 765, 767, 770 (5th Cir. 1981) (holding that a defendant who
opened a post office box for “Mehling Arts & Crafts” had a reasonable expectation
of privacy in a package addressed to Mehling).
Here, the district court correctly found that the Campbells did not have a
reasonable expectation of privacy in the package delivered to the Praver house such
6
that they could challenge the search of the package. Although Frederick accepted the
package from an undercover officer, and the package was found in the backseat of a
car that Alex was driving, possession alone is insufficient to establish a Fourth
Amendment interest in an object. See Salvucci, 448 U.S. at 91. Furthermore, while
Alex’s name was on the lease to the Praver house, the Campbells were not the sender
or named addressee on the package, nor did they establish a connection to the named
addressee or show that they used the name on the package as an alias. Compare
Richards, 638 F.2d at 770. Additionally, when Frederick spoke to the police, he
attempted to distance himself from the package’s addressee. Therefore, the
Campbells did not have standing to challenge the search of the package, and we need
not address whether the search violated the Fourth Amendment.
Second, we find no merit in the claim that they had standing to challenge the
search of the Praver house. We review the evidence from a motion to suppress “in
the light most favorable to the government.” United States v. Baron-Mantilla, 743
F.2d 868, 870 (11th Cir. 1984). We may consider evidence presented at trial when
reviewing the district court’s denial of a motion to suppress. United States v.
Villabona-Garnica, 63 F.3d 1051, 1056 (11th Cir. 1995). A defendant may have a
reasonable expectation of privacy in a home that he does not own or rent if he shows
“an unrestricted right of occupancy or custody and control of the premises as
7
distinguished from occasional presence on the premises as a mere guest or invitee.”
Baron-Mantilla, 743 F.2d at 870 (quotations omitted). Where there was testimony
that a defendant did not live in a searched apartment, as well as testimony that
someone other than the defendant had leased the apartment, the defendant had not
shown that he had a reasonable expectation of privacy in the apartment. United States
v. Brazel, 102 F.3d 1120, 1148 (11th Cir. 1997).
At trial, Frederick testified that he did not live in the Praver house, and at the
suppression hearing, the evidence showed that Frederick did not lease the house.
Accordingly, since he did not establish that he was more than a mere guest at the
Praver house, he did not have standing to challenge the search of the house.
As for Alex, we need not address his claim that he had standing to challenge
the search of the Praver house. A motion to suppress evidence must be made before
the deadline set by the court, or the suppression issue is waived. Fed.R.Crim.P.
12(b)(3)(C), (c), (e). Alex did not address his expectation of privacy in the Praver
house or the constitutionality of the search of the house until well after the court’s
deadline to file suppression motions had passed. See Fed.R.Crim.P. 12(c).
Therefore, Alex has waived this claim, and we will not review it. See Lewis, 492
F.3d at 1221.
8
Third, we find no merit in the Campbells’s argument that there was insufficient
evidence that the conspiracy involved more than 1,000 kilograms of marijuana, thus
requiring the reversal of their convictions and sentences. To prove that a defendant
violated 21 U.S.C. § 841, the government must prove beyond a reasonable doubt “that
the defendant possessed a controlled substance knowingly and willfully and that he
did so with the intent to distribute it.” Baker, 432 F.3d at 1233. For sentencing
purposes, any fact, other than a prior conviction, “that increases the penalty for a
crime beyond the prescribed statutory maximum must be submitted to a jury, and
proved beyond a reasonable doubt.” Blakely v. Washington, 542 U.S. 296, 301
(2004) (quotation omitted). The statutory maximum “is the maximum sentence a
judge may impose solely on the basis of the facts reflected in the jury verdict or
admitted by the defendant.” Id. at 303 (emphasis omitted). Under 21 U.S.C. §
841(b)(1)(A), the statutory maximum is life imprisonment if the jury finds the
defendant guilty of possessing with the intent to distribute 1,000 kilograms or more
of marijuana. 21 U.S.C. § 841(b)(1)(A)(vii).
For purposes of determining the base offense level under the Sentencing
Guidelines, “[t]he government must establish the drug quantity by a preponderance
of the evidence.” Mertilus, 111 F.3d at 873. A defendant may be held responsible
9
for “all drugs foreseeably distributed pursuant to” a conspiracy. Id. (quotation
omitted).
Here, the evidence showed that Frederick obtained marijuana through the mail
and sold it to a number of customers. Based on shipping labels found in one of
Frederick’s storage units, shipping labels and receipts found in Alex’s pocket when
he was arrested, and the actual marijuana recovered by the officers, the jury could
reasonably conclude that the conspiracy involved more than 1,000 kilograms of
marijuana. As a result, their convictions were, therefore, not shocking, and there was
no plain error. See Schier, 438 F.3d at 1107.2
There was also no sentencing error in this case. Because the jury explicitly
found that both Frederick and Alex had conspired to distribute more than 1,000
kilograms of marijuana, their maximum sentences were life imprisonment. See 21
U.S.C. § 841(b)(1)(A). Based on the shipping labels and the actual marijuana
recovered, the government sufficiently proved the drug quantity by a preponderance
of the evidence, and the district court correctly calculated Frederick’s and Alex’s base
2
We review Frederick’s and Alex’s arguments as to the sufficiency of the evidence to
support their convictions for plain error because neither party presented an argument about the
quantity of drugs to the district court in their respective motions for a judgment of acquittal. See
Straub, 508 F.3d at 1010-11.
10
offense levels using that drug quantity. Accordingly, there has been no error, plain
or otherwise, as to Frederick’s or Alex’s sentence.3
Fourth, turning to Dodd’s arguments on appeal, we reject her claim that the
government breached her plea agreement. A defendant may appeal her sentence
based on an alleged plea agreement breach even if the plea agreement contains a
sentence appeal waiver. Copeland, 381 F.3d at 1105. In determining whether the
government breached a plea agreement, we apply an objective standard to determine
whether the government acted consistently with the defendant’s reasonable
understanding of the agreement when she pleaded guilty. Id.
Under the terms of Dodd’s plea agreement, the parties stipulated to a base
offense level of 30. However, the probation officer calculated a higher base offense
level of 32 based on previously suppressed evidence. In explaining the discrepancy,
the prosecutor stated that it did not “really disagree with [the] probation” officer’s
calculation because reliable suppressed evidence could be taken into account for
sentencing purposes. Thus, even if this statement breached the plea agreement, it was
not a “clear or obvious” error because the government did not clearly argue for a
3
Alex objected to the district court’s calculation of the drug quantity. However, because
Frederick did not object to this finding, his particular claim is reviewed for plain error only. See
Gray, 626 F.2d at 501.
11
position contrary to the plea agreement. See Puckett, 129 S.Ct. at 1429.4 As for
Dodd’s argument that the government breached the plea agreement by asking for a
mid-to-high end guideline range sentence, this request was not a breach because the
plea agreement did not restrict the government from asking for a specific sentence.
And finally, even assuming that the government plainly breached the plea agreement,
the breach did not affect Dodd’s substantial rights because it did not affect her
sentence. See Puckett, 129 S.Ct. at 1432-33, 1433 n.4. The district court explicitly
stated that, even if it used the recommended base offense level of 30, it still would
have sentenced Dodd to 175 months’ imprisonment because any shorter sentence
would have been insufficient given Dodd’s role in the conspiracy, the scope of the
conspiracy, and Dodd’s criminal history.
Lastly, we dismiss Dodd’s claims regarding her sentence that the district court
was biased against her, that her sentence was substantively unreasonable, and that the
court erred by failing to provide a written statement of reasons justifying its sentence.
A sentence appeal waiver contained in a plea agreement is enforceable if it was made
knowingly and voluntarily. Bushert, 997 F.2d at 1350-51. To enforce a sentence
appeal waiver, “[t]he government must show that either (1) the district court
4
We review Dodd’s argument for plain error because she did not object to the alleged
breach before the district court. See United States v. Romano, 314 F.3d 1279, 1281 (11th Cir.
2002).
12
specifically questioned the defendant concerning the sentence appeal waiver during
the Rule 11 colloquy, or (2) it is manifestly clear from the record that the defendant
otherwise understood the full significance of the waiver.” Id. at 1351.
In this case, the district court specifically questioned Dodd about her sentence
appeal waiver during the plea colloquy, and she indicated that she understood the
waiver and was voluntarily waiving her right to appeal her sentence. Therefore, Dodd
knowingly and voluntarily entered into her sentence appeal waiver. Because no
exceptions to her sentence appeal waiver apply, we dismiss all of her challenges to
her sentence.
***
Based on the above, we affirm Frederick’s and Alex’s convictions and
sentences. However, we remand to the district court to correct a clerical error in their
judgments. In both Frederick’s and Alex’s judgments, Count 2 erroneously includes
21 U.S.C. § 846, which only applies to Count 1 of their convictions. As for Dodd,
we reject her argument that the government breached the plea agreement, and we
dismiss her appeal as to her challenges to her sentence.
AFFIRMED IN PART, REMANDED IN PART, AND DISMISSED IN
PART.
13
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121 F.3d 281
74 Fair Empl.Prac.Cas. (BNA) 943,71 Empl. Prac. Dec. P 44,882Nellie BRASIC, Plaintiff-Appellant,v.HEINEMANN'S INC., Bakeries, Defendant-Appellee.
No. 96-3559.
United States Court of Appeals,Seventh Circuit.
Argued May 30, 1997.Decided July 30, 1997.
John F. O'Meara (argued), Park Ridge, IL, for plaintiff-appellant.
James A. Spizzo, Nancy M. Gerrity (argued), Vedder, Price, Kaufman & Kammholz, Chicago, IL, for defendant-appellee.
Before EASTERBROOK, RIPPLE, and MANION, Circuit Judges.
MANION, Circuit Judge.
1
Nellie Brasic, while employed at Heinemann's Bakeries, slapped co-worker Nicholas Lemus in the face. Heinemann's prohibits its employees from assaulting one another or fighting on company property, conduct which, according to the "Rules and Regulations for Heinemann's Employees," will result in "immediate termination for a first offense." Brasic was terminated the same day. Her union filed a grievance on her behalf; Heinemann's upheld Brasic's termination.
2
After receiving the EEOC's Notice of Right to Sue, Brasic sued under Title VII of the Civil Rights Act of 1964 alleging that she had been a victim of sex discrimination. According to her complaint, Brasic was terminated for conduct for which Heinemann's would not have terminated a male employee.1
3
In response to Brasic's allegations Heinemann's asserted what it termed a legitimate nondiscriminatory business reason for terminating Brasic--violation of the company's "no-hitting" rule--and moved for summary judgment. Brasic now alleges numerous instances where male employees were involved in fights and altercations and were not terminated. These reveal, she argues, that the distinguishing feature of her termination was that she was female. The overriding problem for Brasic is that she failed to properly set out these alleged facts to counter Heinemann's motion for summary judgment. Along with its motion for summary judgment, Heinemann's filed its statement of undisputed material facts setting out in numbered paragraphs, with specific page and paragraph cites, the facts supporting summary judgment. This procedure was in line with Local Rule 12(M).2 In turn, in order to oppose Heinemann's motion, Local Rule 12(N) required Brasic to file a concise response to Heinemann's 12(M) statement with specific references to affidavits, parts of the record, and other supporting materials supporting her response.3 Further, if she wished to submit additional facts which would require the court to deny Heinemann's motion for summary judgment, Brasic was required to file her own statement with the required supporting references. Brasic did neither. First, she filed a memorandum in opposition to summary judgment with no record cites, exhibits, or statements of fact. With leave of court, Brasic filed a "corrected" memorandum along with a rule 12(N)(3)(a) response to Heinemann's motion. But the district court "[did] not consider any of the facts stated in plaintiff's memorandum in response to defendant's motion for summary judgment that [were] not properly included and supported by citation to supporting materials in either the rule 12(M) statement of defendant or the rule 12(N) statement of the plaintiff." September 10, 1996, District Court Order. The court determined that:
4
The uncontested facts establish that defendant had policies, partly in writing and partly not in writing, that (1) any employee who hit another employee would be terminated and (2) termination would be imposed only if [the] alleged hitter admitted hitting the other employee or the alleged hittee's claim to have been hit by the alleged hitter was corroborated by one or more third parties to the incident. The facts properly established in the Rule 12(M) and (N) statements support defendant's contention that these policies were uniformly enforced.
5
Id. Accordingly, the district court entered summary judgment for Heinemann's.
6
Brasic filed a motion for reconsideration which the district court denied: "Based upon the 12(M) and 12(N) statements that were filed in this matter which, of course, are extraordinarily important in a motion for summary judgment, the Court is going to deny the motion to reconsider."
7
Brasic appeals, arguing that she "adequately responded to the facts asserted by the defendant pursuant to Local Rule 12(M)," and citing what she claims are multiple instances where the "no-hitting" rule was not applied to similarly situated male Heinemann's employees.
8
Of course we usually review an entry of summary judgment by construing the facts and inferences most favorably to the non-moving party. But where that party has not followed the local rules requiring a response, supported by appropriate citations to the record, to each uncontested fact asserted in the movant's 12(M) statement, the moving party's facts remain uncontested. Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1313 (7th Cir.1995). Under rule 12(N), a failure to properly contest in the 12(N) statement material facts set out in the movant's 12(M) statement, constitutes a binding admission of those facts. Id. In such a case, we "depart from our usual posture of construing all facts in favor of the nonmoving party; rather we accept as true all material facts contained in [the moving party's] 12(m) statement." Id. (quoting Johnson v. Gudmundsson, 35 F.3d 1104, 1108 (7th Cir.1994)). Accordingly, as did the district court, we accept as true all material facts contained in Heinemann's 12(M) statement that were supported by citations to the record but were not contested in accordance with rule 12(N). Thus we consider Heinemann's submitted material facts that are uncontested by "specific references to the affidavits, parts of the record, and other supporting material," Local General Rule 12(N)(3)(a), and we do not consider Brasic's additional facts that are not supported by similar references. Local General Rule 12(N)(3)(b).
9
The burden in this case rests on Brasic. In response to her accusation that she was terminated because she was female, Heinemann's submitted what it considered a legitimate, nondiscriminatory business reason for her termination. Under the McDonnell Douglas4 burden-shifting approach, see, e.g., Bahl v. Royal Indemnity Company, 115 F.3d 1283, 1290 (7th Cir.1997), the burden shifted to Brasic to proffer some evidence supporting her contention that Heinemann's business reason was not true--that it was pretextual. "[T]he plaintiff always has the ultimate responsibility of proving that [s]he was the victim of intentionally discriminatory conduct by [her] employer." Id.
10
Brasic has failed to meet that burden for several reasons. In its 12(M) statement, with record references supported by citation to page and paragraph numbers, Heinemann's specifically set out that it has written rules and regulations. Brasic acknowledged receiving a copy of the regulations, which prohibit among other things assaulting an employee or fighting on company property. Any violation results in immediate termination on a first offense. pp 32, 34. Heinemann's further asserted that Brasic struck Lemus on the face, and that Brasic admitted she had done so. pp 43, 45. Lowell Lindholm, Heinemann's plant manager, made the decision to terminate Brasic because she had slapped Lemus; Brasic's gender played no role in that decision. pp 8, 56. A grievance meeting relating to Brasic's termination was held in Lindholm's office attended by Brasic, management, and union representatives. p 61. Following the grievance meeting, Brasic's gender also played no role in Lindholm's decision to uphold her termination. p 64. Heinemann's company records, prepared by Lindholm, show that Brasic was terminated for "fighting on company property" and because she "struck another employee." p 65.
11
As further evidence that its no-hitting rule was the legitimate business reason for Brasic's termination, Heinemann's submitted that in December of 1988, it discharged Brian Clark and Juan Taberes, both males, for fighting because they had been hitting each other on company property. para.p 42.
12
These facts are all material to the issue of whether Heinemann's had a legitimate business reason for terminating Brasic; uncontested they are definitive. Brasic argues they were not uncontested. If we look at Brasic's corrected 12(N) response we find the following: She admitted pp 8, 32, 33, 34, and 65. Cryptically, she asserted that p 45 was repetitious of p 45. Brasic contested p 56: "Paragraph 56 is false; Lindholm ultimately terminated the plaintiff but he did so under circumstances he would not terminate a male. (See all exhibits)." She similarly challenged p 64: "Despite what he heard at the hearing, Lindholm terminated the plaintiff; gender was the significant factor in his decision. (see all exhibits)." Finally, Brasic admitted p 42, "but affirmatively states that there were other males who struck others or fought other employees and did not get fired (See deposition of Caroline Seestadt Exhibit C; grievance report of Gregarion Gonzales and deposition of Davis Fair Exhibit I and affidavit of James McQuaid Exhibit M)."
13
The two volumes of exhibits that accompany this case are not numbered sequentially, but when placed together they constitute three-and-a-quarter inches of paper totaling roughly 750 pages. For Brasic to deny a paragraph of Heinemann's 12(M) statement with the direction to the court to "see all exhibits," does not approach 12(N)'s mandate. The rule requires specific references to affidavits and parts of the record, not to entire affidavits or, in this case, the entire record. In citing to everything ("all exhibits"), Brasic specifically cites to nothing. Brasic's response to paragraph 42 is only slightly more helpful. The exhibits cited (C, I, and M) total 148 pages, all but 2 of them deposition transcripts.
14
"It is not our task, or that of the district court, to scour the record in search of a genuine issue of triable fact. We rely on the nonmoving party to identify with reasonable particularity the evidence that precludes summary judgment." Richards v. Combined Ins. Co. of America, 55 F.3d 247, 251 (7th Cir.1995). This circuit has consistently upheld strict enforcement of rule 12(N). See Wienco, Inc. v. Katahn Associates, Inc., 965 F.2d 565, 567-68 (7th Cir.1992) (stating such), Schulz v. Serfilco, Ltd., 965 F.2d 516, 519 (7th Cir.1992) (citing cases). "We have endorsed the exacting obligation these rules impose on a party contesting summary judgment to highlight which factual averments are in conflict as well as what record evidence there is to confirm the dispute...." Waldridge v. American Hoechst Corp., 24 F.3d 918, 921-22 (7th Cir.1994). We repeatedly have sustained entry of summary judgment where "the nonmovant has failed to submit a factual statement in the form called for by the pertinent rule and thereby conceded the movant's version of the facts." Id. at 922 (citing cases). This is such a case.
15
In addition, Brasic failed to set out additional facts she wished the district court to consider in a separate 12(N) statement with short numbered paragraphs and appropriate specific references to the record. See Local General Rule 12(N)(b), supra at note 3. She wanted the district court to consider a number of incidents in which male Heinemann's employees allegedly violated the company rules prohibiting assaults but were not discharged. She claimed in her response to Heinemann's motion for summary judgment that these employees were similarly situated to her but were not terminated because they were male, suggesting that her termination was because she was female. These allegations, the factual details of the incidents, and specific references to that portion of the record sustaining the allegations were all absent. Brasic filed no separate 12(N) statement at all. Accordingly there was nothing for the district court to consider.
16
As a result of Brasic's failure to comply with Local General Rule 12(N), the district court only had before it the facts set out above derived from Heinemann's 12(M) statement. And those facts, supported by the record, demonstrate that Heinemann's had a no-hitting rule with termination on a first offense and that Brasic was terminated after she violated that rule when she struck Lemus in the face. "[Brasic's] failure to comply with the local rule was ... not a harmless technicality, but a mistake that our precedents (for good reason) have deemed fatal." Waldridge, 24 F.3d at 924. By failing to comply with local rule 12(M), Brasic was unable to sustain her burden of presenting evidence that Heinemann's business reason was pretextual; the district court had no choice but to enter summary judgment for Heinemann's.
