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77 F.2d 542 (1935)
UNITED STATES CASUALTY CO.
v.
HOAGE, Deputy Com'r, et al.
No. 6205.
United States Court of Appeals for the District of Columbia.
Argued January 7, 1935.
Decided April 15, 1935.
Henry I. Quinn, of Washington, D. C., for appellant.
Leslie C. Garnett, U. S. Atty., John J. Wilson and H. L. Underwood, Asst. U. S. Attys., and James E. McCabe, all of Washington, D. C., for appellees.
Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, HITZ, and GRONER, Associate Justices.
ROBB, Associate Justice.
Appeal from a decree in the Supreme Court of the District dismissing appellant's bill to set aside an award by appellee Hoage, *543 as Deputy United States Compensation Commissioner, to Mrs. Agnes Stamps and her children, widow and children of Raymond L. Stamps, deceased. The award was made pursuant to the provisions of the Act of May 17, 1928 (45 Stat. 600; D. C. Code 1929, title 19, §§ 11, 12 [33 USCA § 901 note]), making the Longshoremen's and Harbor Workers' Compensation Act (Act of March 4, 1927, 44 Stat. 1424, 33 USCA §§ 901-950) applicable as a workmen's compensation law in the District.
Early in June, 1928, Stamps, a resident of Georgia, under a contract of employment (apparently oral) made in Alabama, entered the service of Hinkle Brothers, Inc., roofing contractor of Birmingham, Ala., and continued in its employ until his death on December 4, 1929. During the entire period he was actually employed in Alabama about a month. Throughout the course of the rest of the time he was employed in Ohio, Iowa, Louisiana, Tennessee, Pennsylvania, and finally from September 1, 1929, to the date of his death he was employed on roof construction work at Walter Reed Hospital in the District of Columbia, where his injury occurred. It was a condition of his employment that he should serve in other states as well as in Alabama. The Deputy Commissioner found that the employer was subject to the District of Columbia Workmen's Compensation Law and that the liability of the employer thereunder was insured by the United States Casualty Company (appellant).
The Alabama Workmen's Compensation Law (Gen. Acts 1919, pp. 206-239; Ala. Code 1923, c. 287, §§ 7534-7597) provides that "where an accident occurs while the employee is employed elsewhere than in this state, which would entitle him or his dependents to compensation had it happened in this state, the employee or his dependents shall be entitled to compensation under articles 1 and 2 of this chapter if the contract of employment was made in this state, unless otherwise expressly provided by said contract, and such compensation shall be in lieu of any right of action and compensation for injury or death by the laws of any other state." Code, § 7540. The contract of employment between Stamps and Hinkle Brothers, Inc., did not provide otherwise. The law also provides that "the rights and remedies herein granted to an employee shall exclude all other rights and remedies of said employee, his personal representative, parent, dependents or next of kin, at common law, by statute or otherwise on account of said injury, loss of services or death. * * *" Code, § 7546.
Appellant contends that, by reason of the contract of hire entered into in Alabama, it was subject only to the provisions of the Alabama Workmen's Compensation Act.
The District of Columbia Workmen's Compensation Law is compulsory; it provides that "every employer shall be liable for and shall secure the payment to his employees of the compensation payable under sections 7, 8, and 9 [section 7 of the act, 33 USCA § 907, relating to reimbursements for medical services; section 8 of the act, 33 USCA § 908, compensation for disability; section 9 of the act, 33 USCA § 909, compensation for death]." Section 4 (a), Longshoremen's and Harbor Workers' Compensation Act, 33 USCA § 904 (a). Section 15 (b) of the act, 33 USCA § 915 (b), provides that "no agreement by an employee to waive his right to compensation under this Act [chapter] shall be valid." As to the constitutionality of such a provision in state statutes, see Alaska Packers Ass'n v. Industrial Accident Comm. of Cal., 55 S. Ct. 518, 79 L. Ed. ___, decided March 11, 1935. Under the District of Columbia law the liability of an employer "shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law. * * *" Section 5, Longshoremen's and Harbor Workers' Act (33 USCA § 905).
The District law is administered by a Commission. Sections 39, 19 of the act (33 USCA §§ 919,939).
The Alabama Workmen's Compensation Act is elective, although presumed accepted unless the election is affirmatively exercised. Code, § 7547. Records and reports under the act are kept by the state compensation commissioner (Code, § 7589 et seq.); the Chief Justice of the Supreme Court of Alabama is charged with the duty of preparing rules for carrying out the provisions of the act (Code, § 7588); and in cases of dispute, either party "may file a verified complaint in the circuit court of the county which would have jurisdiction of an action between the same parties arising out of tort." Code, § 7578. The law further *544 provides, as we have pointed out above, that the rights and remedies given by it are in lieu of all others for the injury suffered. Sections 7545, 7546, Code.[1]
Provisions of the Alabama law conflict with those of the District of Columbia. To the extent, therefore, that the District is required to give full faith and credit to the conflicting Alabama statute, it must be denied the right to apply in its own courts a statute of the District, lawfully enacted in pursuance of its domestic policy. Alaska Packers Ass'n v. Industrial Accident Comm. of Cal., 55 S. Ct. 518, 523, 79 L. Ed. ___. The real question for decision, then, is whether the full faith and credit clause requires the District of Columbia to give effect to the Alabama statute rather than its own.
The liability under the Workmen's Compensation Act is not for a tort, but is imposed as an incident of the employment relationship, as a cost to be borne by the business enterprise. Bradford Electric Light Co. v. Clapper, 286 U. S. 145, 157, 158, 52 S. Ct. 571, 76 L. Ed. 1026, 82 A. L. R. 696. "Where the policy of one state statute comes into conflict with that of another, the necessity of some accommodation of the conflicting interests of the two states is * * * apparent." Alaska Packers Case, supra. The court in that case pointed out that literal enforcement of the full faith and credit clause (Const. U. S. art. 4, § 1), without regard to the statute of the forum, would lead to the absurd result that, wherever the conflict arises, the statute of each state must be enforced in the courts of the other, but cannot be in its own; that unless by force of that clause a greater effect is to be given to a state statute abroad than the clause permits it to have at home, it is unavoidable that that court determine for itself the extent to which the statute of one state may qualify or deny the rights asserted under the statute of another; but the necessity is not any the less whether a statute and policy of the forum is set up as a defense to a suit brought under the foreign statute or the foreign statute is set up as a defense to a suit or proceedings under the local statute. "In either case, the conflict is the same. In each, rights claimed under one statute prevail only by denying effect to the other. In both the conflict is to be resolved, not by giving automatic effect to the full faith and credit clause, compelling the courts of each state to subordinate its own statutes to those of the other, but by appraising the governmental *545 interests of each jurisdiction, and turning the scale of decision according to their weight."
In that case the Supreme Court of California had upheld an award of compensation by the State Industrial Accident Commission to Juan Palma for injuries received in Alaska. 34 P.(2d) 716. The contract was made in California, the employer doing business in that state, and contemplated work in Alaska during the salmon canning season. The contract recited that the employer had elected to be bound by the Alaska Workmen's Compensation Law and stipulated that the parties should be subject to and bound by the provisions of that statute. The California Workmen's Compensation Act provides that "no contract, rule or regulation shall exempt the employer from liability for the compensation fixed by this Act. * * *" St. Cal. 1931, p. 1950, § 27 (a). In the Supreme Court of the United States it was contended by the employer that the award was invalid under the due process and full faith and credit clauses of the Federal Constitution (Amend. 14; art. 4, § 1).
The first question to be decided, said the court, is whether a state is precluded by the due process clause, "in the special circumstances of this case, from imposing liability for injuries to the employee occurring in Alaska. * * * We assume that in Alaska the employee had he chosen to do so, could have claimed the benefits of the Alaska statute, and that if any effect were there given to the California statute, it would be only by comity or by virtue of the full faith and credit clause." The court then pointed out that Palma was an alien, more than 2,000 miles from his home in Mexico, and that he was employed with 53 others in California; that the contract of employment called for their transportation to Alaska, 3,000 miles distant, for seasonal employment of between two and three months, and at the conclusion of this term they would be returned to California; it was necessary for them to return to California to receive their full wages; that the probability was slight that the injured workmen on their return to California would be able to return to Alaska and successfully prosecute their claims for compensation. Without a remedy in California they would be without remedy, and there was a danger that they might become public charges, both matters of grave concern to the state. "California, therefore, had a legitimate public interest in controlling and regulating this employer-employee relationship in such fashion as to impose a liability upon the employer for an injury suffered by the employee, and in providing a remedy available to him in California. * * * The interest of Alaska is not shown to be superior to that of California. No persuasive reason is shown for denying to California the right to enforce its own laws in its own courts, and in the circumstances the full faith and credit clause does not require that the statutes of Alaska be given that effect."
In Ohio v. Chattanooga Boiler & Tank Co., 289 U. S. 439, 53 S. Ct. 663, 77 L. Ed. 1307, it was ruled that the Tennessee Workmen's Compensation Act, as construed by the Supreme Court of the State,[2] does not preclude recovery from an employer, under the Compensation Act, and in the courts, of another State, on account of an injury suffered there by an employee in the course of his employment, although both employer and employee were citizens of Tennessee, and the employer had its principal place of business in Tennessee and the contract of employment was made there.
In that case, under the agreed facts, the employer never had a regular place of business in Ohio; had not qualified to do business there as a foreign corporation; had not complied with the provisions of the Ohio Workmen's Compensation Law; both the company and Tidwell (the employee) were residents of Tennessee; the employment agreement contemplated that the employee should serve also in other states. His injury occurred in Ohio, where he went to erect a tank which had been fabricated in Tennessee. The Tennessee Act provides: "When an accident happens while the employee is elsewhere than in this state, which would entitle him or his dependents to compensation had it happened in this state, the employee or his dependents shall be entitled to compensation under this act [chapter] if the contract of employment was made in this state, unless otherwise expressly provided by said contract," Tenn. Code 1932, § 6870; and that "the rights and remedies herein granted to an employee subject to this Act [chapter] on account of personal injury or death by accident shall exclude other rights and remedies of such employee, his personal representative, dependents, or next of kin, at common law or otherwise, on account of *546 such injury or death." Tenn. Code 1932, § 6859.
The provisions of the Tennessee Act (sections 6859 and 6870, Tenn. Code) which the Supreme Court of the state ruled not to preclude recovery under the law of another state are substantially the same as the provisions of the Alabama law (section 7540 and section 7546, Ala. Code) relied upon by appellant.[3]
In the present case the contract of employment contemplated performance of work in any state where the business of the employer (roof construction jobs) might require his services. He was not a resident of Alabama and the period of his actual service in that state was almost negligible. He had worked for several months in the District of Columbia, and his wife and children were not living in Alabama. The District therefore, had a legitimate public interest growing out of the employer-employee relationship, not only to impose liability upon the employer for an injury suffered by the employee, but to provide a remedy available to him in the District of Columbia. To require him to go to Alabama for redress might result in serious embarrassment and impose a burden on the District of Columbia; in other words, the employee in case of injury might become a public charge. Moreover, in such a situation as confronts the employee time and expense are important considerations.
In a proceeding in the District against the employer, the conflicting Alabama statute could be invoked by the employer only through comity or by virtue of the full faith and credit clause, and in either event only if "by appraising the governmental interests of each jurisdiction, and turning the scale of decision according to their weight," it be shown that the interests of the District were not superior.
Applying the rule declared in the Alaska Packers Case, we are of the view that there is no substantial reason for denying the District the right to enforce its own law in its own courts, and that in the circumstances the full faith and credit clause does not require that the statutes of Alabama be given effect.
It results that the decree is affirmed.
Affirmed.
NOTES
[1] Note.
District of Columbia Law
Compulsory; "Every employer shall be liable for and shall secure the payment to his employees of the compensation payable" under the act. Section 4 (a), Longshoremen's and Harbor Workers' Compensation Act (33 USCA § 904 (a).
* * * * * * *
Administered by a commission. Sections 39, 19 of the act (33 USCA §§ 919, 939).
* * * * * * *
Rights and liabilities exclusive and in place of all other liability of the employer to the employee, etc. Section 5, of the act (33 USCA § 905).
* * * * * * *
Employee may not waive right to compensation. Section 15 (b) of the act (33 USCA § 915 (b).
* * * * * * *
Total compensation for injury or death shall not exceed $7,500. Section 14 (m) of the act (33 USCA § 914 (m).
Alabama Law
Elective; although presumed accepted unless the election is affirmatively exercised. Ala. Code, § 7547.
* * * * * * *
State compensation commissioner keeps records and reports under the act (Code, § 7589 et seq.); but in cases of dispute either party "may file a verified complaint in the circuit court of the county which would have jurisdiction of an action between the same parties arising out of tort." Code, § 7578.
* * * * * * *
Rights and remedies given are in lieu of all others for the injury suffered. Code, §§ 7545, 7546.
* * * * * * *
Employee may elect not to accept compensation under act. Code § 7547.
* * * * * * *
Total compensation in no case shall exceed $5,000. Code, § 7563.
[2] Tidwell v. Chattanooga Boiler & Tank Co., 163 Tenn. 420, 43 S.W.(2d) 221.
[3] See St. Louis-San Francisco R. Co. v. Carros, 207 Ala. 535, 93 So. 445.
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444 N.E.2d 332 (1983)
Christopher DEWEES, Petitioner-Appellant,
v.
STATE of Indiana, Respondent-Appellee.
No. 1-782A192.
Court of Appeals of Indiana, First District.
January 25, 1983.
Rehearing Denied March 3, 1983.
Susan K. Carpenter, Public Defender of Indiana, Paul Levy, Deputy Public Defender, Indianapolis, for petitioner-appellant.
Linley E. Pearson, Atty. Gen., Kathleen Ransom Radford, Deputy Atty. Gen., Indianapolis, for respondent-appellee.
NEAL, Judge.
STATEMENT OF THE CASE
Defendant-appellant Christopher Dewees (Dewees) appeals the denial of his motion for presentence jail credit.
We affirm.
STATEMENT OF THE FACTS
Dewees was arrested by Henry County authorities and confined to jail on a theft charge on August 12, 1981. An information was filed on August 18, 1981. Dewees made bond on September 1, 1981, and remained free pursuant to the bond until September 3, 1981, when he was rearrested by Henry County authorities on new, unrelated theft and burglary charges. The bond under the earlier charge was never withdrawn, and Dewees remained in the Henry County jail until December 30, 1981, when, upon his plea of guilty pursuant to a written plea bargain, he was given a four-year executed sentence for the earlier theft charge. The later, unrelated burglary and theft charges were dismissed pursuant to the same plea bargain. The trial court credited Dewees with 21 days presentence jail time (apparently from August 12 to September 1).
ISSUE
The sole issue on appeal is whether Dewees is entitled to presentence jail credit against his sentence for theft under the earlier charge, in which he was bonded out, *333 for the time spent in jail because of his rearrest on the later charges, which were dismissed according to the plea bargain disposing of both cases.
DISCUSSION AND DECISION
This particular issue is one of first impression. The applicable statutes, enacted in 1976 and amended in 1977, are Ind. Code 35-50-6-4(a) and 35-50-6-3(a):
"XX-XX-X-X(a) Credit time assignments
... (a) A person imprisoned for a crime or imprisoned awaiting trial or sentencing is initially assigned to Class I."
"XX-XX-X-X(a) Credit time classes
... (a) A person assigned to Class I earns one (1) day of credit time for each day he is imprisoned for a crime or confined awaiting trial or sentencing."
The predecessor of these statutes was Ind. Code 35-8-2.5-1 (1976, Repealed) which provided that credit be given for days of presentence confinement,
"... as a result of the criminal charge for which sentence is imposed or as a result of the conduct on which such charge is based."
Ind. Code 35-8-2.5-2 (1976, Repealed) provided in substance that if the sentences ran concurrently, the credit would be applied to each sentence, and if the sentences ran consecutively the credit would be applied to the aggregate term of the sentences.
Franks v. State, (1975) 262 Ind. 649, 323 N.E.2d 221, decided under the old statute, held that when a defendant is awaiting two trials on different crimes during the same period and is convicted and sentenced separately but concurrently, he is entitled to presentence credit on each sentence. Brown v. State, (1975) 262 Ind. 629, 322 N.E.2d 708, discussed the constitutional and philosophical underpinnings for the old statute. The Supreme Court noted that the statute requiring credit for all presentence confinement attributable to the same offense, in addition to implementing Fifth Amendment double jeopardy protection,
"... responds to potential equal protection problems which would arise if presentence confinement were the result of the inability of a criminal defendant to post bail and thereby secure his release pending trial, resulting in different periods of total confinement being served by two prisoners who had been convicted of the same offense, solely because one had the money to post bail and the other did not. Law and procedures which discriminate against indigent defendants are inconsistent with the promise of equal treatment under law.
* * * * * *
... The law confines the use of pre-trial detention to only one end: namely, that the criminal defendant be present for trial. This limitation is implicit in the concept of bail. Art. 1, § 17, Indiana Constitution." (Citations omitted.)
Id. at 712, 322 N.E.2d 708. Owen v. State, (1979) Ind., 396 N.E.2d 376, followed the reasoning of Franks. Cooley v. State, (1977) 172 Ind. App. 199, 360 N.E.2d 29, held that the old statute applied only to time spent in confinement "as a result of the criminal charge for which sentence is imposed or as a result of the conduct on which such charge is based," and held that time spent on a different office in Illinois could not be so applied to an Indiana sentence. See also, Burnett v. State, (1982) Ind. App., 439 N.E.2d 174; Woodson v. State, (1978) Ind. App., 383 N.E.2d 1096.
In Dolan v. State, (1981) Ind. App., 420 N.E.2d 1364, Judge Staton made an exhaustive analysis of the above cases and the change in the statute. The Dolan court held at 1372 that Owen and Franks established the rule that,
"... a defendant is to be granted presentence time served credit for the time spent imprisoned from the date of arrest for a charge to the date of sentencing for that charge."
Dolan concluded that the new provisions, Ind. Code 35-50-6-4(a) and 3(a) merely continued the rule of Owen and Franks. The Dolan court stated that the omission of the "result of" phraseology found in the repealed provision worked no change.
*334 "The Legislature's omission of the `result of' phraseology creates a second problem. Seemingly, IC XX-XX-X-X has the less restrictive prerequisite for presentence credit. The defendant is credited for time `confined awaiting trial or sentencing.' One possible interpretation of this statute would allow a defendant convicted and sentenced for one offense credit toward that one sentence for time spent `awaiting trial or sentencing' for any offense. Such an interpretation and application of this legislation would be unreasonable and clearly violate the intent of the Legislature. This we will not do. See, Pryor v. State (1973), 260 Ind. 408, 296 N.E.2d 125; Marks v. State (1942), 220 Ind. 9, 40 N.E.2d 108; State v. Moles (1975), 166 Ind. App. 632, 337 N.E.2d 543.
Although IC XX-XX-X-X states a defendant is allowed credit for time `confined awaiting trial or sentencing,' we conclude the Legislature clearly intended the credit to apply only to the sentence for the offense for which the presentence time was served. Any other result would allow credit time for time served on wholly unrelated offenses. Under the criminal justice system, once convicted, the defendant must serve the sentence imposed for the offense committed. Credit time allowed by legislative grace toward a specific sentence clearly must be for time served for the offense for which that specific sentence was imposed.
Thus we offer the following guidelines for determining a defendant's presentence time served credit. The defendant establishes credit when his confinement prior to sentencing results from the offense for which the sentence is imposed. Where a defendant is confined during the same time period for multiple offenses and the offenses are tried separately, the defendant is entitled to a `full credit' for each offense for which he is sentenced. Each `full credit' is determined by the number of days the defendant spent in confinement for the offense for which the defendant is sentenced up to the date of sentencing for that offense. Ordinarily, the presentence time served credit whether the defendant is held on one or multiple offenses is determined by the same method. The credit will be the number of days the defendant spent in confinement from the date of arrest for the offense to the date of sentencing for that same offense."
Id. at 1373. Under the new statute the credit is imposed against the aggregate sentences where consecutive sentences are imposed, and not against each individual sentence. Simms v. State, (1981) Ind. App., 421 N.E.2d 698. Where a defendant is in jail on one charge and a second charge is filed, credit on the second charge begins to accrue at the date of the arrest and not the date of filing. Dolan, supra.
Here, Dewees was clearly not held more than 21 days on the charge for which he was sentenced. He is not entitled to any credit which may have accrued on a separate charge. The rule and the statute are based on the constitutional guarantees involving double jeopardy and equal protection. The end result is that a defendant, because of time spent in jail awaiting trial, will not serve more time than the statutory penalty for the offense, and will not serve more time than a defendant who has the good fortune to have bail money. However, if one defendant has committed other, different, and additional crimes and another has not, the equal protection considerations are not present. Likewise, if a defendant who has committed additional crimes receives additional penalties, double jeopardy considerations are not present.
For the above reasons, this cause is affirmed.
Affirmed.
ROBERTSON, P.J., and RATLIFF, J., concur.
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63 Wis.2d 702 (1974)
218 N.W.2d 288
AFRAM, Respondent,
v.
BALFOUR, MACLAINE, INC., Appellant.
No. 159.
Supreme Court of Wisconsin.
Argued May 6, 1974.
Decided June 4, 1974.
*706 For the appellant there were briefs by William A. Stearns and Quarles, Herriott, Clemons, Teschner & Noelke, all of Milwaukee, and oral argument by Mr. Stearns.
For the respondent there was a brief by Milton Shinken and Shinken & Shinken, all of Milwaukee, and oral argument by Milton Shinken.
HEFFERNAN, J.
Because the trial judge erroneously assigned the burden of proof to the defendant, and in *707 addition failed to make any findings of fact, our review of the order is made more difficult.
The defendant at the outset of the trial on the jurisdictional question objected to the fact that it had the burden, both of persuasion and going forward with the evidence, placed upon it. In effect, it became the task of the defendant to prove a negativethat there was no jurisdiction. It is error to require a defendant objecting to jurisdiction to show the nonapplicability of the Wisconsin long-arm statutes. We have stated as much in Rauser v. Rauser (1970), 47 Wis. 2d 295, 300, 177 N. W. 2d 115, when, in reference to the facts of that case, we said sec. 262.05 (5) (a), Stats., did not provide a basis for jurisdiction because the plaintiff did not establish that defendant had made a promise to perform services.
Moreover, sec. 262.18, Stats., specifies that, in the case of default, the plaintiff has the obligation to prove prima facie the facts supporting jurisdiction. The obligation to make such proof prima facie is upon the party asserting jurisdiction whether the matter is contested or not.
If there were any doubt upon whom the burden ought to fall, the record in the instant case is convincing. The hearing consisted of the defendant attempting to prove the nonexistence of a factual underpinning of jurisdiction. The defendant's order of proof was met by a barrage of objections on the ground of irrelevancy. It was apparent by the end of the hearing that the format adopted was cumbersome and unworkable. The trial judge acknowledged near the end of the proceedings that he had probably erred in assessing the burden of proof. We no doubt could set aside the order on the ground of erroneous procedure which prevented a trial of the real issues. This, however, would penalize the defendant, who raised the proper objection repeatedly.
Perhaps it was because of the error in assigning the burden that the trial judge concluded not to make findings of fact. At any rate, there are none.
*708 Ordinarily, our question on review is to look to the findings and sustain them unless they are contrary to the great weight and clear preponderance of the evidence. In the instant case, since there are no findings, the trial judge's conclusion is not to be given the special deference which this court ordinarily gives to a finder of the facts. What we review is a conclusion of law. Accordingly, that conclusion will be sustained only if it is supported by the preponderance of the evidence, i.e., we are obliged to put ourselves in the shoes of the fact finder and test the plaintiff's assertion of jurisdiction. This court, however, is one of appellate jurisdiction only, and we will resolve factual matters only when they are undisputed or susceptible to proof by judicial notice.
By stating the posture of this case, the small likelihood of the plaintiff prevailing is at once apparent. The plaintiff never assumed the burden that should properly have fallen upon him, and few of the facts upon which a jurisdictional decision could be based are wholly uncontested.
There are some salient facts, however, which appear to be uncontested. The New York brokerage house of Balfour was not the contracting party in the disputed telephone conversation of February 5, 1969. Its only function was to relay the order to Watson, the London broker. The written confirmation of the transaction came in this case, as it routinely did, not from Balfour in New York, but from Watson in London, on a form that specified that the only parties to the agreement were Watson and Afram. Proceeds or deficits were to be paid only by these parties. The record shows that Watson sent checks in pounds sterling directly to Afram until Afram requested as a convenience that the conversion to dollars be made for him by Balfour. Although there was some evidence that in some cases the transaction in London was immediately confirmed by a telephone call from Balfour to Afram, there was no proof of that in this instance.
*709 In short, the proof fails to show any relationship of Balfour to the instant transaction, except as a transmittal agent. We do not here decide the merits, but if, as seems to be the underlying claim of Afram, Balfour erroneously or negligently transmitted the order to London, the claim might well fall into the field of tort and not under sec. 262.05 (5), Stats., Local services, goods or contracts.
Under sec. 262.05 (5), Stats., personal jurisdiction is based upon the relationship of the particular transaction to Wisconsin, rather than upon the defendant's relationship to the state.
The notes of Prof. G. W. Foster, Jr., the reporter for the revision of the jurisdictional statutes, appear in the 1970 Wisconsin Annotations commencing on page 1298.