17
While we review a district court's entry of summary judgment de novo, Richards, 55 F.3d at 251, as noted above, "it is not our task ... to scour the record" in search of genuine issues of material fact that were not correctly presented to the district court. Id. Nevertheless, we have looked at some of the evidence Brasic claims would have demonstrated that Heinemann's legitimate business reason was pretextual. On appeal, Brasic has provided this court with the specific references to the record missing from her rule 12(N) filing in district court.5 Having examined the record references now submitted by Brasic, we find no admissible or relevant evidence contesting Heinemann's legitimate business reason for terminating her.
18
Brasic's case essentially rests on the deposition transcript of Caroline Seestadt, a Heinemann's employee who testified about several cases in which she claims male employees violated the no-hitting rule and were not terminated. But in each case, Seestadt stops short of testifying to any actual knowledge about the investigation and/or punishment of these violations. Seestadt does not allege that management personnel responsible for enforcing the rules were aware of the incidents. In fact, in some instances she admits they were not. Nor does she know whether the accused admitted or denied the incident, or what if anything witnesses to the events told management. Seestadt herself does not claim she ever informed management of the incidents she had witnessed. Additionally, a number of the incidents testified to by Seestadt, in addition to constituting inadmissible hearsay evidence, were entirely irrelevant to the question of whether Heinemann's terminated employees for hitting other employees on company property. Examples of such incidents are Seestadt's allegations of threats made by male employees, both verbal and physical, as well as incidents occurring off company property. In one incident, on which Brasic places much weight, one male employee struck another and was not fired. But the employee who had been struck subsequently retracted his accusation and there had been no witnesses to the incident. This was not comparable to Brasic's case--she admits having struck Lemus. We are not even sure that a single incident where management failed to enforce its own rules rebuts their status as a legitimate business reason for an employee's termination, especially where, as here, the plaintiff has acknowledged their existence and admitted she violated them. We have consistently held that the courts must avoid stepping into the role of super personnel manager and must not second guess legitimate business decisions. Rand v. CF Industries, Inc., 42 F.3d 1139, 1146 (7th Cir.1994); cf. Kralman v. Illinois Dept. of Veterans' Affairs, 23 F.3d 150, 157 (7th Cir.1994) (employer is entitled to make mistake or exercise poor judgment so long as it honestly believes in reason offered for making decision).
19
The only evidence of an incident similar to Brasic's was one in which two employees hit each other and admitted the fact after management was informed of the incident. Both employees were terminated immediately, just as was Brasic. Brasic acknowledges Heinemann's enforced its explicit and straightforward no-hitting rule in that instance. Absent any evidence to the contrary, the district court was correct to conclude that Heinemann's terminated Brasic for the same violation. In short, Heinemann's would have been entitled to summary judgment even had Brasic's evidence been submitted in compliance with local rules.
20
Accordingly we affirm the district court's entry of summary judgment for Heinemann's.
1
In her complaint Brasic also alleged sexual harassment. She subsequently withdrew these claims in her response to Heinemann's motion for summary judgment and they are not at issue on appeal
2
United States District Court for the Northern District of Illinois' Local General Rule 12(M) requires:
Motions for Summary Judgment; Moving Party. With each motion for summary judgment filed pursuant to Fed.R.Civ.P. 56 the moving party shall serve and file:
(1) any affidavits and other materials referred to in Fed.R. Civ. P. 56(e);
(2) a supporting memorandum of law;
(3) a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law, and that also includes:
(a) a description of the parties, and
(b) all facts supporting venue and jurisdiction in this Court.
The statement referred to in (3) shall consist of short numbered paragraphs, including within each paragraph specific references to the affidavits, parts of the record, and other supporting materials relied upon to support the facts set forth in that paragraph. Failure to submit such a statement constitutes grounds for denial of the motion.
If additional material facts are submitted by the opposing party pursuant to section N of this rule, the moving party may submit a concise reply in the form prescribed in section N for a response. All material facts set forth in the statement filed pursuant to section N(3)(b) will be deemed admitted unless controverted by the statement of the moving party.
3
Local General Rule 12(N) requires:
Motions for Summary Judgment; Opposing Party. Each party opposing a motion filed pursuant to Fed.R.Civ.P. 56 shall serve and file:
(1) any opposing affidavits and other materials referred to in Fed.R.Civ.P. 56(e);
(2) a supporting memorandum of law; and
(3) a concise response to the movant's statement that shall contain:
(a) a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon, and
(b) a statement, consisting of short numbered paragraphs, of any additional facts that require the denial of summary judgment, including references to the affidavits, parts of the record, and other supporting materials relied upon. All material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party.
4
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)
5
For example, rather than being directed to "deposition of Caroline Seestadt Exhibit C," we are directed to such references as "Exhibit C pp. 31-35, 110-12, 114-15."
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576 F.2d 279
UNITED STATES of America, Plaintiff-Appellee,v.Kenneth C. FITZGIBBON, a/k/a Michael Coe, Defendant-Appellant.
No. 77-1520.
United States Court of Appeals,Tenth Circuit.
Argued and Submitted April 21, 1978.Decided May 9, 1978.Rehearing Denied June 9, 1978.
Richard S. Henderson, San Diego, Cal., for defendant-appellant.
Rod W. Snow, Asst. U. S. Atty., Denver, Colo. (Joseph F. Dolan, U. S. Atty., Denver, Colo., with him on the brief), for plaintiff-appellee.
Before BARRETT, DOYLE and LOGAN, Circuit Judges.
LOGAN, Circuit Judge.
1
Kenneth C. Fitzgibbon appeals his conviction by a jury of knowingly and willfully making a false statement in violation of 18 U.S.C. § 1001, in connection with bringing foreign currency through U. S. Customs.
2
On appeal the appellant makes a number of claims: the indictment was defective; he was charged under the wrong statute; the evidence was insufficient to support the verdict; he was the victim of an illegal search; the jury was improperly instructed; and the Act involved here is unconstitutional.
3
Defendant-appellant Fitzgibbon entered the United States at Denver on a flight from Calgary, Canada. Upon arrival at U. S. Customs Fitzgibbon tendered to the official on duty, Joseph Lockhart, the "Customs Declaration" Form 6059-B, which is given during flight to all passengers coming into the United States from abroad. A question on the form asks "Are you or anyone in your party carrying over $5,000.00 in coin, currency, or monetary instruments?" Fitzgibbon had checked a "no" answer to that question. The official asked Fitzgibbon that question again orally during his inspection, as is apparently done routinely. Fitzgibbon's answer again was "no."
4
Fitzgibbon had come under suspicion on a tip, the investigation of which showed he had purchased a ticket from Denver to Calgary, Canada, and a return on the same flight forty minutes later. He had in fact returned the following morning. Lockhart testified that he did not recognize Fitzgibbon's name or appearance as one for whom he was to watch, but noticed Fitzgibbon was hesitant in answering "no" to the question about money. He stated that he then asked Fitzgibbon if he acquired anything in Canada and again the answer was "no." As Lockhart examined Fitzgibbon's baggage, his testimony was that the defendant appeared nervous. Lockhart then motioned to a supervisor for a secondary examination. Fitzgibbon was taken to a search room and, in the presence of another Customs official, Lockhart "padded down" Fitzgibbon as a safety precaution and requested that the defendant empty his pockets. In Fitzgibbon's wallet was a relatively small amount of Canadian and Mexican money. Lockhart asked Fitzgibbon if this was the only currency the defendant had on his person and Fitzgibbon answered "yes." Defendant was then asked to remove his boots. In doing so he mumbled something about "investment," and as he removed each boot he reached into it and pulled out a bundle of Canadian currency, amounting in total to approximately $9,800.00 Canadian (worth slightly more than that total in U. S. dollars).
5
Fitzgibbon was then read his Miranda rights and taken to another room where he volunteered to Customs Agent H. R. King that he had acquired the money in Canada and wanted to avoid a hassle with the United States Internal Revenue Service because part of the money was not his; he was to send $5,410.72 of the money to an attorney in New Jersey. The remainder he said he earned in doing some construction work on a home in Washington state belonging to a Canadian resident. Fitzgibbon produced a slip of Canadian hotel notepaper from an envelope with the figure 5410.72 written on it.
6
In questioning Fitzgibbon, Customs Agent King took down information contained on a Wisconsin driver's license produced by Fitzgibbon. At trial the Director of Driver Control for Wisconsin testified that the number on the license was fictitious. Another agent testified that he checked the address given on the license and was unable to find any such location.
7
The indictment in this case reads as follows:
8
On or about March 31, 1977, at Denver, in the State and District of Colorado, KENNETH C. FITZGIBBON, also known as Michael Coe, did knowingly and willfully make a false statement and representation and make use of a document, to-wit: a Customs Declaration Form 6059-B, which contained a false statement and entry, to the effect that KENNETH C. FITZGIBBON, aka Michael Coe, did not possess more than $5,000.00 in currency when in fact KENNETH C. FITZGIBBON, aka Michael Coe, did possess approximately $10,000.00 in Canadian currency, such declaration or report being required by Title 31, United States Code, Section 1101, under the auspices of the United States Customs Service of the United States Department of Treasury, all in violation of Title 18, United States Code, Section 1001.
9
The statutory provision underlying the charge, 31 U.S.C. § 1101, states:
10
. . . whoever, whether as principal, agent, or bailee, or by an agent or bailee, knowingly
11
(1) transports or causes to be transported monetary instruments
12
(B) to any place within the United States from or through any place outside the United States, . . .
13
in an amount exceeding $5,000 on any one occasion shall file a report or reports in accordance with subsection (b) of this section.
14
31 U.S.C. § 1052(l ) defines monetary instruments as:
15
coin and currency of the United States, and in addition, such foreign coin and currencies, . . . as the Secretary may by regulation specify for the purposes of the provision of this chapter to which the regulation relates.
16
These provisions are implemented by regulations found in 31 C.F.R. § 103.23(a),1 and C.F.R. § 103.11 defines the meaning of the term "currency" to include "(t)he coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued. . . ."
17
We will consider appellant's contentions on appeal in the order in which they are presented in his brief.
18
1. Fitzgibbon claims the indictment is defective because it is not specific enough. The argument is somewhat difficult to follow but he seems to contend it should have used the term "monetary instruments" instead of "currency," should have stated specifically that the report requirement encompasses Canadian currency, and should have cited specifically the regulation defining monetary instruments to include Canadian currency. Also he alleges the Customs form referred to is a "baggage declaration" and that is not a proper form.
19
We find no merit in these arguments. Fed.R.Crim.P. 7(c)(1) requires only a "plain, concise and definite written statement of the essential facts constituting the offense charged." The test of the sufficiency of the indictment has been stated many times in the cases, and is whether the indictment contains the elements of the offense charged and apprises the accused of the nature of the offense. A guilty verdict will not be set aside for mere technical defects unless it is apparent the defendant is prejudiced. United States v. Mason, 440 F.2d 1293, 1296 (10th Cir. 1971), cert. denied, 404 U.S. 883, 92 S.Ct. 219, 30 L.Ed.2d 165 (1971). The indictment here sufficiently apprises the defendant as to the nature of the offense. He is charged with knowingly and willfully making a false statement on a specific Form 6059-B, in violation of a specific statute. The statute creating the reporting duty is also cited. The date of the act constituting the violation is set forth, and the currency which was being carried is recited. The precise regulation need not be mentioned expressly. It was incumbent upon the government to prove beyond a reasonable doubt that defendant knowingly made the false statement, hence that he knew Canadian currency was within the intent of the reporting requirement. But it is not essential that the indictment do more than state that his carrying in of Canadian currency was a violation, in order to advise him of the charge.
20
As to the complaint that Customs Form 4790 is the proper form instead of the one recited in the indictment, we note that Form 6059-B was in normal use given to incoming passengers to ascertain whether a report on Form 4790 was required, and the defendant's only answer was on Form 6059-B, as charged.
21
2. We see no merit in appellant's argument that he should have been charged under 31 U.S.C. §§ 1058-59 and 31 C.F.R. 103.49 rather than under 18 U.S.C. § 1001. We recently dealt with a similar contention in United States v. Ready, 574 F.2d 1009 (10th Cir. 1978) and held that which of two applicable statutes will be made the basis of an indictment is the decision of the government prosecutors.
22
Appellant contends, however, that in enacting §§ 1058-59 Congress intended to preempt prosecution under 18 U.S.C. § 1001. We are cited nothing to support the argument that Congress intended §§ 1058-59 to be the exclusive provisions available to prosecute Title 31 violators; in fact, 31 U.S.C. § 1052(k) suggests Congress contemplated prosecution under 18 U.S.C. § 1001 by reciting:
23
For the purposes of § 1001 Title 18 the contents of reports required under any provision of this chapter are statements and representations in matters within the jurisdiction of an agency of the United States.
24
3. Did the evidence support a finding that defendant reasonably knew that Canadian currency was meant to be included in the reporting requirement? Here reliance is placed mostly upon the fact that the large posters in the passenger approaches to the terminal contain a picture of the American flag plus "$5,000," advising passengers to report negotiable instruments and currency over the amount of $5,000.
25
Certainly it is relevant whether defendant reasonably knew he should report Canadian money. The form did not expressly refer to Canadian or foreign currency. It did not, however, expressly refer to U. S. currency either, unless that is the required inference from use of the sign "$" before the figure "5,000.00." And if the Canadian currency is considered merely a commodity there is a further statement on the form as follows:
26
In addition, the laws of the United States require that you declare ALL articles acquired abroad (whether worn or used, whether dutiable or not, and whether obtained by purchase, as a gift, or otherwise ) which are in your or your family's possession at the time of arrival. Furthermore, Repairs made abroad must also be declared.
27
Nonresidents may make an oral declaration. Returning Residents may make an oral declaration if the total price of articles declared (price actually paid or, if not purchased, fair retail price in country where obtained ) is not more than the sum of $100 per person. Otherwise You Must List In Writing On The Reverse Of This Form All Articles And Repairs Acquired Abroad Which You Are Now Bringing Through Customs. (See additional instructions on reverse.)
28
All your baggage (including handbags and hand-carried parcels) may be examined. False Statements Made To A Customs Officer Are Punishable By Law. Consult "U. S. Customs Hints" and your inspector for full information.
29
We cannot read appellant's mind, so we have to infer his knowledge of reporting requirements from his behavior and all of the facts in evidence. In this connection we do not have to rely upon the posters or even Form 6059-B which he signed. He made a statement from which it could reasonably be inferred he knew of the requirement when he said he wanted to avoid a hassle with the United States Internal Revenue Service. Further, the fact he carried the money in his boots rather than in his wallet or in his pockets supports the inference he was attempting to hide it. His possession of a false driver's license, and his "no" answers to repeated questions about whether he acquired anything in Canada and whether he had money would support the conclusion he knew of the reporting requirement.
30
As to the contention that he might have reasonably supposed his agency relationship as to part of the money would excuse the reporting, we need only read the precise wording of the question he answered "no."
31
It stated, "Are you or anyone in your party carrying over $5,000 in coin, currency or monetary instruments?" That clearly requires an agent or one acting partly as agent, carrying such amounts as involved here, to give an affirmative reply.
32
4. It is asserted that the money was obtained in violation of defendant's Fourth Amendment rights against unreasonable searches. Obviously U. S. Customs inspectors make searches of the person and baggage of people entering the United States, as a part of their routine duties. It has been held that to conduct a strip search involving a serious invasion of a person's privacy the Customs official must have a "real suspicion" based upon " objective, articulable facts." United States v. Guadalupe-Garza, 421 F.2d 876 (9th Cir. 1970). The Circuit which formulated that standard has ruled against appellant's contention in a "boot" case. In United States v. Chase,503 F.2d 571, 574 (9th Cir.), cert. denied, 420 U.S. 948, 95 S.Ct. 1332, 43 L.Ed.2d 427 (1975), it was stated:
33
Real suspicion should, therefore, limit searches only when there is a similar danger of embarrassment: where, in short, the suspect is forced to disrobe to a state which would be offensive to the average person. Judged by this standard, the removal of a boot is surely not a "strip." Rather, it is like one removing an overcoat or a suit jacket relatively innocuous. . . .
34
The case before us is an easy one compared to Chase. There the party was required to remove other articles of clothing also, and yet the search was considered lawful. Here defendant was taken to an area where strip searches were made, but was asked only to remove his boots. While one inspector testified that he would not say whether the search might have gone farther, there is no question but that it did stop with the boot removal. We hold that the search was lawful.
35
5. While we believe a cautionary instruction to the jury would have been warranted here as to the driver's license, none was requested. No complaint was made at the time about the jury instructions given by the judge, and defendant presented no additional suggestions that were rejected by the Court. We have reviewed the instructions given and believe they are not prejudicial and state the issues to be decided clearly enough. We find no " manifest injustice" which requires reversal. United States v. Hagen, 470 F.2d 110 (10th Cir. 1972), cert. denied, 412 U.S. 905, 93 S.Ct. 2291, 36 L.Ed.2d 970 (1973); McMurray v. United States, 298 F.2d 619 (10th Cir. 1961), cert. denied, 369 U.S. 860, 82 S.Ct. 950, 8 L.Ed.2d 18 (1962).
36
6. Appellant contends that the portions of the Bank Secrecy Act, 84 Stat. 1114, involved here (31 U.S.C. §§ 1101-1105) violate his First, Fourth and Fifth Amendment rights and should be declared unconstitutional.
37
The contentions regarding the First and Fourth Amendments have been rejected by the U. S. Supreme Court in California Bankers Ass'n v. Shultz,416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974) and United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976).
38
Fitzgibbon's Fifth Amendment objection is directed to the power of the government to compel persons crossing our national borders to file reports of information which might later be used as incriminating evidence in a criminal prosecution. The constitutional issues raised by appellant here have been considered and resolved against appellant's position in United States v. San Juan, 405 F.Supp. 686 (D.Vt.1975), rev'd on other grounds, (without discussion of these constitutional issues) 545 F.2d 314 (2d Cir. 1976). We do not here decide the constitutional questions raised because they are not properly before us. Fitzgibbon was convicted of filing a false statement, under 18 U.S.C. § 1001. The Supreme Court has held in several cases "that one who furnishes false information to the Government in feigned compliance with a statutory requirement cannot defend against prosecution for his fraud by challenging the validity of the requirement itself." United States v. Knox, 396 U.S. 77, 79, 90 S.Ct. 363, 365, 24 L.Ed.2d 275 (1969).
39
Bryson v. United States, 396 U.S. 64, 72, 90 S.Ct. 355, 360, 24 L.Ed.2d 264 (1969) stated the principle as follows:
40
Notwithstanding the fact that the Government has proved the elements necessary for a conviction under § 1001, the petitioner would have us say that the invalidity of § 9(h) would provide a defense to his conviction. But after Dennis (Dennis v. United States, 384 U.S. 855, 86 S.Ct. 1840, 16 L.Ed.2d 973) it cannot be thought that as a general principle of our law a citizen has a privilege to answer fraudulently a question that the Government should not have asked. Our legal system provides methods for challenging the Government's right to ask questions lying is not one of them. A citizen may decline to answer the question, or answer it honestly, but he cannot with impunity knowingly and willfully answer with a falsehood. (Footnote omitted.)
41
See also Dennis v. United States, 384 U.S. 855, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966); Leary v. United States, 544 F.2d 1266 (5th Cir. 1977) (false statement to U. S. Customs officials).
42
7. Finally, it is argued the trial was unfair, citing principally the fact that information about defendant's use of a false Wisconsin driver's license was allowed to be admitted. That evidence was proper for the purpose for which it was used. We have examined the entire record and find no merit in appellant's contention concerning an unfair trial.
43
AFFIRMED.
1
31 C.F.R. § 103.23(a) as applicable reads: "Each person who physically transports . . . currency or other monetary instruments in an aggregate amount exceeding $5,000 on any one occasion . . . into the United States from any place outside the United States shall make a report thereof . . .."
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649 N.W.2d 474 (2002)
EDUCATION MINNESOTA-CHISHOLM, Chisholm, Minnesota, Relator,
v.
INDEPENDENT SCHOOL DISTRICT NO. 695, Chisholm, Minnesota, Respondent,
STATE of Minnesota, Bureau of Mediation Services, Respondent.
No. C1-02-291.
Court of Appeals of Minnesota.
August 13, 2002.
*475 Christina L. Clark, Education Minnesota, St. Paul, for relator.
Scott C. Neff, The Trenti Law Firm, Virginia, for respondent ISD No. 695.
Joseph E. Flynn, Jennifer K. Anderson, Knutson, Flynn & Deans, P.A., Mendota Heights, for amicus curiae Minnesota School Boards Association.
*476 Considered and decided by ANDERSON, Presiding Judge, LANSING, Judge, and KALITOWSKI, Judge.
OPINION
G. BARRY ANDERSON, Judge.
Relator petitioned for clarification of a collective-bargaining unit, requesting that certain part-time early childhood family education teachers be included within that local bargaining unit. A hearing officer denied relator's petition for clarification. Relator argues that part-time early childhood family education teachers are "public employees" under Minn.Stat. § 179A.03, subd. 14 (2000) and therefore should be included in the bargaining unit. Because early childhood family education programs and courses are community education instruction offered on a noncredit basis, we affirm.
FACTS
The parties have stipulated to the facts. Respondent Independent School District No. 695, Chisholm, Minnesota (school district), is a public employer subject to the Public Employment Labor Relations Act (PELRA). Minn.Stat. § 179A.01-.25 (2000 & Supp.2001). The school district offers early childhood family education (ECFE) programs and courses for the district's parents and their pre-school children.[1] ECFE programs and courses are optional and are not included in the compulsory instruction mandated by Minn.Stat. § 120A.22 (2000). ECFE programs and courses are held during; the school year; however, the ECFE teaching year is generally shorter than the 180-day academic year. The school district employs six licensed,[2] part-time ECFE teachers in the program, which is operated at two district elementary schools. Historically, the school district has paid ECFE teachers an hourly wage and the teachers have not received benefits as part of their employment.
On February 23, 2001, relator Education Minnesota-Chisholm[3] filed a petition for unit clarification with respondent Minnesota Bureau of Mediation Services (Bureau) requesting that the part-time ECFE teachers be included in the local bargaining unit. The parties agreed to forego a contested evidentiary hearing and submitted the dispute to a hearing officer on stipulated facts.
The hearing officer determined that, based on Bureau precedent and the plain language of Minn.Stat. § 179A.03, subd. 14, "ECFE instructors are hired by the school district for the purpose of community education offered on a non-credit basis." In re Petition for Clarification by Educ. Minn.-Chisholm, BMS No. 01-PCL-961 (Feb. 5, 2002). The hearing officer therefore concluded that the ECFE teachers were subject to the minimum hour requirements *477 of Minn.Stat. § 179A.03, subd. 14(e) and, consequently, the part-time ECFE teachers were not "public employees" under PELRA. The hearing officer thus excluded the part-time ECFE teachers from the bargaining unit. Relator filed a petition for writ of certiorari with this court on February 21, 2002.
ISSUE
Are early childhood family education programs and courses community education instruction offered on a noncredit basis?
ANALYSIS
Relator advances several reasons why it believes the Bureau erred in its interpretation of the statute: (1) the concept of credit/noncredit simply does not apply to ECFE; (2) the legislature did not intend to exclude part-time ECFE teachers from the definition of "public employee"; and (3) PELRA has consistently included teachers as "public employees" no matter how few hours they work per week.
An agency's construction of a statute may be entitled some weight when the statutory language is technical and the agency's interpretation is longstanding. See Lolling v. Midwest Patrol, 545 N.W.2d 372, 375 (Minn.1996). As relator notes, however, the Bureau has never specifically addressed the issue presented in this case and the statutory language is not technical. Therefore, we are not bound by the Bureau's interpretation of the statute. See Am. Fed'n of State, County & Mun. Employees, Council No. 14, Saint Paul v. City of Plymouth, 563 N.W.2d 79, 80 (Minn.App.1997) ("This court is not bound by an administrative agency's interpretation of a statute." (citation omitted)); Am. Fed'n of State, County & Mun. Employees, Council No. 65, Nashwauk v. City of Buhl, 541 N.W.2d 12, 13 (Minn.App.1995), review denied (Minn. Jan. 25, 1996); Rochester Educ. Ass'n v. Indep. Sch. Dist. No. 535, 415 N.W.2d 743, 745 (Minn.App.1987) (stating that an agency's determination that certain individuals were not "teachers" under the statute "while entitled to respect, is fully reviewable" (citations omitted)); Indep. Sch. Dist. No. 721, New Prague v. Sch. Servs. Employees, Local 284, Richfield, 379 N.W.2d 673, 674 (Minn.App.1986) (reviewing the Bureau's interpretation of "normal work week" de novo), review denied (Minn. Mar. 14, 1986).
Minn.Stat. § 179A.06, subd. 2 (2000) grants public employees "the right to form and join labor or employee organizations." "Public employees in an appropriate unit have the right to designate an exclusive representative to negotiate with the employer." City of Buhl, 541 N.W.2d at 13 (quotation omitted). Under Minn.Stat. § 179A.04, subd. 2 (2000), the Bureau is authorized to determine whether an employee is a "public employee" and which public employees constitute an appropriate bargaining unit for purposes of collective bargaining. See generally Minn.Stat. § 179A.09 (2000) (criteria for unit determination).
"Public employee," however, is defined by statute. Minn.Stat. § 179A.03, subd. 14. In general, a "public employee" is a "person appointed or employed by a public employer." Id. This broad definition, however, is subject to several specific exceptions. For example, a part-time employee whose work "does not exceed the lesser of 14 hours per week or 35 percent of the normal work week in the employee's appropriate unit" is not a "public employee." Id., subd. (e). Therefore, in general, part-time employees who fail to satisfy this minimum hour requirement are not public *478 employees and must not be included in the particular bargaining unit.[4]
The statute, however, provides a "teacher" exception to the part-time employee exception. A part-time employee who does not satisfy the minimum hour requirement is still a "public employee" if the employee is hired by a school district to (1) replace an absent teacher who is a public employee; or (2) take a new teaching position. Id., subd. 14, cl. (i)(A)-(B). Therefore, the teacher exception to the part-time employee exception essentially exempts most part-time K-12 teachers from the minimum hour requirement and consequently most part-time K-12 teachers are public employees under PELRA.[5]
But there is also an exception to the teacher exception. Although most part-time K-12 teachers are "public employees," a teacher hired by a school district "for community services or community education instruction offered on a noncredit basis" is still subject to the minimum hour requirement. Id., subd. 14, cl. (i). Thus, part-time community education teachers who do not satisfy the minimum hour requirement are not public employees if they teach community education programs and courses which are "offered on a noncredit basis." Id.
The parties agree that ECFE is community education. The parties have also stipulated that the ECFE teachers relevant to this appeal are not public employees if we conclude that ECFE programs and courses are "offered on a noncredit basis." Therefore, the outcome of this case necessarily depends on the meaning of "noncredit."
Because early childhood family education programs and courses are not offered for some type of "credit," they are offered on a noncredit basis; consequently, we conclude that part-time ECFE teachers who fail to satisfy the statute's minimum hour requirement are not "public employees" under PELRA.
A. Plain Meaning of Noncredit
The goal of statutory interpretation is to ascertain the intent of the legislature; but "[w]ords and phrases [must be] construed according to rules of grammar and according to their common and approved usage." Minn.Stat. § 645.08(1) (2000); see also Arlandson v. Humphrey, 224 Minn. 49, 55, 27 N.W.2d 819, 823 (1947) ("Unless obviously used in a different sense, words in a statute are to be construed in their ordinary, popular sense,according to the common and approved usage of the language." (quotation omitted)). When the words of a statute are clear and unambiguous, the statutory language must not be disregarded. See Minn.Stat. § 645.16 (2000); Olson v. Am. Family Mut. Ins. Co., 636 N.W.2d 598, 604 (Minn.App.2001) ("The legislature * * * has made it clear that legislative intent and the spirit of the law, if any such intent or spirit can be ascertained, cannot override the plain language of a statute." (citation omitted)). Therefore, contemporaneous legislative history should only be examined when the words of a statute are not explicit. Minn.Stat. § 645.16.
*479 "Noncredit" is not defined by PELRA or other Minnesota law. "Noncredit," in the context of educational instruction, is generally defined as "[o]f, relating to, or constituting an educational course that does not offer credit toward an academic degree." The American Heritage Dictionary 1230 (3rd ed.1992). "Credit," on the other hand, is defined as "[o]fficial certification or recognition that a student has successfully completed a course of study: * * * A unit of study so certified." Id. at 439. Other authorities define "credit" as "educational recognition that a course of studies has been successfully completed." WordNet 1.6 (Princeton Univ.1997), at http://www.dictionary.
com/search?q=credit (last visited July 25, 2002). "Credit" has also been defined as "[t]he honour or commendation bestowed on account of a particular action, personal quality, etc.; acknowledgement of merit." Oxford English Dictionary 1155 (Oxford Univ. Press 1987).
Relator argues, and the dissent agrees, that concepts of credit and noncredit simply do not apply to ECFE instruction. Until this case, the Bureau has never had occasion to interpret the definition of "noncredit."[6] But, as respondent notes, the definition of "noncredit" is clear, unambiguous, and relatively simple: it means "not for credit." ECFE courses, like other community education courses, are not offered as part of any academic program with a graduation or like event as the ultimate outcome. Unlike elementary school, high school, college, or university curricula where satisfaction of certain academic requirements results in uniform advancement (usually in one-year increments) and graduation, ECFE programs and courses have no such uniform curricula or potential for academic advancement.
Moreover, ECFE programs and courses are optional and not mandated by state law. See Minn.Stat. § 120A.22; Early Childhood Family Education (ECFE), at http://children.state.mn.us/ecfi/ecfe.htm ("Participation is voluntary and services are offered free, or for a nominal fee.") (last modified April 25, 2001). Affording the word "noncredit" its common and approved meaning leads inexorably to the conclusion that ECFE programs and courses are "offered on a noncredit basis."
B. Legislative History & Purpose of PELRA
Relator also argues that the legislature intended to include part-time ECFE teachers as "public employees" under PELRA and that the statute has always included teachers no matter how may hours they work per week. Because we have already concluded the word "noncredit" is clear and unambiguous, we need not examine contemporaneous legislative history. What remains of the contemporaneous legislative history, however, does not detract from our conclusion that ECFE programs *480 and courses are community education instruction offered on a noncredit basis.
Relator correctly points out that the legislature amended the statute in 1983 to include as "public employees" most K-12 teachers regardless of how many hours they work per week. 1983 Minn. Laws ch. 322, § 1. But the legislature, in the same amendment, also carved out the explicit exception for part-time employees teaching noncredit community education programs and courses. Id. (amending Minn.Stat. § 179A.63, subd. 7 (1982)).
Moreover, the legislative history of the 1983 amendment is plainly equivocal. As relator concedes, the legislative history does not indicate whether the legislature discussed or considered the amendment's effect on part-time ECFE teachers. Relator's contention that the exception for noncredit community education instruction was targeted at adult "value-added" or secondary education courses is, therefore, pure speculation and conjecture.
Relator also posits that there is no reason why part-time ECFE teachers should be treated differently than their part-time K-12 and full-time ECFE colleagues. Indeed, under our construction of the statute, full-time ECFE teachers are public employees, whereas part-time ECFE teachers will not be public employees. The scope of a statute, however, is the province of the legislature, not the courts. In re Welfare of J.R.Z., 648 N.W.2d 241, 248 (Minn.App.2002) (stating that "the decision concerning the reach of the statute rests with the legislature"); Ullom v. Indep. sch. Dist. No. 112, 515 N.W.2d 615, 617 (Minn.App.1994) (suggesting that courts cannot add to a statute "what the legislature purposely omits or inadvertently overlooks" (quotations omitted)). The legislature had the opportunity in 1983 to specifically include all teachers, including all community education teachers, within the definition of "public employee." It did not.
DECISION
The Bureau did not err when it concluded that early childhood family education programs and courses are community education instruction offered on a noncredit basis. Consequently, the Bureau did not err when it concluded that early childhood family education teachers who do not satisfy the minimum hour requirement of Minn.Stat. § 179A.03, subd. 14(e), are not "public employees" under PELRA.
Affirmed.
LANSING, Judge (dissenting).
I respectfully dissent. I agree with the majority's analysis that the statutory language at issue, Minn.Stat. § 179A.03, subd. 14 (2000), is neither technical nor subject to an agency's longstanding interpretation. But I disagree that subdivision 14, clause (i) of section 179A.03 unambiguously excludes parttime licensed teachers in the Early Childhood Family Education (ECFE) program from the definition of public employee.
It is undisputed that the Chisholm School District is a public employer, that ECFE is funded through community education, and that only licensed teachers may be employed for ECFE programs. Under Minn.Stat. § 179A.03, subd. 14, subject to specific exceptions, any person employed by a public employer is a public employee. One of the exceptions is parttime employees whose service does not exceed a minimum number of hours. Id., subd. 14(e). But this exception does not apply to
(i) [a]n employee hired by a school district or the board of trustees of the Minnesota state colleges and universities except at the university established in *481 section 136F.13 or for community services or community education instruction offered on a noncredit basis: (A) to replace an absent teacher or faculty member who is a public employee, where the replacement employee is employed more than 30 working days as a replacement for that teacher or faculty member; or (B) to take a teaching position created due to increased enrollment, curriculum expansion, courses which are a part of the curriculum whether offered annually or not, or other appropriate reasons[.]
Id., subd. 14, cl. (i).
The term "community education instruction offered on a noncredit basis" is ambiguous both in text and context because elementary and early childhood education do not have a credit certification system. The word "noncredit" presupposes a credit-noncredit distinction that does not exist in elementary and early childhood education but does apply to secondary and postsecondary education.
When a statute speaks with clarity in limiting its application to specifically enumerated subjects, its application should not extend to other subjects. Martinco v. Hastings, 265 Minn. 490, 495, 122 N.W.2d 631, 637 (1963). But when the language of a statute is ambiguous, the appellate court must "determine the probable legislative intent and give the statute a construction that is consistent with that intent." Tuma v. Comm'r of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986) (citations omitted).
Education-Minnesota Chisholm and the Chisholm School District do not disagree on the legislature's purpose for adding "community education instruction offered on a noncredit basis" to subdivision 14. The phrase was part of an act with the stated purpose of expanding the definition of public employee to add certain postsecondary teachers to the other parttime teachers already included in the definition. 1983 Minn. Laws ch. 322, § 1. The accompanying restriction for "community education instruction offered on a noncredit basis" essentially excluded adult education courses that did not provide formal or institutional credit.
Consistent with the stated purpose for the amendment, the act inserted "faculty member" in two places, inserted references to the community college board and state university board in several places, and excluded "individual[s] hired to teach one course for up to four credits for one quarter in a year." Id. The restriction for instruction offered on a noncredit basis was not aimed at teachers in the preschool ECFE program and should not be applied to exclude those teachers from the teachers' bargaining unit.
Finally, including the parttime ECFE teachers in the teachers' bargaining unit is consistent with the statutory structure that permits teachers who teach parttime in the kindergarten and elementary school system to participate in the teachers' bargaining unit without requiring a minimum number of service hours. It also achieves the logical result of allowing the parttime ECFE teachers to participate in the same bargaining unit with their fulltime ECFE counterparts. For all of these reasons, I dissent.
NOTES
[1] ECFE is based on the idea that the family provides a child's first and most important learning environment, and parents are a child's first and most significant teachers. ECFE works to strengthen families and enhance the ability of all parents to provide the best possible environment for the healthy growth and development of their children. Early Childhood Family Education (ECFE), at http://children.state.mn.us/ecfi/ecfe.htm (last modified Apr. 25, 2001). See generally Minn.Stat. § 124D.13 (2000).
[2] Minnesota law requires ECFE teachers to hold teacher's licenses. Minn.Stat. § 122A.26, subd. 2 (2000) ("A person who teaches in an early childhood and family education program which is offered through a community education program * * * shall continue to meet licensure requirements as a teacher.").
[3] Education Minnesota-Chisholm is the exclusive bargaining representative for teachers in Independent School District No. 695.
[4] See, e.g., In re Petition for Clarification by Stewartville Educ. Ass'n, BMS No. 87-PR-5 (Oct. 7, 1986) (concluding that full-time ECFE teachers are "public employees" because they satisfy the statute's minimum hour requirement and whether they teach noncredit courses is irrelevant).
[5] A replacement teacher, however, must work more than 30 days as a replacement to qualify as a public employee. Minn.Stat. § 179A.03, subd. 14, cl. (i)(A).
[6] The Bureau relied on three prior Bureau orders as precedent, but, as relator argues, none of these cases directly addressed the definition of "noncredit." Only two cases are specifically relevant to this appeal. In the first case, the Bureau concluded "community education instructors of non-degree credit classes are public employees within the meaning of * * * PELRA." In re Petition for Clarification by Robbinsdale Fed'n of Teachers, BMS No. 84-PR-591-A (Mar. 2, 1984) (emphasis added). The Bureau also recognized in dictum, however, "that the part-time (e) and temporary (f) exclusionary clauses apply to units of community education instructors teaching noncredit courses." Id. In the second case, the Bureau apparently assumed that ECFE teachers provided "non-credit instruction," and were therefore subject to the minimum hour requirement of Minn.Stat. § 179A.03, subd. 14(e). In re Petition for Clarification by Elk River Educ. Ass'n, BMS No. 93-PCL-973 (May 27, 1993).
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 17-2602
UNITED STATES OF AMERICA
v.
KENNETH ALLEYNE,
Appellant
________________
Appeal from the District Court of the Virgin Islands
(Division of St. Croix)
(D.C. Criminal Action No. 1-15-cr-00012-001)
District Judge: Honorable Wilma A. Lewis
________________
Argued on May 24, 2018
Before: KRAUSE, ROTH and FISHER, Circuit Judges
(Opinion filed: May 8, 2019)
Gordon C. Rhea, Esq. (Argued)
Hamm Rhea Eckard
5030 Anchor Way
Suite 13
Christiansted, VI 00820
Counsel for Appellant
Anna A. Vlasova, Esq. (Argued)
Office of the United States Attorney
5500 Veterans Drive, Suite 260
United States Courthouse
St. Thomas, VI 00802
Counsel for Appellee
OPINION *
ROTH, Circuit Judge
Kenneth Alleyne appeals the District Court’s denial of his motion for judgment of
acquittal under Federal Rule of Criminal Procedure 29. He argues that he is entitled to a
judgment of acquittal because the government failed to prove the specific intent element
for any of the charged offenses. For the reasons stated below, we will affirm the
judgment of the District Court.
I.