In referring to the portion of the revision covered by sec. 262.05 (5), Stats., the reporter states:
"In the second situation there is some degree of consensual privity between the plaintiff and defendant with respect to the action brought. In these cases it is not necessary that the defendant have done any act within the state; the basis for personal jurisdiction is rather that the defendant has entered some consensual agreement with the plaintiff which contemplates a substantial contact in Wisconsin. The contemplated contact may include performance of services in the state by either party, the production, use or consumption of goods within the state, the payment of money secured by local property, the payment of money upon the happening of some insured event within the state, or the agreement to insure a resident of the state against the happening of an event which might occur anywhere. See subs. (5), (6), (7) and (10)." (P. 1302)
On page 1307, further discussing sec. 262.05 (5), Stats., Professor Foster states:
"Three jurisdictional facts are required by this subsection: (i) a claim arising out of a bargining arrangement made with the defendant by or on behalf of the plaintiff; (ii) a promise or other act of the defendant, made or performed anywhere, which evidences the bargaining *710 arrangement sued upon; and (iii) a showing that the arrangement itself involves or contemplates some substantial connection with the state."
Sec. 262.05 (5) (a), Stats., requires that there be a promise by the defendant to perform services within the state or to pay for services within this state that are to be performed by the plaintiff. There has been no proof that Balfour was to perform any services within this state, nor any allegation that it would pay for any services of the plaintiff to be performed in this state.
Neither is sec. 262.05 (5) (b), Stats., applicable. Certainly, there is no proof that the defendant Balfour actually performed any services for Afram in the state of Wisconsin or that Afram performed any services for Balfour.
Perhaps the plaintiff could assert facts that would support a finding of jurisdiction under sec. 262.05 (5) (a) or (b), Stats., but it has chosen not to assume the burden of doing so. As we see the undisputed facts, any mutual obligations that arose out of the particular transaction were between Afram and Watson and not Afram and Balfour.
Sec. 262.05 (5) (c), (d), and (e), Stats., are concerned with the promise to deliver or to deliver goods, documents of title, or other things of value, either to the state or from it and by either the plaintiff or defendant. Sec. 262.05 (5) (c), (d), and (e) provide:
"A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 262.06 under any of the following circumstances:
". . .
"(5) LOCAL SERVICES, GOODS OR CONTRACTS. In any action which:
". . .
"(c) Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff's benefit, by the defendant to deliver or receive within this state *711 or to ship from this state goods, documents of title, or other things of value; or
"(d) Relates to goods, documents of title, or other things of value shipped from this state by the plaintiff to the defendant on his order or direction; or
"(e) Relates to goods, documents of title, or other things of value actually received by the plaintiff in this state from the defendant without regard to where delivery to carrier occurred."
As the consequence of the transaction which commenced by Afram's telephone call of February 5, 1969, but one item was delivereda form executed by Watson, stating that it had sold 40,000 Troy ounces of silver for the account of Afram on a seven-month basis.
The evidence shows that this document was sent by Watson directly to Afram and never passed through the hands of Balfour. The contract form specifically limits the contracting parties to Watson and Afram. No one else, including Balfour, is a party to it. It is signed only by a Watson representative.
There has been no proof made by the plaintiff that the contract is negotiable or assignable. In fact, the contrary seems to be the case, for the contract rules appearing on the reverse of the form indicate that trading can be done only through a member of the exchange in London.
It is argued that the mailing of the contract to Afram in Wisconsin confers jurisdiction under sec. 262.05 (5) (c), (d), and (e), Stats., in that the silver contract was a "thing of value." But these statutes require that delivery or promise to deliver be by the defendant. Here no promise, express or implied, has been found by the finder of the fact. The thing that was delivered was by Watson, who is not a party to this litigation. Whether the contract is a "thing of value" is an unresolved question. We cannot hold that, as a matter of law, it is, and the trial court did not find that it was. The document is merely a confirmation of an order to sell, and it was so referred to by Afram. While it may, under certain circumstances, *712 confer valuable rights, the plaintiff merely asserted that conclusion and did not prove it. We are not persuaded, in the absence of proof, that the thing here is a commodity futures contract referred to as a "security" in sec. 551.02 (13) (a); and even if it is, we have not been shown that it ipso facto becomes a "thing of value" in terms of the requirements for conferring jurisdiction over a particular transaction in this state. If the transaction had matured, there would have been a warehouse receipt issued for the silver. A warehouse receipt is, of course, a "thing of value" and ordinarily negotiable.
We note also that had the transaction been fully completed in June according to Afram's plans, the balance due him would be on the London Metal Exchange and the $17,950 he now claims would have been sent by Watson, not Balfour.
Nagel v. Crain Cutter Co. (1971), 50 Wis. 2d 638, 645, 184 N. W. 2d 876, stated that it was not the intention of the legislature that the mere payment of money be enough to confer jurisdiction. Thus, even were it contemplated that Balfour, as an accommodation to Afram, converted pounds sterling to dollars and sent them on to Afram, it would be a mere payment of money, as an accommodation to Afram, not pursuant to a contractual relationship.
We conclude, therefore, that jurisdictional facts have not been proved which would allow this court to decide, as a matter of law, that this case can properly be heard on the merits by a Wisconsin court.
It is also argued that Balfour had a local presence or status in Wisconsin under sec. 262.05 (1) (d), Stats., which allows suit here against a defendant who "[i]s engaged in substantial and not isolated activities within this state . . . ."
There is no finding in this regard by the trial judge, and the evidence is, to a degree at least, disputed. Whether Balfour solicited business here is in sharp dispute. *713 Whether it had established a "referral" system which was the equivalent of a pattern of solicitation was in dispute, and again not resolved by the judge. It appears undisputed that at the time the action was commenced on July 20, 1970, Balfour had no customers in Wisconsin and was engaging in no business activities here. While sec. 262.05 (1) (d), Stats., seems to make the date of the commencement of the action the benchmark for the determination of "substantial . . . activities," we do not rely only on that date, conclusive as it appears to be if the statute is given its literal meaning. Rather, we find that the facts in respect to such activities are in dispute, and the trial judge did not resolve the question. Again, this omission in the record appears to be the result of the plaintiff's failure to assume and discharge his burden of proof.
While we have adopted a methodology of appraising jurisdictional contacts (Zerbel v. H. L. Federman & Co. (1970), 48 Wis. 2d 54, 65, 179 N. W. 2d 872, and Nagel v. Crain Cutter Co. (1971), 50 Wis. 2d 638, 648, 184 N. W. 2d 876), such analysis is unnecessary here. The standards set by sec. 262.05, Stats., if met, prima facie meet the constitutional demands of Pennoyer v. Neff (1877), 95 U. S. 714, 24 L. Ed. 565, and International Shoe Co. v. Washington (1945), 326 U. S. 310, 66 Sup. Ct. 154, 90 L. Ed. 95. If the transaction has the necessary qualitative relationship to the forum as spelled out in the various subsections of sec. 262.05, the constitutional objection is prima facie at least surmounted. What is listed are situations or transactions in which it is not unfair or a denial of due process to extend Wisconsin's long arm of jurisdiction to a nonresident defendant.
An analysis of the evidence shows that plaintiff failed to prove that jurisdiction can properly be asserted under either sec. 262.05 (1) or sec. 262.05 (5), Stats. To assume jurisdiction under that state of the record would *714 clearly offend traditional notions of fair play and substantial justice.
Plaintiff also asserts that the defendant waived any objection to jurisdiction when it adversely examined the plaintiff prior to the hearing on the jurisdictional question. The examination went beyond the exploration of jurisdictional facts and also probed the merits of the lawsuit.
The situation is ruled by the rationale of Punke v. Brody (1962), 17 Wis. 2d 9, 16, 115 N. W. 2d 601, wherein we said:
"Nothing in these subsections requires a holding, and such holding would be inconsistent with their purpose, that after a defendant has joined in his answer his objection to jurisdiction and his defenses on the merits, any subsequent appearance by him to prepare for or to go to trial on the merits constitutes a waiver of his objection to jurisdiction over his person."
The objection to jurisdiction was not waived.
By the Court.Order reversed and cause remanded with directions to dismiss the plaintiff's complaint.
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505 S.W.2d 934 (1974)
CITY OF BEAUMONT et al., Appellants,
v.
RANGER INSURANCE COMPANY, Appellee.
No. 7537.
Court of Civil Appeals of Texas, Beaumont.
January 24, 1974.
Rehearing Denied February 14, 1974.
Kenneth Wall, City Atty., Beaumont, for appellants.
Benckenstein & Norvell, Beaumont, for appellee.
STEPHENSON, Justice.
This is an action brought by Ranger Insurance Company (hereinafter called Ranger) seeking a declaratory judgment that it is not required to defend the City of Beaumont (hereinafter called City) or to indemnify City. Both parties filed motions for summary judgment, and the trial court granted Ranger's motion and denied City's motion.
The record before us shows the City, as owner and lessor, leased to Lee Sheffield (Beaumont Aviation) the Beaumont Municipal Airport for a term of five years, beginning September 1, 1966. Such lease contained the following provision:
"Lessee shall indemnify, save and keep harmless the Owner from all liabilities, claims, damages, judgments, injuries, costs and expenses which may in any manner come against Owner in consequence of or result from any operations that Lessee may conduct or carry on on the leased premises, and shall carry public indemnity and property damage insurance on the premises above described in the sum of $100,000 for each person and $300,000 for each accident, and property damage liability in the sum of $100,000 for each accident, the cost of said policies to be borne by said Lessee, but said *935 policies must be written by companies acceptable to Owner and shall cover Owner as well as Lessee, and said policies shall be filed with the City Clerk of the City of Beaumont."
November 11, 1968, Ranger issued its general liability insurance policy made the basis of this suit. Such policy contained this provision:
"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
Coverage A. bodily injury or
Coverage B. property damage
to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental thereto, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent ..."
The policy defines the term "insured" as:
"[A]ny person or organization qualifying as an insured in the `Persons Insured' provisions of the applicable insurance coverage. The insurance afforded applies separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the company's liability."
The policy also contained the following endorsement:
"In consideration of the premium charged it is hereby understood and agreed that such insurance as is afforded by this policy under coverages A & B shall also apply with respect to the City of Beaumont, Texas, its elective and appointed officials and salaried employees of the City of Beaumont, Texas as additional insureds but the inclusion of additional interest or interests shall not operate to increase the limits of the companies liability."
February 8, 1973, Robert Ronald Flippin brought suit against City alleging that on or about August 8, 1969, he was injured on the premises of Beaumont Municipal Airport while employed by Sheffield. That lawsuit will hereinafter be referred to as the Flippin Case. City called on Ranger to defend that case, and Ranger brought this suit pending before this court.
Both parties agree that there are no factual issues and that the questions before this court are points of law. Ranger's pleadings in the trial court set forth its seven legal contentions, most of which are based upon the argument that the policy in question is an indemnity policy. At the outset that contention is rejected. We hold that such policy is a general liability insurance policy and that City is a named insured.
The most serious problem in this case is the determination as to whether the petition in the Flippin Case alleges a cause of action against City which occurred during the policy coverage. The law is now well settled in this state that the duty of an insurer to defend is determined from the allegations of the petition in the suit against the insured. Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W. 2d 22 (Tex.1965).
A copy of the petition filed in the Flippin Case is made a part of the summary judgment proof before us. The material allegations as to liability are contained in paragraphs 2 and 3 of such petition, and read as follows:
"2.
"On or about August 8, 1969, in the late afternoon, the minor Plaintiff, Robert Ronald Flippin, was working at the Municipal Airport located in Beaumont, Jefferson County, Texas. The Defendant, The City of Beaumont, was the owner of the Municipal Airport which *936 the Defendant leased to the employer of said minor Plaintiff. On this occasion the minor Plaintiff was disassembling a rotating beacon which was mounted on a tower located on top of the main office building of the Municipal Airport. The Defendant, The City of Beaumont, acting through its agents, servants and employees, had secured the tower to the top of the building by bolting it to I-beams located on top of the building. On the occasion in question, while the minor Plaintiff was on the tower disassembling the beacon, the tower jerked from its mounting due to the rusting through of the bolts, tower and I-beams, falling on its side with part of the tower hanging over the edge of the building. The minor Plaintiff was thrown from his position on on the tower to the ground, more than two stories below, a distance of approximately 40 or 50 feet. As a result of the fall, the minor Plaintiff, Robert Ronald Flippin, sustained serious and permanently incapacitating injuries.
"3.
"When the Defendant, The City of Beaumont, acting through its agents, servants and employees, mounted the tower on top of the Municipal Airport building, the tower was secured in such a manner as to greatly hasten the rusting out of the tower, bolts, and I-beams. The manner in which the tower was mounted was unreasonable, as that term is understood in law, under the conditions and circumstances then prevailing.
"As owner of the leased premises, The City of Beaumont, when in possession of the premises prior to leasing to the minor Plaintiff's employer, failed to maintain said tower and its mounting in a reasonably safe condition. When the tower became defective and dangerous, not suitable or safe for a person to be on it in order to maintain the beacon thereon, the Defendant, The City of Beaumont, failed to replace the tower, bolts, and I-beam mounting and remedy the defective and dangerous condition existing due to the rusting out of said tower, bolts and I-beams.
"When the Defendant, The City of Beaumont, gave the minor Plaintiff's employer possession of the premises as lessee, the defects in the tower, bolts and I-beams which caused the fall and resulting injuries to said minor Plaintiff, were then in existence and known to the Defendant, The City of Beaumont. The Defendant failed to warn said minor Plaintiff's employer that the manner in which the tower was mounted was likely to hasten the rusting process, the Defendant failed to disclose the long length of time that the tower had been mounted in this manner, and failed to disclose the existence of the aforementioned defects and dangerous conditions known only to the Defendant, its agents, servants and employees. For all these reasons, the Defendant is answerable under the law for the injuries and damages sustained by the Plaintiff."
We must now analyze such petition to ascertain whether or not it states a cause of action within the policy coverage. The allegations as to negligence, in essence, are as follows:
1. City mounted the tower by bolting it to I-beams, which greatly hastened the rusting out of the tower, bolts, and I-beams and that was unreasonable.
2. Prior to leasing, City failed to maintain the tower in a reasonably safe condition.
3. City failed to replace the tower, bolts, and I-beam mounting and remedy the defective and dangerous condition due to the rusting out of the tower, bolts, and I-beams.
4. When City gave Sheffield possession, the defects in the tower, bolts, and I-beams were in existence and known to City, and City failed to warn Sheffield of the manner in which the tower had been mounted.
*937 5. City failed to disclose the long length of time the tower had been mounted in such manner.
6. City failed to disclose the existence of the defects and dangerous condition.
Under the policy in question, Ranger has the duty to defend and also agreed to pay all sums the insured becomes obligated to pay as damages for bodily injury caused by an occurrence. "Occurrence" is defined in the policy as an accident which results during the policy period, which was neither expected nor intended from the standpoint of the insured. The policy provides that the insurance coverage for bodily injury applies to an occurrence arising out of the ownership, maintenance, or use of the insured premises.
The Supreme Court of this state has clearly stated the rule we must follow in analyzing the petition and the insurance policy in order to determine whether or not there is coverage. We find this statement in the Heyden case, supra, at 26:
"While we have said above that the court is limited to a consideration of the allegations and the insurance policy in determining an insurer's duty to defend, we wish to point out that in considering such allegations a liberal interpretation of their meaning should be indulged. It is stated in the comprehensive annotation in 50 A.L.R.2d 458, at 504:
"`Where the complaint does not state facts sufficient to clearly bring the case within or without the coverage, the general rule is that the insurer is obligated to defend if there is, potentially, a case under the complaint within the coverage of the policy. Stated differently, in case of doubt as to whether or not the allegations of a complaint against the insured state a cause of action within the coverage of a liability policy sufficient to compel the insurer to defend the action, such doubt will be resolved in insured's favor.'"
Another case writing on this point is Sewer Constructors, Inc. v. Employers Casualty Co., 388 S.W.2d 20, 24 (Tex.Civ. App., Houston, 1965, error ref., n.r.e.), in which this statement is made:
"We think if there are allegations from which the reasonable reader would conclude that a continuing and unabandoned operation is being asserted there is an affirmative assertion of a claim within the coverage. To state it otherwise, if the allegations would admit of the introduction of evidence that would show a continuing operation there is an affirmative allegation of coverage. In case of doubt the pleading is to be construed most strongly against the insurer."
Also, in Maryland Casualty Company v. Mitchell, 322 F.2d 37, 39 (5th Cir. 1963) (footnotes omitted), this statement is made:
"The insurer is under a legal duty to defend if, and only if, the petition alleges facts constituting a cause of action within the coverage of the policy. That duty arises even though the petition may allege, in addition to the cause of action covered by the policy, facts constituting a cause of action not covered by the policy."
We have come to the conclusion that this case is controlled by the law restated in Flynn v. Pan American Hotel Co., 143 Tex. 219, 183 S.W.2d 446, 448 (1944), as follows:
"The rule in this state and in the other states, or most of them, is that when there is no agreement by the landlord to repair the premises and he is not guilty of fraud or concealment by failing to disclose defects existing when the lease is made, he is not liable to the tenant, or to employees or others entering under the tenant, for injuries caused by such defects."
See also, Morton v. Burton-Lingo Co., 136 Tex. 263, 150 S.W.2d 239 (1941); Crocker v. Clark-McDavitt Properties, Inc., 365 S. *938 S.W.2d 21, 23 (Tex.Civ.App., San Antonio, 1963, error ref., n.r.e.), in which this statement is made:
"The owner of leased premises is liable to the public or to third persons for injuries resulting from a defective structure on the premises, when the defect existed at the time the lease was made."
The Flippin petition makes no allegations that City agreed to repair the leased premises and shows specifically that Flippin was on the premises as the tenant's employee. However, the allegations of the Flippen petition show that the defect complained of was created by City and that City failed to disclose to its tenant the existence of such defect. Flippin's cause of action against City arose when he fell and was injured. That was an "occurrence" as that term is defined in the insurance policy. It resulted during the policy period and arose out of the ownership of the leased premises. Under Flynn, supra, that petition states a cause of action against City and Ranger is obligated to defend.
Reversed and remanded.
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204 F.Supp. 65 (1962)
Robert L. CORBIN, Plaintiff,
v.
Abraham RIBICOFF, Secretary of Health, Education and Welfare, Defendant.
Civ. A. No. 3046.
United States District Court W. D. South Carolina, Greenwood Division.
May 1, 1962.
W. H. Nicholson, Jr., Greenwood, S. C., for plaintiff.
John C. Williams, U. S. Atty., Charles Porter, Asst. U. S. Atty., Greenville, S. C., for defendant.
WYCHE, Chief Judge.
This is an action asking the District Court to review a final decision of the Secretary of Health, Education and Welfare, in accordance with 205(g) of the Social Security Act (42 U.S.C.A. § 405 (g). The decision of the Secretary denied the plaintiff the period of disability and disability insurance benefits for which he applied.
Plaintiff in this case has a fourth grade education. He started to work in the textile mills when he was fourteen years of age and worked at various plants until he suffered a heart attack on July 5, 1958, at the age of forty-seven. After the heart attack his family physician advised him not to do any strenuous work but stated that he could "only do sedentary or clerical work". Plaintiff went back to the cotton mill where he had worked and tried to obtain a job as a watchman but was refused employment. The only other *66 medical evidence in the record is by a doctor, an internist, who was requested by the defendant to make a cardiac evaluation of the plaintiff. He examined the plaintiff and made the following finding: "1. Arteriosclerotic heart disease, compensated, functional Class II. 2. Recent myocardial infarction. 3. Angina pectoris, mild."
Since 1958, plaintiff and his wife have lived with their son, who has been their principal support; plaintiff cannot walk over a block without stopping; has to climb steps with his hands; has dizzy spells; when he tried to work around the house and dig in the yard he found that he could not, and had an attack of temporary blindness; he drives an automobile only for short distances; he has considerable trouble with shortness of breath, sleeps without a pillow at night. His wife testified that he has to go to bed if he does "the least thing". He sees his doctor every three to five weeks.
The District Court is bound by the decision of the Examiner only if his findings and inferences were based upon substantial evidence and the law was properly applied by him.
It is well settled, needing no citation here, that findings of law are not binding on this Court, and where the law has been misapplied, this Court may properly correct the errors below.
The statute must be administered with much informality, and satisfaction of claimant's statutory burden is to be judged in a practical way. Butler v. Flemming, (C.A.5) 288 F.2d 591 (1961).
The four elements of proof to be considered in making a finding of plaintiff's ability or inability to engage in any substantial gainful activity, as laid down in the recent case of Underwood v. Ribicoff (C.A.4) 298 F.2d 850 (1962), are as follows: "(1) the objective medical facts, which are the clinical findings of treating or examining physicians divorced from their expert judgments or opinion as to the significance of these clinical findings, (2) the diagnoses, and expert medical opinions of the treating and examining physicians on subsidiary questions of fact, (3) the subjective evidence of pain and disability testified to by Claimant, and corroborated by his wife and his neighbors, (4) Claimant's educational background, work history, and present age."
It is undisputed in this case that the plaintiff has a heart condition which disqualifies him from strenuous work, the kind of work to which he had been accustomed, as shown by the medical records and the subjective evidence of same as testified to by plaintiff and corroborated by his wife. It is undisputed that plaintiff has a limited educational background, and a record of steady employment up until the time of his heart attack in 1958. Plaintiff was only forty-seven years of age when he had the heart attack but a heart condition can be just as disabling to a young person as to an older person, especially to a person with a fourth grade education whose work history shows that his training and experience equip him only for work which involves a considerable amount of physical exertion. He is dependent for his living upon the ability of his body to function at near capacity. The plaintiff has no educational background that would prepare him for a desk job, nor for any other type of sedentary employment that might reasonably be available to him.
In construing the Act the Court of Appeals of the Fifth Circuit in the case of Butler v. Flemming, (C.A.5) 288 F.2d 591 (1961), (cited as authority in the case of Underwood v. Ribicoff, (C.A.4), 298 F.2d 850 (1962)), decided that the test of eligibility for disability freeze under the Social Security Act must include a consideration of claimant's background, experience, training, education, physical and mental capabilities, kinds and types of employment formerly followed and no longer open to him, the absence of any indication of any specific work less exacting within his residual competency and reasonably available as a prospective source of employment in the general area where he lives.
*67 Chief Judge Biggs of the Third Circuit, designated to sit in the District Court in the case of Klimaszewski v. Flemming, (D.C.E.D.Pa., 1959) 176 F. Supp. 927, 932, stated that: "The word `any' must be read in the light of what is reasonably possible, not of what is conceivable. The statute must be given a reasonable interpretation. It is a remedial statute and must be construed liberally. It was not the intention of Congress to impose a test so severe as that required by the Secretary and to exact as a condition precedent to the maintenance of a claim the elimination of every possibility of gainful employment."
The Court of Appeals of the Eighth Circuit in the cases of Ribicoff v. Hughes, 295 F.2d 833 (C.A.8, 1961), and Kohrs v. Flemming, 272 F.2d 731 (C.A.8, 1959), followed the interpretation of the Act by Chief Judge Biggs of the Third Circuit.
The Court of Appeals of the Second Circuit in the case of Kerner v. Flemming, 2 Cir., 283 F.2d 916, 921, held, after reviewing the record, that there was no substantial evidence that would enable the Secretary to make any reasoned determination whether applicant was "unable to engage in substantial and gainful activity" and said: "Such a determination requires resolution of two issues what can applicant do, and what employment opportunities are there for a man who can do only what applicant can do? Mere theoretical ability to engage in substantial gainful activity is not enough if no reasonable opportunity for this is available."
In construing the Act, the Sixth Circuit, in an opinion by the late able and distinguished Circuit Judge John D. Martin, Sr., in the case of Roberson v. Ribicoff (C.A.6) 299 F.2d 761 (1962), pointed out that the Sixth Circuit had followed the standards laid down in the case of Kerner v. Flemming, supra. See, Hall v. Fleming, 239 F.2d 290 (C.A.6, 1961); King v. Fleming, 289 F.2d 808 (C.A.6, 1961).
The Seventh Circuit in the case of Teeter v. Flemming, 270 F.2d 871 (C.A. 7, 1959) said: "The Social Security statute does not require applicant to be completely helpless, but to be unable to engage in substantial and gainful activity (commensurate with his age, educational attainments, training experience, mental and physical capacities) by reason of a medically determinable physical or mental impairment."
As I demonstrated in the case of Snelling v. Ribicoff, (D.C.E.D.S.C.) 198 F.Supp. 432 (1961), the vast majority of the United States District Courts have also agreed that the foregoing tests and standards should be applied in the interpretation of the Social Security Act.
In my opinion the administrative decision in this case does not measure up to the adopted standards and tests of the Court of Appeals of the Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Circuits, nor is it in agreement with the tests and standards prescribed by the great majority of the United States District Courts.
My review of the entire record convinces me that the plaintiff's earning capacity and capabilities in engaging in any substantial gainful activity are negligible if not nonexistent.
Under the foregoing authorities, I must conclude that the findings of the Examiner as to the establishment of a period of disability and disability insurance benefits are not supported by substantial evidence on the record considered as a whole and under the appeal given by 42 U.S.C.A. § 405(g), the conclusions of the Secretary that the plaintiff was not entitled to the period of disability and disability insurance benefits was clearly erroneous, was incorrect, and must, therefore, be reversed.
It is, therefore, ORDERED, That the decision of the Secretary in this case be and the same is hereby reversed, with direction that judgment be entered for the plaintiff.
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98 F.Supp. 88 (1951)
DE VITO
v.
UNITED AIR LINES, Inc., et al.
Civ. No. 9555.
United States District Court E. D. New York.
May 24, 1951.
*89 *90 *91 Gair & Gair, New York City, for plaintiff.
Haight, Deming, Gardner, Poor & Havens, New York City, William J. Junkerman, David L. Corbin, and Douglas B. Bowring, all of New York City, of counsel, for defendant United Air Lines, Inc.
Mendes & Mount, New York City, for defendant Douglas Aircraft Co., Inc.