Alleyne was indicted on 44 counts of wire fraud, 1 one count of conversion of
government money, 2 and one count of making a false statement. 3 He was accused of
fraudulently obtaining Overseas Housing Allowance (OHA) benefits while he was a
Lieutenant Colonel in the Virgin Islands National Guard (VING). The OHA program
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
1
18 U.S.C. § 1343.
2
18 U.S.C. § 641.
3
18 U.S.C. § 1001.
2
fully reimburses rental housing costs, subject to approval by the VING, for guardsmen
stationed in U.S. overseas territories. Because OHA benefits function as a
reimbursement, they must be used for the intended purpose of paying housing costs and
cannot be diverted for other purposes.
As relevant to this case, Alleyne entered into three separate year-long leases
spanning from November 1, 2009, to October 31, 2012. He submitted signed
applications titled “Individual Overseas Housing Allowance (OHA) Report” for each of
the leasing years. By signing the application form, Alleyne certified that the information
in the form and the attached copy of the lease were true and correct, that he would
immediately inform his commanding officer of any changes to the reported information,
and that he had read the OHA briefing sheet. The leases that Alleyne attached to his
applications required payment of $2,150, due on the first of each month. The landlord of
the property is listed in the leases as Earla A. John. Although not so identified in the
leases, Earla A. John is also known as Earla A. J. Alleyne and is Alleyne’s mother. 4
Alleyne’s applications were approved by the VING and he collected OHA benefits in the
amount of $2,150 per month.
On November 1, 2011, Colonel Michael McDonald of the VING issued a memo
(the November 2011 Memo) requiring guardsmen to produce canceled rent checks as
4
Evidence elicited at trial by defense counsel showed that, in 2002, Earla John had in fact
deeded the rental property to her three children, including Alleyne. John apparently did
not inform Alleyne of her actions, and a VING JAG officer testified at trial that this
practice is common in the Virgin Islands as a type of informal estate planning. Alleyne’s
ownership interest in the property is ultimately irrelevant to the present appeal. See infra
note 22.
3
proof of payment in order to continue receiving OHA benefits. At around the same time,
Alleyne added his mother/landlord as joint holder of an account at Banco Popular that
Alleyne had previously held exclusively in his own name. Using another bank account,
Alleyne subsequently wrote checks to his mother for $2,150 for rent covering the months
of November 2011, December 2011, and January 2012. These checks were deposited in
the shared Banco Popular account, and Alleyne received OHA reimbursement after
submitting the canceled checks.
At trial, the government introduced evidence that Alleyne had fraudulently
obtained OHA reimbursement payments. Special Agent Gina Galle testified at trial that,
having reviewed Alleyne’s financial records, she found no evidence that Alleyne ever
paid rent to his mother prior to November 2011, in violation of the lease and OHA
requirements. 5 Furthermore, Alleyne’s mother, who testified as a defense witness,
acknowledged under oath that she never actually accessed the Banco Popular account. In
addition, while residing on the rented property, and prior to submitting the OHA
applications at issue, Alleyne submitted a loan application to USAA Bank in which he
stated that he lived on a family estate and paid nothing in rent. This statement directly
contradicted the facts certified by Alleyne in his OHA application—namely, that he was
required to pay Earla John $2,150 in monthly rent. Alleyne would have been barred from
receiving OHA reimbursement benefits had he reported that he did not pay rent for his
housing.
5
Only after the issuance of the November 2011 Memo did Alleyne make the first
purported rent payments to his mother for the full amount of $2,150. The only other
transfer Alleyne made to his mother was a $65 check made out in August 2011.
4
After the conclusion of the trial, Alleyne moved for a judgment of acquittal
pursuant to Federal Rule of Criminal Procedure 29. The District Court denied Alleyne’s
Rule 29 motion, and the jury subsequently found Alleyne guilty on all pending counts. 6
At a post-trial status conference, the District Court stated that it had denied the motion
because the government had presented sufficient evidence to prove each element of the
charged offenses to a rational juror. Alleyne now appeals.
II. 7
We exercise plenary review over a District Court’s denial of a motion for
judgment of acquittal, applying the same standard as the District Court. 8 “We review the
record in the light most favorable to the prosecution to determine whether any rational
trier of fact could have found proof of guilt[] beyond a reasonable doubt.” 9 The bar to
success on a Rule 29 motion is “extremely high.” 10 “[T]he jury’s verdict must be
assessed from the perspective of a reasonable juror, and the verdict must be upheld as
long as it does not fall below the threshold of bare rationality.” 11 “That deference is
warranted because we trust jurors to judge the evidence, and we instruct them as to all
aspects of their decision making.” 12
6
The government agreed to drop 2 of the 44 counts of wire fraud. Thus, Alleyne was
convicted of 42 counts of wire fraud.
7
The District Court exercised jurisdiction pursuant to 18 U.S.C. §§ 3231 and 3241. We
exercise jurisdiction under 28 U.S.C. § 1291.
8
United States v. Salahuddin, 765 F.3d 329, 348 (3d Cir. 2014).
9
United States v. Caraballo-Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (citations
omitted) (alteration in original).
10
Salahuddin, 765 F.3d at 348.
11
Caraballo-Rodriguez, 726 F.3d at 430-31 (citation omitted).
12
Id. at 431.
5
Thus, in order to prevail on a Rule 29 motion, a defendant must show that the
evidence introduced at trial was insufficient to prove at least one essential element of the
charged offense. Alleyne argues that the government failed to prove the specific intent
element required to convict him of each charged offense. 13 In support of his argument,
Alleyne relies upon three cases—United States v. Wexler, 14 United States v. Thomas, 15
and United States v. Idowu 16—in which this Court overturned a defendant’s drug
conspiracy conviction because the government presented insufficient evidence to prove
the defendant knew of the particular objective of the conspiracy. Alleyne asserts in his
brief that those cases represent this Court’s “very high evidentiary burden required for
specific intent,” but he fails to acknowledge that they have been overturned. In
Caraballo-Rodriguez, the en banc Court discarded the standard used in Wexler, Thomas,
and Idowu because it was “more akin to ad hoc second-guessing the juries’ verdicts than
exercising a review function based on sufficiency of the evidence.” 17 Instead, the Court
13
Wire fraud requires a defendant to have “acted with the intent to defraud.” United
States v. Riley, 621 F.3d 312, 325 (3d Cir. 2010). Although Riley addressed mail fraud
under § 1341 rather than wire fraud under § 1343, we have long held that the elements of
wire fraud and mail fraud are identical, apart from the means through which the
communication is transmitted. See United States v. Frey, 42 F.3d 795, 797 (3d Cir.
1994).
Conversion of government money and making a false statement include similar
specific intent elements. See 18 U.S.C. § 641 (defining conversion of government money
to require that the defendant have “intent to convert [government money] to his use or
gain, knowing it to have been . . . converted”); 18 U.S.C. § 1001 (defining a false
statement as requiring a defendant to “knowingly and willfully” falsify a material fact,
make a false representation, or make or use any document containing false information).
14
838 F.2d 88 (3d Cir. 1988).
15
114 F.3d 403 (3d Cir. 1997).
16
157 F.3d 265 (3d Cir. 1998).
17
Caraballo-Rodriguez, 726 F.3d at 430.
6
held that specific intent “need not be proven by direct evidence,” as “jurors are routinely
instructed that their verdict can be supported by direct or circumstantial evidence, and
reasonable inferences can be drawn from both types of evidence.” 18 As a result, the
government needed to show only that Alleyne acted with the intent or purpose to
deceive. 19 The jury was free to infer intent from circumstantial evidence. 20
Here, the government provided ample evidence from which the jury could have
inferred specific intent to defraud. The evidence included (1) the three separate OHA
applications filed by Alleyne certifying that he had read the OHA briefing sheet; (2)
Special Agent Galle’s testimony that Alleyne’s financial records indicated that he had
never paid rent to his mother/landlord; (3) the loan application that Alleyne submitted to
USAA Bank, in which he stated that he resided on a family estate and paid nothing in
rent; and (4) Alleyne’s actions involving the “joint” Banco Popular checking account
and his mother’s concession that she never accessed the account.
This “quantum of evidence” provides sufficient grounds upon which a rational
jury could have found Alleyne guilty on all counts. 21 Consequently, Alleyne’s argument
that the District Court erred in denying his Rule 29 motion is without merit. 22
18
Id. at 431 (emphasis added).
19
See Third Circuit Model Criminal Jury Instructions, Mail or Wire Fraud – “Intent to
Defraud” Defined § 6.18.1341-4 (“To act with an ‘intent to defraud’ means to act
knowingly and with the intention or the purpose to deceive or to cheat.”).
20
Riley, 621 F.3d 312, 333 (3d Cir. 2010); see also United States v. Bryant, 655 F.3d
232, 243 (3d Cir. 2011) (“The Government may prove mens rea with circumstantial
evidence . . ..”).
21
Cf. Caraballo-Rodriguez, 726 F.3d at 434.
7
III.
For the aforementioned reasons, we will affirm the judgment of the District Court.
22
We need not address in any detail Alleyne’s argument that the government did not
show that he knew of his ownership interest in the property. The government’s case
depended upon showing that Alleyne knowingly and intentionally entered into a lease,
failed to pay rent, but nevertheless received regular OHA reimbursement payments for
the amount of rent that he falsely told the government he had paid. Such a scheme would
have been illegal regardless of Alleyne’s ownership interest in the property or his
knowledge of such an interest.
8
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462 N.E.2d 1048 (1984)
Eddie Leon HILL, Appellant (Defendant below),
v.
STATE of Indiana, Appellee (Plaintiff below).
No. 1182S417.
Supreme Court of Indiana.
May 9, 1984.
Christian J. Gielow, Merrillville, for appellant.
Linley E. Pearson, Atty. Gen., Amy Schaeffer Good, Deputy Atty. Gen., Indianapolis, for appellee.
PRENTICE, Justice.
Following a trial by jury, Petitioner (Appellant) was convicted of inflicting injury in the perpetration of a robbery or attempted robbery and was sentenced to life imprisonment. On direct appeal, this Court affirmed the conviction. Hill v. State, (1979) 271 Ind. 86, 390 N.E.2d 167. This appeal is from the denial of post-conviction relief.
Petitioner claims that he was denied the effective assistance of counsel upon direct appeal and that the jury's return of inconsistent and contradictory verdicts necessitates a reversal of his conviction.
Following Petitioner's conviction, his trial attorney filed a Motion to Correct Errors, which included, inter alia, a claim that the jury's verdict was inconsistent and contradictory in that the Petitioner had been charged in two counts with (1) robbery and (2) inflicting an injury in the perpetration of a robbery, both for the same act, and that the jury returned a verdict of guilty upon the second count but failed to return a verdict upon the first count. Subsequently, the Office of the Indiana Public Defender pursued Petitioner's direct appeal. In preparing that appeal, it was decided that Petitioner's claim upon the issue of inconsistent verdicts was without merit; hence, it was not argued on direct appeal. It is that decision by the Public Defender which Petitioner claims was a denial of effective assistance of appellate counsel.
We must first determine whether the issue of inconsistent verdicts was meritorious *1049 and should have been argued on direct appeal. In Beck v. State, (1978) 269 Ind. 576, 382 N.E.2d 164, a nearly identical issue was presented to this Court. There, as in the case at bar, the appellant argued that the failure to return a verdict on the robbery charge was equivalent to a verdict of not guilty on that charge. Then, the reasoning continued, if one is not guilty of robbery, how could he be guilty of armed robbery (or, in this case, inflicting injury in the perpetration of a robbery)? Justice Hunter explained:
"The syllogism fails in its major premise: the absence of a verdict on the lesser included offense did not signify an acquittal on that charge. To the contrary, the guilty verdict on the greater charge obviated the necessity for any verdict on the lesser charge. This Court has often held that when the jury does return guilty verdicts on both the greater and lesser offenses, when the counts stemmed from the same criminal act, the verdict on the lesser offense must be disregarded as superfluous. Judgment should be entered only upon the greater offense. Webb v. State, (1972) 259 Ind. 101, 284 N.E.2d 812; Carter v. State, (1951) 229 Ind. 205, 96 N.E.2d 273. The double jeopardy clause prohibits the imposition of multiple punishments for the same offense. For purposes of the double jeopardy clause of the Fifth Amendment, a lesser included offense requires no proof beyond that which is required for conviction of the greater offense, and the greater offense is therefore by definition the `same' for purposes of double jeopardy as any lesser offense included in it. Brown v. Ohio, (1977) 432 U.S. 161, 97 S.Ct. 2221, 53 L.Ed.2d 187. In this case, the charges stemmed from the same criminal act." (emphasis in original).
Id. at 577-578, 382 N.E.2d at 165-166.
Petitioner's claim of ineffective assistance of appellate counsel is predicated upon the failure to present the above issue to this Court on direct appeal. In that the claim had no merit whatsoever, the failure to raise it on appeal cannot be viewed as incompetence or ineffective representation of counsel. Conrad v. State, (1980) 273 Ind. 587, 406 N.E.2d 1167, 1169.
Our standard of review for appeals from the denial of post-conviction relief is as follows:
"Petitioner ha[s] the burden of proof and stands in the shoes of one appealing from a negative judgment. The trial judge, as trier of the facts, is the sole judge of the weight of the evidence and the credibility of the witnesses. It is only where the evidence is without conflict and leads to but one conclusion, and the trial court has reached an opposite conclusion, that the decision will be disturbed as being contrary to law." (citations omitted).
Neville v. State, (1982) Ind., 439 N.E.2d 1358, 1360. Petitioner has failed to sustain his burden of proof.
We find no reversible error, and the judgment of the trial court denying post-conviction relief is affirmed.
GIVAN, C.J., and HUNTER, DeBRULER and PIVARNIK, JJ., concur.
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345 Mass. 727 (1963)
189 N.E.2d 522
TRUSTEES OF THE NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY[1]
vs.
TILESTON & HOLLINGSWORTH COMPANY.
Supreme Judicial Court of Massachusetts, Suffolk.
January 11, 1963.
April 5, 1963.
Present: WILKINS, C.J., SPALDING, WHITTEMORE, SPIEGEL, & REARDON, JJ.
Thomas H. Mahony, for the defendant, submitted a brief.
David W. Walsh for the plaintiffs.
SPIEGEL, J.
This is an action of contract based upon an alleged breach of a written agreement for the construction and maintenance of a railroad sidetrack and providing for indemnification. The case was referred to an auditor whose findings of fact were not to be final. His report was *728 introduced in evidence at the trial, before a judge of the Superior Court sitting without a jury, supplemented by exhibits and oral testimony. The judge found for the plaintiff in the sum of $16,923.86. The defendant took exceptions to the denial of certain motions and requests for rulings. At the request of the defendant the judge reported the case to this court for decision. The parties stipulated "that if the Supreme Judicial Court determines that the plaintiff is entitled to recover, the Clerk of the Superior Court is to enter judgment for the plaintiff for the sum of $16,515.12 and interest thereon from October 16, 1957."
We herewith condense the pertinent findings of the trial judge. On December 28, 1945, the parties entered into a written contract by the terms of which the plaintiff was to construct a sidetrack 405 feet in length on the defendant's land. The contract included the following relevant sections: "5. (b) The Contractor [the defendant] also agrees to indemnify and hold harmless the ... [plaintiff] for loss, damage or injury from any act or omission of the Contractor, or the Contractor's employees, or agents, to the person or property of the parties hereto and their employees, and to the person or property of any other person or corporation, while on or about said sidetrack; and if any claim or liability other than from fire shall arise from the joint or concurring negligence of both parties hereto it shall be borne by them equally." "7. The Contractor shall maintain and keep said sidetrack in proper condition for the safe and efficient handling of cars thereon, including the removal of snow and ice therefrom, as indicated in red on said print, or shall pay to the Trustees the cost of such repairs and maintenance as may be made thereon by them in the exercise of their judgment."
The defendant "was engaged in the manufacture of paper and paper products and in its process used clay and starch at its plant in Hyde Park. As accessory to the plant operation it had a platform adjacent to the side track here involved, where it received materials used in its operations. The clearance between the edge of the platform and the side of a freight car on the track was estimated to be 7 or 8 *729 inches in width and approximately level with the box car floors." The contract was in effect on December 12, 1955, when the plaintiff was engaged in "spotting" a freight car at a point on the track adjacent to the platform designated by one of the defendant's foremen. This platform was covered with a white substance which had accumulated on it. One of the plaintiff's employees, a brakeman named Morrissey, had the duty of boarding the moving freight car and setting the brake on it so that it would stop at the designated place. In attempting to effect this result Morrissey passed along the defendant's platform for approximately eighty feet over the white substance, which he had seen there before and knew to be there immediately previous to his accident, and as the freight car approached he boarded an iron ladder on the side of the freight car, getting onto it from the platform, and then "switched" to another ladder which led to the top of the freight car. As Morrissey neared the top, he "slipped and fell to the ground and was injured." There was testimony that the platform was covered with "something that made... [Morrissey's] shoes slippery."
On January 9, 1957, the plaintiff wrote to the defendant "advising that Morrissey had been injured `while working on your side track at Hyde Park, Massachusetts, under circumstances which (we) believe would make you liable under the provisions of your side track contract,'" and requested the defendant to refer the matter to its insurance carrier. This letter was acknowledged on January 11, 1957, by the defendant, which "stated that it had referred the matter to its insurance carrier." On March 26, 1957, at the latter's request, the plaintiff furnished the insurance carrier, Liberty Mutual Insurance Company (Liberty), with copies of medical reports. On August 6, 1957, the plaintiff gave Liberty a transcript of the testimony of the train crew, a copy of a memorandum requesting authority to dispose of the claim, and a statement of the medical and hospital bills paid and outstanding. Another letter dated August 13, 1957, was sent to Liberty "to the effect that further medical and *730 hospital bills had been paid." In a letter dated August 27, 1957, the plaintiff requested "advice as to Liberty's position as Morrissey was pressing for an answer." On September 23, 1957, Liberty wrote to the plaintiff "confirming a previous telephone communication and stated that it was unwilling to contribute to the settlement of the claim of Morrissey for injuries arising out of the alleged accident of December 12, 1955." On September 23, 1957, the plaintiff again wrote to Liberty advising "that they had disposed of the Morrissey claim and looked to Liberty for reimbursement." On October 16, 1957, the plaintiff, by its attorney, wrote to the defendant making a demand upon it for reimbursement under the indemnity clause.
The auditor made the following findings: Morrissey was in the exercise of due care and suffered injuries; there was no negligence on the part of his fellow employees; the defendant was negligent in causing or permitting a slippery substance to accumulate and remain on its platform "at a time when it knew or ought to have known that freight cars were being delivered to it and in such delivery the plaintiff's employees would use the platform"; the plaintiff acted prudently and in good faith in making a settlement which was fair and reasonable in order to discharge any legal liability of the plaintiff to Morrissey under the Federal Employers' Liability Act; the settlement was made without judgment of any court or order of any judicial or quasi-judicial body, board or authority; and "finally that no specific demand was ever made by ... [the plaintiff] upon ... [the defendant] to assume the defense of any claim made by Morrissey."
The trial judge ruled that the rights of Morrissey, as an employee, rest on the Federal Employers' Liability Act, 45 U.S.C. (1958) § 51 et seq., and that liability is to be determined in the light of the plaintiff's exposure to the provisions of that act. Chicago, R.I. & Pac. R.R. v. Dobry Flour Mills, Inc. 211 F.2d 785, 788 (10th Cir.).
The trial judge's "Rulings and Findings" include the following: "I find and rule that the defense of assumption *731 of the risk and the contributory negligence of Morrissey are not open to Tileston in this litigation, and even if the same were to be considered, the evidence does not sustain the burden of proof as to these defenses. I find and rule that on all the evidence, including the Auditor's Report, together with reasonable inferences therefrom, ... [the plaintiff] was not bound to make any formal and explicit demand upon ... [the defendant] in addition to the information voluntarily given to Liberty Mutual Insurance Company, ... [the defendant's] insurance carrier. I find and rule on all the evidence, with the inferences therefrom, that ... [the plaintiff] in good faith made a reasonable settlement of the personal injury claim of Morrissey within the time during which Morrissey could have brought an action under the Federal Employers' Liability Act."
The judge denied the defendant's "motion" that "upon all the evidence, the law and the pleadings ... the plaintiff is not entitled to recover." Exceptions to the defendant's requests numbered 1, 3, and 4[1] are based substantially upon the same grounds as the "motion." There is no need to consider them separately. The defendant, in support of its position, argues that the plaintiff had the burden of proving "A prior effective adjudication by a competent legal tribunal obligating the plaintiff to pay to Morrissey the sum of money for which it seeks reimbursement or indemnification from the defendant." We are not persuaded. If we were to sustain this contention it would deny an indemnitee the right to make a reasonable settlement with a claimant when the indemnitor refuses to participate in the matter. In Berke Moore Co. Inc. v. Lumbermens Mut. Cas. Co., ante, 66, 70, we stated that "an insurance company which without right has refused to defend an action against its *732 insured no longer can insist upon the case being carried to judgment against the insured." The insured, who is in a position comparable to that of the indemnitee here, "should have full liberty of determination whether to settle or to try.... [It] should be able to take into consideration the likelihood of success or failure, the cost, uncertainty, delay, and inconvenience of trial as compared with the advantages of settlement. What is reasonable to do ... [it] should be permitted to do." We think the same considerations control here. See New York Cent. & Hudson River R.R. v. T. Stuart & Son Co. 260 Mass. 242, 249, and cases collected in annotation, 128 A.L.R. 565 and annotation, 67 A.L.R.2d 1086. Morrissey had a prima facie claim against the railroad even though the danger involved was caused by an adjacent property owner, Ellis v. Union Pac. R.R. 329 U.S. 649, 651; Chicago, R.I. & Pac. R.R. v. Dobry Flour Mills, Inc. 211 F.2d 785, 788 (10th Cir.), and even though Morrissey may not have been engaged in interstate commerce at the moment of injury. Southern Pac. Co. v. Gileo, 351 U.S. 493, 499. Reed v. Pennsylvania R.R. 351 U.S. 502, 505. When the defendant's insurance carrier denied liability, the plaintiff was entitled to consummate a fair and reasonable settlement with the claimant.
The defendant also excepted to the denial of its requested ruling numbered 2 that the plaintiff "had the burden of proving a demand or request made upon the defendant to take over the defense of a pending law action or legal proceeding brought against the plaintiff by Morrissey." In addition to the discussion, supra, we point out that the indemnitee need give the indemnitor merely "notice and an opportunity to defend" in order to bind the indemnitor to the result of a settlement or judgment concluded in the absence of the indemnitor. Miller v. United States Fid. & Guar. Co. 291 Mass. 445, 449. Buhl v. Viera, 328 Mass. 201, 203. Pasquale v. Shore, 343 Mass. 239, 243-244. The contract in question did not require a "demand or request" nor are we aware of any law which necessitates such a requirement. The numerous communications between the plaintiff, *733 the defendant, and the defendant's insurance carrier, culminating in the latter's denial of liability, make it clear that sufficient "notice and an opportunity to defend" were given.
We see no merit in the exception to the denial of the defendant's motion to strike certain portions of the auditor's report. The defendant's argument on this issue, as well as other contentions made by it and not detailed in this opinion, do little more than challenge the sufficiency of the evidence. The record furnishes extensive support for the conclusions reached by the auditor and the trial judge. There was no error.
Exceptions overruled.
Judgment for plaintiff inaccordance with stipulation.
NOTES
[1] The present trustees, predecessor trustees, and the railroad company are herein referred to as the plaintiff.
[1] "1. The plaintiff is not entitled to recover from the defendant."
"3. The plaintiff, to recover under the contract in question, had the burden of proving a judgment, decree or order of some competent legal tribunal directing the plaintiff to pay Morrissey a specific sum of money upon a litigated claim for damages or compensation.
"4. The plaintiff was not obliged to pay Morrissey any money as damages for personal injury under the Federal Employers' Liability Act unless its negligence was a proximate cause of said personal injury."
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69 F.3d 539
NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.Paul KOMYATTI, Petitioner-Appellant,v.Herbert NEWKIRK, and Indiana Attorney General, Respondents-Appellees.
No. 95-2525.
United States Court of Appeals, Seventh Circuit.
Submitted Oct. 18, 1995.1Decided Oct. 24, 1995.
Before POSNER, Chief Judge, and CUMMINGS and BAUER, Circuit Judges.
ORDER
1
Paul Komyatti, an inmate in the Maximum Control Complex (MCC) in Westville, Indiana, filed a petition for writ of habeas corpus, 28 U.S.C. Sec. 2254, on the basis that without a prior hearing he was transferred to the MCC, a maximum security prison which Komyatti asserts is the equivalent of segregation, because he was a "legal adviser" for other inmates.
2
Komyatti's attempt to characterize this as "not a transfer to a different prison, but rather ... placement in segregation," fails. As we recently held in Whitford v. Boglino, No. 93-2660 (7th Cir. Aug. 4, 1995), 1995 WL 459230 at * 4, an inmate's "transfer to a maximum security institution [does] not implicate his federal due process rights." Komyatti need not have been charged with or convicted of a disciplinary violation before being transferred to a more restrictive institution. Meachum v. Fano, 427 U.S. 215, 226-27 (1976). See also Sandin v. Connor, 63 U.S.L.W. 4601 (U.S. June 19, 1995), 1995 WL at * 7 (Court notes that even punishing an inmate by placing him in segregation will not always trigger due process protections). Komyatti could initially have been placed in the MCC, and thus his transfer to that institution "does not fall outside the expected scope of the sentence." Whitford, 1995 WL 459230 at * 4. See also Ramirez v. Turner, 991 F.2d 351, 353 (7th Cir.1993) (due process clause does not require hearing in connection with transfer to more restrictive prison, even if the transfer is the result of the inmate's misbehavior, or is labeled a disciplinary transfer), quoting Miller v. Henman, 804 F.2d 421, 423 (7th Cir.1986).
3
The judgment of the district court denying the petition for writ of habeas corpus is AFFIRMED.
1
After preliminary examination of the briefs, the court notified the parties that it had tentatively concluded that oral argument would not be helpful to the court in this case. The notice provided that the parties could file a "Statement as to Need of Oral Argument." See Fed.R.App.P. 34(a); Cir.R. 34(f). No such statement having been filed, the appeal is submitted on the parties' briefs and the record
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STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
State of West Virginia, FILED
Plaintiff Below, Respondent June 13, 2014
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
vs) No. 13-1076 (Mason County 11-F-26) OF WEST VIRGINIA
Brook N. Carmichael,
Defendant Below, Petitioner
MEMORANDUM DECISION
Petitioner Brook N. Carmichael, by counsel Duane C. Rosenlieb, Jr., appeals the Circuit
Court of Mason County’s order entered on September 20, 2013, revoking petitioner’s probation
and ordering her to be incarcerated for one to fifteen years. The State of West Virginia, by
counsel Derek Knopp, filed a response.
This Court has considered the parties= briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.
On January 31, 2011, petitioner and her co-defendant husband, Shawn Carmichael,
burglarized the home of Randi Carmichael, the sister-in-law of Shawn Carmichael. Petitioner
served as a lookout while her husband entered the residence with a screwdriver, taking two gold
and diamond rings and a knife. Petitioner was later found in possession of one of the rings and
tried to sell the other. Petitioner gave police a voluntary statement admitting to being in
possession of the ring.
Petitioner was indicted on May 3, 2011, on one count of burglary, one count of grand
larceny, and one count of conspiracy to commit burglary. Petitioner was offered a plea deal,
which was executed on July 11, 2011, at which time petitioner agreed to plead guilty to burglary
in exchange for dismissal of the grand larceny and conspiracy counts. On September 19, 2011, a
sentencing hearing was held. Petitioner’s sentence was suspended in lieu of three years of
probation. On November 10, 2011, the Mason County Probation Department filed a petition for
revocation of probation, alleging that petitioner violated the rules of the Day Report program by
testing positive for oxycodone. Petitioner further admitted to smoking marijuana and it was
found that she was not attending the full sessions of her General Equivalency Diploma (“GED”)
classes as required. On December 12, 2011, petitioner failed to appear for her probation
revocation hearing and a capias was issued. The hearing was reset for February 3, 2012.
1
Petitioner admitted to violating her probation by testing positive for controlled substances. Her
probation was revoked but disposition was continued. Eventually, the court reinstated her
probation, but extended it by six months. She was also given sixty days to enter an inpatient
rehabilitation program in Dayton, Ohio, and again ordered to obtain her GED.
On June 5, 2012, another petition for revocation of probation was filed, alleging that
petitioner failed to attend the residential drug treatment program after she was accepted and that
she failed to report a change in residence. Petitioner did not appear at the June 25, 2012, hearing
and another capias warrant was issued. On September 16, 2013, petitioner was apprehended and
appeared for her revocation hearing. She admitted to two probation violations, and, although she
was given the opportunity to have a continuance to have more time to consult with counsel, she
declined. The court then revoked her probation and reinstated her original sentence of one to
fifteen years of incarceration. She received credit for 283 days of time served.
On October 9, 2013, petitioner filed a pro se motion for reduction of sentence, noting that
she was in a GED program and was on a waiting list for a drug rehabilitation program. Petitioner
requested probation or home confinement. On October 22, 2013, the court denied the motion for
reduction of sentence. Petitioner filed the instant appeal on October 10, 2013.
Although petitioner later filed a motion for reduction of sentence, she actually appeals
from her sentencing order. “‘The Supreme Court of Appeals reviews sentencing orders . . . under
a deferential abuse of discretion standard, unless the order violates statutory or constitutional
commands.’ Syl. Pt. 1, in part, State v. Lucas, 201 W.Va. 271, 496 S.E.2d 221 (1997).” Syl. Pt.
1, State v. James, 227 W.Va. 407, 710 S.E.2d 98 (2011).
On appeal, petitioner first argues that the circuit court’s ruling/disposition was too harsh
given the history of the case and the circumstances surrounding her case. Petitioner also argues
that the court’s disposition is not in her best interests, does not promote the public’s welfare, nor
does it promote the fair administration of justice. Petitioner sought probation, arguing that she
was working toward her GED and was on a waiting list for a drug treatment facility.
We have previously held that “‘[s]entences imposed by the trial court, if within statutory
limits and if not based on some [im]permissible factor, are not subject to appellate review.’
Syllabus Point 4, State v. Goodnight, 169 W.Va. 366, 287 S.E.2d 504 (1982).” Syl. Pt. 3, State v.
Georgius, 225 W.Va. 716, 696 S.E.2d 18 (2010). This Court finds that petitioner’s sentence in
this matter was proper. Petitioner was granted probation initially, and violated the rules of her
probation at least twice. Petitioner also absconded and a capias warrant had to be issued for her
arrest. Thus, probation was no longer appropriate, as we have recognized that “probation is a
privilege of conditional liberty bestowed upon a criminal defendant through the grace of the
circuit court.” State v. Duke, 200 W.Va. 356, 364, 489 S.E.2d 738, 746 (1997) (citations
omitted). Moreover, the sentence was within statutory limits and not based on an impermissible
factor.
Finally, the Court declines to address petitioner’s argument that an alternative method for
dealing with non-meritorious claims be adopted.
2
For the foregoing reasons, we affirm.
Affirmed.
ISSUED: June 13, 2014
CONCURRED IN BY:
Chief Justice Robin Jean Davis
Justice Brent D. Benjamin
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II
3
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7 So.3d 1097 (2009)
ELLIOTT
v.
STATE.
No. SC09-358.
Supreme Court of Florida.
March 30, 2009.
Decision without published opinion. Mand.denied.
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463 F.Supp.2d 459 (2006)
UNITED STATES of America,
v.
Jeffrey STEIN, et al., Defendants.
No. S1 05 Crim. 0888(LAK).
United States District Court, S.D. New York.
December 4, 2006.
James R. DeVita, Bryan Cave LLP, John A. Townsend, Townsend & Jones LLP, New York, NY, for Defendant Carol Warley.
John M. Hillebrecht, Justin S. Weddle, Kevin M. Downing, Stanley J. Okula, Jr., Margaret Garnett Assistant United States Attorneys, Michael J. Garcia, United States Attorney, New York, NY, for U.S.
MEMORANDUM PINION
KAPLAN, District Judge.
Defendant Carol Warley was a partner in KPMG LLP ("KPMG"), one of the *460 world's largest accounting firms. She was questioned in the course of an IRS investigation by attorneys hired by KPMG. When that investigation gave way to a threatened indictment of KPMG, the firm, in an effort to curry favor with prosecutors and avoid prosecution, waived its attorney-client privilege and gave the government documents embodying the substance of the attorneys' communications with Ms. Warley. Warley contends that the attorneys were representing her as well as KPMG, that her attorney-client privilege was compromised by the actions of the government and KPMG, and that the evidence should be suppressed. She thus raises a troublesome question that arises whenever an employee[1] of a business organization consults with counsel retained by the entity about matters involving both the employee and the entity when does the lawyer represent the employee as well as the entity?
This problem could be avoided if counsel in these situations routinely made clear to employees that they represent the employer alone and that the employee has no attorney-client privilege with respect to his or her communications with employer-retained counsel. Indeed, the Second Circuit advised that they do so years before the communications here in question.[2] But there is no evidence that the attorneys who spoke to Ms. Warley followed that course.
Facts
Ms. Warley was a partner of KPMG at all relevant times. In 2003, the IRS was investigating KPMG's tax shelter activities, including some in which clients of Warley had participated. In the course of the investigation, Warley communicated with KPMG's in-house counsel and with two law firms retained by KPMG, Kronish Lieb Weiner & Hellman LLP ("Kronish") and King & Spalding LLP ("King & Spalding"). Warley does not recall having been told that the attorneys represented only KPMG or that any privilege belonged solely to the firm and could be waived by the firm without her consent.[3]
In September 2004, in circumstances that have been discussed elsewhere,[4] KPMG waived its attorney-client privilege for communications relating to the IRS summons.[5] It gave the government documents relating to these communications, and the government apparently intends to use them in prosecuting Warley and others. The government argues that KPMG's waiver was sufficient to allow it to obtain the documents and disputes Warley's claim of privilege.[6]
Warley identifies two sets of allegedly privileged communications relating to which the government has documents.[7] First, Warley was interviewed by attorneys from Kronish and King & Spalding on two occasions in August 2003. The government is in possession of a memorandum *461 of these interviews prepared by a Kronish attorney as well as his handwritten notes. In addition, it has listed as a trial witness one of the Kronish attorneys present at these interviews.
The second allegedly privileged communication is an email exchange in January and February of 2003 between Warley and Steven Gremminger, an in-house attorney for KPMG, relating to the tax strategies under investigation. The government has a copy of this email string.
Both parties point to the substance of the communications to support their respective claims that privilege did or did not attach. Warley further relies upon KPMG's 2003 partnership agreement, which provided that "[t]he General Counsel shall act on behalf of all Members, except where a dispute arises between an individual Member and the Firm."[8] Finally, Warley alleges that counsel retained by KPMG jointly represented KPMG and her personally in two lawsuits prior to the events at issue here.[9]
Discussion
A. Scope of Privilege
The question whether employee communications with counsel retained by the employer about matters relating to the employment are privileged vis-a-vis the employee in other words, whether the employee has a personal attorney-client privilege that only the employee may waive is troublesome because competing interests are at play.
On the one hand, an employee, like any other agent, owes the employer a duty to disclose to the employer any information pertinent to the employment.[10] This includes an obligation "to assist [the] employer's counsel in the investigation and defense of matters pertaining to the employer's business."[11] Moreover, an employer has a substantial interest in retaining freedom of action to respond to investigations and other legal threats, an interest borne of the desire to remain in business and of duties to other constituents of the entity. Allowing individual *462 employees to assert personal attorney-client privilege over communications with the employer's counsel could frustrate an employer's ability to act in its own self interest, perhaps to the detriment of other employees, stockholders, or partners.[12]
Nevertheless, there are weighty considerations on the other side of the scale. Once a government investigation begins, the interests of employees and of the entity may diverge. Indeed, that may be true in other circumstances in which employees communicate with employer counsel. Employees often are unaware of the potential personal consequences of cooperating with lawyers hired by their employers. Even more troublesome, they may cooperate with employer-retained counsel in the belief that their communications are protected by a personal privilege, sometimes as a result of a misapprehension of the law and occasionally perhaps as a result of deception, inadvertent or otherwise.
Courts have wrestled with this problem for some time now. In the absence of evidence that the employee was deceived by the employer as to the existence of a personal attorney-client relationship or as to a personal right to control the disclosure of privileged materials,[13] circuits have employed different standards to determine when personal privilege attaches. Some have looked at whether the individual reasonably believed that there was a personal attorney-client relationship,[14] although the Second Circuit has rejected this approach.[15] Others have focused on whether the individual expressly requested personal *463 al advice or representation.[16] In In re Bevill, Bresler & Schulman Asset Management Corp., the Third Circuit enunciated a five-part test that has been adopted by at least two other circuits
"First, [the individual claiming personal privilege] must show they approached [counsel] for the purpose of seeking legal advice. Second, they must demonstrate that when they approached [counsel] they made it clear that they were seeking legal advice in their individual rather than in their representative capacities. Third, they must demonstrate that the [counsel] saw fit to communicate with them in their individual capacities, knowing that a possible conflict could arise. Fourth, they must prove that their conversations with [counsel] were confidential. And, fifth, they must show that the substance of their conversations with [counsel] did not concern matters within the company or the general affairs of the company."[17]
Our circuit addressed the issue in United States v. International Brotherhood of Teamsters.[18] The Teamsters court first noted that courts typically have said that the attorney-client privilege for an employee's communication with corporate counsel about corporate matters belongs to the corporation, not the individual employee. Nevertheless, it said, courts have found a personal privilege where the individual met "certain requirements."[19] It quoted the Third Circuit's Bevill test as one such example and noted that other courts have required the employee "make it clear to corporate counsel that he seeks legal advice on personal matters."[20] Drawing upon all of these sources, the Circuit concluded that the individual before it lacked any personal privilege with respect to the communications at issue because he "neither sought nor received legal advice from [his employer's counsel] on personal matters."[21]
Teamsters' holding thus rests on the scope of "personal matters."[22] But the *464 meaning of that phrase has not been developed. Do "personal matters" involve solely the individual, with no impact on the entity's interests whatsoever? Or may they encompass matters that implicate both the individual and the entity? Although the facts of Teamsters suggest that the Circuit might have contemplated the former view, it did not expressly address the question.