GALSTON, District Judge.
Following a verdict of $300,000 in favor of the plaintiff against both defendants, and a verdict in favor of Douglas on the cross-claim of United against Douglas, motions have been made in respect to the verdicts by both Douglas and United.
The Douglas Aircraft Company, Inc., throughout this opinion will be referred to as Douglas, and United Air Lines, Inc. will be referred to as United.
The motions of Douglas insofar as the plaintiff's claim is concerned, are for a directed verdict, and in the alternative, for a new trial.
The motions of United are to set aside the verdict for plaintiff against the defendant United, and the verdict in favor of Douglas on United's cross-claim.
These motions will be disposed of in this one opinion.
The plaintiff as widow and administratrix in this action, sought to recover damages for the death of her husband, Anthony DeVito, pursuant to a statute of Pennsylvania, which provides: "Whenever death shall be occasioned by unlawful violence or negligence, and no suit for damages be brought by the party injured during his or her lifetime the widow of any such deceased * * * may maintain an action for and recover damages for the death thus occasioned." April 15, 1851, P.L. 669, sec. 19, 12 P.S.Pa. § 1601.
On June 17, 1948 Anthony DeVito, resident of Brooklyn, New York, was a passenger on board a United DC-6 commercial air liner, designated NC 37506. On a scheduled daylight flight from Chicago to New York, under prevailing good weather conditions, the plane crashed into a hillside near Mt. Carmel, Pennsylvania. All thirty-nine passengers and four crew members were killed in the crash.
It is the claim of the plaintiff that the catastrophe resulted from the negligence of the defendants. United was the carrier and was in control of the operation of the plane. Douglas was the manufacturer of the plane.
The cross-claim of United against Douglas is on two counts: (1) an alleged breach of contract, and (2) a claim that if the jury found a verdict for plaintiff against United, then it should hold Douglas responsible for any act of negligence of United.
With these multiple claims, and a denial of all material allegations relating to negligence and to breach of contract, the parties determined on a course of examination before trial of many witnesses, and the taking of many depositions. And at the trial, the testimony of some forty-odd witnesses in addition was taken, and hundreds of exhibits offered; so that we have a record of over thirty-three hundred typewritten pages.
*92 At the outset it may be said that it was difficult for the plaintiff, and for the defendant United, to explore the evidentiary grounds. Trial counsel for Douglas certainly did not facilitate them during the taking of the pre-trial depositions; and the trial itself was prolonged to a matter of seven weeks, due in marked degree to prolix examination and cross-examination by trial counsel for Douglas.
The plane which crashed was sold by Douglas to United on or about March 25, 1947, pursuant to the terms of a purchase agreement which had been entered into between the parties covering that plane and nineteen similar airplanes. United paid Douglas the purchase price, amounting in the aggregate to more than thirteen million dollars.
On November 11, 1947, all Douglas DC-6's which were then in operation, including NC 37506, were grounded because of fires of undetermined origin that had occurred on other DC-6's at Bryce Canyon, Utah, on October 24, 1947, and at Gallup, New Mexico, on November 11, 1947. Shortly thereafter, a Modification Board was set up, in November and early December 1947, for the purpose of considering recommendations concerning changes in design of the DC-6, in order to avoid a recurrence of the fires at Bryce Canyon and Gallup. Among those who participated in the work of the Modification Board were representatives of Douglas, Civil Aeronautics Board, Civil Aeronautics Administration, United Air Lines, American Air Lines, Pan American-Grace, and National Air Lines. The Board was presided over by Arthur Raymond, a vice-president of Douglas.
In a letter from Mr. F. W. Conant, a vice-president of Douglas, written November 28, 1947, to Mr. W. A. Patterson, president of United, it was stated that it was the desire of Douglas to make effective such changes as were determined by this board and approved by the Civil Aeronautics Administration. Then, following the meetings of the Modification Board in November and December 1947, Douglas conducted a number of flight tests, in January and February 1948. Douglas then determined the final configuration of the modified DC-6 planes to control or regulate the fire-fighting apparatus, and the ventilation of underfloor baggage compartments, in order, inter alia, to avoid hazardous concentration of carbon-dioxide gas from entering into the habitable compartments of the plane when carbon dioxide was discharged. Thereafter plans, blue-prints and special equipment required in making the changes were furnished by Douglas to United. The actual physical work in meeting the Douglas plans and specifications was performed by United, but at Douglas' expense. Personnel were sent by Douglas to United's repair station to provide technical advice and supervision, and to assist whenever necessary in the incorporation of the changes in the airplanes. During this period numerous "service bulletins" were furnished by Douglas to United, covering all phases of the modification program. Each of these bulletins covered one or more specific design changes, and explained the reason for the change. On the completion of the modification changes, airplane NC 37506 was authorized by the Civil Aeronautics Administration to resume operation, and accordingly was put back into service of United on June 3, 1948.
It may be well to note now that evidence introduced by Douglas, as well as by the plaintiff, and which was not disputed by United, disclosed that carbon dioxide had been discharged by the pilots of NC 37506 into the forward baggage compartment shortly before the fatal crash. This fact was one of the circumstances which would seem to have warranted the jury in inferring that concentrations of carbon dioxide entered the cockpit and rendered the pilot and co-pilot incapable of proper control of the plane.
In support of its motions, Douglas contends that it fully satisfied its duty to warn United of any danger in the operation of the airplane by including in the emergency procedure a warning contained in its operation and maintenance manuals that failure fully to open the emergency pressure relief valves would result in excessive amounts of carbon dioxide entering the cockpit.
The duty to instruct the users of its DC-6 as to inherent dangers and precautions *93 to meet them rested on Douglas. Douglas knew, and therefore should be charged with the knowledge, that during the flight tests conducted by Douglas in January and February 1948, the test pilots were adversely affected by carbon dioxide entering the cockpit, even when the manually operated cabin pressure relief valve was open, and even though the pilots were wearing oxygen masks of the re-breather type. This evidence weighs heavily against Douglas. Pilot Peyton, Douglas's chief test pilot, told Dr. C. S. White of the Lovelace Clinic that he was "almost completely out" in one of the test flights. Londelius, another test engineer of Douglas, who was present in the cockpit on Flight A-5, as well as on other flight tests, told Dr. White that Peyton, the pilot, "just sat there", and the pilot seemed to be excited and was staring straight ahead.
This condition was so serious that Douglas realized that it was faced with a new problem, a problem not theretofore encountered in the operation of DC-6 airplanes specifically, nor in commercial aviation generally. Mr. Raymond said: "I would say in the discussions of the Modification Board there was a general awareness of the fact that too high a concentration of CO2 might be expected to cause a starvation of oxygen in other words, a partial suffocation but at that time all of the discussions before the Board indicated to me that the people present thought of CO2 as a completely harmless material, except as it might starve out oxygen. After all, it is something that we breathe out every time we breathe."
Nevertheless, the results of the flight tests were regarded as so disturbing as to cause Douglas to retain the Lovelace Clinic Aero-Medical Specialists to conduct a survey. The report of Dr. White, the representative sent by Lovelace Clinic to the Douglas plant to conduct the investigation, was submitted to Douglas in February of 1948. As will presently appear, the jury could very well have reached the conclusion that the Mt. Carmel catastrophe stemmed from the "active" negligence of Douglas in respect to this report. The report raises a question whether the flight tests conducted by Douglas and which resulted in the final configuration as to emergency fire-fighting procedures, especially the procedure for ventilating the airplanes after the discharge of the carbon dioxide, adequately met the problem of hazard of carbon dioxide concentration. The report, among other matters, recited:
"3. Carbon Dioxide gas is toxic to humans because it produces anoxia, a gaseous acidosis of the blood and irritation of the eyes and respiratory passages. A relatively severe acidosis may produce rapid failure of the normal healthy heart.
"7. There is a need for more research on the toxic effects of inspiring CO2 gas both at ground level and altitude.
"9. A number of circumstances occurred during Flight Test of Fire Emergency procedures in DC-6 aircraft which reflected the lack of thorough medical indoctrination in Flight Test procedures.
"11. Rapidly fatal results may follow exposure to high CO2 concentrations. Personnel should not enter areas or compartments into which CO2 has been discharged until adequate ventilation has ensued and then only with caution. If it is necessary to enter a CO2 rich atmosphere, a closed respiratory system must be insured and the eyes must be adequately protected.
"12. The technique used for gas sampling aboard the DC-6 on test flights, while practical for collecting gas from the compartments below deck, was considered inadequate for use in habited areas of the aircraft. For physiological purposes accuracy is essential, and Haldane (29) years ago pointed out the error in assuming complete air exchange within hollow tubes such as gas pipettes when air is led in through a glass entry tube and the pipette is vented by a similar tube at the other end. Displacement or vacuum type sampling is a more acceptable and accurate method from the biochemical standpoint.
"15. Variations in CO2 expansion when the gas is released into a `cold' and a `hot' below deck area can be expected. Cockpit and cabin CO2 concentrations may vary under the two conditions depending on the pressure differential which exists across the *94 deck. Until this point is checked in flight, the CO2 concentrations obtained during fire emergency procedures to date, are open to some question."
Dr. White made the following recommendations:
"1. Maximal allowable CO2 concentrations for habited compartments in aircraft be established in commercial aviation and that the relevant material in this report be made available to the CAA, the aircraft industry, the Airline Medical Directors' Association, and the A T A as an aid in establishing and accepting industry-wide regulations in this regard.
"2. Research in the toxic effects of inspiring CO2 gas at altitude be stimulated by whatever means is necessary to insure obtaining adequate data.
"3. Engineering, technical and flight test personnel, along with the medical department of the Douglas Aircraft Company, be made cognizant of the data contained herein.
"4. Appropriate information pertaining to CO2 toxicity, symptoms, precautionary measures and flight test procedures for initial testing of CO2 gear and smoke evacuation procedures be disseminated to all airline companies who use DC-6 equipment, providing this is consistent with the policy of the Douglas Company.
"5. The methods used for arriving at CO2 gas concentrations in the cabin and cockpit during flight be improved to conform with accepted physiological procedures.
"8. Flight test of fire emergency procedure for the DC-6 be continued to: 1) more accurately determine peak CO2 concentrations in the cockpit and cabin using refining methods; 2) determine the effect on cabin and cockpit contamination, if any, of firing CO2 into a `hot' rather than a `cold' below deck compartment, especially if cabin pressure is stabalized (sic) in the attempt to prolong higher CO2 concentrations in the compartments beneath the floor; * * *."
There is no evidence to rebut or dispute the accuracy or validity of Dr. White's report.
It is clear that Dr. White's report was never transmitted to United before the accident. The most that Douglas can claim in this regard is that Donald Douglas, Jr. testified that he had discussed the report with Christenson, United's flight safety engineer, before the Mt. Carmel accident. Christenson denies ever having heard of the Dr. White report from Douglas or any other official or employee, or from anybody else, before June 17, 1948, the date of the crash. But taking the Douglas testimony at face value, it would appear that his discussion was limited to time concentration values. The jury might well have questioned whether this so-called "discussion" constituted knowledge on United's part of the complete contents of Dr. White's report. Curious too in this connection is the testimony of Brush, chief pilot of Douglas. Referring to the White report he said: "I read most of the report, the parts which were most pertinent to what we were doing. I probably did not spend more than, oh, an hour on the report; a report of that nature cannot be properly evaluated in an hour."
On this vital subject relating to the hazard of undue concentration of CO2 in cabin or cockpit quarters of the plane, it is of interest to note that key personnel in the Douglas organization had no knowledge of either the flight tests or of the White report before June 17, 1948. For example, Mr. Raymond, the Douglas vice president who has been referred to before, testified that no results of any tests involving the discharge of carbon dioxide in the fuselage of the airplane were called to his attention during the Modification program, and as to the White report, he said: "I didn't even know about it."
Dr. White had advised, in his report, the dissemination of the information contained therein to all users of the DC-6, as well as to the Civil Aeronautics Administration. On the original letter transmitting the report from White to Douglas, and at the time it was received by Douglas, a chief test pilot of Douglas wrote on the face: "Do not discuss with CAA" and transmitted it to two other pilots, Foulds and Peyton, Peyton being one of those pilots who had had the *95 disturbing experience with CO2 in the January flight tests. And as the attorney for the plaintiff pointed out in his argument against the motion of Douglas to dismiss, at the close of the plaintiff's case, "if it were not for the fortunate circumstance that photostatic copies had been made of that original letter, before the erasure, which is in evidence, so that a comparison of the photostat and the original shows a complete erasure from the original, but shows the words had been there, `Do not discuss with CAA,' shows that on the photostat, and it was finally conceded, after many many pages of testimony, that that is what the words were because they were not too legible at the time the photostatic copy was seen, but those were the words."
In order to avoid compelling inferences that here resided inescapable proof of negligence that contributed to the happening of the tragic crash, Douglas contends that the Proposed Civil Aeronautics Administration Safety Regulation Release, submitted in 1947 (Douglas Ex. G), and the United flight bulletin of June 16, 1948 (which was not released by United until after the Mt. Carmel accident) indicate that United knew of the toxic nature of carbon dioxide gas and the danger which might arise from excessive amounts thereof entering the cockpit. But the Proposed Safety Release, so far as the evidence discloses, was never actually adopted by the Civil Aeronautics Administration. The Release states that from the standpoint of toxicity, "CO2 has a definite advantage over other (fire extinguishing) agents in that relatively higher concentrations (10% by volume) can be reached without seriously affecting personnel."
In the letter of A. W. Dallas, Director of Engineering, Air Transport Association of America, dated November 21, 1947, containing comments of the Proposed Safety Regulation Release as requested by the Civil Aeronautics Administration, the following is stated:
"Page 2 General Considerations
"The attempt under these general considerations has been to outline for information purposes the various factors connected with the different fire extinguishing agents. We believe that such explanations are very helpful to the industry but in this particular case we feel that the information given is so limited that it becomes misleading to the reader. * * *"
Moreover, Dr. White's report states that the safe limit is a 5% concentration for not more than five minutes at sea level, and 4 volumes percent for not more than 15 minutes.
The Proposed Safety Release discusses CO2 toxicity in general terms and is in no way specifically related to the emergency procedure established for the modified DC-6 to prevent hazardous concentrations of carbon dioxide from endangering flight personnel or passengers. Finally, although this document was known to Douglas as well as to United, Douglas' executives and key personnel stated, in testifying in this case, that the carbon dioxide hazards disclosed by the flight tests presented a completely new problem. Testimony given by Mr. Raymond has already been referred to. Mr. Donald Douglas, Jr., Director of Contract Requirements and Director of Flight Test for Douglas, testified as follows:
"Q. Was this experience of the flight crew on flights A-4 and A-5 on January 16, 1948, the first information that you had of any danger from excessive concentrations of CO2? A. Any danger beyond the knowledge that I had previously that it was just a case of suffocation, in large amounts.
"Q. Did the experience which the flight crew had on January 16, 1948 come as a surprise to you? A. Why sure."
Mr. Robert Brush, chief pilot of Douglas when the flight tests were conducted in January and February 1948, testified on cross-examination as follows:
"Q. Well, I am asking you as of the time that you heard of the experiences on flights A-4 and A-5 which resulted in a meeting that day and a meeting the next day in which it was all discussed, and I am asking you whether that new problem wasn't one which centered around the discovery that fumes of carbon dioxide affected the personnel in the cockpit so that they couldn't properly do their work? A. That is correct.
*96 "Q. That posed a menace, did it not, this new problem to the personnel which might affect the ability to manage and fly a plane safely?
"The Witness: Would you please repeat that? (Question repeated.)
"A. I think I can best answer that by stating it brought up the necessity of establishing procedures to keep the CO2 which you described as a menace from entering the cockpit.
"Q. Well, I described it as a menace, don't you think it fairly states the reason for the necessity for keeping the fumes out of the cockpit, otherwise it would be a menace? A. Yes sir, agreed.
"Q. That constituted the new problem which arose after it had been discovered on flights A-4 and A-5? A. Right."
As for the United bulletin of June 16, 1948, the evidence is undisputed that, prior to the Mt. Carmel accident, United used the rebreather type of oxygen mask only. It is also undisputed that the procedure established by Douglas required the oxygen supply to be shut off whenever carbon dioxide was discharged. Captain Holloway, chief test pilot of United, testified that the rebreather type of mask was plugged into the oxygen supply of the DC-6 airplanes used by United. Consequently, shutting off the oxygen supply, as the procedure directed, would mean that the wearer would get no oxygen except for that present in the air in the cockpit. Use of the rebreather type of mask, therefore, would not have increased the intake of oxygen.
Douglas also contends that the emergency procedure as established by Douglas was approved by the Civil Aeronautics Administration. This contention, however, ignores the important fact that the DEV 133 report submitted by Douglas to the Civil Aeronautics Administration, and the basis upon which the Civil Aeronautics Administration granted its airworthiness directives after modification, contained no reference to the effects of carbon dioxide upon flight personnel during the flight tests of January and February, 1948. Nor, as has been said hereinbefore, had Dr. White's report been submitted to the Civil Aeronautics Administration at the time when Douglas applied for approval of the emergency procedure, or at any time.
Enough has been said to indicate that there is substantial evidence to support the verdict against Douglas. It is of the utmost significance that at no time did Douglas, in any manual, instruct pilots of DC-6 to use one hundred percent oxygen masks. Nor did Douglas at any time prior to June 17, 1948 give any warning to United that rebreather type oxygen masks were inadequate to protect the wearer against the possible hazards of carbon dioxide concentrations in the cockpit. Hence the telegram sent out by Douglas on June 22, 1948, written by the same man who had requested Dallas to withdraw his warning and recommendations to operators of DC-6 of June 14, is significant as an admission by Douglas that its manual of operation was not complete. In this telegram he says: "Recent tests at this plant show that operation of the CO2 fire extinguishers under some circumstances may result in excessive CO2 concentrations in the cockpit of the DC-6. As an extra precaution it is urged that cockpit crews be ordered to use oxygen masks upon release of CO2 to any fuselage compartment."
The jury had enough proof before it in respect to the insufficiency of the January and February flight tests, of the deliberate concealment of the White report, and of the failure, in the Douglas instructions as disclosed in its manuals, to order the use of full oxygen masks, to hold Douglas primarily responsible for the catastrophe. It is difficult to dismiss the thought that it was human failure negligence that caused the death of forty-three people; and that had Douglas distributed the White report to those in the aviation industry, and particularly to the Civil Aeronautics Administration and United, and followed its recommendations, the catastrophe might never have happened. Douglas' motion for judgment must be denied.
A motion for judgment notwithstanding the verdict and a motion for a new trial, are granted upon different bases. In Montgomery Ward & Co. v. Duncan, 311 U.S. 243, at page 251, 61 S.Ct. 189, at page *97 194, 85 L.Ed. 147, the Supreme Court stated as follows: "Each motion, as the rule recognizes, has its own office. The motion for judgment cannot be granted unless, as a matter of law, the opponent of the movant failed to make a case and, therefore, a verdict in movant's favor should have been directed. The motion for a new trial may invoke the discretion of the court in so far as it is bottomed on the claim that the verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair to the party moving; and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury."
In diversity cases, it has been held that the question of legal sufficiency of the evidence in support of a claim is to be determined according to the local law applicable to the rights of the parties. See Stoner v. New York Life Insurance Co., 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284.
In this case, the significant facts on which the litigation is founded occurred in Pennsylvania. Therefore, the court's duty is to follow the rules of conflict of laws prevailing at the place of trial. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477. The conflict of laws rule in New York is that generally the law of the forum regulates the weight of the evidence requisite to a recovery. See New York Annotations to the Restatement of Conflict of Laws, sec. 595, and cases cited. But the conflict of laws principle is not significant in the instant case; for whether the applicable local law be regarded as that of New York or of Pennsylvania, there is no substantial difference in the rule to be followed.
Under New York law, judgment notwithstanding the verdict may be granted where the verdict is not sustained by any evidence whatever. Dickerson v. Long Island R. Co., 266 App.Div. 852, 42 N.Y.S. 2d 335; motion for leave to appeal den'd, 266 App.Div. 921, 44 N.Y.S.2d 344. However, a judgment notwithstanding the verdict will not be entered where the evidence raises an issue for the jury, as where there is evidence reasonably tending to support the verdict or where there is a substantial conflict in the evidence. See Sullivan v. Central Hanover Bank & Trust Co., 294 N.Y. 497, 63 N.E.2d 76.
Pennsylvania law is to the same effect. Duffy v. York, Haven Water & Power Co., 233 Pa. 107, 81 A. 908; Kindt v. Reading Co., 352 Pa. 419, 43 A.2d 145, 162 A.L.R. 1. Moreover, under Pennsylvania law, on a motion for a judgment notwithstanding the verdict for the plaintiff, the testimony should be read not only in the light most favorable to the plaintiff, but he must be given the benefit of every doubt and inference of fact pertaining to the issues involved which may reasonably be deduced from the evidence. Palmer v. Moren, D.C., 44 F.Supp. 704.
Douglas' motion for a new trial must also be denied, for the verdict is not clearly or decidedly against the weight of the evidence. See Meyers v. Hines, 199 App.Div. 594, 191 N.Y.S. 773; Reithof v. Pittsburgh Rys. Co., 361 Pa. 489, 65 A.2d 346. That the jury could have drawn different inferences or conclusions from the evidence than they did, or might properly have reached a different verdict, is not a ground for requiring a new trial, Orr v. William J. Burns, International Detective Agency, 337 Pa. 587, 12 A.2d 25; or that the trial judge would have reached a different conclusion from that of the jury. Dashnau v. City of Oswego, 204 App.Div. 189, 198 N.Y.S. 226.
As to the defendant, United, the question of its liability to the plaintiff must be considered in the light of the duty it owed to its passengers to use the highest care in the maintenance and the operation of its airplanes. The Civil Aeronautics Regulations provide that means must be provided to prevent hazardous quantities of carbon dioxide from entering habitable compartments. United contends that it relied upon Douglas and that failure to prevent hazardous carbon dioxide concentrations from entering the cockpit was negligence on Douglas' part. Insofar as concerns its duty to its passengers, however, United's reliance upon Douglas would not *98 lessen the duty owed. In Curtis v. Rochester & Syracuse Railroad Co., 18 N.Y. 534, an action against a railroad company for an injury received by a passenger, the court, 18 N.Y. at page 536, stated as follows: "The carrier, however, is in all cases bound to provide a safe and secure carriage for the transportation of the passengers; and nothing can exempt him from this responsibility, but the existence of some latent defect, which no reasonable degree of human skill and foresight could guard against; and this obligation extends to every species of appliance belonging to the carrier and used by him in the business in which he is engaged. Consequently, whenever it appears that the accident occurred through some defect in the vehicle, or other apparatus used by the carrier, a strong presumption of negligence arises, founded upon the improbability of the existence of any defect which extreme vigilance, aided by science and skill, could not have detected."
The Court regarded it as "* * * well settled that the carrier is responsible for the negligence or want of skill of every one who has been concerned in the manufacture of any portion of its apparatus. Hegeman v. Western Railroad Company, [13 N.Y. 9] 3 Kern. 9; * * *". See also Restatement of the Law, Torts, sec. 412; N. Y., N. H. & H. R. Co. v. Baker, 98 F. 694, at page 697, 50 L.R.A. 201; Southern Ry. Co. v. Hussey, 42 F.2d 70, 72, 74 A.L.R. 1172, affirmed 283 U.S. 136, 51 S.Ct. 367, 75 L.Ed. 908; and Venuto et al. v. Robinson et al., 3 Cir., 118 F.2d 679, 682, and 683, certiorari denied, C. A. Ross, Agent, Inc., v. Venuto, 314 U.S. 627, 62 S.Ct. 58, 86 L.Ed. 504.
The fact that United relied on the tests conducted by Douglas, and on Douglas' assurance that the problem was "adequately covered", as stated in Douglas' telegram to Dallas of June 14, 1948, did not lessen United's duty of care to its passengers. Therefore, the verdict in favor of the plaintiff against United must also stand. The issues of liability to the plaintiff, both as to the "active" negligence of Douglas, and the "passive" negligence of United, having thus been resolved in favor of the plaintiff, we proceed now, so far as the plaintiff is concerned, to the second question the excessiveness of the verdict.
My reaction, when the jury reported, was that $300,000 is grossly excessive, and is not justified by the evidence in the case.
At the time of the death of DeVito, he was thirty-eight years of age and in excellent health. He had been employed steadily by one concern for some fifteen years; and had risen, from the position of stenographer, earning $35 a week, to become the head of the Easter Egg Coloring Department, a department doing a volume of business of about a half million dollars a year. In the last full year before his death, in 1947, he earned $9,038.12. There is nothing in the evidence to show what his earnings over the previous years had been. In other words, we have only the testimony that "his original salary, the first year, was $1,620" and that "in 1947 he earned $9,038.12". The treasurer of the employer company testified that DeVito had been a valuable and trusted employee, and that "he was on the way to advance himself still further."
All of the decedent's income, with the exception of $30 a week which he reserved for his own immediate needs and purposes, was required and used for the support of his family. In addition to the widow, there were two children, at the time of decedent's death, eleven and seven years of age, who survived. As to special damages, the item of funeral expenses amounted to $599.25. Deducting the amount retained by DeVito from his income in 1947, and deducting also amounts calculated as items for state and federal income taxes, leave a balance of $6,500 as the net income which was available for the maintenance and support of his family. DeVito's life expectancy according to the mortality tables, was thirty-two years. The present worth of an annuity of $1 payable over a period of thirty-two years at 2½ percent interest,[1] according to standard annuity tables, is $21.849. On the basis of these *99 figures then the present worth of an annual income of $6,500 would be approximately $142,000, to which should be added the funeral expenses, making the total approximately $142,600.
The Pennsylvania rule for determining damages is stated in Dubrock v. Interstate Motor Freight System, 3 Cir., 1944, 143 F.2d 304, 307, where the following is quoted from Gaydos v. Domabyl, 301 Pa. 523, 152 A. 549: "As a general rule, pecuniary loss embraces the present worth of deceased's probable earnings during the probable duration of deceased's life, which would have gone for the benefit of the children, parent, husband, or wife, as the case may be, and is broad enough to include the present worth of the value or probable services which would, in the ordinary course of events, be of benefit to one within this class."
In Mars v. Meadville Tel. Co., 344 Pa. 29, 23 A.2d 856, a wife's action for damages for causing the death of her husband, the court declared that the sum representing the present worth of the husband's life expectancy, as indicated by mortality tables, of the amount which the wife testified she had been receiving for maintenance and support, was not to be taken as the absolute criterion of the wife's pecuniary loss. It was held that the wife was entitled, in addition to the pecuniary loss, to compensation for the loss of other non-pecuniary benefits which the deceased husband, as a husband and father, would have bestowed on his family. The loss of service, of counsel and guidance and of gifts, to his children, are included in these non-pecuniary benefits. Visokay v. United States, D.C., 83 F.Supp. 367.
The plaintiff contends that, in view of the testimony as to his promising future, the jury could properly have found that within some years DeVito would have been earning at least four or five thousand dollars a year more, and "that annual earnings of $20,000 to $25,000 were well within the realm of probability." It is argued that this probable increase in future earning power, the likelihood of the deceased's living to an age far in excess of that expressed by the mortality tables, together with a consideration of such non-measurable factors as the loss of care and guidance to the children, fully warranted the verdict.
Nevertheless, the amount awarded "must bear some reasonable proportion to the injury sustained and the loss suffered by the plaintiff." Fornwalt v. Reading Co., D.C., 79 F.Supp. 921, 923.
In Cromley v. Speich, D. C., 19 F.Supp. 857, 858, affirmed 3 Cir., 1938, 94 F.2d 543, the court stated the measure of damages under Pennsylvania law as follows: "The amount of damages which members of the family are entitled to recover for the death of a husband and father is dependent on the pecuniary loss suffered by those who seek recovery. Pecuniary loss is the destruction of a reasonable expectation of pecuniary advantage from the deceased. It is not a matter of guess or conjecture, but must be based upon facts showing the contributions which the deceased made during his lifetime and facts upon which the jury can base an estimate of the probable contributions which he would have made for the balance of his natural life. Gaydos v. Domabyl, 301 Pa. 523, 152 A. 549. After arriving at an estimate * * which might reasonably have been expected, this amount should be reduced to its present value. * * *" See also Southern Pac. Co. v. Guthrie, 9 Cir., 186 F.2d 926.
In Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, at page 264, 66 S.Ct. 574, at page 579, 90 L.Ed. 652, the Court stated: "* * * even where the defendant by his own wrong has prevented a more precise computation, the jury may not render a verdict based on speculation or guesswork. But the jury may make a just and reasonable estimate of the damage based on relevant data, and render its verdict accordingly. In such circumstances `juries are allowed to act on probable and inferential as well as direct and positive proof.'"
A verdict indicating that the jury arrived at an amount representing the present worth of the pecuniary contributions of the decedent to his family, based upon *100 the relevant data presented by the evidence, together with an added amount representing those factors for which there exists no precise yardstick for translating injury into money, but which amount is a sane and reasonable estimate, ought to prevail even though the court would have awarded less. However, where the amount awarded is far in excess of the present worth of what the evidence discloses was the actual contribution made by the decedent to the plaintiff, it must be concluded that the jury overstepped its power to act upon probable and inferential proof, and based its award upon speculation and guesswork, placing undue emphasis upon probabilities but losing sight of relevant data presented by the evidence in the case.[2]
Of course, it is generally conceded that the purchasing power of money today is less than it was at the time of the accident, and what the earning power of money will be in the future is open to speculation, perhaps only justified on the part of those who are trained in the economic field. In the effort to reach a just and reasonable award, taking all factors and circumstances into consideration, it would seem the plaintiff's recovery should not exceed $160,000.
Unless the plaintiff, within twenty days from the entry of the orders on these motions, files a stipulation accepting the reduced figure, the motion for a new trial will have to be granted.
There remains for consideration the cross-claim of United against Douglas, and the verdict of the jury in favor of Douglas. United contends that the policy of obstruction and confusion that was pursued by trial counsel for Douglas in this litigation deprived United of a fair trial. In the affidavit of William J. Junkerman in support of United's motion, attention is directed to a number of such acts on the part of trial counsel for Douglas. The following may be enumerated:
Throughout the trial, counsel for Douglas sought to create the impression that there was only one "official" operating manual for the DC-6 airplane; that such manual was the "Bible, which contained the symbol of approval of a governmental agency;" and that United "utterly ignored" this manual.
This Douglas manual was repeatedly, during the trial, and in the summation of Douglas' trial counsel, referred to as the "CAA approved airplane operation manual" or as the "government manual", or "the government operation manual" or the "Civil Aeronautics Administration manual" or "a government official manual", and always with the specific purpose of leading the jury to believe that it was the production of the Civil Aeronautics Administration. The fact is quite the contrary, for the evidence shows beyond the possibility of doubt that the manual was the production of Douglas, and that Douglas had secured the approval of the Civil Aeronautics Administration without informing the Civil Aeronautics Administration of the White report or of any of its recommendations. The inevitable effect of such distortion was to lead the jury to believe that any deviation from the Douglas manual was a deviation or a violation of a directive of the Civil Aeronautics Administration, based on a full disclosure by Douglas to the Civil Aeronautics Administration of the hazards of the use of carbon dioxide in powerful concentrations in the cockpit without the protection of full oxygen masks.
To make this conduct even more reprehensible, in addition Counsel knew from the testimony of a Civil Aeronautics Administration representative that United's manual covering the emergency procedures, as issued in revised form May 10, 1948, and in effect on June 17, 1948, had been approved by the Civil Aeronautics Administration inspector.
At least a dozen times throughout the summation, Douglas' trial counsel endeavored *101 to drive home a violation by United of what he termed the Civil Aeronautics Administration manual. The repetition was with deliberate, devious design, despite the court's admonition.
Again trial counsel for Douglas sought deliberately to create the impression in the minds of the jury that the specific copy of Douglas manual, in evidence as Plaintiff's Exhibit 20, was the very same manual that had been allocated to the Mt. Carmel airplane. The true fact is that Plaintiff's Exhibit 20 had been prepared by Douglas as a duplicate, and that the serial and identification numbers of the Mt. Carmel plane had been inserted in it after the crash, and for the purposes of the trial. On the very first page of Exhibit 20, the manufacturer's serial number "42-871", and the Civil Aeronautics Administration identification number "NC 37506" are typewritten in clear black type, whereas all the rest of the manual appears in blue type.
The cross-examination by Douglas' trial counsel of United's expert witness, Dr. Floe, of the Massachusetts Institute of Technology, on the subject of the emergency pressure relief valve, affords additional evidence of a planned attempt to create confusion in the minds of the jury. The following is from that cross-examination:
"Q. Well, Doctor Floe, did you submit a copy of your report which has been introduced in evidence here, to the experts in the employ of the Civil Aeronautics Board? A. I did not submit a copy directly. No.
"Q. You know it was submitted, don't you? A. Yes.
"Q. Do you know that you were unable by your report submitted to those experts to convince them that the valve was open * * *?"
This questioning was inexcusable and indefensible, for its obvious implication was that the Civil Aeronautics Board had concluded in its report that the pilots of the Mt. Carmel plane had failed to open the valve when carbon dioxide had been discharged. In view of sec. 701(e) of the Civil Aeronautics Act, 49 U.S.C.A. § 581, that "no part of any report or reports of the former Air Safety Board or the Civil Aeronautics Board relating to any accident, or the investigation thereof, shall be admitted as evidence or used in any suit or action for damages growing out of any matter mentioned in such report or reports", the question to Dr. Floe was grossly improper. Trial counsel was quite aware of the statute and its terms, for this specific section had been referred to on several occasions during the trial.
Another grossly improper remark of trial counsel for Douglas is the following passage quoted from his summation: "Now, that brings us to the use of this expert testimony where United brought in Dr. Floe to establish that the cabin pressure emergency relief valve in the back end of the airplane was open; * * *. We put on Dr. Tuckerman, whose opinion didn't cost the Douglas Aircraft Company one penny. We didn't buy him, and he didn't sell out to us. He didn't sell us his opinion."
Mr. Junkerman objected to that statement, and though I dislike interrupting counsel in summation, even at the risk of encountering a motion for a mistrial, I said: "I do not think it is a fair comment myself."
On this phase of the case, whether the emergency relief valves were open or closed at the time the airplane crashed, expert testimony was of first importance. United had called Dr. Floe as its expert, and he had testified that the valves were fully open. Douglas had offered the testimony of three other experts to show that the valves were closed. Dr. Floe's testimony was, therefore, crucial to United's case on that issue. Particularly was the comment harmful because the weight of the evidence was not to be determined by the number of witnesses called on either side, but by the quality and professional attainment of the witness.
For Douglas' trial counsel to make the comparison indicated in his summation I should call only unfortunate if I did not believe that it had been deliberately planned, and therefore the term "unfortunate" *102 is inadequate as a characterization. The passage addressed to the jury was speciously designed to create the impression that Dr. Floe had "sold out to" United. Though it is proper to point out in summation that an expert witness has received professional service fees, it is quite a different matter to characterize such a witness as one who has been "bought". Aetna Life Insurance Co. of Hartford, Conn. v. Kelley, 8 Cir., 1934, 70 F.2d 589.
There are other instances of alleged misconduct on the part of trial counsel for Douglas to which United takes objection. It may be said that when viewed as isolated incidents they do not always appear serious, but in the light of the several acts oft repeated, they become significant as indicating, at least, efforts to confuse the proof. For example, Douglas' trial counsel made every effort to keep out of evidence the radio messages from NC 37506 received just prior to the crash from which it could be concluded that carbon dioxide had been discharged. Numerous objections were made, repeatedly and in great detail throughout the examination of the witnesses called by the plaintiff to establish that fact, and counsel's cross-examination was detailed and prolonged. Then curiously, despite such strenuous efforts on the part of trial counsel to keep knowledge of the discharge of the carbon dioxide from being presented to the jury, Douglas' second witness in its own case was asked by its trial counsel the following question:
"Q. Well now, Mr. Reaser, did you find there (at the scene of the Mt. Carmel crash) any part of the air-conditioning equipment of NC 37506 which gave any indication to you that carbon dioxide had actually been discharged in this particular airplane in flight? A. Yes sir. There was."
Then, at the direction of Douglas' trial counsel, Reaser went on to describe, from an examination of various parts of the air-conditioning system that it could be determined whether carbon dioxide had been discharged. He concluded: "* * * those were the two items which seemed to point most strongly, as far as the air-conditioning system was concerned, indicating that carbon dioxide had been discharged."
Other instances which invite criticism, though not so serious as the major offences that have been described, appear in the cross-examination of some of United's witnesses, for example of Davies, appearing in the stenographic record at page 1152, of Holloway at page 1486, of Blaschke at page 1838, and of Layman at pages 2512, 2513.
The subject cannot be dismissed without referring also to the examination of Douglas' witnesses Peyton and Raymond. Part of it may be quoted:
(Re-direct examination of Mr. Raymond):
"Q. If the court should want formal flight reports prepared of 31 flights, do you believe you could have it done for him by using this basic data?
"The Court: Do not put me in that position. This is merely because of a subpoena duces tecum that was served on you, and I felt that if you could comply with it, you should. If you can't, because of the absence of any such documents, then you should say so supported by the proof of those who know that there are no such reports in evidence. That is all. Mr. Raymond has testified about that."
(Re-direct examination of Captain Peyton):
"Q. So that are you positive that CO2 was discharged in flight on A-2 and that it was into the forward lower baggage compartment, that you were the pilot, and that you weren't affected
"The Court: Why do you have to repeat that? He so testified.
"Mr. Gallagher: Very well, your Honor, thank you.
"The Court: You are summing up, that is all.
"Mr. Gallagher: I thought that was a good idea, your Honor.
"The Court: It may have been a good idea, but I object to your doing it."
(Re-cross-examination of Captain Peyton):
*103 "Q. I might say to you, Captain, or might ask you: Mr. Raymond testified that that report that you just were reading from was prepared some time in the summer of 1948; does that accord with your recollection?
"Mr. Gallagher: Just a moment, if your Honor pleases. I will object to the question. He is repeating a question or referring to the testimony of some other witness. Your Honor would not let me do it the other day
"The Court: I dislike your reference to what I wouldn't let you do.
"I will overrule the objection and advise you to give heed to my admonitions.
"Mr. Gallagher: I am sorry, your Honor."
Of course, for misconduct of trial counsel to establish the basis for a new trial, it must be shown that such misconduct was prejudicial to the party complaining of the misconduct. Trial counsel sought by specious questioning to lead the jury to conclude that the valves were found closed. That was for the purpose of convincing the jury that the pilot and co-pilot of NC 37506, when carbon dioxide was discharged into a baggage compartment, had not properly followed the emergency procedure established for DC-6 airplanes.
It is apparent that both United and Douglas regarded that question as vitally important, for the issue was vigorously contested. Insofar as the plaintiff's case is concerned, as has been indicated in the earlier portions of this opinion, the evidence was substantial in warranting the jury in finding both United and Douglas liable, regardless of whether the valves were open or closed. Thus liability of Douglas and United could be based upon a finding that the procedures as established were inadequate to meet the hazards of carbon dioxide concentration when the gas was discharged under flight conditions.
But the verdict on the cross-claim of United against Douglas is quite a different matter. In finding for Douglas, the jury must have found that United was guilty of "active" negligence. If the jury had concluded from the evidence that the valves had been opened, it is fair to infer that it also found that United had, by its pilots, followed the procedure set forth in the Douglas manuals. Then, the evidence by which Douglas sought to prove that United was negligent in not properly following the procedure for example, the absence of the warning note in United's operation manual, and the admitted ignorance of United's personnel of such warning note, a matter upon which Douglas laid considerable stress becomes immaterial.
But it is important to note that there was substantial evidence to warrant the jury in finding that the dangers from carbon dioxide concentration could not have been avoided, even though the emergency procedure established had been followed. The inescapable inference then is that in order to find that United was "actively" negligent, it would have been necessary for the jury to find that United knew, or ought to have known, that such procedure was defective. There is evidence, and of a substantial nature, as has been indicated hereinbefore, that warranted a finding that United never knew, or ought to have known, of such defect in the procedure.
Of course, it must be recognized that on a motion for a new trial the evidence will be considered in the light most favorable to the prevailing party. In resolving the conflict in the evidence upon the question of the valves, then, the jury must be regarded as having concluded in favor of Douglas that they were closed at the time of the crash. It is particularly because of this inference that the misconduct of trial counsel for Douglas becomes significant and material, for his improper actions bear upon the evidence directed to the determination of that issue. How much, if any, the jury was influenced by the actions of counsel is not subject to determination. However, since it is not a single act which is involved but, as has been stated, numerous acts, and since they are related to a pivotal issue in the case, United's objections cannot be dismissed as being without foundation. On the contrary, United's case for recovery-over is supported by substantial proof.
*104 Of course, the evidence does not directly disclose how seriously the flight personnel on NC 37506 were affected by the carbon dioxide. There were no survivors, and the radio contact was lost just prior to the crash. But there is testimony of eye witnesses along the road describing the progress of the plane in flight from the time of the final radio contact until the crash, covering an interval of approximately eight to ten minutes. If anything, these accounts would indicate that the airplane, during that period, was flying erratically, not along a direct course but in broken course, and at varying altitudes. This evidence would warrant an inference that the pilots were so adversely affected as to bring about a loss of control of the plane.
The specific degree of responsibility which can be laid to the ineffectiveness of the emergency procedure cannot be established from the evidence. In like manner, the specific degree of incapacitation of the pilots, assuming the valves were not opened, is also indeterminable. Consequently, although the responsibility for the amount of damage caused by each act cannot be established, both parties in these circumstances may be held liable for the entire damage as joint tort-feasors, even though contribution to the injury is different in degree. Holstein v. Kroger Grocery & Baking Co. et al., 348 Pa. 183; 34 A.2d 491; Hughes et ux. v. Pittsburgh Transp. Co. et al., 300 Pa. 55, 150 A. 153, 155.
In Holstein v. Kroger Grocery & Baking Co. et al., supra, defendant Ehler endeavored to pass the truck of the defendant, Kroger Company, when both were about 250 to 300 feet from plaintiff's car, approaching from the opposite direction. The Kroger Company's driver, instead of permitting Ehler to pass, increased the truck's speed and suddenly swerved to the left, when about 75 feet from plaintiff's car, causing it to crash into plaintiff's automobile. The Kroger Company appealed from a verdict for the plaintiff against both defendants, on the ground that "the negligence of the Kroger Company was not a contributing factor thereto, since it did not change, according to the jury's verdicts, the situation as it existed immediately before Kroger's truck struck the Ehrler car." [348 Pa. 183, 34 A. 492.] The court, in affirming the verdict and judgment entered thereto, stated: "This argument of defendant company completely ignores the fact that in the situation with which we are here concerned the matter of concurrent negligence is involved and not that of proximate cause. * * * The negligence of which the Kroger company was convicted was the act of the operator of its truck increasing its speed when Ehrler was attempting to pass and also in permitting the truck to swerve to the left. This failure of the truck driver to exercise due care in itself did not cause the collision * * * for Ehrler could have avoided the accident by decreasing the speed and falling behind the truck when he saw the Holstein machine approaching. Clearly, what caused the collision with the latter vehicle was the combined negligence of both defendants, * * *." 34 A.2d 491, at page 492.
The court also held that the facts presented brought the case within the principle, as enunciated in Hughes v. Pittsburgh Transp. Co., supra, that "where there would have been no injury whatever but for the continuing negligence of the defendant who first put the plaintiff in peril, and which existed when the negligence of the other turned the peril into actual injury, the negligences are concurrent and both defendants are jointly and severally liable for the injuries thereby occasioned."
In Hughes et ux. v. Pittsburgh Transp. Co., supra, the taxicab company whose driver stopped with the rear wheel of the taxi between the trolley rails, and the street railway company whose motorman should have seen the taxi's wheel there and had ample time to stop the car before the collision, were held concurrently negligent. At page 154 of 150 A. 153, the court stated: "The injured plaintiff was a passenger for hire in the taxicab, and the transportation company owed to her the highest degree of care and diligence in carrying her to her destination and enabling her to alight safely. * * * "True, this paramount right (to use the space *105 between the tracks to operate street cars) affords no excuse to the railway company for the clear negligence of its motorman; but neither does that clear negligence furnish any excuse for the taxicab driver's failure to exercise the high degree of care to which his passenger was entitled."
If the jury concluded that the emergency pressure relief valves were closed, it might thus have found that the catastrophe was caused by the concurrent negligence of Douglas and United. Consequently the unfairness or speciousness of counsel for Douglas in the effort to establish that belief in the minds of the jury was prejudicial to United in a high degree. Indeed, that counsel may have had some doubts in his own mind as to the impression created by his conduct of the case before the jury is indicated in the opening remarks of his summation. He said: "If in the course of the trial I have done anything that caused you to have some feeling of displeasure or resentment towards me, I will ask you at this time to let bygones be bygones. * * *" Unfortunately, despite that expression of conscience, he repeated his offence.
There were instances when the court was forced to rebuke counsel for his conduct; for example, during the cross-examination of Dr. Floe already referred to, the court felt it necessary to interrupt the question being addressed to the witness, and stated: "That is a wholly improper question and I sustain the objection that was about to be made. I direct the jury totally to dismiss the question from its mind."
There were other instances where counsel appeared deliberately to misunderstand the court. During the examination of Captain Peyton, a witness called on behalf of Douglas, the following occurred:
"Q. Will you explain to his Honor, to the jury, and to me just what the purpose of that flight was, and that test, and also where this thing referred to as the hell hole is located and whether there was any carbon dioxide in the cockpit during that test?
"The Court: Do you remember all of that?
"The Witness: Yes, sir, I will try to. Would you like this in my own words?
"Q. Yes, I would like it in your own words. I do not want you to give it in mine because his Honor said you couldn't understand me.
"The Court: I did not say that. I asked him whether he remembered it all."
I must conclude, therefore, that improper insinuations and assertions both during the course of the trial and in summation by trial counsel for Douglas were deliberately calculated to mislead the jury. The trial court has the power to set aside the jury's verdict in any case where the ends of justice so require. Brown v. Walter, 2 Cir., 1933, 62 F.2d 798; Aetna Casualty & Surety Co. v. Yeatts, 4 Cir., 1941, 122 F.2d 350; London Guarantee & Accident Co. Ltd. v. Woelfle, 8 Cir., 1936, 83 F.2d 325; New York Central Railroad Company v. Johnson, 279 U.S. 310, 49 S. Ct. 300, 73 L.Ed. 706; Berger v. United States, 295 U.S. 78, 89, 55 S.Ct. 629, 79 L.Ed. 1314.
This was a bitterly contested lawsuit. However, the fact that much feeling was engendered as a consequence thereof did not give license to overstep the bounds of legitimate advocacy.[3]
The verdict of the jury on the cross-claim will, therefore, be set aside. The jury had but the second cause of action set forth in the cross-claim to consider, for at the conclusion of the proofs, and before summation, the first cause of action, alleging damages for breach of contract, was set aside by the court on the ground that the notice of demand by United was not *106 made within a reasonable time as a matter of law. However, at that time there was not brought to the attention of the court matters that are set forth in the affidavit of William J. Junkerman. It is contended by United that the question of reasonableness of the notice mailed by United was for the jury under the authority of Whitfield v. Jessup, 31 Cal.2d 826, 193 P.2d 1; In re Flood's Estate, 217 Cal. 763, 21 P.2d 579. The important question then is when did United know, or when ought it to have known, of the breaches of contract committed by Douglas? It appears that immediately after the accident, the wreckage of the plane was placed under the control of the Civil Aeronautics Board; also that the emergency pressure relief valve control handle, the position of which would determine whether the pilots had followed the emergency procedures, was removed by the Civil Aeronautics Board, by Inspector Berman, and taken to his office; that twenty-eight days after the accident, the valve and control handle assembly were delivered by the Civil Aeronautics Board to Douglas in Santa Monica. Thereafter, on March 8, 1949, the assembly was delivered by the Civil Aeronautics Board to the Bureau of Standards, and later in that month returned by that Bureau to the Civil Aeronautics Board; and it was not until March 30, 1949 that the parts were submitted to Dr. Floe, the expert retained by United. His report was made on June 7, 1949, and the findings were contrary to those previously reported by Douglas. Thus it appeared to United then for the first time that the accident was due not to the failure of the pilots to follow the emergency procedures, as claimed by Douglas, but to the inadequacy of the procedures issued by Douglas and the improper tests made by Douglas with respect to the changes in the design. Finally, nine days after the report of Dr. Floe was issued, United informed Douglas of its claim.
If all this had been brought to my attention at the time the motion was disposed of, it would have appeared that the question of reasonableness of time was one not for the court but for the jury.
Accordingly on the retrial of the cross-claim, both causes of action stated therein will be considered at issue.
Submit orders on notice in accordance with the foregoing opinion.
NOTES
[1] This, in the light of investment returns, would seem a conservative rate.
[2] Upon inquiry I have been informed by the Clerk of this court that the verdict of $300,000, in a negligence action, based on the death of one individual, is the largest recorded. Indeed it is twice the sum of the largest jury award recorded in this court.
[3] This criticism is in no way intended to attach to the attorneys of record for Douglas. Trial counsel was not in their organization, and apparently had absolute control of the conduct of the case, both during the taking of depositions before trial and during the trial. He was not a member of this bar, but was on motion of the attorneys for Douglas granted permission to try the case.
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09-4095-ag
Canaj v. Holder
BIA
A097 478 771
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN
A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING A SUMMARY ORDER
MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of
New York, on the 12th day of August, two thousand ten.
PRESENT:
DEBRA ANN LIVINGSTON,
GERARD E. LYNCH,
DENNY CHIN,
Circuit Judges.
_____________________________________
SHTJEFEN CANAJ,
Petitioner,
v. 09-4095-ag
NAC
ERIC H. HOLDER, JR., UNITED STATES
ATTORNEY GENERAL,
Respondent.
_____________________________________
FOR PETITIONER: Charles Christophe, New York, New York
FOR RESPONDENT: Tony West, Assistant Attorney General; James
A. Hunolt, Senior Litigation Counsel; Jesse
Lloyd Busen, Trial Attorney, Office of
Immigration Litigation, Civil Division, United
States Department of Justice, Washington,
D.C.
UPON DUE CONSIDERATION of this petition for review of a decision of
the Board of Immigration Appeals (ABIA@), it is hereby ORDERED, ADJUDGED,
AND DECREED, that the petition for review is DENIED.
Shtjefen Canaj, a native of Kosovo and citizen of the former Yugoslavia,
seeks review of a September 9, 2009, order of the BIA denying his motion to
reopen. In re Shtjefen Canaj, No. A097 478 771 (B.I.A. Sept. 9, 2009). We
assume the parties= familiarity with the underlying facts and procedural history of
this case.
We review the BIA=s denial of a motion to reopen for abuse of discretion,
mindful of the Supreme Court=s admonition that such motions are Adisfavored.@
Ali v. Gonzales, 448 F.3d 515, 517 (2d Cir. 2006) (citing INS v. Doherty, 502 U.S.