Some guidance may be gained from circuits that have addressed this issue in the context of the fifth Bevill factor, which requires that the communication "not concern matters within the company or the general affairs of the company."[23] The Tenth Circuit concluded that this factor
"only precludes an officer from asserting an individual attorney client privilege when the communication concerns the corporation's rights and responsibilities. However, if the communication between a corporate officer and corporate counsel specifically focuses upon the individual officer's personal rights and liabilities, then the fifth prong of [Bevill] can be satisfied even though the general subject matter of the conversation pertains to matters within the general affairs of the company. For example, a corporate officer's discussion with his corporation's counsel may still be protected by a personal, individual attorney-client privilege when the conversation specifically concerns the officer's personal liability for jail time based on conduct interrelated with corporate affairs."[24]
The First Circuit adopted the Tenth Circuit's interpretation and discussed its application where communications involving the individual's liabilities "do not appear to be distinguishable" from those concerning the entity's interests.[25] Acknowledging that both the employee and the entity could have an attorney-client relationship with the attorney with respect to such a communication, but noting also the fiduciary duty owed by a corporate officer to the corporation, the First Circuit concluded that "a corporation may unilaterally waive the attorney-client privilege with respect to any communications made by a corporate officer in his corporate capacity, notwithstanding the existence of an individual *465 attorney-client relationship between him and the corporation's counsel."[26] Thus, under the First Circuit formulation, individual privilege may be asserted successfully only when "communications regarding individual acts and liabilities are segregable from discussions about the corporation."[27] To hold otherwise, the court reasoned, "would open the door to a claim of jointly held privilege in virtually every corporate communication with counsel."[28]
The Tenth and First Circuits thus have argued persuasively that communications implicating personal liability for acts within the scope of an individual's employment[29] may be protected by individual attorney-client privilege, at least in some circumstances. It is an open question whether such communications involve "personal matters" within the meaning of Teamsters. But it is unnecessary to resolve that issue here. As discussed below, and particularly in light of the fact that the burden of proof lies with the party asserting privilege,[30] Warley fails to meet any standard.
B. Warley's Claims
To begin with, there is no evidence that Warley was deceived by KPMG or its attorneys about the nature of her relationship with counsel. Although she claims to have "understood that . . . [counsel] were representing [her] personally as a partner in the firm,"[31] her subjective belief alone does not support a conclusion that KPMG's acts were responsible for that belief. Accordingly, the analysis of her claims rests on whether the communications involved "personal matters."
Warley's communications with counsel were about events and conduct within the scope of her work as a partner at KPMG,[32] thus clearly implicating KPMG's interest in responding to the IRS investigation. The events and conduct, however, also implicated Warley's personal interests and liabilities, as is amply evidenced by her status as a defendant in this case. Warley's communications thus present the difficult circumstance where both the individual's and the entity's interests are involved.
As discussed above, the scope of "personal matters" under Teamsters is unclear. Under a narrow reading, the fact that the communications implicated KPMG's interests alone would require that Warley's claim of privilege be rejected. Even under the approach adopted by the First and Tenth Circuits, however, Warley could not prevail on a privilege claim absent a showing that communications implicated her interests alone and were segregable from those involving KPMG's interests. Nothing in the allegedly privileged documents or the affidavits submitted with this motion indicates that the communications focused *466 on her personal interests alone. The Court therefore need not determine the parameters of "personal matters," as Warley's disclosures would not come within even a broad view of the term.
Warley nevertheless argues that her communications were privileged vis-a-vis herself because (1) the KPMG partnership agreement provides that "[t]he General Counsel shall act on behalf of all Members, except where a dispute arises between an individual Member and the Finn," and (2) counsel retained by KPMG represented both Warley and the firm in litigation on two occasions prior to the communications here at issue. But these contentions are not persuasive.
To begin with, the occasions on which Warley and KPMG were jointly represented occurred in circumstances in which Warley was a witness, not a party, to the litigation. The Court is not persuaded that representation of an employee by em" ployer-retained counsel where the employee's role is that of a witness in a lawsuit against the employer could give rise to a reasonable expectation on the part of the employee that all communications she might have with employer-retained counsel, even a long time thereafter, were made in the context of an individual attorney-client relationship.
Nor has Warley offered any evidence that she in fact subjectively relied either upon the language in the partnership agreement or the previous litigation experience in concluding that Kronish, King & Spalding, or Gremminger was representing her individually.[33]
Conclusion
In the end, Warley's showings amount merely to a claim of her subjective belief which, without more, is insufficient to meet her burden of proving privilege. For the foregoing reasons, Warley's motion for relief from the government's alleged violation of her attorney-client privilege [docket item 682] is denied.
SO ORDERED.
NOTES
[1] "Employee" is used as a matter of convenience to refer to partners and employees except where the context otherwise requires.
[2] United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 217 (2d Cir.1997).
[3] Warley Decl. ¶ 5.
[4] See United States v. Stein, 435 F.Supp.2d 330 (S.D.N.Y.2006).
[5] Gov't Mem. 3.
[6] The government argues in the alternative that Warley has waived any privilege or that the crime-fraud exception applies. Since the Court finds no privilege, it need not address these arguments.
[7] Warley asserts that there may be other privileged communications in the government's possession of which she is not aware. DeVita Decl. ¶ 8.
[8] DeVita Decl., Ex. E, ¶ 3.6.
[9] Warley makes much also of a subsequent joint representation of her and KPMG by King & Spalding in a civil suit that involved the tax strategies at issue in the IRS investigation in which she and KPMG, among others, were named defendants. Since that joint representation occurred after the communications at issue here and thus could not have any bearing on whether an individual attorney-client relationship existed at the time of these communications, it is not relevant. Similarly irrelevant are statements made by counsel for Warley and KPMG well after the fact, particularly considering their ambiguous nature. Finally, both parties point to possessive language such as "our outside counsel" or "KPMG has retained [attorneys] to help it" in contemporaneous emails from KPMG senior management and in-house counsel. These statements are neither clear nor dispositive of the issue at hand.
[10] See RESTATEMENT (THIRD) OF AGENCY § 8.11 ("An agent has a duty to use reasonable effort to provide the principal with facts that the agent knows, has reason to know, or should know when . . . the agent knows or has reason to know that the principal would wish to have the facts or the facts are material to the agent's duties to the principal. . . .").
Both parties agree that the communications at issue here involved matters pertinent to KPMG's affairs. Where the substance of the communication involves only personal concerns of the employee, with no impact on the employer, the analysis of the competing interests would likely change.
[11] In re Grand Jury Subpoena, 274 F.3d 563, 571 (1st Cir.2001).
The fact that KPMG is a partnership and that Warley was a partner does not alter this analysis, as partners owe similar duties. See, e.g., Meinhard v. Salmon, 249 N.Y. 458, 463-64, 164 N.E. 545, 546 (1928) (Cardozo, J.).
[12] See Teamsters, 119 F.3d at 216 n. 2 (rejecting reasonable belief standard for individual privilege because it "would provide employees seeking to frustrate internal investigations with an exceedingly powerful weapon").
[13] Where such evidence exists, it may be appropriate to make the employer bear the burden of the employee's erroneous understanding.
An employer often has an interest in giving an employee the impression that communications between an employee and an employer-retained attorney are privileged. Such impressions, whether products of express or implicit assurances, encourage full and frank disclosure, which may be in the employer's interest. Hence, employees on occasion may be told or, perhaps more often, allowed to believe that employer-retained counsel act on their behalf as well as for the employer. But employers, regulators and prosecutors have no legitimate interest in benefitting from information disclosed by employees to employer-retained counsel as a result of deception attributable to employers. (Although, as noted above, employees may be obliged to disclose such information to their employers, an employee quite rationally might reject an employer's demand for information and suffer the consequences in preference to making disclosures that could result in criminal charges against or other severe adverse consequences to the employee.) Of course, if counsel always followed the Second Circuit's admonition to make full and accurate disclosure to employees as to the ownership of any privilege that may attach to communications, the situation never would arise. Thus, if the employee has been misled by the employer, it may be appropriate to treat the communication as protected by the employee's personal privilege regardless of its pertinence to the employer's business.
In contrast, in some cases an employee may believe that his or her statements to employer-retained counsel are privileged because the employee has picked up incomplete or erroneous information, completely independent of the employer. People act on erroneous information all the time. Their employers have no duty to ensure that all of their decisions are fully informed and well advised. In consequence, employees who talk to employer-retained counsel in the belief that their statements are privileged as to them personally, without having been led to that belief by the employer or its counsel, have only themselves to blame and must take the consequences.
[14] See In re Grand Jury Subpoena, 415 F.3d 333, 339-40 & n. 4 (4th Cir.2005).
[15] Teamsters, 119 F.3d at 216-17.
[16] See Ross v. City of Memphis, 423 F.3d 596, 605 (6th Cir.2005); In re Grand Jury Subpoena, 68 F.3d 480, 1995 WL 608481, at *2 (9th Cir.1995).
[17] 805 F.2d 120, 123, 125 (3d Cir.1986) (citing district court) (first alteration added). See also In re Grand Jury Proceedings v. U.S., 156 F.3d 1038, 1040-41 (10th Cir.1998); In re Grand Jury Subpoena, 274 F.3d at 571-72.
[18] 119 F.3d 210.
[19] Id. at 215.
[20] Id.
[21] Id. at 216.
Although the government urges the Court to apply the Bevill test in this case, Teamsters did not adopt Bevill as its holding. Further, while Bevill has much to commend it, it contains elements that are unpersuasive. For example, Bevill's first factor requires the individual to approach counsel in search of legal advice. But, as Warley correctly notes, "[i]n the real world, it is often the entity and its in house attorneys who first learn of the need for representation of the firm and its partners." Warley Reply 7.
[22] A footnote in Teamsters stated that "[t]he terms `corporate' and `corporation' are used for ease of reference to refer to any entity that employs its own counsel to represent its interests, even though not all such entities are in fact corporations." Teamsters, 119 F.3d at 214 n. 1. The government urges that Teamsters therefore is controlling here notwithstanding that KPMG is a limited liability partnership and that the entity involved in Teamsters was not. Given the difference in the nature of the entities involved, Teamsters is binding here and in other cases involving entities different from that involved in that case only to the extent that there is no material difference between the entities involved in the cases.
The question whether Teamsters applies in a partnership case is not entirely clear and, indeed, may not admit of a general answer. For one thing, members of a general partnership are jointly and severally liable for obligations of the partnership and thus have a far greater personal stake in the representation of the entity, if in fact the partnership is an entity to begin with, than does an employee of a corporation. For another, partnerships frequently are not legal entities. See, e.g., Williams v. Hartshorn, 296 N.Y. 49, 51, 69 N.E.2d 557, 559 (1946) (partnership not a legal entity under New York law); Sugarman v. Glaser, 62 Misc.2d 1037, 1039, 310 N.Y.S.2d 591, 593 (Sup.Ct. Bronx Co.1970) (CPLR § 1025, which allows partnership to sue and be sued in its own name, does not alter fact that partnership is not a legal entity for substantive purposes). In such instances, counsel to the partnership in reality represents the individual partners. Finally, there is a vast difference, quite possibly pertinent to the attorney-client privilege issue, between a large partnership in which the majority of partners has little or no role in the management of partnership affairs and a much smaller partnership in which every partner is heavily involved in all partnership affairs. Suffice it to say for present purposes, however, that Warley has not sustained her burden of demonstrating that the circumstances of her partnership support treating her as anything other than an employee for purposes of the privilege. KPMG is a limited liability partnership with over one thousand partners who probably are not exposed to unlimited liability for partnership obligations. See 6 DEL.CODE ANN. § 15-306(c). Under Delaware law, moreover, the firm is an entity distinct from its members. Id. § 15-201(a).
[23] Bevill, 805 F.2d at 123.
[24] In re Grand Jury Proceedings, 156 F.3d at 1041.
[25] In re Grand Jury Subpoena, 274 F.3d at 572.
[26] Id. at 573. It is not clear how the First Circuit would rule in an analogous case involving an employee who was not an officer or director.
[27] Id.
[28] Id.
[29] For reasons previously discussed, the Court assumes that communications made to employer-retained counsel by an employee who was misled into believing that the communications were subject to a personal privilege might well be regarded as subject to a personal attorney-client privilege.
[30] Teamsters, 119 F.3d at 214; United States v. Schwimmer, 892 F.2d 237, 244 (2d Cir. 1989).
[31] Warley Decl. ¶ 3.
[32] The Court has reviewed the memorandum of the August 2003 interviews, which was submitted under seal. The full email string between Warley and
[33] Warley's affidavit states that her belief that the outside attorneys represented her personally with respect to the communications at issue here "was consistent with" her experience in the previous litigations. Wesley Decl. ¶ 3. Noting such a consistency, however, is very different from asserting reliance on the prior experiences, which Warley does not do. Gremminger was attached as an exhibit to Warley's moving papers.
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301 S.C. 267 (1990)
391 S.E.2d 560
Tara T. SIMMONS and Betty Bradham as Co-Representatives of the Estate of William R. Simmons, Respondents
v.
SOUTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Appellant.
23191
Supreme Court of South Carolina.
Heard February 20, 1990.
Decided April 16, 1990.
*268 Robert J. Thomas and Robert P. Wood, both of Rogers, Thomas, Cleveland, Koon, Waters & Tally, Columbia, for appellant.
J. Michael Baxley, of Driggers & Baxley, Hartsville and Russell P. Patterson, of Jones, Schneider & Patterson, Hilton Head Island, for respondents.
Heard Feb. 20, 1990.
Decided April 16, 1990.
CHANDLER, Justice:
South Carolina Farm Bureau Mutual Insurance Company (Insurer) appeals an Order reforming its insurance policies to provide Respondents with Underinsured Motorist Coverage (UIM). We affirm.
FACTS
On August 28, 1984, William R. Simmons was injured in an accident while riding as a passenger in a pickup truck owned by his brother and sister-in-law. Simmons had five auto insurance policies with Insurer, and was also a named insured on a policy covering the pickup truck.
Simmons' claim for UIM benefits was denied by Insurer. Thereafter, he filed suit against the driver of the other vehicle, Velma Sharpe, who had liability limits of $15,000/$30,000. A copy of the summons and complaint was sent to Insurer, advising that any judgment against Sharpe in excess of $15,000 would result in an action against Insurer for UIM benefits.
Shortly before trial, Simmons notified Insurer that the suit *269 against Sharpe was pending, and offered to settle for $30,000. Insurer, again, denied any liability for UIM benefits.[1]
A jury trial on June 26, 1987, resulted in a $120,000 verdict against Sharpe. Thereafter, Simmons executed a "Covenant not to Levy Execution" (Covenant) against Sharpe in excess of her $15,000 limits.
Simmons then instituted this action against Insurer. The trial judge reformed the policies, awarding Simmons $90,000[2] on the grounds that Insurer had failed to make an effective offer of UIM coverage under State Farm Mutual Auto Ins. v. Wannamaker, 291 S.C. 518, 354 S.E. (2d) 555 (1987).
ISSUES
1. Does Wannamaker apply retroactively?
2. Was Simmons required to formally serve Insurer with the summons and complaint against Sharpe?
3. Was Insurer's subrogation right destroyed by Simmons' execution of the Covenant?
DISCUSSION
I. RETROACTIVITY OF WANNAMAKER
In Wannamaker, supra, this Court established four criteria to determine whether an offer of UIM coverage is effective.[3] Insurer concedes that the offer here does not satisfy Wannamaker, but contends that Wannamaker should be applied prospectively only. We disagree.
"The general rule regarding retroactive application of judicial decisions is that decisions creating new substantive rights have prospective effect only, whereas decisions creating new remedies to vindicate existing rights are applied retrospectively." Toth v. Square D Co., *270 298 S.C. 6, 8, 377 S.E. (2d) 584, 585 (1989). Prospective application is required when liability is created where none formerly existed. Id.
Clearly, Wannamaker creates no new substantive right; actions to reform insurance policies have long been available to insureds. Wannamaker merely provides a method for determining whether a policy should be reformed. Accordingly, its criteria apply retrospectively.
II. SERVICE OF SUMMONS AND COMPLAINT
Insurer next contends it was entitled to formal service of the summons and complaint against Sharpe. We disagree.
At the time Simmons instituted suit, S.C. Code Ann. § 56-9-830 (1976)[4] required a party seeking UNINSURED benefits to formally serve the insurer. Although recent legislation applies the same requirement for UNDERINSURED benefits,[5] no such provision existed at the time Simmons commenced his suit and, therefore, Insurer was not entitled to formal service of the summons and complaint.
III. SUBROGATION
Insurer contends it is not liable for UIM benefits as the "Covenant Not to Levy Execution" against Sharpe destroyed its right to subrogation.
"Subrogation is an equitable right and will be enforced or not according to the dictates of equity and good conscience." Powers v. Calvert Fire Ins. Co., 216 S.C. 309, 317, 57 S.E. (2d) 638, 642 (1950). In Powers, we stated:
[an Insurer] cannot sit down and hold its hands and purse and thereafter escape liability for fulfillment of its contrary by reason of the insured's effort, after fair notice, to recoup his loss by litigation against a wrongdoer.
216 S.C. at 316, 57 S.E. (2d) at 642.
*271 Here, it would be inequitable to permit Insurer to rely upon its right of subrogation after denying, repeatedly, any contractual obligation for UIM benefits. Moreover, when it failed to appear or intervene in the action against Sharpe, Insurer waived its subrogation rights.
Affirmed.
GREGORY, C.J., and HARWELL, FINNEY and TOAL, JJ., concur.
NOTES
[1] Simmons died in July, 1986, and the Co-Administrators of his Estate were substituted as Respondents.
[2] This amount represents $15,000 UIM coverage on each of five policies Simmons had with Insurer, plus $15,000 for the policy of his brother and sister-in-law.
[3] These criteria are: (1) the Insurer's notification process must be commercially reasonable; (2) the limits of optional coverage must be specified; (3) the insured must be intelligibly advised of the nature of UIM coverage; and (4) the insured must be told that optional coverages are available for an additional premium. 291 S.C. at 521, 354 S.E. (2d) at 556.
[4] This section was repealed and recodified as § 38-77-150 by 1987 Act No. 155, § 1.
[5] See, S.C. Code Ann. § 38-77-160 (Effective July 1, 1989).
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In the
United States Court of Appeals
For the Seventh Circuit
Nos. 99-2698, 99-2539 & 99-2629
Central States, Southeast and Southwest Areas
Pension Fund and Howard McDougall, Trustee,
Plaintiffs-Appellees/Cross-Appellants,
v.
Nitehawk Express, Inc., Six Transfer, Inc.,
Interstate Express, Inc., Midwest Jobbers
Terminals, Inc. and James LaCasse,
Defendants-Appellants/Cross-Appellees.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
Nos. 95 C 3944 and 97 C 1402--John A. Nordberg, Judge.
Argued February 8, 2000--Decided August 4, 2000
Before Cudahy, Manion and Diane P. Wood, Circuit
Judges.
Cudahy, Circuit Judge.
I) Background
In some industries, particularly those where
jobs are "episodic," individual companies do not
sponsor pension plans. See Langbein & Wolk, Pension and
Employee Benefit Law 57 (2d ed.). Instead, groups of
firms in an industry make pension contributions
to a joint, or multiemployer, pension plan. See
id. In 1980, Congress passed the Multiemployer
Pension Plan Amendments Act of 1980 (MPPAA). See
29 U.S.C. sec.sec. 1381-1461. The MPPAA was
prompted by Congress’s fear that as individual
employers withdrew from joint plans without
providing funds to cover their workers’ accrued
benefits, a plan could be underfunded by the time
the workers retired and their benefits came due.