314, 322-23 (1992)). A party may file only one motion to reopen removal
proceedings, and must do so no later than 90 days after the date on which the
final administrative decision was rendered in the proceeding sought to be
reopened. 8 C.F.R. ' 1003.2(c)(1),(2). It is beyond dispute that Canaj=s motion to
reopen was untimely.
I. Ineffective Assistance of Counsel
Where ineffective assistance of counsel prevents an alien from presenting
his claim, the filing deadline for motions to reopen may be equitably tolled. Cekic
v. INS, 435 F.3d 167, 171 (2d Cir. 2006). In order to warrant equitable tolling, an
alien is required to demonstrate Adue diligence@ in pursuing his claims during
2
Aboth the period of time before the ineffective assistance of counsel was or
should have been discovered and the period from that point until the motion to
reopen is filed.@ See Rashid v. Mukasey, 533 F.3d 127, 132 (2d Cir. 2008). We
have noted that Athere is no period of time which we can say is per se
unreasonable, and, therefore, disqualifies a petitioner from equitable tolling -- or,
for that matter, any period of time that is per se reasonable.@ Jian Hua Wang v.
BIA, 508 F.3d 710, 715 (2d Cir. 2007).
We find no abuse of discretion in the BIA=s conclusion that Canaj
failed to exercise due diligence where he filed his motion to reopen over one year
after he discovered that he received ineffective assistance of counsel. See id.
Canaj does not deny that he became aware of the BIA=s decision in September or
October 2007, but asserts that he did not learn that his prior counsel had failed to
file a brief until he retained new counsel and that it took him time to file
complaints against his former counsel. However, Canaj did not explain when he
retained new counsel, when he filed the complaints, nor why obtaining new
counsel and filing complaints against his former counsel took over one year.
Accordingly, Canaj fails to demonstrate that the BIA abused its discretion in
denying his untimely motion. See Id.
II. Changed Country Conditions
The time and number limitations also do not apply to a motion to reopen
that is Abased on changed circumstances arising in the country of nationality or in
3
the country to which deportation has been ordered, if such evidence is material
and was not available and could not have been discovered or presented at the
previous hearing.@ 8 C.F.R. ' 1003.2(c)(3)(ii). We review for substantial
evidence the BIA=s evaluation of country conditions evidence submitted with a
motion to reopen. Jian Hui Shao v. Mukasey, 546 F.3d 138, 169 (2d Cir. 2008).
Canaj argues that the BIA abused its discretion in denying his motion to
reopen in light of the evidence presented. While the BIA has an obligation to
consider the Arecord as a whole@ and may abuse its discretion by denying a
motion to reopen without addressing Aall the factors relevant to [a] petitioner=s
claim,@ Ke Zhen Zhao v. U.S. Dep=t of Justice, 265 F.3d 83, 97 (2d Cir. 2001), it is
not required to Aexpressly parse or refute . . . each individual . . . piece of
evidence offered by the petitioner.@ Wei Guang Wang v. BIA, 437 F.3d 270, 275
(2d Cir. 2006) (internal quotation marks omitted). Here, the BIA considered
Canaj=s evidence, including an affidavit from Prenk Camaj, but determined that
any changes were insufficient to warrant reopening and that conditions had, in
fact, improved. See Siewe v. Gonzales, 480 F.3d 160, 167 (2d Cir. 2007)
(AWhere there are two permissible views of the evidence, the factfinder=s choice
between them cannot be clearly erroneous.@ (internal quotation marks omitted)).
On this record, we cannot conclude that the BIA erred in evaluating
Canaj=s evidence. See Jian Hui Shao, 546 F.3d at 169; Ke Zhen Zhao, 265 F.3d
at 93. Thus, we will not disturb its denial of Canaj=s untimely motion to reopen.
4
Moreover, the BIA did not err in denying Canaj=s CAT claim because it was based
on the same factual predicate as his claim for withholding of removal. See Paul
v. Gonzales, 444 F.3d 148, 157 (2d Cir. 2006).
For the foregoing reasons, the petition for review is DENIED. As we have
completed our review, any stay of removal that the Court previously granted in
this petition is VACATED, and any pending motion for a stay of removal in this
petition is DISMISSED as moot. Any pending request for oral argument in this
petition is DENIED in accordance with Federal Rule of Appellate Procedure
34(a)(2), and Second Circuit Local Rule 34.1(b).
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk
5
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902 So.2d 132 (2004)
Ex parte Harold SINGLETON.
In re State of Alabama
v.
Harold Singleton.
CR-03-1981.
Court of Criminal Appeals of Alabama.
November 24, 2004.
Thomas E. Drake II, Cullman; and Marcus B. Polson, Birmingham, for petitioner.
Troy King, atty. gen., and Audrey Jordan, asst. atty. gen., for respondent.
PER CURIAM.
The petitioner, Harold Singleton, filed this petition for a writ of habeas corpus requesting that we lower the amount of his cash bail, set at $150,000. In January 1999, Singleton was indicted for theft of property in the first degree, for receiving stolen property, and for obscuring the identity of a vehicle. The grand jury fixed bail at $10,000. After Singleton was indicted, the State moved that bail be increased. In February 1999, Singleton's bail was increased to $150,000 and was limited to cash only. Singleton was eventually arrested in Arkansas in May 2004. He waived extradition and was returned to Alabama. Singleton moved that his $150,000 cash bail be reduced. That motion was denied. Singleton then filed a petition for a writ of habeas corpus in the Cullman Circuit Court. That petition was denied; this original petition for a writ of habeas corpus followed.
Singleton first argues that the "cash only" bail set in his case violates Art. I, § 16, Ala. Const.1901, because he has a constitutional right to bail by "sufficient sureties." Art. I, § 16, provides:
"That all persons shall, before conviction, be bailable by sufficient sureties, except for capital offenses, when the proof is evident or the presumption *133 great; and that excessive bail shall not in any case be required."[1]
(Emphasis added.)
Alabama has had six state constitutions in the years 1819, 1861, 1865, 1868, 1875, and 1901. Alabama's first Constitution contained the provision: "All persons shall, before conviction, be bailable by sufficient securities...." Art. I, § 17, Ala. Const. 1819. That provision remained intact in the Constitution of 1861 but was amended in the Constitution of 1865 to read: "That all persons shall, before conviction, be bailable by sufficient sureties...." Art. I, § 17, Ala. Const. 1865. In the Alabama Constitution of 1901, that provision was moved, in toto, to Art. I, § 16 of the Bill of Rights.
When Art. I, § 16, Ala. Const.1901, was adopted there was no discussion of this provision because it was identical to the provision contained in the 1875 Constitution. See Official Proceedings of the Constitutional Convention of 1901. In 1865 when the term was changed from "sufficient securities" to "sufficient sureties," there was no discussion of the change in the record of the official proceedings. However, we are aware of the Alabama statutes that were enacted and the rules of court that were adopted after the Alabama Constitution of 1901 was ratified.
The Alabama Legislature enacted the Alabama Bail Reform Act of 1993 ("the Act") to address the evolving changes in bail and the emergence of the professional bonding company as an entity. That Act provides for four different types of bail: cash bail, judicial public bail, professional surety bail, and property bail, see § 15-13-111, Ala.Code 1975; it defines what constitutes each form of bail. The Act also addresses bond forms,[2] the obligations of undertaking bail, the arrest of a person on bail by a surety or his agent, and the forfeiture of bail.
After the passage of the Act, the Alabama Supreme Court adopted Rule 7, Ala.R.Crim.P., which establishes discretionary guidelines to assist judges in setting bail. Rule 7.3 addresses the mandatory conditions and additional conditions a judge may place on the granting of bail. Rule 7.3(b)(1), Ala.R.Crim.P., states that the judge setting bail may order the "[e]xecution of an appearance bond in an amount specified by the court, either with or without requiring that the defendant deposit with the clerk security in an amount as required by the court." Rule 7.3(b)(6), provides that the judge may also place "[a]ny other conditions which the court deems reasonably necessary." Rule 7 clearly places great discretion in the judge setting the amount of bail and the terms of a release order.
The only Alabama case to address an issue similar to the one now before us is Williams v. City of Montgomery, 739 *134 So.2d 515 (Ala.Civ.App.1999). The Williams court addressed whether a cash-only bail after conviction violated Art. I, § 16, Ala. Const.1901. That Court held that the Alabama Constitution of 1901 addressed only pretrial release not release after conviction; therefore, there was no state constitutional provision against setting an excessive bail after conviction. The court did note: "Rule 7.3(b) provides that the judge can require an appearance bond or a secured appearance bond as a condition of release, which would include cash bail." Williams, 739 So.2d at 518 (emphasis added).
Though we have not specifically addressed the issue presented in this case, we agree with the rationale of the Supreme Court of Iowa when upholding the setting of a cash-only bail against a claim that it violated an identical constitutional provision. As the Supreme Court of Iowa so eloquently stated:
"The gradual emergence of the sufficient sureties clause and the very limited record of its eventual inclusion in our constitution requires us to draw our conclusions on its meaning and application from the historical development of the bail system and other contextual indicators of its meaning. Ultimately, we believe the core purpose of the clause was to guarantee a bailable individual access to a surety of some form. However, a number of factors leads us to conclude that the framers did not intend that such access be unfettered or tied specifically to a commercial bonding process.
"The strongest support for our conclusions rests on the language of the clause itself in historical perspective. We believe the framers were at least familiar with the history of the bailing process and the role of surety in that process. Moreover, we know that the framers were familiar with the provisions of other constitutive documents and regularly referenced them in the course of debating drafts of our constitution.... These factors indicate that the framers were conscious of the historical lineage of the words they chose and meant what they said: `[a]ll persons shall ... be bailable, by sufficient sureties,' subject to some exceptions. Iowa Const. art. I, § 12 (emphasis added). We believe this was a clear creation of a right to access a surety of some form. However, this language does not indicate that the framers intended that a person should be bailable by any surety without limit.
"To the contrary, the framers chose an explicit limitation on access to a surety by using the word sufficient in the sufficient sureties clause. By including this qualification for a surety, the framers carved out a measure of discretion for the person overseeing the bailing process. This was consistent with the historical approach to sureties.... Moreover, we believe this investment of discretion with the judicial officer was part of a quid pro quo for a bailable individual that reflected the historical relationship between the state, the prisoner, and the surety.
"Our framers chose to provide a limited right to bail in the Iowa Constitution, and provided some protection for this right in that a sufficient surety could bail an accused individual. In exchange, the framers created a potential exception by which the state could retain oversight over this process. Ultimately, this trade off served what has long been acknowledged to be the primary purpose of bail: assuring a defendant's appearance in court.... The defendant was given a right to be bailed, subject to the state's analysis of a surety's sufficiency to provide adequate recompense if the prisoner did not show for his judicial proceedings. By allowing a court to *135 judge the sufficiency of the surety, the court was also permitted to judge implicitly the sufficiency of the surety's interest in making sure the prisoner was present for further court proceedings. Yet, no part of this process dictates unfettered access to a surety for a prisoner. In fact, unfettered access would be contrary to the language of our constitution and, indeed, the long history of the bail system's development and operation.
"We are also confident that the framers did not intend to favor one particular method of surety commercial bonding by inclusion of the sufficient sureties clause. The historical record bears out that the concept of commercial bonding was emerging around the time of our constitution's framing [1844-1846]. This emergence brought to light a new concept that deviated from the traditional methods of personal, monetary, or property surety that featured highly personalized contact between the state, the prisoner, and the surety. While it is possible that our framers had both traditional and commercialized surety in mind when drafting the sufficient sureties clause, we do not believe the traditional form of surety had been fully eclipsed nor was the commercial form truly ascendant. At most, our framers had both forms in mind. To conclude the sufficient sureties clause extends an unfettered right to a commercial bail bondsmen contradicts the language of our constitution as well as historical reality."
State v. Briggs, 666 N.W.2d 573, 581-83 (Iowa 2003) (footnote omitted). Compare State v. Brooks, 604 N.W.2d 345 (Minn.2000)(holding that constitution prohibited a cash-only bail because the constitution contained the phrase "bail by sufficient sureties"); State ex rel. Jones v. Hendon, 66 Ohio St.3d 115, 609 N.E.2d 541 (1993) (holding a cash-only bail improper based on the wording of its constitution and its rules of court).
Based on the wording of the Alabama Constitution of 1901, our statutes, and our rules we cannot say that Art. I, § 16, Ala. Const.1901, prohibits a judge from setting a "cash only" pretrial bail.
Singleton also argues that his bail is excessive when compared with the bail recommended by the bail schedule contained in Rule 7.2, Ala.R.Crim.P.
When denying Singleton's habeas corpus petition, the trial judge stated:
"After hearing on Writ of Habeas Corpus, plaintiff herein present before the Court and represented by counsel, Tommy Drake, Esq., and Marcus Polson, Esq., and the Court having conducted the testimony of the plaintiff and the arguments of counsel, the Court finds the plaintiff to be held in Cullman county jail pursuant to his arrest on May 3, 2004, on the grand jury indictment issued in January 1999 and charges of theft of property, 1st degree, receiving stolen property, 1st degree, and obscuring identity of a vehicle. The plaintiff was arrested in the State of Arkansas and waived extradition to Alabama. The State of Mississippi has issued a `hold' on the plaintiff regarding similar charges. His arrest was part of a multistate investigation into auto theft rings. A recent search pursuant to a warrant in Cullman County implicates the plaintiff in additional cases of the same nature as those for which he was indicted in 1999. The State asserts it has searched for defendant for the last five years and he has eluded it efforts. The Court further notes the plaintiff has a criminal history that includes a conviction for murder in Cullman County among other things and the State intends *136 to seek enhancement under the Habitual Felony Offender Act.
"Based on the foregoing, the Court finds the bond of $150,000 cash only set by Judge H. Frank Brunner to be reasonable and necessary to ensure the plaintiff's appearance in Court to answer the charges. Accordingly, the writ is hereby quashed and held for naught. The plaintiff shall remain incarcerated until such time as he can post bond in the amount of $150,000 cash only."
Based on the bail schedule contained in Rule 7.2, Ala.R.Crim.P., we do not believe that Singleton's bail is excessive. The recommended bail for theft of property and receiving stolen property is between $2,000 and $20,000. The recommended bail for obscuring the identity of a vehicle is between $1,000 and $10,000. Rule 7.2, Ala.R.Crim.P., also contains a list of factors that a court may use to determine whether the recommended bail should be increased. Those factors are:
"1. The age, background and family ties, relationships and circumstances of the defendant.
"2. The defendant's reputation, character, and health.
"3. The defendant's prior criminal record, including prior releases on recognizance or on secured appearance bonds, and other pending cases.
"4. The identity of responsible members of the community who will vouch for the defendant's reliability.
"5. Violence or lack of violence in the alleged commission of the offense.
"6. The nature of the offense charged, the apparent probability of conviction, and the likely sentence, insofar as these factors are relevant to the risk of nonappearance.
"7. The type of weapon used, e.g., knife, pistol, shotgun, sawed-off shotgun.
"8. Threats made against victims and/or witnesses.
"9. The value of property taken during the alleged commission of the offense.
"10. Whether the property allegedly taken was recovered or not; damage or lack of damage to property allegedly taken.
"11. Residence of the defendant, including consideration of real property ownership, and length of residence in his or her place of domicile.
"12. In cases where the defendant is charged with a drug offense, evidence of selling or pusher activity should indicate a substantial increase in the amount of bond.
"13. Consideration of the defendant's employment status and history, the location of defendant's employment, e.g., whether employed in the county where the alleged offense occurred, and the defendant's financial condition.
"14. Any enhancement statutes related to the charged offense."
If convicted, Singleton faces a possible sentence of life imprisonment as a habitual offender. Based on Singleton's previous history and the possible sentence he faces if convicted we cannot say that the $150,000 cash bail is excessive in this case.[3]
For the foregoing reasons this petition is due to be denied.
PETITION DENIED.
*137 McMILLAN, P.J., and COBB, BASCHAB, and WISE, JJ., concur; SHAW, J., concurs in the result.
NOTES
[1] Justice Douglas of the United States Supreme Court, sitting as a Circuit Justice, in Bandy v. United States, 81 S.Ct. 197, 5 L.Ed.2d 218 (1960) (Douglas, Circuit Justice), succinctly stated the purpose behind setting bail:
"Th[e] traditional right to freedom during trial and pending judicial review has to be squared with the possibility that the defendant may flee or hide himself. Bail is the devise which we have borrowed to reconcile these conflicting interests. `The purpose of bail is to insure the defendant's appearance and submission to the judgment of the court.' Reynolds v. United States, 80 S.Ct. 30, 32, 4 L.Ed.2d 46. It is assumed that the threat of forfeiture of one's goods will be an effective deterrent to the temptation to break the conditions of one's release."
81 S.Ct. at 197, 5 L.Ed.2d at 219.
[2] Section 15-13-112 provides that bond forms are to be adopted by the Alabama Supreme Court.
[3] Singleton also argues that his bail should not have been raised before he was arrested and brought before the court; however, he states no grounds or caselaw in support of this contention.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MAY 5, 2006
No. 05-15737 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-00207-CR-T-26-MAP
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ANDRE ABELINO UNSALEGONGORA,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(May 5, 2006)
Before ANDERSON, BIRCH and DUBINA, Circuit Judges.
PER CURIAM:
Appellant Andre Abelino Unsalegongora 1 (“Abelino”) appeals his 135-
month concurrent sentences imposed after pleading guilty to: (1) conspiracy to
possess with intent to distribute five kilograms or more of cocaine while on board
a vessel, in violation of 46 App. U.S.C. § 1903(a), (g), & (j) and 21 U.S.C.
§ 960(b)(1)(B)(ii) (Count 1); and (2) possession with intent to distribute five
kilograms or more of cocaine while on board a vessel, in violation of 46 App.
U.S.C. § 1903(a) & (g), 21 U.S.C. § 960(b)(1)(B)(ii), and 18 U.S.C. § 2.
In May 2005, the United States Navy ship Rentz (“the Rentz”) was
patrolling in the Eastern Pacific Ocean. A helicopter dispatched from the Rentz
spotted a vessel and determined that it was the Colombian fishing vessel OFY
(“the OFY”). Naval officials tracked the OFY and observed it moving erratically
and changing its course multiple times. By the time the Rentz closed in on the
OFY, the OFY was engulfed in smoke and flames, and its eight crew members,
including Abelino, boarded a smaller vessel. Law enforcement officials
extinguished the fire on the OFY and found 4,300 kilograms of cocaine concealed
in a hidden compartment. The officers then boarded the smaller vessel and
arrested the OFY’s crew members, including Abelino. Ruceo Portocarrero
identified himself as the master of the OFY.
1
Although the appellant was indicted and prosecuted under the last name “Unsalengongora,”
his real name is “Gonzalez-Gongora.”
2
On appeal, Abelino argues that the district court erred in not granting him a
mitigating role reduction. He claims that he was just “a common man,” and did
not have any equity interest in the cocaine that was found on the OFY. He
maintains he did not plan or organize the conspiracy, lacked knowledge of the
scope of the offense, had no supervisory authority, did not make any material
decisions with regard to the transportation of the cocaine, did not have any control
over the cocaine, did not profit from the conspiracy, and did not possess a firearm
for authority or security purposes. In support, Abelino relies on the district court’s
and other circuits’ case law. He also claims that he was less culpable than “the
other co-conspirators on board the vessel such as the captain and the vessel’s
owner’s drug representative and guard.”
We have “long and repeatedly held that a district court’s determination of a
defendant’s role in the offense is a finding of fact to be reviewed only for clear
error.”2 United States v. De Varon, 175 F.3d 930, 937 (11th Cir. 1999) (en banc).
Section 3B1.2 of the Sentencing Guidelines provides for a four-level decrease to a
defendant’s offense level if the defendant was a minimal participant in any
2
In United States v. Booker, 543 U.S. 220 (2005), the Supreme Court excised 18 U.S.C.
§ 3742(e), which established standards of review on appeal. However, this Court has held that
pre-Booker standards for reviewing application of the Sentencing Guidelines (i.e., findings of fact
for clear error, and questions of law de novo) still apply post-Booker. United States v. Crawford,
407 F.3d 1174, 1177-78 (11th Cir. 2005).
3
criminal activity and a two-level decrease if the defendant was a minor participant
in any criminal activity. U.S.S.G. § 3B1.2.
A defendant who is a minimal participant is one who is plainly among the
least culpable of those involved in the conduct of a group. U.S.S.G. § 3B1.2,
comment. (n.4). A defendant is a minor participant if he is less culpable than most
other participants, but whose role can not be described as minimal. U.S.S.G.
§3B1.2, comment. (n. 5). In determining a defendant’s mitigating role in the
offense, the district court “must measure the defendant’s role against the relevant
conduct for which [he] was held accountable at sentencing . . . [and] may also
measure the defendant’s role against the other participants to the extent they are
discernable in the relevant conduct.” De Varon, 175 F.3d at 945. “The defendant
bears the burden of proving his minor role by a preponderance of the evidence.”
United States v. Boyd, 291 F.3d 1274, 1277 (11th Cir. 2002). Where a drug
courier’s relevant conduct is limited to his own criminal act, a district court may
legitimately conclude that the courier played an important and essential role in that
crime. See DeVaron, 175 F.3d at 942-43. Furthermore, “the amount of drugs
imported is a material consideration in assessing a defendant’s role in [his] relevant
conduct.” See id. at 943. “[W]here the relevant conduct attributed to a defendant is
identical to [his] actual conduct, [he] cannot prove that [he] is entitled to a
4
[mitigating-role] adjustment simply by pointing to some broader criminal scheme
in which [he] was a minor participant but for which [he] was not held
accountable.” Id. at 941. We have held that “the fact that a defendant's role may
be less than that of other participants engaged in the relevant conduct may not be
dispositive of role in the offense, since it is possible that none are minor or
minimal participants.” See DeVaron, 175 F.3d at 944.
Here, the record supports the district court’s finding that Abelino’s role in
the relevant offense was neither minor nor minimal. With respect to the first prong
of the DeVaron analysis, at sentencing, Abelino was held accountable only for the
4,300 kilograms of cocaine, a very large amount, which was the amount that the
OFY was transporting. Thus, Abelino’s actual and relevant conduct were the
same, and, as such, the district court’s ruling was not clearly wrong.
With respect to the second prong of the DeVaron analysis, there is
insufficient evidence to show that Abelino was a minor or minimal participant in
comparison to others. Here, the only persons identifiable from the evidence are
Abelino, the other six crew members, and Portocarrero, the captain of the vessel.
Abelino has provided no evidence that he was less culpable than the other six crew
members of the OFY, or that his responsibilities aboard the OFY were less vital to
the enterprise than those of any of the other crew members. Abelino tries to
5
distinguish himself from Portocarrero, arguing that his role in the offense was less
important than Portocarrero’s. However, Portocarrero received a two-level
enhancement pursuant to U.S.S.G. § 2D1.1(b)(2)(B) because he was the captain of
the OFY. The case law that Abelino cites is not binding on this Court3 and does
not establish that Abelino was entitled to a mitigating-role reduction. To conclude,
Abelino had the burden to prove he played a mitigating role in the offense, and the
district court did not clearly err in finding that he did not meet this burden.
Therefore, we affirm Abelino’s sentence.
AFFIRMED.
3
“Under the established federal legal system the decisions of one circuit are not binding on
other circuits.” See Minor v. Dugger, 864 F.2d 124, 126 (11th Cir. 1989).
6
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540 F.2d 1011
The PEOPLE OF the TERRITORY OF GUAM, Plaintiff-Appellee,v.Edmund J. OLSEN, Defendant-Appellant.
No. 76-1557.
United States Court of Appeals,Ninth Circuit.
Aug. 10, 1976.
Howard G. Trapp of Trapp, Gayle, Teker, Hammer & Lacy, Agana, Guam, for defendant-appellant.
Nancy Nye, Asst. Atty. Gen., Agana, Guam, for plaintiff-appellee.
OPINION
Before BROWNING, DUNIWAY, ELY, HUFSTEDLER, WRIGHT, TRASK, CHOY, GOODWIN, WALLACE, SNEED and KENNEDY, Circuit Judges.
PER CURIAM:
1
In Agana Bay Development Co. v. Supreme Court of Guam, 529 F.2d 952 (9th Cir. 1976), a divided panel of this court held that the Organic Act of Guam, 64 Stat. 384 (1950), authorized the territory to enact its Court Reorganization Act, by which it transferred the appellate jurisdiction of the district court to the newly created Supreme Court of Guam. The record in that case shows that it was settled after our opinion issued; no petition for certiorari was filed with the Supreme Court of the United States.
2
Appellant in the present case was convicted of criminal charges in the Superior Court of Guam. He appealed to the United States District Court for the Territory of Guam, and that court dismissed the appeal on the authority of Agana Bay. Appellant then petitioned for a writ of certiorari to the Supreme Court of the United States before the case was heard in our court; the petition was denied. We ordered the case submitted to the court en banc so that the question presented in Agana Bay could be resolved by the full court.
3
We now hold that the provisions of Guam's Court Reorganization Act transferring the appellate jurisdiction of the district court to a territorial court are not authorized by the Organic Act. We therefore overrule the panel's opinion in Agana Bay Development Co. v. Supreme Court of Guam. In so holding we adopt the analysis of the dissenting opinion in Agana Bay. We find particularly applicable to this case that portion of the Agana Bay dissent which points out that litigation in the territorial court may involve substantial federal questions which cannot be reviewed by the United States Supreme Court or by any other article III court under existing statutes. See 529 F.2d at 960-61, n.3.
4
We recognize that Guam's Court Reorganization Act was drawn to give expression to a strong desire by the territorial legislature for a greater degree of autonomy and self-government for Guam, and our ruling should not be construed as critical of that objective. We hold only that the appellate jurisdiction of the district court may not be transferred without congressional authorization and pursuant to such provisions and safeguards as Congress may provide.
5
The ruling of the district court declining appellate review in this case is reversed and the cause is remanded.
6
GOODWIN, Circuit Judge, with whom Judges DUNIWAY, TRASK and WALLACE join, dissenting:
7
I dissent, for the reasons set out by Judge Carter in Agana Bay Development Co. v. Supreme Court of Guam, 529 F.2d 952 (9th Cir. 1976).
MEMORANDUM OF CIRCUIT JUDGE CHAMBERS:
8
On June 9, 1976, I participated in the vote of the active judges of the court to take this case en banc.
9
On June 13, 1976, I received notice that the Chief Justice of the United States was appointing me as chairman of a newly created committee of the Judicial Conference of the United States on the Pacific Territories.
10
On July 8, the Chief Justice completed the committee by adding thereto our Circuit Judges Ely and Choy and Judge Paul D. Shriver (retired United States district judge for the Territory of Guam) of Denver, Colorado, and Charles H. Habernigg (former Attorney General of American Samoa), of Portland, Oregon.
11
In the interim between my appointment and the appointment of Judges Ely and Choy to the committee, the latter two had cast their votes for the view expressed by Judge Kennedy. Judge Ely voted on June 24 and Judge Choy on June 28. I did not vote because it seemed that I should not wear a judicial hat and a semi-legislative or policy hat at the same time, although I do not consider myself disqualified.
12
On the other hand, it seems proper that the votes of Judges Ely and Choy should be counted because their official positions on the committee were created after they had voted.
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829 F.2d 1126
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Robert Charles TURNER, Plaintiff-Appellant,v.Mary A. KOLMAN; John T. Porter; United States of America,Defendants-Appellees.
No. 87-3268
United States Court of Appeals, Sixth Circuit.
September 24, 1987.
ORDER
Before ENGEL, MERRITT and RYAN, Circuit Judges.
1
This pro se plaintiff seeks review of a judgment of the district court which dismissed his civil action. Defendants have filed a motion to dismiss. Upon examination of the record and the briefs submitted by the parties, the panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate Procedure.
2
For the reasons stated in the district court's order, its final judgment entered March 24, 1987, is hereby affirmed. Rule 9(b)(5), Rules of the Sixth Circuit. Furthermore, the motions to dismiss and for appointment of counsel are hereby denied.
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Case: 16-10235 Document: 00514081143 Page: 1 Date Filed: 07/20/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-10235 FILED
July 20, 2017
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
ISMAEL RICO,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before REAVLEY, HAYNES, and COSTA, Circuit Judges.
HAYNES, Circuit Judge:
In this appeal of a criminal sentence, Defendant Ismael Rico challenges
the application of two enhancements to his base offense level and the denial of
a reduction for acceptance of responsibility. For the following reasons, we
AFFIRM.
I.
Defendant Ismael Rico pleaded guilty to conspiracy to possess with
intent to distribute a controlled substance. In Rico’s presentence investigation
report (“PSR”), the probation officer assessed a base offense level of thirty-
eight. The PSR also applied a two-level adjustment under United States
Sentencing Guideline (“U.S.S.G.”) § 2D1.1(b)(1) because the offense involved a
Case: 16-10235 Document: 00514081143 Page: 2 Date Filed: 07/20/2017
No. 16-10235
firearm; a two-level adjustment under U.S.S.G. § 2D1.1(b)(5) because the
methamphetamine that Rico distributed had been imported; and a two-level
adjustment under U.S.S.G. § 2D1.1(b)(12) on the basis that Rico maintained a
premises for the purpose of distributing a controlled substance. 1 Following a
three-level reduction under U.S.S.G. § 3E1.1 for acceptance of responsibility,
The PSR calculated Rico’s total offense level as forty-one. That total offense
level, combined with a criminal history category of III, yielded a guidelines
imprisonment range of 360 months to life. But because the statutory
maximum prison term was forty years, the guidelines range became 360 to 480
months. See 21 U.S.C. §§ 841(b)(1)(B), 846; U.S.S.G. § 5G1.1(a); U.S.S.G. Ch.
5, Pt. A.
At sentencing, the district court denied the reduction for acceptance of
responsibility, but otherwise adopted the PSR, resulting in a Guidelines range
of 480 months due to the statutory maximum. The district court sentenced
Rico to 400 months in prison and a four-year term of supervised release.
II.
We review the interpretation of the Guidelines de novo and factual
findings for clear error. United States v. Serfass, 684 F.3d 548, 550 (5th Cir.
2012). There is no clear error where the district court’s finding is plausible in
light of the record as a whole. United States v. Juarez-Duarte, 513 F.3d 204,
208 (5th Cir. 2008) (per curiam).
A.
In his first issue on appeal, Rico challenges the two-level enhancement
he received for importation of methamphetamine under U.S.S.G. § 2D1.1(b)(5).
More specifically, he maintains that the information in the PSR was
insufficient to support a finding that the methamphetamine was from Mexico.
1 According to the PSR, the November 1, 2014, version of the Guidelines was used.
2
Case: 16-10235 Document: 00514081143 Page: 3 Date Filed: 07/20/2017
No. 16-10235
Where a defendant has intentionally relinquished or abandoned a known right,
the issue is waived. United States v. Olano, 507 U.S. 725, 733 (1993). Because
Rico waived this objection, we cannot address it. See United States v. Musquiz,
45 F.3d 927, 931 (5th Cir. 1995) (“Waived errors are entirely unreviewable,
unlike forfeited errors, which are reviewable for plain error.”).
In his objections to the PSR, Rico contested that the methamphetamine
was imported from Mexico. By his written objections, Rico essentially made
two arguments: (1) he did not know the origin of the methamphetamine, and
thus his base offense level could not be enhanced and (2) the information
contained in the PSR was insufficient to support the enhancement because it
was unreliable. Prior to the sentencing hearing, the district court entered an
order tentatively concluding that Rico’s objections were without merit. The
district court stated that it was “advising the parties of such tentative
conclusion so that it can be taken into account by the parties in determining
what presentations to make at the sentencing hearing.”
At the sentencing hearing, the district court asked Rico whether he “still
want[ed] to pursue any of those objections.” Counsel for Rico responded in the
affirmative, but chose to pursue some, but not all, of the objections. He stated
that, as to the importation enhancement, “that’s a legal objection as to the
standard used by the Fifth Circuit. We’re simply making that objection to
preserve it for later appeal.” Counsel further conceded that he “agree[d] that
. . . as the law stands now, that is a proper finding.” (emphasis added). Indeed,
when the court clarified whether “the issue is whether or not the law should
be that the increase should not be applicable if he doesn’t know it came from
Mexico,” counsel responded, “Yes, Your Honor.” This exchange shows that,
although Rico knew of his objection based on insufficient information, he
consciously decided to forgo that objection at sentencing. Instead, he limited
his objection to the standard applied by this circuit and acknowledged the
3
Case: 16-10235 Document: 00514081143 Page: 4 Date Filed: 07/20/2017
No. 16-10235
enhancement was proper under that precedent. Accordingly, he waived his
objection. See Musquiz, 45 F.3d at 931.
Rico maintains that the tentative ruling was sufficient to preserve the
issue on appeal. We disagree. The ruling was only a tentative one, intended
to assist the parties in preparing for sentencing. Contrary to Rico’s suggestion,
it was not meant to discourage pursuing objections; indeed, the district court
began the sentencing hearing by explicitly asking Rico if he wanted to pursue
any of his objections. Again, Rico did so, but did not pursue all of them.
Accordingly, this is not a situation where further objection would have been
futile. Cf. United States v. Gerezano-Rosales, 692 F.3d 393, 399–400 (5th Cir.
2012). 2
B.
Rico next argues that the district court erred in applying an
enhancement to his base offense level for “maintain[ing] a premises for the
purpose of manufacturing or distributing a controlled substance,” U.S.S.G.
§ 2D1.1(b)(12), because the information in the PSR was insufficiently reliable
to support such a finding. Because the information was sufficiently reliable to
support the maintaining-a-premises finding, we affirm the application of the
enhancement.
In assessing the maintaining-a-premises enhancement, the PSR stated
that Rico obtained methamphetamine from his source of supply and
transported it to be stored and maintained at his mother’s home, where he
resided “on and off” during the conspiracy. Furthermore, the PSR stated that
2 To the extent that Rico reurges his legal claim that the mere distribution of imported
methamphetamine is insufficient to warrant the adjustment, that claim, as he admits, is
foreclosed. Under our case law, U.S.S.G. § 2D1.1(b)(5) has no scienter requirement; thus, the
fact that the methamphetamine was imported—regardless of whether he was aware of the
importation—is adequate for the adjustment to apply. See United States v. Foulks, 747 F.3d
914, 915 (5th Cir. 2014) (per curiam); Serfass, 684 F.3d at 553–54.
4
Case: 16-10235 Document: 00514081143 Page: 5 Date Filed: 07/20/2017
No. 16-10235
Rico left methamphetamine with his brother to deliver to a co-defendant, David
Godinez. Rico’s brother delivered methamphetamine to Godinez from his
mother’s home on several occasions at the direction of Rico. Moreover,
“coconspirators confirmed that the defendant stored methamphetamine at his
mother’s residence . . . . Godinez retrieved methamphetamine, on at least one
occasion, from the defendant’s mother’s residence.”
In his objections to the PSR, Rico challenged the maintaining-a-premises
enhancement. In responding to the objections, the Government clarified that
Godinez was the primary source of information against Rico, and that Godinez
stated that Rico stored and sold methamphetamine from his mother’s home.
In the addendum to the PSR, the probation officer stated that he clarified the
information with one of the agents on the case as well as with debriefings of
coconspirators and codefendants. The addendum specified that “[o]n more
than one occasion, the defendant instructed his brother, who resided at their
mother’s home, to provide quantities of methamphetamine to Godinez at their
mother’s home.”
When sentencing a defendant, “the court may consider relevant
information without regard to its admissibility under the rules of evidence
applicable at trial, provided that the information has sufficient indicia of
reliability to support its probable accuracy.” U.S.S.G. § 6A1.3(a) (emphasis
added). We have clarified that “[w]hile a PSR generally bears sufficient indicia
of reliability, ‘[b]ald, conclusionary statements do not acquire the patina of
reliability by mere inclusion in the PSR.’” United States v. Narviz-Guerra, 148
F.3d 530, 537 (5th Cir. 1998) (second alteration in original) (citation omitted)
(quoting United States v. Elwood, 999 F.2d 814, 817–18 (5th Cir. 1993)). The
applicable “reasonably reliable” standard, however, is “not intended to be
onerous.” United States v. Malone, 828 F.3d 331, 337 (5th Cir.), cert. denied
sub nom. Green v. United States, 137 S. Ct. 526 (2016).
5
Case: 16-10235 Document: 00514081143 Page: 6 Date Filed: 07/20/2017
No. 16-10235
Rico argues that, by not attributing the statements contained in the PSR
to a particular source, the statements are bald assertions that are
insufficiently reliable. See, e.g., United States v. Rome, 207 F.3d 251, 254 (5th
Cir. 2000) (per curiam) (determining that “the statement that the defendant
and his accomplice would have stolen all the guns if they had not been
interrupted” was a bald assertion); United States v. Williams, 22 F.3d 580, 581
n.3 (5th Cir. 1994) (determining that law enforcement’s statement that the
defendant was “the muscle” behind the conspiracy was a bald assertion). He
likens this case to Narviz-Guerra, in which the defendant challenged the
reliability of statements made in the PSR relating to drug quantity. 148 F.3d
at 537. The PSR in Narviz-Guerra stated that the total amount was “based
primarily on information contained in various debriefings, recorded meetings
and telephone calls, and on the amount of marijuana seized in the different
arrests of the co-conspirators” and that the defendant was only being held
accountable for “those amounts of drugs that have been substantiated.” Id.
We noted that there was no way to determine if the information was reliable
because none of the enumerated sources for the information was attached to
the PSR nor was there an explanation of how the information in the PSR was
corroborated. Id.
Narviz-Guerra does not control the outcome here. Although the PSR and
PSR addendum in this case contain a general laundry list of sources for the
information contained therein, the PSR specifically attributes the information
about storing drugs at the mother’s house to “coconspirators.” Moreover, not
only did the Government clarify in its response to Rico’s objections that the
specific source for the information was Godinez, but also Rico acknowledged
that Godinez was the source of this information at the sentencing hearing,
stating that there was “an allegation from the codefendant Godinez in this case
that Mr. Rico was using his mother’s house to store methamphetamines.”
6
Case: 16-10235 Document: 00514081143 Page: 7 Date Filed: 07/20/2017
No. 16-10235
Indeed, although the PSR itself does not specifically identify Godinez as the
source for the maintaining-a-premises enhancement, it is apparent from the
PSR and its addendum that Godinez provided the investigating officers with
information about Rico’s involvement in the drug conspiracy as a general
matter. Statements by coconspirators are sufficiently reliable to form the basis
of a finding. See United States v. Zuniga, 720 F.3d 587, 591 (5th Cir. 2013)
(per curiam); United States v. Cantu-Ramirez, 669 F.3d 619, 629 (5th Cir.
2012).
Additionally, upon receipt of Rico’s objections to the PSR, the probation
officer clarified the information in the PSR with an agent on the case. As to
this point, we have noted that information based on the results of a police
investigation is sufficiently reliable. See United States v. Fuentes, 775 F.3d
213, 220 (5th Cir. 2014) (per curiam); United States v. Vela, 927 F.2d 197, 201
(5th Cir. 1991); see also United States v. Godinez, 640 F. App’x 385, 389 (5th
Cir.) 3 (per curiam) (“In light of the [probation officer]’s interview with the case
agent wherein the agent clarified and corroborated the information found in
the investigative material relied upon to compile the PSR, we hold that the
information contained therein, including the description of the [unidentified
confidential informant]’s involvement . . . , is ‘reasonably reliable.’”), cert.
denied, 137 S. Ct. 104 (2016). On these facts, the information was sufficiently
reliable to support the maintaining-a-premises finding.
C.
In his final issue on appeal, Rico maintains that the district court erred
by not granting him a three-point reduction for acceptance of responsibility
3Although Godinez is not “controlling precedent,” it “may be [cited as] persuasive
authority.” Ballard v. Burton, 444 F.3d 391, 401 n.7 (5th Cir. 2006) (citing 5TH CIR. R. 47.5.4).
7
Case: 16-10235 Document: 00514081143 Page: 8 Date Filed: 07/20/2017
No. 16-10235
under U.S.S.G. § 3E1.1. Because any error in denying the reduction is
harmless, we affirm.
An error in calculating a defendant’s guidelines range will be harmless
and not require reversal if the district court considered the correct guidelines
range and indicated that it would impose the identical sentence if that range
applied. United States v. Richardson, 676 F.3d 491, 511 (5th Cir. 2012); United
States v. Duhon, 541 F.3d 391, 396 (5th Cir. 2008); United States v. Bonilla,
524 F.3d 647, 656 (5th Cir. 2008)). 4 The record establishes that the district
court was aware of, and considered, the guidelines range that would apply if
Rico received a reduction under § 3E1.1. At the sentencing hearing, the
Government notified the court of the sentencing range with the reduction and
without the reduction. In announcing the sentence, the district court stated,
“I’ve concluded that a sentence of 400 months of imprisonment would be an
appropriate sentence in this case, and that would be without regard to whether
there was acceptance of responsibility.” (emphasis added). The court went on
to state “[i]n other words, that really is kind of a moot issue because that’s the
sentence I would have imposed, even if the range was 360 to 480 months.”
(emphasis added). Because the district court considered the purportedly
correct Guidelines range and made it clear that the sentence would be the same
regardless of whether that range applied, any error was harmless. See Duhon,
541 F.3d at 396 (5th Cir. 2008) (“[I]n Bonilla, we concluded that a non-
Guideline sentence does not result from the district court’s miscalculation of
the Guideline range if the district court: (1) contemplated the correct Guideline
4 United States v. Ibarra-Luna, 628 F.3d 712, 714 (5th Cir. 2010), does not mandate
a different result. The circumstances of that case involved a district court that did not
consider the correct guidelines range, only the incorrect one. In such cases, in order to
establish harmless error, the Government must show that the district court would have
imposed the same sentence for the same reason. Richardson, 676 F.3d at 511 (contrasting
the requirements of Bonilla and Duhon with those of Ibarra-Luna).
8
Case: 16-10235 Document: 00514081143 Page: 9 Date Filed: 07/20/2017
No. 16-10235
range in its analysis and (2) stated that it would have imposed the same
sentence even if that range applied.” (citing Bonilla, 524 F.3d at 656)).
AFFIRMED.
9
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NOT RECOMMENDED FOR PUBLICATION
File Name: 19a0398n.06
No. 18-3958
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Aug 01, 2019
UNITED STATES OF AMERICA, )
DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
)
ON APPEAL FROM THE
v. )
UNITED STATES DISTRICT
)
COURT FOR THE NORTHERN
ANTHONY H. LETT, )
DISTRICT OF OHIO
)
Defendant-Appellant. )
)
BEFORE: SUTTON, GRIFFIN, and READLER, Circuit Judges.
GRIFFIN, Circuit Judge.
If bringing a knife to a gun fight is a supremely bad idea, stealing a gun from a gun show
is not far behind it. When defendant Anthony Lett tested his luck by attempting the latter, it left
him with two federal charges and—after a jury trial—two federal convictions. He now appeals
the denial of two pre-trial suppression motions and his sentence. We affirm.
I.
In the spring of 2016, Berea, Ohio hosted a gun show. Anthony Lett and two of his
comrades attended it. Lett was a convicted felon and, as such, was prohibited from buying
firearms. So he stole one instead.
It all started when one of Lett’s companions posed a series of unusual questions to a vendor.
After the conversation ended, the vendor noticed that a gun was missing from his table. He notified
No. 18-3958, United States v. Lett
police, who sent an officer to take a report. While the vendor spoke with the officer, Lett
approached and stole a different gun—picking it up off the table and walking away. Fortunately,
the vendor’s son, who was at a neighboring table, saw Lett, confronted him, and recovered the
gun.
Later in the day, Lett and his other partner in crime stole a third gun from a different vendor.
Lett spoke with the vendor to distract him, and Lett’s accomplice took one of the vendor’s guns
and began walking away. The vendor noticed, confronted the man, and recovered the gun. And
he, like the other vendor who had been a crime victim that day, reported the theft. That report
made its way to an off-duty officer who was working security. As that officer learned of the crime,
he saw Lett leaving the show. He had also heard of the previous thefts and therefore knew to keep
his eye on Lett. Then a third vendor pointed at Lett and said he was involved in the most recent
theft.
Armed with this knowledge, the officer tried to stop Lett. But Lett refused to stop; he said
he had not done anything wrong and kept on walking. So the officer physically restrained him.
Then three or four more vendors arrived and identified Lett as one of the thieves. Lett later
provided his identification, and as the officer verified its accuracy, he learned that Lett had several
active arrest warrants. At that point, federal agents who were also at the show stepped in and took
Lett to a private area for questioning.
While the agents detained him, they learned that police had yet to apprehend one of his
accomplices, who was potentially armed and had entered a hospital. In response, the hospital
initiated lockdown procedures and the agents addressed the situation. One agent took Lett’s
picture with a cellphone, showed the picture to two vendors, and asked them if the picture depicted
one of the men they had witnessed stealing guns. The agent did the same with drivers-license
-2-
No. 18-3958, United States v. Lett
photographs of whom he believed were the other suspects—including the one who had entered the
hospital. The vendors confirmed that Lett and the others were the ones who had stolen multiple
guns.
The agents eventually arrested Lett, and the government later charged him with being a
felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1) and with possessing a stolen
firearm in violation of 18 U.S.C. § 922(j). He then filed two motions to suppress evidence. In the
first, he argued that the officer who initially stopped him lacked reasonable suspicion that he had
committed a crime. In the second, he claimed that the agent who showed photographs to the
vendors violated due process because doing so unduly suggested that Lett was the suspect. The
district court denied both motions.
Lett went to trial, where both vendors testified that an agent had shown them a picture they
had identified as one of the suspects, and where the agent himself testified that the vendors had
identified Lett, specifically. The jury convicted him of both crimes. The district court then
sentenced him to 120 months’ imprisonment on the first charge and 30 months’ imprisonment on
the second. The court imposed those sentences consecutive to each other and consecutive to a
lengthy state sentence Lett had received for an unrelated crime. This appeal followed.
II.
Lett challenges the denial of both suppression motions and the district court’s decision to
run his federal sentences consecutive to his unrelated state one. Thus, we must answer three
questions: Did the officer have reasonable suspicion to stop Lett? Was the agent’s use of Lett’s
photograph improper? And did the district court err by imposing consecutive sentences?
Reasonable Suspicion. The Fourth Amendment guarantees “[t]he right of the people to be
secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.”
-3-
No. 18-3958, United States v. Lett
U.S. Const. amend. IV. Officers may temporarily seize citizens if the officers have “reasonable”
suspicion of criminal activity stemming from “specific and articulable facts” the officers know at
the time of the stop. Terry v. Ohio, 392 U.S. 1, 21–22 (1968). It is not a high bar. Navarette v.
California, 572 U.S. 393, 396–97 (2014). All an officer needs is “a minimal level of objective
justification” for the stop. Illinois v. Wardlow, 528 U.S. 119, 123 (2000).
Measured by these considerations, Lett’s challenge comes up short. He argues that the
officer was unable “to articulate any facts that would establish the legal conclusion that [he] was
engaged in any form of criminal activity” and that the officer detained him “simply because other
unknown parties [said] to do so but did not give [the officer] a reason.” Yet the eyewitnesses did
give the officer a reason to stop Lett: they identified him as one of the men who had stolen guns.
So did the officer have reasonable suspicion to stop Lett? Yes. The eyewitness
identifications, alone, created that suspicion. See, e.g., United States v. Powell, 210 F.3d 373 (6th
Cir. 2000) (table) (“[A]n officer certainly has ‘reasonable suspicion’ to rely on a victim’s statement
that a particular individual is a suspect.”); see also United States v. Marxen, 410 F.3d 326, 329
(6th Cir. 2005) (holding that an officer had reasonable suspicion to stop a car when an eyewitness
to a robbery had identified it as the getaway car); Gardenhire v. Schubert, 205 F.3d 303, 317 (6th
Cir. 2000) (noting that an eyewitness identification of a suspect, alone, might not create probable
cause but would create reasonable suspicion). The district court therefore correctly denied Lett’s
suppression motion.
Photograph Identification. When an eyewitness relies on photographs to identify a
suspect, the government may in turn rely on that identification if the process surrounding it was
not so suggestive that it produced a high likelihood of misidentification. Simmons v. United States,
390 U.S. 377, 384 (1968). Consistent with this standard, a defendant seeking to exclude such an
-4-
No. 18-3958, United States v. Lett
identification must show that the procedure leading to it was unduly suggestive. United States v.
Sullivan, 431 F.3d 976, 985 (6th Cir. 2005). If he makes that showing, a court must then consider
the totality of the circumstances surrounding the identification to evaluate its reliability. Id.
Lett argues that the district court erred by admitting the government’s identification
evidence, but he has not shown that the process that produced it was unduly suggestive. He claims
it was “highly suggestive,” but he never explains why that was so. Instead of describing what
occurred and why it created a likelihood of misidentification, he focuses on what did not happen.
Lett emphasizes that the agent never used a blind administrator (someone who does not know the
suspect’s identity) and never circled back with a lineup of multiple photographs or actual people.
That might be correct, but it doesn’t benefit Lett because no court has held that due process
requires those procedures. Indeed, in past cases we have approved the use of identifications that
occurred in their absence. See, e.g., United States v. Watson, 540 F. App’x 512, 515 (6th Cir.
2013) (noting that whether officers used a blind administrator was “irrelevant” to whether a
photographic identification violated due process); Bruner v. Perini, 875 F.2d 531, 534–35 (6th Cir.
1989) (approving the admission of identification testimony when the police had not used a lineup
and had instead brought the defendant, alone, in front of the eyewitness).
So was the agent’s use of Lett’s photograph improper? No. Lett has not given us any
reason to conclude that it was. And everything about the identifications suggests that the vendors
were correct. As the government points out, both venders interacted with Lett that day, speaking
with him as he stood just a few feet away. He stole a gun in front of one of them, and he was
speaking with the other as his accomplice stole a different gun—events that were sure to stick out
from the run-of-the-mill interactions the vendors had that day. And they identified his photograph
-5-
No. 18-3958, United States v. Lett
the day of the crimes, not weeks or months later. Accordingly, the district court did not err in
denying Lett’s suppression motion.
Consecutive Sentences. When a district court sentences a defendant who is already serving
time for another offense, the court must decide whether to run the new sentence consecutively or
concurrently to the current one. 18 U.S.C. § 3584(a). To make that decision, the court must
consider several factors listed in 18 U.S.C. § 3553(a). See 18 U.S.C. § 3584(b). The Sentencing
Guidelines also list several factors the court must keep in mind. See USSG § 5G1.3, app. n. 4(A).
If the district court considers these factors, it enjoys discretion to impose either type of sentence—
consecutive or concurrent. United States v. Watford, 468 F.3d 891, 916 (6th Cir. 2006).
Lett takes issue with the consecutive sentences he received. He claims that nothing in the
record shows that the district court considered the relevant factors. But his argument encounters
a few insurmountable obstacles. First, despite the district court asking if anyone had objections to
the sentence, Lett never raised one. Thus, plain-error review applies, see United States v. Vonner,
516 F.3d 382, 386 (6th Cir. 2008) (en banc), which requires Lett to establish that the district court
committed (1) an error (2) that was clear or obvious, (3) that affected Lett’s substantial rights and
(4) that affected the judicial proceedings’ fairness, integrity, or public reputation, id. But Lett has
not attempted to make that showing; he neither mentions the plain-error elements nor makes any
argument we could interpret as addressing them.