See Central States, Southeast and Southwest Areas
Pension Fund and Howard McDougall v. Hunt Truck
Lines, Inc., 204 F.3d 736 (7th Cir. 2000). To
avoid the development of this scenario, Congress
provided that when an employer withdraws from a
multiemployer plan, it must pay "withdrawal
liability" in an amount roughly equal to its
proportionate share of the plan’s unfunded vested
benefits. Thus, withdrawal liability essentially
forces employers to continue making payments on
behalf of fully vested workers so that, even
though the company is no longer a going concern,
its fully vested workers will receive the
benefits they earned there. The employer’s
"contribution history," or the level of
contributions it has made on behalf of workers
over a fixed period of time, provides a
substantial element in the calculation of
withdrawal liability. Generally, a higher
contribution history indicates a higher
proportionate participation in a plan, but it is
not unusual in a plan where each employer sets a
different benefit level that some employers may
be paying too little for their promised benefits
while others pay too much. Therefore, until a
pension fund calculates how much a withdrawing
employer would have to invest in order to pay at
the promised benefit level, it is hard to say
whether a higher contribution history necessarily
correlates with a higher withdrawal liability.
James LaCasse was the 100 percent shareholder
of three companies known as Hines Transfer, Inc.
(Hines), Six Transfer Co. (Transfer) and Nitehawk
Express, Inc. (Nitehawk). The three are
considered to be a "controlled group," and are
treated as a single employer. See 29 U.S.C. sec.
1301(b)(1). We refer to the three as the LaCasse
controlled group. Transfer had eighteen workers;
Nitehawk had four. All three companies had
entered into collective bargaining agreements
with local affiliates of the International
Brotherhood of Teamsters. Under the agreements,
the companies were to make pension payments on
behalf of their workers to the Central States,
Southeast and Southwest Areas Pension Fund
(Central States), which is a multiemployer
pension plan under ERISA. See 29 U.S.C. sec.sec.
1002(37) and 1301(a)(3).
Hines Transfer shut down in 1986, and it was
freed from its obligation to make contributions
to Central States. Central States did not assess
withdrawal liability because the LaCasse group’s
contributions to the Fund did not decline more
than 70 percent over the preceding three-year
period as a result of the Hines shutdown. See 29
U.S.C. sec. 1385. In September 1992, Transfer
sold its assets to Six Cartage (Cartage). The
MPPAA exempts some sales of assets from
withdrawal liability, if the buyers and sellers
structure the sale appropriately and comply with
certain reporting and bonding requirements. Once
the purchase agreement was complete, Transfer
notified Central States of the sale, but claimed
an exemption. Critically, Transfer did not comply
with all of the technical requirements set out in
the statute’s exemption provision. Central States
did not assess withdrawal liability against Six
Transfer at that time. In any event, Cartage
continued making payments on behalf of former
Transfer employees. A year later, Nitehawk shut
down. Central States then determined that the
controlled group had completely withdrawn from
Central States, and therefore owed withdrawal
liability in the amount of $456,620. The
controlled group initiated arbitration, while
Central States exercised its statutory
prerogative to sue for so-called interim
withdrawal liability payments. See 29 U.S.C. sec.
1399(c)(2). In 1996, the district court--properly
deferring consideration of the underlying case--
granted summary judgment on the interim payment
issue for Central States, and ordered the
controlled group to pay $456,620 plus liquidated
damages and attorney’s fees.
In 1997, the arbitrator found that the LaCasse
group owed no withdrawal liability because
Transfer’s sale of assets--which accounted for
the lion’s share of the group’s reduced
contribution to the Fund--was exempt from
withdrawal liability under the MPPAA. See
Appellant’s App. at 24 (In the Matter of
Arbitration Between Nitehawk Express and Six
Transfer, Inc. and Central States, Southeast and
Southwest Areas Pension Fund, AAA Case No. 51-
621-00147-94 at 13-14) (hereinafter In the Matter
of Nitehawk). Predictably, the LaCasse group
moved to enforce the arbitration award and vacate
the judgment ordering interim payment. The
district court determined that, contrary to the
arbitrator’s view, Transfer had failed to meet
the three conditions required to secure an
exemption from withdrawal liability. Because the
sale of assets was not exempt, the court
determined, it constituted a partial withdrawal
from the Fund. Although withdrawal liability was
not proper so long as one member of the
controlled group, Nitehawk, remained a going
concern, as soon as Nitehawk shut its doors, the
controlled group had to ante up. Therefore, the
court granted partial summary judgment to Central
States and ordered the LaCasse group to pay
withdrawal liability. But it went on to hold that
the group’s liability should be calculated
without reference to Transfer’s contribution
history because, in its view, Cartage had
essentially adopted Transfer’s contribution
history, which meant the Fund had suffered no
harm. See Central States et al. v. Nitehawk
Express, Inc. et al., No. 97 C 1402 (N.D Ill.
March 23, 1999) (hereinafter "Mem. Op.") at 15-
16. The LaCasse group appeals the award of
withdrawal liability, and Central States cross-
appeals the district court’s decision to allocate
Transfer’s contribution history to Cartage, as
well as its refusal to award attorney’s fees in
connection with Central States’ victory in the
interim payments case./1
II) Analysis
A) Background of the MPPAA
The MPPAA requires that a company choosing to
withdraw from a multiemployer pension plan must
pay "withdrawal liability," which is intended to
cover that company’s share of the unfunded vested
benefits that exist when it withdraws. See 29
U.S.C. sec.sec. 1381, 1391. Congress permits
multiemployer pension plans many options for
calculating withdrawal liability, all of which
are intended to assure that departing employers
bear their fair share of pension payments, and do
not leave others holding the bag. Most of the
methods endorsed by Congress calculate withdrawal
liability "as a function of contributions made by
the withdrawing employer, normally for the five
[or ten] plan years ending with the year in which
the unfunded vested benefits or change in the
unfunded vested benefits is determined." Ronald
A. Kladder, Asset Sales After MPPAA--An Analysis
of ERISA Section 4204, 39 Bus. Law. 101, 117
(November 1983).
Congress recognized that the daunting prospect
of withdrawal liability might deter a struggling
company from selling a failing division and
trying to salvage the others. In order to
encourage asset sales, Congress excused companies
from withdrawal liability when they sold assets.
See 29 U.S.C. sec. 1384. But this exemption was
potentially problematic. What if the purchaser
withdrew from the plan? Because the MPPAA
calculates withdrawal fees based on a five- or
ten-year history of contributions to the Plan,
"the purchaser’s withdrawal liability, calculated
as of the date of the sale, would be zero unless
the purchaser also had a preexisting contribution
obligation to the plan." See Kladder, supra, at
116.
To avoid the "zero liability" scenario, Congress
conditioned the seller’s withdrawal exemption on
the purchaser’s assumption of a preexisting
obligation to the plan. Specifically, Congress
established three conditions for exemption.
First, the buyer must assume an obligation to
make contributions to the plan at substantially
the same level as the seller’s contribution. See
29 U.S.C. sec. 1384(a)(1)(A). Second, the
purchaser must provide to the plan a bond or
escrow account for five plan years commencing
with the first plan year beginning after the sale
of assets. The bond must be roughly equivalent to
the seller’s annual contribution for recent
years, and will be paid to the plan if the buyer
withdraws or misses an annual contribution to the
plan at any time in the five years following the
sale. See 29 U.S.C. sec. 1384(a)(1)(B). Finally,
the contract for sale must provide that, if the
buyer fully or partially withdraws in the five
years following the sale and does not pay
withdrawal liability, the seller is secondarily
liable for the fee. See 29 U.S.C. sec.
1384(a)(1)(C).
B) The Transfer-Cartage Sale of Assets
In the present case, Central States contends
that Transfer failed to obtain an exemption when
it sold its assets to Cartage. The arbitrator
found that Transfer had properly obtained an
exemption. See In the Matter of Nitehawk,
Appellant’s App. at 37. The district court
disagreed. The LaCasse group urges us to defer to
the arbitrator. The district court reviewed the
arbitrator’s actions for clear error, and we
apply the same standard in reviewing the district
court’s decision as that court did in reviewing
the arbitrator’s interpretation. See Matteson v.
Ryder Sys. Inc., 99 F.3d 108, 112 (3d Cir. 1996).
Clear error may seem an unusually exacting
standard of review for an arbitration award. It
is true that Congress specifically stated that
"there shall be a presumption, rebuttable only by
a clear preponderance of the evidence, that the
findings of fact made by the arbitrator were
correct." 29 U.S.C. sec. 1401(c)./2 But we have
recognized that whether a party has successfully
structured a transaction to satisfy the statutory
standard for exemption is a "classic example[ ]
of [a] ’mixed question[ ] of law and fact.’"
Chicago Truck Drivers, Helpers and Warehouse
Workers Union (Independent) Pension Fund v. Louis
Zahn Drug Co., 890 F.2d 1405, 1409 (7th Cir.
1989). That is a particularly apt description of
the present case, in which the arbitrator was
required to compare the terms of the contract
with the statutory requirements, and to attach
legal significance to Cartage’s failure to post
a bond. Congress did not set forth a standard by
which to review an arbitrator’s findings on these
types of questions. We resolved in Zahn that the
proper standard of review for such questions is
for clear error. See id. at 1411. A finding is
clearly erroneous if the reviewing court, after
acknowledging that the factfinder below was
closer to the relevant evidence, is firmly
convinced that the factfinder erred. The district
court stated, and we agree, that the arbitrator
committed clear error on the question whether
Transfer’s sale of assets merited an exemption.
See Mem. Op. at 11.
In this case, the clear error is apparent upon
review of the Purchase Agreement, the provisions
of which are fatally noncompliant with the MPPAA.
As required by statute, the purchase agreement
does seem to obligate Cartage to make payments at
substantially the same level as Transfer, thus
satisfying the first precondition for
exemption./3 But the Purchase Agreement does not
assign secondary liability to Transfer. The
LaCasse group protests that the contract
accomplishes the goal of secondary liability
because it calls for Cartage’s liabilities to
revert back to it in the event of a breach. The
arbitrator agreed. See In the Matter of Nitehawk,
Appellant’s App. at 36. The LaCasse group says
"reversion" is called for in sections 14 and 15
of the Agreement. Section 14 states that
covenants and warranties will survive closing,
and section 15 provides for remedies in the event
of a breach of contract. That provision states
that in the event Cartage breaches the contract,
Cartage, "at [Transfer’s] option, will relinquish
all title, possession and control of the business
and all assets purchased under this agreement to
[Transfer]." Appellee’s App., Tab 2 at page 10,
sec. 15(b). LaCasse testified at his deposition
that this language required him to reassume
liabilities if Cartage were to breach the
contract. Contrary to that interpretation, the
plain language does not call for an automatic
reversion to Transfer or require that Transfer
reassume liabilities. It states only that Cartage
would have to turn the business back over to
Transfer "at [Transfer’s] option." Appellee’s
App., Tab 2 at page 10, section 15(b) (emphasis
added). We need not speculate whether Transfer
would have exercised that potentially dubious
option if Cartage’s prospects had gone south. As
discussed above, Congress did not want to leave
pension plans without recourse if buyers
"vamoosed" without paying withdrawal fees. See
Artistic Carton Company v. Paper Industry Union-
Management Pension Fund, 971 F.2d 1346, 1352-53
(7th Cir. 1992). Congress considered it crucial
that sellers be bound to pay withdrawal liability
if buyers proved unsound. The contract involved
here does not bind Transfer, and therefore the
sale of assets cannot be exempt.
This failure alone is enough to deprive the
asset sale of the exemption. Moreover, we note
that Transfer and Cartage bungled the bond
requirement. The arbitrator concluded that the
failure to post bond was "not determinative of
this dispute," because Central States’ interests
were protected. In the Matter of Nitehawk,
Appellant’s App. at 37. The district court
stated, and we agree, that this is a second
instance of clear error. As discussed above, the
purchaser must furnish a bond "commencing with"
the first plan year after the sale of assets. See
29 U.S.C. sec. 1384(a)(1)(B). This is not an
empty formality; it forces the buyer to back up
its promise to pay the seller’s withdrawal
liability until the buyer accrues its own
liability. See, e.g., Artistic Carton, 971 F.2d
at 1352. (One might wonder what the buyer
receives in exchange for accepting the liability
and putting additional money down. Presumably,
the sale price for the assets reflects the
liabilities that go along with them. See, e.g.,
5 Erisa Litigation Rep. 13, 16 (April 1996) ("the
issue of additional contingent liability [if the
contribution history is to be transferred to the
buyer] can be factored into the sales price.")).
In the present case, Cartage did not post a bond.
The plan may waive the bond requirement if the
parties request a waiver and meet certain
statutory conditions, one of which is a bond
amount less than $250,000. See 29 C.F.R. sec.
4204. There is no question in this case that the
parties would have qualified for the exemption
because the amount of the required bond was less
than $250,000. But the parties erred
procedurally. First, Transfer requested the bond
exemption alone, when the statute explicitly
states that "the parties" must request a waiver.
Further, Transfer waited until six months into
the first plan year to seek the bond waiver. See
Record Vol. I at Tab 5. Transfer argues that
Cartage did not have to post the bond until the
end of the first plan year, and therefore its
waiver request was timely if filed before the
expiration of the plan year.
We find the waiver request inadequate. First,
Cartage did not participate in the waiver
request. This alone makes it invalid. See
Brentwood Fin. Corp. v. Western Conference of
Teamsters Pension Fund, 902 F.2d 1456, 1461 (9th
Cir. 1990) (seller’s request for waiver
insufficient). And it is not as though we are
punishing Transfer for Cartage’s lapse; Transfer
could probably have met the requirement of a
joint request by simply asking a Cartage official
to sign the waiver request it drafted, but it did
not. Additionally, we doubt the request was
timely. We have stated as a general matter that
the determination as to whether the purchaser has
met the requirements for an exemption is at the
time of the sale, not afterwards. See Central
States, Southeast and Southwest Areas Health and
Welfare Fund v. Cullum Companies, Inc., 973 F.2d
1333, 1338 (7th Cir. 1992). This principle pulls
us towards the Fund’s view that Cartage had to
either post the bond or request the variance at
the start of the plan year./4 Transfer makes
another, more fanciful, argument, that a seller
need not satisfy the requirements for withdrawal
liability exemption until there is a complete
withdrawal. Cullum nips this argument in the bud:
the time of sale is the time to satisfy the
requirements. In sum, we conclude that when the
LaCasse group sold Transfer’s assets to Cartage,
it failed to comply with two of the three
requirements necessary to secure an exemption
from withdrawal liability.
The arbitrator held that the shutdowns of Hines
and Nitehawk were not sufficient to trigger
withdrawal liability because the Transfer sale
was exempt. That finding of exemption was clear
error on a mixed question of law and fact; once
it is reversed, the arbitrator’s conclusion
regarding the availability of withdrawal
liability (which is probably best characterized
as a mixed question of law and fact) is also
clearly erroneous. Together, the shutdowns of
Hines, the non-exempt sale of Transfer’s assets
and the shutdown of Nitehawk amounted to a
complete withdrawal from the Plan, sufficient to
trigger withdrawal liability.
C) Apportioning Contribution History
The remaining question is how to apportion the
LaCasse group’s contribution history among the
parties in this case. Because the arbitrator did
not think the group had withdrawn, it did not
hazard a calculation. The district court, in
granting summary judgment, deleted Transfer’s
contribution history from the LaCasse group and
attributed it to Cartage./5 We review this grant
of summary judgment de novo. See Hunt Truck
Lines, 204 F.3d at 742. The most precise and
authoritative guide to allocating contribution
history in the present circumstance has been
offered by the Pension Benefit Guaranty
Corporation. As the agency charged with
interpreting the MPPAA, the PBGC is entitled to
substantial deference when it construes the
statute. See Trustees of Iron Workers Local 473
Pension Trust v. Allied Products Corp., 872 F.2d
208, 210 n.2 (7th Cir. 1989). PBGC Opinion Letters
are not as authoritative as PBGC regulations, but
they have been discussed in the same vein as
Revenue rulings. See, e.g., Blessitt v.
Retirement Plan for Employees of Dixie Engine
Co., 848 F.2d 1164, 1170-73 (11th Cir. 1988). In
PBGC Opinion Letter 92-1, the agency considered
a complex scenario in which a controlled group
like LaCasse shed four subsidiaries, each
accounting for 25 percent of the group’s
contributions to a multiemployer pension plan.
See PBGC Op. Ltr. 92-1, 1992 WL 425182 (March 30,
1992) (hereinafter PBGC Letter). The PBGC’s
hypothetical controlled group sold the assets of
subsidiary B in a non-exempt sale, just as
LaCasse sold the assets of Transfer. See id. at
1. The PBGC stated that "the contribution history
of [the subsidiary] remains part of the
controlled group’s contribution history for
purposes of calculating amounts of subsequent
withdrawal liability." Id. at 2. Indeed, the PBGC
intimated that the only reason the sale of
subsidiary B did not trigger liability itself was
that it caused a drop of just 25 percent in the
controlled group’s contributions to the Fund. See
id. In the present case, the Fund explains that
it did not view Transfer’s withdrawal as causing
the required three-year drop in contributions to
qualify as a partial withdrawal. So the sale did
not--as in the PBGC hypothetical--trigger
liability. Therefore, Transfer is in exactly the
position of the PBGC’s hypothetical asset seller,
and just as the contribution history remained
with the seller in that case, it must remain with
the seller in this case.
The district court relied on a different and,
we think, less analogous passage in the PBGC
letter to reach the opposite result. In that
passage, the PBGC instructed that if the
controlled group sold the stock of one
subsidiary, and the controlled group later
withdrew, the group’s liability would be
determined without reference to the contribution
history of the subsidiary whose stock had been
sold. See id. at 3. Why? And why doesn’t the same
reasoning apply to a sale of assets? The answer
is that a sale of stock is covered by a different
provision of the statute, 29 U.S.C. sec. 1398,
which specifies that the successor employer
resulting from such a transaction "shall be
considered the original employer." Therefore,
under the statute, the contribution history of a
subsidiary whose stock is sold automatically
transfers to the buyer. See PBGC Ltr. at 2-3.
This statutory dictate reflects the longstanding
principle of corporate law that "a purchaser of
corporate stock takes the risk of all outstanding
corporate liabilities, except in so far as the
contract of purchase may provide otherwise." Ford
Motor Co. v. Dexter, 56 F.2d 760, 761 (2d Cir.
1932).
The Ninth Circuit analyzed a situation similar
to the one before us in Penn Central Corp. v.
Western Conference of Teamsters Pension Trust
Fund, 75 F.3d 529 (9th Cir. 1996). In that case,
the parent company of a controlled group shut
down two subsidiaries. It then sold the stock of
a third subsidiary. See id. at 533. Because the
stock sale caused the controlled group to cease
contributions to the Fund, withdrawal liability
was triggered. The Ninth Circuit attributed the
subsidiary’s contribution history to the
purchaser. But it allocated the contribution
history for the two shuttered subsidiaries to the
seller. Id. at 533. It reasoned that when the
MPPAA equated the purchaser with the "original
employer," it meant for the purchaser to become
responsible only for the liability of the
subsidiary it bought. This result confirms our
view that the "original employer" provision for
stock sales merely codifies the principle that a
stock purchaser takes the liability associated
with that stock.
In the present case, Cartage did not purchase
Transfer’s stock. So although the case seems
superficially analogous to Penn Central, it is
actually quite different. Under neither corporate
law nor the MPPAA did Transfer’s liabilities--in
particular, its contribution history--
automatically shift to the purchaser. The MPPAA
and the PBGC’s interpretations of it clearly
indicate that unless the purchaser of assets
assumes withdrawal liability by taking the
prescribed steps, the contribution history and
associated withdrawal liability stay with the
seller. So neither Penn Central nor the latter
portion of the PBGC Opinion Letter are as
instructive as the early portion of the PBGC
Opinion Letter which demonstrates that the
contribution history for a non-exempt sale of
assets remains with the seller.