Second, the district court explained in detail why it imposed the sentence. The government
also argued at length that Lett should receive consecutive sentences, even calling it the “main
issue” the court needed to decide. And the court then said that the government had “correctly
analyzed” the interplay between the various sentencing factors.
-6-
No. 18-3958, United States v. Lett
So did the district court err by imposing consecutive sentences? No. The record reveals
that the district court thoroughly analyzed who Lett was, what he did, and why consecutive
sentences were warranted to punish him, protect the public from him, and deter others from
committing similar crimes. Lett can show no error—much less an error that was obvious,
prejudicial, and unfair.
III.
For these reasons, we affirm Lett’s convictions and sentence.
-7-
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Present: Carrico, C.J., Lacy, Hassell, Keenan, Koontz, and
Kinser, JJ., and Poff, Senior Justice
JOSEPH B. SWEENEY
v. Record No. 991810 OPINION BY JUSTICE CYNTHIA D. KINSER
April 21, 2000
WEST GROUP, INC.
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Marcus D. Williams, Judge
In this appeal, we decide whether a lease provision
requiring a lessee to give written notice of the lessee’s
intent to vacate leased premises at the end of a fixed-term
residential real estate lease can be enforced by a lessor.
Because we conclude that the provision is, in effect, a
statutorily proscribed waiver of the lessee’s rights under
Code § 55-222, we will reverse the circuit court’s judgment
in favor of the lessor.
FACTS AND PROCEEDINGS
Joseph B. Sweeney signed a one-year, fixed-term lease
agreement with West Gate 1 on August 1, 1996, for an
apartment (the premises) located in a complex known as the
Commons of McLean. By its terms, that lease expired on
July 31, 1997. It did not provide for an automatic renewal
of the one-year term.
1
West Gate is owned by the appellee West Group, Inc.
The form lease agreement that Sweeney executed states
that “Lessee shall render to the Lessor a written thirty
(30) day notice to vacate said premises in the event this
Lease is not extended, this notice to be filed with the
Lessor thirty (30) days prior to the expiration of this
Lease.” A lease rider, which Sweeney also executed,
provides that the terms of the rider control in cases of
conflict between the provisions of the lease and those of
the rider. The rider also states that the rights and
responsibilities of the lessee are governed by the Virginia
Residential Landlord and Tenant Act (Act), Code §§ 55-248.2
through –248.40, and that the Act, or other applicable
state law, controls if any conflict exists between the
terms of the lease and the provisions of the Act.
In early June 1997, Sweeney visited the complex’s
rental office and orally informed West Gate’s agent that he
would not be extending his lease beyond its expiration on
July 31, 1997. Sweeney did not give the lessor any written
notice of his intent to vacate the premises at the end of
the fixed term, but he vacated the premises on or before
the last day of the term of his lease.
Almost one year later, West Group filed a warrant in
debt in the Fairfax County General District Court against
Sweeney and a co-signer of the lease, seeking damages in
2
the amount of $899.75 for unpaid rent and damages, 2 plus
interest, costs, and attorney’s fees. Sweeney answered,
denying that he owed the amount sued for, and filed a
counterclaim for $150 plus interest, which represented a
portion of his security deposit that he contended West
Group withheld from him.
The general district court dismissed West Group’s
warrant in debt with prejudice but granted Sweeney a
judgment in the amount of $111.33 on his counterclaim.
West Group appealed the general district court’s judgment
to the circuit court. After a bench trial, the circuit
court entered judgment against Sweeney in the amount of
$730 plus costs. 3 This appeal followed.
ANALYSIS
The sole issue in this appeal is whether the provision
of the lease agreement requiring Sweeney to give the lessor
written notice of his intent to vacate the premises at the
end of the fixed term can be enforced by West Group.
2
West Group calculated its claim in the following
manner: $1,049.75 for damages, utilities, and rent less
Sweeney’s security deposit of $150, leaving an amount due
of $899.75. Of that amount due, West Group included $880
as additional rent because of Sweeney’s failure to give the
written notice to vacate.
3
The circuit court’s final order does not specifically
address Sweeney’s counterclaim. Neither party has assigned
3
Enforcement of the provision would subject Sweeney to
additional rental payments beyond the term of his lease if
he failed to give the written notice. As stated in the
rider to Sweeney’s lease, the Act governs Sweeney’s rights
and responsibilities and thus applies to the present
dispute. Pursuant to Code §§ 55-248.9(A)(1) and (2), a
rental agreement subject to the Act may not contain a
waiver of a tenant’s rights under, inter alia, the Act or
Chapter 13 of Title 55 of the Code. Sweeney’s rights under
Chapter 13 are at issue in this appeal.
Code § 55-222, found in Chapter 13 of Title 55,
addresses the necessity and type of notice required to
terminate various kinds of tenancies. That section
provides, in pertinent part, that notice is not “necessary
from or to a tenant whose term is to end at a certain
time.” The one-year, fixed term of Sweeney’s lease ended
on July 31, 1997, which is “a certain time” within the
meaning of Code § 55-222.
Thus, the provision in Sweeney’s lease agreement
requiring him to give written notice of his intent to
vacate the premises was not only unnecessary but also
contrary to the terms of Code § 55-222. The requirement of
___________________
error with respect to the disposition of the counterclaim.
Thus, that issue is not before the Court in this appeal.
4
written notice is, in effect, a statutorily proscribed
waiver of Sweeney’s rights under Code § 55-222. Such a
waiver is not enforceable. Code § 55-248.9(B).
For this reason, we will reverse the circuit court’s
judgment and enter judgment for Sweeney on the warrant in
debt. 4
Reversed and final judgment.
4
Because of our decision, we do not reach Sweeney’s
other assignment of error.
5
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NO. 07-03-00316-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
OCTOBER 10, 2003
______________________________
ESTELLA RODRIGUEZ, APPELLANT
V.
DONALD C. FRIETAG, M.D., APPELLEE
_________________________________
FROM THE 106TH DISTRICT COURT OF LYNN COUNTY;
NO. XX-XXXXXXX; HONORABLE CARTER TINSLEY SCHILDKNECHT, JUDGE
_______________________________
Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.
MEMORANDUM OPINION
Appellant Estella Rodriguez filed a notice of appeal challenging the trial court's
order signed April 22, 2003. On September 4, 2003, the trial court clerk filed a motion for
extension of time in which to file the clerk's record citing, among other reasons, appellant's
failure to pay or make arrangements to pay for the record. By letter dated September 5,
2003, the motion was granted extending the deadline to September 26, 2003. By that
same letter, appellant's counsel, Mr. David Martinez, was directed to certify to this Court
on or before September 25, 2003, whether he had complied with Rules 34.5(10) and
35.3(a)(2) of the Texas Rules of Appellate Procedure, noting that failure to do so might
result in dismissal of the appeal. See Tex. R. App. P. 37.3(b). Mr. Martinez did not
respond and the clerk's record has not been filed.
Accordingly, the appeal is hereby dismissed for want of prosecution.
Don H. Reavis
Justice
ef'd), or when the potential error becomes apparent. Perry v. State, 957 S.W.2d 894, 896
(Tex. App.--Texarkana 1997, pet. ref'd). Hoxie correctly asserts that the circumstance
which gave rise to a portion of its argument did not occur until the jury failed to find that
Baker breached the Purchase Agreement. At that point, it became clear that Baker owed
no debt to Hoxie; prior thereto, the matter was in dispute. (2) So, because the focus of
Hoxie's contention involved the want of a debt and the jury did not find that such a debt
was wanting until after the trial court granted Baker's motion for a directed verdict on his
usury claim, we cannot say that Hoxie's contention or objection was apparent at the time
the trial court was considering Baker's motion.
Alternatively, though not expressly identified as an attack on the legal sufficiency of
the evidence underlying the trial court's verdict viz the finding of usury, Hoxie's argument
effectively questions the legal sufficiency of that evidence. That is, the company questions,
among other things, whether the trial court could have found as a matter of law that Hoxie
committed usury when a purported element of Baker's claim, i.e. the existence of an
underlying debt, ultimately went unestablished. And, in alleging that Baker failed to prove
an element of his claim, Hoxie in effect questioned the sufficiency of the evidence
underlying the court's decision. Finally, being an attack on the sufficiency of the evidence,
Hoxie need not have presented the issue below to have preserved it for review. See
Strickland v. Coleman, 824 S.W.2d 188, 191 (Tex. App.--Houston [1st Dist.] 1991, no writ)
(holding that a motion for new trial is not necessary to attack either the legal or factual
sufficiency of the evidence underlying a non-jury finding).
Thus, Hoxie did not waive its argument that no absolute obligation to pay a debt
existed. Having determined this, we now decide whether the argument is accurate and,
if so, its affect on our prior decision.
No Debt?
As previously indicated, the trial court granted Baker's motion for a directed verdict
upon his claim of usury. This was done before the court submitted the question of whether
the same individual breached the Purchase Agreement. However, when the latter issue
was submitted, the jury concluded that Baker had not. In so finding, the jury held, for all
practical purposes, that Baker owed Hoxie no debt.
Next, it was the existence of that supposed debt which caused Hoxie to demand
from Baker, via the January 15, 1998 demand letter, damages plus interest thereon.
Simply put, if Hoxie had not concluded that Baker breached the Purchase Agreement, then
it would have had no basis for seeking damages and interest. Additionally, while recovery
by Hoxie depended upon the existence of a debt, question remains whether the same was
and is true of Baker's claim for usury. Baker argued that it is not, while Hoxie asserted that
it is. To resolve this dispute, we reiterate various principles of usury discussed and relied
upon in our original opinion.
It is beyond dispute that usury provisions are penal in nature and, therefore, must
be strictly construed. Moore v. Liddell, Sapp, Ziveley, Hill & Laboon, 850 S.W.2d 291, 293
(Tex. App.--Austin 1993, writ denied); Childs v. Taylor Cotton Oil Co., 612 S.W.2d 245, 251
(Tex. App.--Tyler, 1981, writ ref'd n.r.e.). In construing the provisions applicable here, we
initially encounter § 305.001 of the Texas Finance Code. Through it, the legislature
deigned to penalize one who "contracts for, charges, or receives interest that is greater
than the amount authorized" by law. Tex. Fin. Code Ann. §305.001(a) (Vernon 1998)
(emphasis supplied). In other words, there must be some effort to assess "interest" to
trigger application of the statute. See Gonzalez County Sav. & Loan Ass'n, 534 S.W.2d
903, 906 (Tex. 1976) (holding that the lender did not commit usury since a bona fide
commitment as demanded by the lender was not interest); Sunday Canyon Prop. Owners
Ass'n v. Annett, 978 S.W.2d 654, 658 (Tex. App.--Amarillo 1998, no pet.) (holding that a
realty assessment fee was not interest so levying the fee did not constitute usury). If what
the defendant sought was not "interest," then his actions cannot be violative of §305.001.
So, we now endeavor to discern what constitutes "interest." Luckily, that does not
require us to write on a clean slate for the legislature already addressed the matter.
According to statute, "interest" means "compensation for the use, forbearance, or detention
of money." Tex. Fin. Code Ann. §301.002(a)(4) (Vernon Supp. 2001). Moreover, in
utilizing the terms "use, forbearance or detention of money" the legislature did not
accompany the words with any modifying or conditional language. That is, it said nothing
about the "supposed," "purported" or "alleged" use, forbearance or detention of money.
And, because it did not, we are prohibited from reading such qualifying terms into the
definition. Instead, authority obligates us to construe the statute as defined by the
legislature, and as defined by the legislature, it contemplates the actual use, forbearance
or detention of money. So, if there is no actual use, forbearance or detention of money,
then there can be no interest involved. And, if there is no interest involved, then there can
be no violation of §305.001. With this said, we now turn to the circumstances of the
dispute before us.
As described in our original opinion, the type of interest allegedly implicated here
involved a request for compensation due to the detention of money. Again, Hoxie alleged
that Baker failed to pay a debt owed and owing to Hoxie, that debt being the sums
purportedly due as a result of Baker agreeing to buy the farm machinery. See William C.
Dear & Assoc., Inc. v. Plastronics. Inc., 913 S.W.2d 251, 253-54 (Tex. App.--Amarillo 1996,
writ denied) (stating that the detention of money occurs when a debt becomes due and
payment has been withheld); Sunwest Bank v. Gutierrez, 819 S.W.2d 673, 675 (Tex. App.--El Paso 1991, writ denied) (stating the same). Given this, we now determine whether the
requisite detention occurred at bar and note that the jury's verdict all but resolved the issue.
As described above, Hoxie's claim was founded upon Baker's supposed breach of
the Purchase Agreement. It was that breach which allegedly gave rise to a chose-in-action
or debt between the two parties. Yet, when the allegation was submitted to the jury for
decision, it rejected the proposition. That is, it held that Baker had not breached the
agreement, which, in turn, meant that Baker owed no debt to Hoxie. Logically, if Baker
owed no debt to Hoxie, then it cannot be said that Baker actually detained any monies of
Hoxie. And, if no monies were actually detained, then it cannot be said that Hoxie sought
compensation, through its January 15th letter, for the actual detention of money. And, if
Hoxie did not seek such compensation, then it cannot be said that Hoxie sought interest
from Baker. And, if Hoxie did not seek interest from Baker, then it cannot be said that the
company violated §305.001 or any other usury law.
In sum, our Supreme Court held, in George A. Fuller Co. v. Carpet Serv., Inc., 823
S.W.2d 603 (Tex. 1992), that a demand for excessive prejudgment interest cannot give
rise to a claim for usury. Id. at 605-606. This was so because the source of the claim was
not a commercial or consumer transaction but the judicial process itself. (3) Id. Through
Domizio v. Progressive County Mut. Ins. Co.,No 03-00-00423-CV, 2001Tex. App. LEXIS
5926(Austin August 30, 2001, no pet. h.), the intermediate court of appeals told us that
the insurance company was not liable for usury since there existed no lending relationship
between the two parties. Id. at *12-13. From these opinions and the statutes involved, we
see that there must be some relationship between the usury claimant and the accused
which financially obligates the claimant to the accused before the claimant can secure the
benefits of the usury statutes. While the Domizio court labeled the relationship as one of
lender/debtor, we view it as one of creditor/debtor. (4) Yet, irrespective of its label, that
relationship did not exist here once the jury found that Baker had not breached the
contract. It being non-existent, we hold, as a matter of law, that the trial court reversibly
erred in finding that Hoxie committed usury. (5)
Accordingly, we overrule Baker's motion for rehearing, grant that of Hoxie in part,
and modify our judgment in part. In doing so, we reverse those portions of the trial court's
judgment 1) awarding Baker damages against Hoxie upon his claims of usury and 2)
denying Hoxie recovery upon the account receivable due from Baker. We further order
that Hoxie recover from Baker the sum of $3137.70 plus interest at the rate of 1) six
percent a year from thirty days after the account receivable became due to the day before
judgment and 2) ten percent a year from the date of judgment until paid. In all other
respects, however, the judgment of the trial court is affirmed. (6)
Brian Quinn
Justice
Publish.
1. There allegedly existed no absolute obligation to pay a debt, according to Hoxie, for two reasons.
First, there was no debt due Hoxie from Baker once the jury found in favor of Baker on the breach of contract
claim. Second, the existence of the debt was contingent upon Baker foregoing his contractual option to
terminate the contract, which option Baker did not forego.
2. In referring to the "debt," we are referring to the monetary obligation or chose-in-action that allegedly
arose when Baker supposedly breached the Purchase Agreement. In refusing to perform the contract, Baker
allegedly detained monies due Hoxie. And, because Baker detained those monies, Hoxie believed itself
entitled to interest. So, the interest it demanded via the January 15, 1998 letter was to recompense it for
Baker's supposed detention of monies due and owing.
3. No one argued at bar that George pretermited recovery since Hoxie allegedly demanded excessive
prejudgment interest and pre-judgment interest could not be the basis of a claim for usury. Thus, we did and
do not address that matter.
4. Admittedly, a loan of money clearly establishes a debtor / creditor relationship and potentially subjects
the lender to claims of usury depending upon the terms of the loan. On the other hand, an agreement to buy
chattel from a vendor coupled with a promise to pay for the chattel in a week, month, year, or the like may not
be perceived as a direct loan of money but merely as an agreement to postpone payment. Yet, it cannot be
denied that the latter transaction also creates a debtor / creditor relationship potentially subjecting the creditor
to claims of usury depending upon the surrounding or subsequently developing circumstances. So, to say
that the person against whom a claim of usury is levied must be a "lender" may be too narrow of an
interpretation when it comes to assessing who may be encompassed by the usury laws. That is why we would
rather call the relationship one of debtor / creditor.
5. Our conclusion would be the same with regard to Hoxie's demand for monies to reimburse it for
interest it allegedly incurred while holding the combines for Baker. Simply put, recover of those monies was
dependent upon establishing that Baker breached its agreement to buy the machinery. Since the jury found
that no such breach occurred, then no debt existed. And, if no debt existed, then there was no debtor /
creditor relationship upon which a claim of usury could be founded.
6. In affirming the remaining portions of the trial court's judgment, we permit the award of attorney's fees
to stand for the reasons mentioned in our original opinion. And, even had Hoxie preserved his complaint
regarding the failure to segregate attorney's fees recoverable under statute from those which were not, its
contention was founded upon the premise that Baker could not recover fees incurred while defending against
Hoxie's breach of contract/declaratory judgment claim. The cases cited in our original opinion, i.e. First City
Nat'l Bank v. Concord Oil Co., 808 S.W.2d 133 (Tex. App.--El Paso 1991, no writ); Ritchie v. City of Fort
Worth, 730 S.W.2d 448 (Tex. App.--Fort Worth, writ ref'd n.r.e.); First Nat'l Bank v. John E. Mitchell Co., 727
S.W.2d 360 (Tex. App.-Amarillo 1987, writ ref'd n.r.e.), reveal that premise to be wrong, however. Each holds
that when a plaintiff (such as Hoxie) seeks a declaratory judgment, the court may award fees to either the
plaintiff or defendant. First City Nat'l Bank v. Concord Oil Co., 808 S.W.2d at 138-39; Ritchie v. City of Fort
Worth, 730 S.W.2d at 451; First Nat'l Bank v. John E. Mitchell Co., 727 S.W.2d at 363. And, because Hoxie
1) sought a declaratory judgment (and attorney's fees related thereto) and 2) does not argue that its request
for same was frivolous, we conclude that the trial court did not err in awarding Baker attorney's fees. Id.
| {
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962 F.2d 1332
UNITED STATES of America, Appellee,v.Herbert R. MONTANYE, a/k/a Muscles, Appellant.UNITED STATES of America, Appellee,v.George A. BRUTON, also known as Homer, Appellant.UNITED STATES of America, Appellee,v.John J. CALIA, Jr., Appellant.UNITED STATES of America, Appellee,v.John S. GLORIOSO, also known as Harry, also known as HarryJohns, Appellant.
Nos. 91-1703, 91-2028, 91-2238 and 91-2242.
United States Court of Appeals,Eighth Circuit.
Submitted Dec. 11, 1991.Decided May 6, 1992.Rehearing and Rehearing En Banc Denied in Nos. 91-2028 and91-2238 June 11, 1992.Rehearing En Banc Granted, OpinionVacated in No. 91-1703 July 30, 1992.
Daryl Douglas, Kansas City, Mo., argued for appellant Montanye.
Patrick Reidy, Kansas City, Mo., argued, for appellant Bruton.
F.A. White, Kansas City, Mo., for appellant Calia.
G.H. Terando, Poplar Bluff, Mo., for appellant Glorioso.
Charles E. Ambrose, Asst. U.S. Atty., Kansas City, Mo., for appellee.
Before FAGG, Circuit Judge, BRIGHT, Senior Circuit Judge, and WOODS,* District Judge.
BRIGHT, Senior Circuit Judge.
1
George Bruton, John Calia, Herbert Montanye and John Glorioso appeal their convictions of conspiracy to distribute methamphetamine, marijuana, cocaine, and related offenses, and the sentences imposed on them. As concerns Bruton's convictions on Counts I and II for conspiracy and continuing criminal enterprise, he alleges that, taken together, these convictions amount to double jeopardy. On review, we remand Bruton's case, No. 91-2028, for the district court to vacate one of those two convictions. We also reverse Montanye's (No. 91-1703) conviction for attempted manufacturing of methamphetamine. Finally, we vacate Montanye's sentence and remand his case for resentencing.
2
Appellants make numerous arguments, many of which we reject without discussion as meritless. We have chosen to address the following arguments. Collectively, appellants argue: (1) the district court erroneously admitted some hearsay statements made by a co-conspirator; (2) the district court erred in entering judgment against appellants for conspiracy because a fatal variance existed between the indictment and the facts that the Government alleged at trial; (3) the district court erred in entering judgment against them on their convictions because the Government presented insufficient evidence.
3
Bruton argues the district court: (1) violated his rights under the Double Jeopardy clause by convicting him of both conspiracy and conducting a continuing criminal enterprise (CCE) for engaging in the same conduct; (2) erred in instructing the jury on the law of CCE; (3) erred in admitting evidence of a phone conversation to the jury because its prejudicial nature outweighed its probative value; (4) erred in enhancing his offense level for possessing a firearm.
4
Calia argues the district court: (1) erred in entering judgment against him on his convictions because the Government presented insufficient evidence; (2) erred in enhancing his offense level for playing a managerial role in the conspiracy.
5
Montanye argues the district court: (1) erred by failing to sever his trial from the other defendants; (2) erred by failing to submit his requested defense instruction to the jury; (3) erred by placing undue emphasis in the jury instructions on his role in the conspiracy; (4) erred by instructing the jury that the Government did not have to prove that appellants agreed to distribute a particular type of controlled substance.
6
Glorioso argues that the district court: (1) erred in permitting the Government to present rebuttal evidence against him when he did not present a defense; (2) erred in entering judgment against him because the Government presented insufficient evidence.
I. BACKGROUND
7
The Government's indictment alleged the following:
8
I. From February 1, 1988 until April 6, 1990, Bruton, Calia, Glorioso, Montanye, Ramon Leal, Charles Leal, Carl Hathcock, Kenneth Dufrenne, and Cecil Evans conspired to manufacture, possess, and distribute controlled substances in violation of 21 U.S.C.A. § 841(a) (West Supp.1991).
9
II. From February 1, 1988 to April 6, 1990, Bruton operated as a leader of a continuing criminal enterprise in violation of 21 U.S.C.A. § 848.
10
III. On August 8, 1989, Bruton and Calia did knowingly possess with intent to distribute approximately seventy pounds of marijuana in violation of 21 U.S.C.A. § 841(a).
11
IV. On February 18, 1990, Bruton did knowingly use a telephone to facilitate the conspiracy to distribute drugs by discussing the conspiracy on the phone with Ramon Leal, in violation of 21 U.S.C.A. § 843(b).
12
V. On February 19, 1990, Bruton and Thomas Cullen did attempt to knowingly and intentionally manufacture methamphetamine by directing Montanye to purchase laboratory glassware for use in the production of methamphetamine.
13
VI. On February 19, 1990, Bruton, Calia, Glorioso, Thomas Cullen and Ramon Leal did possess with intent to distribute 198 pounds of marijuana in violation of 21 U.S.C.A. § 841(a).
14
VII. On March 1, 1990, Bruton, Thomas Cullen, Montanye and Dennis Sessions did attempt to manufacture methamphetamine by possessing laboratory glassware intended for the production of methamphetamine, in violation of 21 U.S.C.A. §§ 841(a)(1), 843.
15
VIII. On March 8, 1990, Bruton did knowingly use a telephone to facilitate the conspiracy to distribute drugs by discussing the conspiracy on the phone with Ramon Leal, in violation of 21 U.S.C.A. § 843(b).
16
IX. On March 10, 1990, Bruton, Carl Hathcock, Ramon Leal and Charles Leal did possess with intent to distribute approximately 207 pounds of marijuana, in violation of 21 U.S.C.A. § 841(a).
17
X. On March 13, 1990, Bruton did knowingly facilitate the conspiracy to distribute drugs by leaving a telephone message with Thomas Cullen regarding the conspiracy, in violation of 21 U.S.C.A. § 843(b).
18
XI. On March 28, 1990, Bruton and Thomas Cullen did knowingly manufacture methamphetamine, in violation of 21 U.S.C.A. § 841(a).
19
XII. On April 5, 1990, at approximately 7:40 a.m., Bruton did knowingly use a telephone to facilitate the conspiracy to distribute drugs by discussing the conspiracy on the phone with Ramon Leal, in violation of 21 U.S.C.A. § 843(b).
20
XIII. On April 5, 1990, at approximately 11:32 a.m., Bruton did knowingly use a telephone to facilitate the conspiracy to distribute drugs by discussing the conspiracy on the phone with Carl Hathcock, in violation of 21 U.S.C.A. § 843(b).
21
XIV. On April 6, 1990, Bruton and Thomas Cullen did knowingly possess with intent to distribute fifty-five grams of methamphetamine, in violation of 21 U.S.C.A. § 841(a).
22
According to the Government, Bruton simultaneously supervised a marijuana smuggling operation, and a methamphetamine laboratory. Thomas Cullen worked as the lab's chemist, manufacturing methamphetamine with equipment and materials provided by Bruton.1 Montanye aided Bruton by delivering glassware for the lab. Ramon Leal served as Bruton's supplier of marijuana from Texas.2 John Calia worked primarily as Bruton's partner in the marijuana operation until Bruton cut him out in March 1990, and substituted Carl Hathcock as his partner.3 Glorioso aided Bruton and Calia in distributing the marijuana.