But the district court did not rely solely on
the PBGC Opinion Letter and Ninth Circuit
opinion. The judge trusted his own eyes, and it
is much harder for us to discount his view than
it was to distinguish the authority he invoked.
At the time of the 1992 sale, Cartage was not
legally responsible/6 for Transfer’s pre-sale
contribution history and thus could have escaped
withdrawal liability. But by the time the case
reached Judge Nordberg in 1997, Cartage would
have been on the hook for withdrawal liability
based on the five-year contribution history it
had accrued since the purchase. The court seemed
to reason that because the Fund had suffered no
harm, it was not justified in seeking to punish
Transfer./7
The "no harm, no foul" approach is
instinctively appealing in the circumstances,
because a retrospective view may cast more light
on the relative rights and obligations of the
parties than would a prospective view at the time
of sale. Still, we must reject it. We have in the
past expressly refused to examine harm that
arises after a sale of assets in determining the
status of that sale. See Cullum, 973 F.2d at
1338. In Cullum, the parties completed an exempt
sale of assets, in which the buyer was obligated,
under the purchase agreement, to contribute to
the plan. See id. The buyer eventually reneged on
this obligation and the Fund assessed withdrawal
liability against the seller, reasoning that the
sale of assets was not exempt because the buyer
did not follow through on its obligation. We held
that the exempt status of the sale was to be
determined at the time of sale. See id. If the
buyer pledged to make contributions at the time
of sale, its eventual bad faith would not change
the status of the sale. The same principle that
worked to the seller’s advantage in Cullum must
be applied here to the seller’s detriment. At the
time of the transaction, the sale did not meet
the statutory requirements whereby Transfer’s
contribution history was shifted to Cartage.
Cartage’s good faith in continuing to make
contributions, thereby building up its own
history on which withdrawal liability could
eventually be calculated, does not change the
fact that the sale was not exempt. The LaCasse
group had one opportunity to discard Transfer’s
contribution history--during the sale--and it did
not do so.
We recognize that in some circumstances,
contemporaneous analysis will look like a trap
for the unwary. But the opposite approach--asking
courts to calculate withdrawal liability
retrospectively--would force the parties to scan
a kaleidoscope, in which constantly changing
facts assume rising and falling importance until
the arbitrary moment in time when an opinion
issues. That would undermine the very certainty
the MPPAA was meant to guarantee. So we have
adopted an arguably imperfect standard in the
service of MPPAA’s rules of general application
(which may ill fit, under particular
circumstances, the realities of these transient
corners of the economy). For instance, in Central
States, Southeast and Southwest Areas Pension
Fund v. Bellmont Trucking Co., 788 F.2d 428, 432
(7th Cir. 1986), we refused to excuse a bankrupt
company from withdrawal liability even though its
workers went on to retire and thus foreclose the
need for pension contributions, or went on to
obtain new jobs where the new employer paid their
contributions. We suggested that the Fund’s lack
of injury was merely fortuitous, and applied a
prospective approach to withdrawal liability that
would protect the Fund in the event it was not as
lucky the next time. See id. at 432 n.2.
The LaCasse group urges that we have taken a
flexible line in the past in order to achieve an
equitable result, citing Central States,
Southeast and Southwest Areas Pension Fund v.
Bell Transit, 22 F.3d 706 (7th Cir. 1994). In
Bell, the employer sold its assets in an exempt
sale, and retained an amount of cash. The Fund
learned of the withheld cash, and determined that
the seller had "liquidated." Id. at 708-09. Under
the MPPAA, if the seller liquidates within five
years after the sale, it is required to post a
bond, which the seller in Bell had not done.
Because the seller had posted no bond, the Fund
tried to assess withdrawal liability against it.
We blocked this effort, stating that the Fund
should only be able to recover the bond amount
(preferably through a civil action), instead of
assessing withdrawal liability against the seller
and giving the Fund a "windfall." Id. at 712. At
first blush, it may seem that we "manipulated"
the statute in order to achieve a "fair" result.
But a close reading of Bell reveals that it was
just another application of the "contemporaneous
analysis" rule. We found that the sale was exempt
when transacted, and could not be unraveled by a
subsequent failure to post bond for the eventual
liquidation. See id. at 711-12. The LaCasse group
argues that Bell sets a precedent against "extra"
payments to the Fund. But in Bell, the Fund was
not entitled to withdrawal liability at the time
of sale, so permitting a delayed assessment of
liability would have paid to the Fund something
that was not owed. Here, the Fund was entitled to
withdrawal liability at the time of sale.
Ultimately, the district court seemed persuaded
by the LaCasse group’s protestation that forcing
it to pay withdrawal liability would give the
Fund a "double recovery." See Mem. Op. at 13. We,
too, are troubled by the possibility that the
Fund may recover more than is required to fully
fund these workers’ benefits. After all, it is
the job of courts to do justice, not make
superfluous awards as punishment for technical
errors. However, on further examination, we see
nothing at stake here to compel us to ignore the
statutory requirement that sellers meet certain
conditions to qualify for an exemption or to
ignore our own precedent assessing the validity
of an exemption at the time of sale or the PBGC’s
instruction that non-exempt sellers retain their
contribution history.
In a pension plan, "[w]orkers’ benefits may be
stated as a percentage of their highest average
incomes . . . multiplied by the number of years
of covered employment." Artistic Carton, 971 F.2d
at 1351. Multiemployer pension plans generally
employ "cliff vesting," meaning that after a
fixed number of years of service, employees gain
a nonforfeitable right to the benefits they have
accumulated. See Angell & Polk, Multi-Employer
Plans, in II Employee Benefits Law sec. 14.6 (Illinois
Institute of Continuing Legal Education, 1994).
Then, as explained in Artistic Carton, an
employee’s vested benefits will continue to grow
as long as he continues to rack up additional
years of service. See 971 F.2d at 1351.
Importantly, one feature of multiemployer plans
is the "portability" of pension credits. See
Angell & Polk, supra, at sec. 14.7. This means
that a worker may leave one Plan participant and
join another, bringing with him the "years of
service" from his previous job. Withdrawing
employers stop making contributions on behalf of
employees before the employees have retired.
Withdrawal liability is supposed to represent the
amount that, "when invested, would theoretically
produce . . . a sum precisely sufficient to pay
(the employer’s proportional share of) a plan’s
estimated vested future benefits." Milwaukee
Brewery Workers’ Pension Plan v. Jos. Schlitz
Brewing Co., 513 U.S. 414, 426 (1995). Central
States apparently bases withdrawal liability on
an employer’s past ten years of contribution
history (at least that is what it did for the
LaCasse group)./8 At the time of withdrawal,
some variables necessary to determining each
workers’ benefits upon retirement are necessarily
unknown. For instance, the employer cannot know
how many years of service a worker will have
accrued by the time he retires or how much his
salary might rise before that time. And before
the Fund can calculate the amount of money that
must be invested today to guarantee adequate
benefits at retirement, it must discount future
benefits to their current value. The Fund has
wide discretion in adopting a valuation method,
but many such methods depend in part on current
market values, which will almost certainly
fluctuate over time. See, e.g., Masters, Mates &
Pilots Pension Plan v. USX Corp., 900 F.2d 727,
730-33 (4th Cir. 1990).
Based on this background, we see that the
equities of withdrawal liability are debatable in
a number of scenarios. In the paradigmatic case,
the non-exempt seller such as the LaCasse group
must pay withdrawal liability on behalf of its
employees. And a non-exempt buyer like Cartage
would have no withdrawal liability even if it
went out of business immediately. The MPPAA rules
were tailored to this circumstance, and they work
appropriately to guarantee that the Fund is
covered by the party who is equitably responsible
for the unfunded vested benefits. But the rule
leads to awkward results elsewhere. For instance,
what if a non-exempt seller were forced to pay
withdrawal liability, and the buyer in that sale
shut down only after ten years of pension
payments? The buyer would be assessed withdrawal
liability based on the ten-year contribution
history it had amassed, on top of the seller’s
withdrawal liability. Therefore, both the seller
and the buyer will have made "full" withdrawal
liability payments; that is, each will have paid
the amount that, when invested, would result in
the promised benefits at retirement. But, this is
not quite the case because, after working ten
years for the second employer, the workers’
promised benefits (which are based on accrued
years of service) will be higher. Additionally,
the applicable valuation rates and actuarial
estimates may have changed in the intervening
years, as they are based in part on market
values. So in this scenario--which is essentially
the same as the dispute between the LaCasse group
and the Fund--the Fund may have recovered more
than necessary to fully fund the workers’
unfunded vested benefits. But it is difficult for
a reviewing court--not privy to the Fund’s
changing valuation methods or the individual
workers’ records--to know how much "excess" the
Fund stands to recover. We are left only with the
queasy feeling that by mechanically applying a
rule of general application, we may be leaving
the Fund in this instance more than whole.
At the same time, it would not be feasible for
us to attempt to apply some general rule of
equity to right this seeming wrong because, when
dealing with the MPPAA and the many variables
involved in calculating withdrawal liability, it
is extraordinarily hard to know what is necessary
to adequately fund the pension plan and
simultaneously do equity to the participants.
What might come to mind is some sort of
overriding rule stating that ultimately the
seller can be liable for no more than is required
to make the Fund whole. This rule might be
feasible to administer, and would place on the
Fund the burden of demonstrating the extent of
its injury, an exercise it has not attempted in
the present case. But Congress has not seen fit
to provide such a rule, and especially
considering the uncertainties involved, it is
impermissible to provide one by judicial fiat.
Whether such a rule is warranted is a policy
judgment, requiring that the possibility of
excess recovery be weighed against the need for
guaranteeing adequate funding of pensions under
all circumstances.
At any rate, given our reluctance to fashion
some equitable rule on our own, we find that the
potential excess recovery in this case does not
violate the MPPAA and is probably within the
bounds of equity. To the extent that the
possibility of excess recovery might offend
considerations of equity, this may be an
inescapable price Congress has elected to pay in
adopting the statutory rules. We believe that the
statute and its administrative interpretations
must continue to be refined to minimize the
chance of duplicative recoveries and other
arguable inequities. And to relieve judicial
concern about excess recovery, the Fund must be
concerned with showing the equity of its demands
as well as their conformance with the technical
requirements of the Act.
D) Attorney’s Fees
Finally, Central States appeals the district
court’s decision to vacate the award of
attorney’s fees to Central States based on the
Fund’s success in securing interim payments while
the arbitration was pending. According to the
MPPAA, an employer must pay a withdrawal
liability assessment according to a schedule set
by the pension fund, "notwithstanding any request
for review or appeal of determinations of the
amount of such liability . . ." 29 U.S.C. sec.
1399(c)(2). This provision captures the MPPAA’s
"pay now, arbitrate later" principle. See Central
States, Southeast and Southwest Areas Pension
Fund v. Wintz Properties, Inc., 155 F.3d 868, 872
(7th Cir. 1998). The statute further provides that
"any failure of the employer to make any
withdrawal liability payment within the time
prescribed shall be treated in the same manner as
a delinquent contribution (within the meaning of
section 1145 of this title.)" 29 U.S.C. sec.
1451(b). Finally, the statute provides that in
any action by a plan to enforce an employer’s
delinquent contributions, "the court shall award
the plan" . . . "reasonable attorney’s fees and
costs of the action" if the action results in a
"judgment in favor of the plan." 29 U.S.C. sec.
1132(g)(2) (emphasis added).
The LaCasse group argues that "no notice of a
demand for payment was ever given to Six Transfer
and therefore, it cannot be liable for interim
payments." Appellant’s Br. at 19. But the notice
sent to the group upon the withdrawal of Nitehawk
states that it covers "all members of any
controlled group . . . of which [Nitehawk] is a
member." Appellee’s App. at 19. Notice to one
controlled group member constitutes notice to
all. See, e.g., Central States, Southeast and
Southwest Areas Pension Fund v. Slotky, 956 F.2d
1369, 1375 (7th Cir. 1992). Further, the Fund’s
extensive documentation of its liability
assessment clearly reflects that its calculations
reflected the contribution histories of Nitehawk,
Hines, and Transfer. So the LaCasse group must
have understood that it was to pay withdrawal
liability for Transfer. The LaCasse group did not
pay the liability before beginning arbitration,
and it was therefore delinquent. Section 1132
seems to us to mandate that the LaCasse group pay
the fees if Central States won a judgment on the
interim payment issue, notwithstanding the
ultimate outcome of the case. The district court
viewed the outcome of this case as a partial
victory for each side. See Appellant’s App. at 21
(Order of May 19, 1999). But we have suggested
that an interim payment order was a final order
on the limited issue of which party gets to hold
the stakes during an arbitration. See Trustees of
the Chicago Truck Drivers, Helpers and Warehouse
Workers Union (Independent) Pension Fund v.
Central Transport, Inc., 935 F.2d 114, 116-17 (7th
Cir. 1991). The MPPAA’s interim payment provision
reflects Congress’s concern that thinly
capitalized employers who are not forced to pay
prior to arbitration may empty their pockets by
the time an arbitrator determines they owe money
to the Fund. See id. So the interim payment
accomplishes a goal entirely different from the
arbitration on the merits. As such, the Fund’s
victory in securing interim payments cannot be
undone by a loss at the merits stage. Therefore,
the district court did not have discretion to
vacate the award of attorney’s fees for that
portion of the litigation.
III) Conclusion
In sum, we affirm the district court’s finding
that the Transfer-Cartage sale did not meet
statutory requirements and therefore did not
exempt Transfer from payment of withdrawal
liability. We affirm the district court’s
conclusion that when Nitehawk withdrew from
Central States, the LaCasse group effected a
complete withdrawal from the Fund. We affirm the
district court’s conclusion that the assessment
of withdrawal liability against the LaCasse group
is warranted. We reverse the district court’s
conclusion that Transfer’s contribution history
should be excluded from the computation of the
LaCasse group’s withdrawal liability, and remand
for a calculation reflecting the contribution
histories of all three employer-members of the
group. Finally, we reverse the district court’s
decision to vacate the attorney’s fees initially
awarded to the Fund for its success in securing
interim payments from the group, and we remand
for reimposition of an order in accord with this
opinion. Each party to bear its own costs.
/1 Central States filed its notice of appeal June
18, giving the LaCasse group 14 days to file its
appeal. It appears the LaCasse group sent its
papers via UPS Next-Day Air on June 29, 1999. The
clerk’s office inadvertently recorded receipt on
July 6, but noted the date July 1 on the check
sent with the appeal, suggesting that filing was
timely. Therefore, we reject Central States’
contention that the LaCasse group did not file
its appeal timely, and that this court does not
have jurisdiction.
/2 Notably, the standard of review for statutorily
mandated MPPAA arbitrations is not as deferential
as it is for labor arbitrations conducted
pursuant to collective bargaining agreements (the
arbitrator’s award must be enforced "so long as
it draws its essence from the collective
bargaining agreement." United Steelworkers of
America v. Enterprise Wheel & Car Corp., 363 U.S.
593, 597 (1960)), or voluntary commercial
arbitrations conducted pursuant to the Federal
Arbitration Act (a district court may vacate an
arbitration award if, inter alia, "the
arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final,
and definite award upon the subject matter
submitted was not made." 9 U.S.C. sec. 10(a)(4)).
"Section 1401(b)(3) of MPPAA indicates the
Arbitration Act, which governs voluntary
arbitration, applies only to the extent it is
consistent with MPPAA . . . [T]he severely
limited review required by section 10 of the
Arbitration Act is inconsistent with section
1401(b)(2) of MPPAA, and the latter prevails."
Union Asphalts and Roadoils, Inc. v. Mo-Kan
Teamsters Pension Fund, 857 F.2d 1230, 1234 (8th
Cir. 1988).
/3 The relevant provision reads as follows:
Buyer will assume all obligations of Six
Transfer, Inc. pursuant to any and all collective
bargaining agreements in effect between Six
Transfer, Inc. and Teamsters Local Union 120 of
St. Paul, Minnesota which contract covers certain
employees of Six Transfer, Inc.
Buyer will also assume any and all potential
withdrawal liability to the Central States
Pension Fund into which contributions were made
pursuant to the above referenced collective
bargaining agreement with Local 120. Buyer will
continue to make payments for contributions to
the pension fund and comply with any other
obligations pursuant to the collective bargaining
agreement.
Appellee’s App., Tab 2 at pages 7-8, sec. 7.
/4 The Ninth Circuit reached a similar conclusion in
a case where the seller claimed that it
"substantially satisfied" the bond requirement by
challenging withdrawal liability, thus notifying
the Fund that it was entitled to a bond waiver.
See Brentwood Fin. Corp. v. Western Conference of
Teamsters Pension Trust Fund, 902 F.2d 1456, 1461
(9th Cir. 1990). The court held that the
"practical effect" of such a course would be to
do away with the bond requirement. Here, too. If
Transfer’s theory were correct, parties to a sale
could evade the bond requirement for a year.
/5 One might wonder whether the district court
should have remanded the question of allocation
to the arbitrator, and whether we should do so.
There is no clear instruction in the MPPAA. But
we have stated as a general matter that "[w]hen
possible, . . a court should avoid remanding a
decision to the arbitrator because of the
interest in prompt and final arbitration." See
Publicis Communication v. True North
Communications Inc., 206 F.3d 725, 730 (7th Cir.
2000) (quoting Teamsters Local No. 579 v. B & M
Transit, Inc., 882 F.2d 274, 278 (7th Cir. 1989)
(citations omitted). In the present case, neither
party contested the district court’s authority to
decide a question left open by the arbitrator,
and both parties have briefed the issue to us. So
we think it sensible and fair to consider the
issue.
/6 When we speak of "legal responsibility," we do
not mean contractual responsibility. It is pretty
clear that the Purchase Agreement obligates
Cartage to make ongoing contributions and pay
withdrawal liability. But this obligation runs to
Transfer. Had Cartage withdrawn and declined to
pay withdrawal liability, the Fund faced
uncertain prospects for collecting from Cartage.
Cases construing the MPPAA have held that
successors in non-exempt sales may be liable for
withdrawal liability. See, e.g., Artistic Carton
Co. v. Paper Industry Union Management Pension
Fund, 971 F.2d 1346, 1352 (7th Cir. 1992). But
here a non-exempt successor has not posted a bond
and therefore the Fund would have to invest time
and money to collect the debt. And if a
"successor" suit against Cartage proved
fruitless, the Fund would have no recourse
against Transfer, which is not secondarily liable
under the Purchase Agreement. Because the Fund
would have no recourse against Transfer (this is
assuming Transfer need not pay withdrawal
liability), Transfer might well refuse to pay the
Fund. So Transfer--the only party to whom Cartage
owed a contractual duty to pay--would have no
reason to sue Cartage for damages. Consequently,
by "legal responsibility" we mean a
responsibility recognized by the MPPAA and
enforceable by the Fund.
/7 In effect, the Fund seemed to be saying, "Now we
know we didn’t lose any money, so why don’t you
give us some more?"
/8 Notably, if the parties had successfully
structured this as an exempt sale of assets, five
years of Transfer’s contribution history on
behalf of its employees would have "vanished."
See Angell & Polk, Multi-Employer Plans, in II
Employee Benefits Law sec. 14.29(5) (Illinois
Institute of Continuing Legal Education 1994).
Though the Fund will assess liability against
Transfer for ten years of contributions, Cartage
would have adopted just five years of Transfer’s
contribution history. If Cartage withdrew, it
would have owed significantly less than Transfer.
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