23
Based on a number of tips that Bruton and Calia were stealing jewelry, the FBI began surveillance of them in July 1989. However, the FBI grew suspicious that Bruton and Calia also dealt drugs. The FBI heightened its surveillance when the DEA arrested Jack Mikulenka in September of 1989 for attempting to purchase 100 pounds of marijuana from one of its agents. Mikulenka cooperated, telling the FBI that he had worked as a courier delivering marijuana in large quantities from Cecil Evans, an infamous criminal in Texas,4 to George Bruton in Kansas City. Mikulenka admitted delivering seventy pounds of marijuana to Bruton in August of 1989. (Count III) After gathering evidence for several months, the FBI obtained a court order to tap Bruton's and Calia's cellular phone conversations in February of 1990.
A. Marijuana
24
In mid-February, Bruton called Ramon Leal in Texas. Leal told Bruton "the count is 198.5." (Count IV) Bruton then called Calia and told him "the number is 199, actually 198.5." Calia called Glorioso, who asked Calia "how we coming down on that?" Calia responded, "well, it'll cost me about one hundred and ninety nine dollars for that last material."
25
The next day, Leal arrived in Kansas City. That night, Calia and Bruton met at Glorioso's house, and Bruton then left in Calia's car for Leal's hotel. Bruton went inside the hotel, returned several minutes later and drove to Glorioso's house using Leal's car. Bruton stayed at Glorioso's for half an hour, and then returned to the hotel parking lot. Bruton went inside the hotel, and then drove Calia's car back to Glorioso's house. (Count VI)
26
In March, Leal told Bruton over the phone "it's two-o-seven, or two-o-nine...." Bruton relayed this number on the phone to Carl Hathcock. Three days later, Bruton met Leal at the hotel again, repeating the ritual of the February meeting, except that Bruton worked with Hathcock instead of Calia and Glorioso.
27
On April 5, 1990, Bruton called Leal in Texas, and Leal told him that the count is "two point four one and a half." (Count XII) The following day, Leal and his son, Charles, left their home in Texas and began driving north on I-35 towards Kansas City. FBI agents pulled the Leals over on the highway. A search of their car revealed 243 pounds of marijuana packaged in plastic-wrapped bricks, and three kilos of cocaine. Hours later, FBI agents arrested Bruton and Hathcock as they left a Kansas City Motel 6 in Hathcock's car. The FBI found $5,894 in cash on Bruton and $223,340 in cash in the trunk of Hathcock's car. (Count XIV)B. Methamphetamine
28
In February 1990, the FBI observed Bruton driving his black pick-up filled with garbage bags from 2401 NW 68th St. to a private landfill outside of Kansas City. The bags contained empty containers of various precursor chemicals that could be used in the manufacture of methamphetamine and broken pieces of laboratory glassware coated with precursor chemicals.
29
Several days later, Bruton called Herbert Montanye, in Bountiful, Utah, and asked him to pick up some "equipment." Montanye agreed. Bruton called him back the next day, and put Thomas Cullen on the phone. Cullen gave Montanye a long list of various pieces of laboratory glassware to purchase from Technical Glass Service in Boise, Idaho, and deliver to Cullen and Bruton in Kansas City. (Count V) On March 1, 1990, FBI agents observed Cullen and Bruton drive to an underground storage facility outside Kansas City and meet Montanye, who drove from Utah in a rented Cadillac. (Count VII)
30
On April 6, the FBI searched the residence at 2401 NW 68th St., a location Cullen had frequented and Bruton had visited several times. The FBI found a clandestine methamphetamine lab, and fifty-five grams of methamphetamine. (Count XV) DEA chemist John Meyers examined the lab and estimated that it had the capacity to produce 37.5 kilos of methamphetamine, assuming that a chemist used all the precursor chemicals on site.
31
The jury found Bruton guilty of all counts, and the district court gave him two concurrent sentences of life without parole for the conspiracy and CCE counts, respectively.5
32
The jury found Calia guilty of conspiracy to distribute marijuana and methamphetamine, and also guilty of Count VI, possessing marijuana with intent to distribute. The jury acquitted Calia of count III. The district court sentenced him to two concurrent thirty-three year terms in prison for Counts I and VI.
33
The jury found Montanye guilty of conspiracy, but only with respect to manufacturing methamphetamine, and of attempting to manufacture methamphetamine. The district court sentenced Montanye to two concurrent thirty-year sentences.
34
The jury found Glorioso guilty of conspiracy, but only with respect to smuggling marijuana, and of possessing marijuana with intent to distribute. The district court sentenced Glorioso to seven years.
II. DISCUSSION
A. Joinder
35
At trial, Montanye moved for severance, arguing that a jury should try his case separately from the offenses against the other defendants. The district court denied the motion. Because he aided only the methamphetamine branch of the conspiracy, Montanye argues the district court prejudiced him by trying his case along with the defendants who distributed marijuana. We will not reverse a failure to grant severance absent an abuse of discretion causing clear prejudice. United States v. Payne, 923 F.2d 595, 597 (8th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2830, 115 L.Ed.2d 1000 (1991). Federal Rule of Criminal Procedure 8(b) provides that "[t]wo or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses." Conspiracy defendants should be tried together, particularly when the Government's case is based on the same evidence. Payne, 923 F.2d at 597. The Government presented evidence proving that Bruton, Calia and Montanye conspired together to attempt to manufacture methamphetamine. Therefore, the district court did not err in trying Montanye with his alleged co-conspirators.
B. Hearsay
36
Appellants question the district court's admission into evidence of several incriminating statements by co-conspirator Carl Hathcock. Hathcock, a fugitive, did not testify. The district court admitted Hathcock's statements through the testimony of another conspirator, Kenneth Dufrenne. Hathcock asked Dufrenne to "find a market" for the marijuana Hathcock planned on purchasing from Bruton. Hathcock told Dufrenne that Bruton's partner was a "big fat slob," who Dufrenne later learned was Calia. Hathcock stated that Calia asked to borrow $250,000 from him to finance a purchase of marijuana. Hathcock also said that after Bruton and Calia purchased marijuana from their "Mexican connection" (Leal), they would "turn it over to one the Dagos named Mr. Glorioso."
37
Bruton, Calia and Glorioso acknowledge that, to the extent Hathcock spoke from personal knowledge, statements made by Hathcock to Dufrenne are not hearsay under the co-conspirator exception of Federal Rule of Evidence 801(d)(2)(E). However, they argue that the district court never determined whether Hathcock made his declarations based on observation, or based on hearsay declarations from other people.
38
In United States v. Lenfesty, 923 F.2d 1293 (8th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 1602, 113 L.Ed.2d 665 (1991), this court permitted hearsay within hearsay statements of conspirators, under Rule 805, when all the statements were made by co-conspirators, id. at 1296-97. Hathcock may not have always spoken from personal knowledge. However, Hathcock did base his statements on what he heard from other conspirators. The district court did not err in admitting Dufrenne's testimony.
C. Relevancy
39
Bruton challenges on relevancy grounds the district court's admission into evidence of a tape recording depicting a sexually explicit conversation between Bruton and Hathcock. Bruton failed to object at trial, and therefore we review only for plain error that would cause a miscarriage of justice. During the taped conversation, Bruton and Hathcock discuss hiring a prostitute. In addition, Bruton and Hathcock exchanged information on the arrangement of an upcoming drug deal. The admission of this evidence fell within the discretion of the district court. Fed.R.Evid. 404(b).
D. Single v. Multiple Conspiracies
40
Appellants argue that while the Government alleged a single conspiracy in the indictment, the Government proved two conspiracies at trial: one to distribute marijuana and another to manufacture and distribute methamphetamine. See Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946).
41
The jury found that while each defendant participated in different aspects of the scheme from the others,6 one overall conspiracy existed. We set aside this finding only if the record does not "contain[ ] evidence from which the jury could find one overall agreement to commit an illegal act." United States v. Regan, 940 F.2d 1134, 1135 (8th Cir.1991).
42
We hold that sufficient evidence supported a single conspiracy with regard to Bruton and Calia. A single conspiracy may exist when one or two members of the scheme direct all actions that take place. United States v. Askew, 958 F.2d 806, 810 (8th Cir.1992). The Government proved that Bruton and Calia acted as key players who directed the actions of the methamphetamine and marijuana branches of the conspiracy. Therefore, all the appellants participated in a conspiracy between at least two people: Bruton and Calia.
43
Our analysis does not end, however, for we must assess whether Montanye and Glorioso agreed to join in Bruton and Calia's conspiracy. Joining a conspiracy means joining not a group, but an agreement. See United States v. Townsend, 24 F.2d 1385, 1390 (7th Cir.1991). Therefore, we must " 'determine what kind of agreement or understanding existed as to each defendant.' " United States v. Glenn, 828 F.2d 855, 857 (1st Cir.1987) (quoting United States v. Borelli, 336 F.2d 376, 384 (2d Cir.1964), cert. denied, 379 U.S. 960, 85 S.Ct. 647, 13 L.Ed.2d 555 (1965) ).
44
Glorioso argues that he did not join the overall conspiracy, but only the marijuana smuggling scheme. We disagree. While at Glorioso's house, Bruton called Cullen and said he would "need 32" shortly before Bruton purchased marijuana from Leal. Cullen arrived at Glorioso's a few minutes later carrying a small bag into the house, which the jury could have inferred contained money for the marijuana buy. From this evidence, the jury could infer that Glorioso knew that he had joined a conspiracy to manufacture methamphetamine and distribute marijuana.
45
We cannot say the same for Montanye. Although Montanye may have knowingly joined a conspiracy to manufacture methamphetamine, no evidence exists to infer that Montanye knew that he was also joining a conspiracy to purchase and distribute marijuana. Montanye's sole act in the conspiracy was his delivery of glassware. In none of the phone conversations taped by the Government did Montanye exhibit knowledge of Bruton's marijuana dealings. Bruton did not speak to Montanye about his marijuana purchases in the code that he used when speaking with Leal, Calia and Glorioso. Thus, Montanye participated in a different conspiracy from the other defendants. See Glenn, 828 F.2d at 859 (holding that variance existed where defendant charged with conspiring to distribute both marijuana and hashish only participated and knew about hashish operation).
46
A variance will only result in reversal when it prejudices a defendant's substantive rights. United States v. Roark, 924 F.2d 1426, 1429 (8th Cir.1991). Sufficient evidence existed to convict Montanye of participating in a conspiracy to manufacture methamphetamine. See infra. The district court did not use evidence of the marijuana conspiracy in sentencing Montanye, thus avoiding any prejudice to him.
E. Rebuttal Testimony
47
Glorioso argues the district court erred in admitting phone conversations as rebuttal evidence because he did not put on a defense. Here, the Government simply requested to re-present evidence the jury had already heard. The admission of the rebuttal evidence amounted to harmless error at best.
F. Bruton's Instructions
48
Bruton challenges the district court's instructions regarding Count II, in which the Government alleged that Bruton engaged in a continuing criminal enterprise (CCE) in violation of 21 U.S.C.A. § 848 (West Supp.1991). Because Bruton failed to object to the instructions at trial, we review the instructions only for plain error. United States v. Mason, 902 F.2d 1314, 1316 (8th Cir.1990). We will apply the plain error rule to jury instructions only to prevent a miscarriage of justice. Id. We have considered several of Bruton's claims and determine that they do not present issues for reversal as plain error.
49
Bruton argues that the district court erred in failing to instruct the jury that it must be unanimous in finding which five people the defendant acted "in concert with" in running the enterprise. A general unanimity instruction usually protects a defendant's sixth amendment right to a unanimous verdict. United States v. Hiland, 909 F.2d 1114, 1139 (8th Cir.1990). A district court may have to give a specific unanimity instruction when a risk of jury confusion exists. Id. Although the Government presented a large volume of evidence in this case, that volume would not by itself confuse the jury as to which five people Bruton managed or supervised. The district court's instructions do not represent a gross miscarriage of justice.7
G. Montanye's Instructions
50
Montanye argues the district court erred in rejecting his proposed instruction on the law of conspiracy. Because he only delivered glassware, Montanye requested an instruction stating:
51
The government must prove defendant Montanye knew of the existence of a conspiracy to manufacture, possess and distribute methamphetamine, marijuana and cocaine. Without such knowledge, he cannot be found guilty even if his acts furthered the conspiracy. One does not become a party to a conspiracy by aiding and abetting, through sales of supplies or otherwise, unless he knows of the conspiracy. The inference of such knowledge cannot be drawn merely from knowledge the buyer will use the goods illegally.
52
Addendum to Appellant Montanye's Br. at 17.
53
The district court rejected this instruction, stating that it would "amount to an acquittal."8 The district court has wide discretion in formulating its charge to the jury. United States v. Figueroa, 900 F.2d 1211, 1217 (8th Cir.), cert. denied, 496 U.S. 942, 110 S.Ct. 3228, 110 L.Ed.2d 675 (1990). However, defendants shall receive a theory of defense if a timely request is made, the evidence supports the proffered instruction, and the instruction correctly states the law. United States v. Casperson, 773 F.2d 216, 223 (8th Cir.1985).
54
Montanye relies on United States v. Falcone, 311 U.S. 205, 210, 61 S.Ct. 204, 206, 85 L.Ed. 128 (1940), and United States v. Direct Sales, 319 U.S. 703, 709, 63 S.Ct. 1265, 1268, 87 L.Ed. 1674 (1943), to argue that he did not become a party to the conspiracy, even if he knew that the glassware he was delivering would be used for an illegal purpose.
55
In Falcone, the defendants were sugar jobbers who sold sugar to wholesalers who then resold it to illegal distilleries. The Court held that merely because the jobbers knew that their sugar was going to illegal distilleries did not make them part of the conspiracy to produce illegal spirits. Falcone, 311 U.S. at 210, 61 S.Ct. at 206. The Court in Direct Sales rephrased the holding in Falcone, stating that "one does not become a party to a conspiracy by aiding and abetting it, through sales of supplies or otherwise, unless he knows of the conspiracy; and the inference of such knowledge cannot be drawn merely from knowledge the buyer will use the goods illegally." Direct Sales, 319 U.S. at 709, 63 S.Ct. at 1268.
56
In Direct Sales, the defendant was a corporation that sold morphine, a controlled substance, in large quantities to a small-town doctor who purchased far more than he could possibly prescribe to his patients. In affirming the conspiracy conviction of the corporation, the Court distinguished Falcone, noting the difference between vendors who sell consumer goods and those who sell regulated, or suspicious goods:
57
The difference is like that between toy pistols or hunting-rifles and machine guns. All articles of commerce may be put to illegal ends. But all do not have inherently the same susceptibility to harmful and illegal use. Nor, by the same token, do all embody the same capacity, from their very nature, for giving the seller notice the buyer will use them unlawfully....
58
This difference is important for two purposes. One is for making certain that the seller knows the buyer's intended illegal use. The other is to show that by the sale he intends to further, promote and cooperate in it. This intent, when given effect by overt act, is the gist of conspiracy.
59
Id. at 710-11, 63 S.Ct. at 1269.
60
When a vendor sells sophisticated laboratory glassware to private individuals, he might suspect the motives of his customers. In this case, Montanye not only suspected, but knew with certainty before delivering the glassware that he would be aiding an illegal conspiracy. Bruton told him to use a false name when purchasing the glassware, and to avoid being followed by police when driving to the glassware factory. Montanye also behaved as if he knew he was breaking the law. Montanye suggested to Bruton that the delivery should take place between two connecting hotel rooms to avoid detection. When highway patrolmen in two states pulled Montanye over because his rental car did not have its temporary plates properly displayed, Montanye lied when questioned about his destination, and appeared extremely nervous. Because the jury could find with certainty that Montanye knew he was aiding an illegal conspiracy, the evidence did not support a Falcone instruction.
61
Montanye next argues that the district court denied him a fair trial because it prejudiced the jury against him by delivering a conspiracy instruction that stated:
62
[I]t is not necessary that a person agree to play any particular part in carrying out the conspiracy. A person may become a member of a conspiracy even if that person agrees to play only a minor part in the conspiracy, such as driving a car or loading needed equipment, as long as you believe, beyond a reasonable doubt, that the person you are considering had an understanding of the unlawful nature of the plan and voluntarily and intentionally joined in it.
63
Instruction No. L, II Joint App. at 439-40.
64
Montanye contends that the instruction's reference to "loading needed equipment" referred too directly to his conduct, and compelled the jury to convict him. We disagree. The district court may instruct the jury using concrete facts from the case to clarify the law's application. United States v. Feldhacker, 849 F.2d 293, 297 (8th Cir.1988).
65
Montanye next challenges the district court's instructions regarding his conviction of aiding and abetting in the attempted manufacture of a controlled substance. Montanye argues that the district court should have told the jury that in order to convict him of attempted manufacturing, it must find him guilty of attempting to manufacture a particular controlled substance. However, a defendant need not possess the specific intent to manufacture a particular controlled substance as long as he had the mens rea to violate the controlled substances act. E.g., United States v. Herrero, 893 F.2d 1512, 1535 (7th Cir.), cert. denied, 496 U.S. 927, 110 S.Ct. 2623, 110 L.Ed.2d 644 (1990).
66
Finally, Montanye argues that the district court erroneously instructed the jury on what constitutes a "substantial step" in an attempt. The district court told the jury that to convict Montanye of attempting to manufacture methamphetamine, it must find that Montanye had taken a "substantial step" towards the manufacture of methamphetamine. The district court instructed the jury:
67
The term "substantial step" means conduct that is significant in scope as distinguished from some relatively insignificant, insubstantial or trivial action. With respect to defendants Montanye and Sessions, the acquisition of glassware in Idaho may not be considered a substantial step in an attempt to manufacture methamphetamine because any such acquisition occurred outside the Kansas City area and not at the time alleged.
68
Instruction No. T, II Joint App. at 449-50.
69
Montanye contends that this instruction incorrectly defines a "substantial step," arguing that such an act must be "more than mere preparation." We disagree. A criminal defendant is not entitled to a particularly worded instruction where the instruction given by the trial court adequately covers the substance of the requested instruction. United States v. Wagner, 884 F.2d 1090, 1096 (8th Cir.1989), cert. denied, 494 U.S. 1088, 110 S.Ct. 1829, 108 L.Ed.2d 958 (1990). No substantial difference exists between conduct that is "significant in scope," and conduct that is "beyond mere preparation." The instruction proffered by the district court gave Montanye's counsel an adequate opportunity to advance the theory that Montanye did not perform a substantial step toward manufacturing methamphetamine.
H. Sufficiency of the Evidence
70
Appellants challenge the sufficiency of the evidence supporting their convictions. In evaluating their arguments, we must give the Government the benefit of all reasonable inferences that the jury could draw from the evidence. United States v. Watson, 952 F.2d 982, 987 (8th Cir.1991). This court upholds a conviction if a reasonable jury could have found guilt beyond a reasonable doubt, and recognizes that the evidence need not exclude every reasonable hypothesis other than guilt. United States v. Haren, 952 F.2d 190, 194 (8th Cir.1991).
1. Continuing Criminal Enterprise
71
Bruton argues the Government failed to present sufficient evidence to convict him of conducting a continuing criminal enterprise (CCE).9 Bruton contends that the Government failed to prove that he organized or supervised at least five other people. Rather, Bruton submits that he was a mere middleman in two different narcotics operations.
72
Bruton faces a difficult challenge, because " '[t]he basic outlines of the ... management element have been liberally construed.' " United States v. Roley, 893 F.2d 992, 994 (8th Cir.1990) (quoting United States v. Possick, 849 F.2d 332, 335 (8th Cir.1988)). In essence, the management element is established by "demonstrating that the defendant exerted some type of influence over another individual as exemplified by that individual's compliance with the defendant's directions, instructions, or terms." United States v. Possick, 849 F.2d 332, 336 (8th Cir.1988).
73
Our study of the record reveals at least five people that Bruton managed or supervised: (1) Jack Mikulenka; (2) John Calia; (3) John Glorioso; (4) Herbert Montanye; (5) Carl Hathcock. The Government presented sufficient evidence supporting Bruton's conviction of CCE.
2. Conspiracy and related counts
74
Appellants all challenge the sufficiency of the evidence supporting their conspiracy convictions, and their convictions for the substantive offenses committed during the conspiracy. To convict appellants of conspiracy, the Government had to prove that they entered into an agreement with at least one other person and that the agreement had as its objective a violation of the law. United States v. Maejia, 928 F.2d 810, 813 (8th Cir.1991). The Government may rely wholly on circumstantial evidence to prove the existence of a conspiracy. United States v. Schmidt, 922 F.2d 1365, 1369 (8th Cir.1991). Members of the conspiracy are liable for all substantive crimes committed by their co-conspirators in furtherance of the conspiracy that were reasonably foreseeable to them. United States v. Williams, 902 F.2d 675, 678 (8th Cir.1990) (citing Pinkerton v. United States, 328 U.S. 640, 645-48, 66 S.Ct. 1180, 1183-84, 90 L.Ed. 1489 (1946)).
75
Bruton challenges the sufficiency of the evidence supporting all his remaining counts. In proving Count II, engaging in a CCE, the Government presented more than sufficient proof to convict Bruton of conspiracy.10 Count III, alleging Bruton acquired marijuana from Jack Mikulenka, is supported directly by Mikulenka's testimony. Bruton argues Mikulenka did not testify credibly. We will not reverse a conviction resting on the testimony of a co-conspirator unless no reasonable juror could believe the witness's testimony. United States v. Jackson, 959 F.2d 81, 82 (8th Cir.1992). Several pieces of evidence, such as phone records and rental car receipts, document Mikulenka's testimony that he drove from Texas to Kansas City to deliver marijuana. A reasonable jury could have believed Mikulenka. Therefore, sufficient evidence supports Count III.
76
Bruton challenges Counts VI, IX and XIV, alleging that he possessed marijuana with intent to distribute. Bruton argues that FBI agents never witnessed marijuana in his presence. However, constructive possession, supported by circumstantial evidence, will support a conviction of possession with intent to distribute. United States v. Schubel, 912 F.2d 952, 955 (8th Cir.1990). Before each visit by Leal, Bruton called Leal, who told Bruton over the phone "the count." The count Leal gave Bruton on April 5 almost exactly matched the pounds of marijuana police found in Leal's car later that day while he was driving north.11 Additionally, the FBI found a huge amount of cash in the car driven by Bruton and Hathcock. The jury could use these facts to deduce that when Leal told Bruton "the count" in March, February and April, he really meant "I will be bringing X pounds of marijuana to sell to you." After each of those phone calls, Bruton visited a hotel where Leal stayed, drove Leal's car to a different location, and then returned Leal's car to the hotel. The jury had sufficient circumstantial proof to infer that Bruton purchased large amounts of marijuana from Leal on February 19, and March 10, and was preparing to purchase more on April 6.
77
Counts IV, VIII, X, XII and XIII allege that Bruton discussed the conspiracy on the telephone. The jury could have reasonably inferred from the facts discussed above that Bruton was discussing the conspiracy on the phone with his co-conspirators during the conversations taped by the Government.
78
Count XI accused Bruton and Cullen of manufacturing methamphetamine on March 28, 1990. Bruton argues that he was never near the methamphetamine lab on that day, and therefore cannot be liable for Cullen's activities. However, Bruton knew Cullen was manufacturing methamphetamine on that day. Cullen called Bruton from the lab that day and told Bruton that he was "working." Bruton stated: "Yeah, well, when you get, uh, the fires put out, well, uh, come over." Additionally, Bruton aided the operation of the methamphetamine laboratory in several ways, indicating his responsibility for its product. Bruton delivered trash for the lab, stored chemicals for the lab at a different location, and ordered glassware for it. Thus, Bruton was liable both for Cullen's manufacture of methamphetamine, and for the methamphetamine found at the laboratory. The Government presented sufficient evidence supporting all of Bruton's convictions.
79
Calia challenges his conviction for Count I, conspiracy. Calia argues that the Government has shown only that he was present during several transactions, and not that he participated in the conspiracy. We disagree. Calia's conversations with Bruton indicate that Calia knew of Bruton's marijuana purchases from Leal. Calia's call to Glorioso telling him the amount of marijuana Leal was bringing furthered the conspiracy. From this evidence, the jury could reasonably have found Calia guilty of conspiracy.
80
Calia challenges Count VI, arguing that he was not present during the purchase of marijuana by Bruton from Leal on February 19, 1990. We disagree. The jury could have reasonably inferred that the following occurred on February 19 from the record: Calia drove to Glorioso's house that night and lent Bruton his car for Bruton to use in picking up marijuana from Leal. When Bruton returned from the hotel, he unloaded the marijuana at Glorioso's house while Calia and Glorioso were in the house.
81
Glorioso challenges his convictions for conspiracy, Count I, and possession of marijuana, Count VI, arguing the Government presented insufficient evidence. The evidence indicates that Glorioso at least allowed the other conspirators use of his house as a drop-off point for marijuana. Calia's conversation with Glorioso on February 19, in which Glorioso inquired as to how much marijuana Bruton would be purchasing, also provided ample circumstantial evidence from which the jury could infer Glorioso's guilt.
82
Montanye challenges his conviction for conspiracy, Count I, arguing that the Government presented insufficient evidence. Montanye argues that he merely delivered glassware, and did not know that doing so was illegal, or that he was joining a conspiracy. We disagree. As we discussed above, the Government presented strong evidence that Montanye knew of the conspiracy, and knew that his delivery of glassware was in furtherance of the conspiracy.
83
Montanye also challenges his conviction for attempted manufacturing of methamphetamine, Count VII, arguing that his delivery of glassware did not constitute a substantial step towards commission of the crime. The elements of an attempt are as follows: (1) an intent to engage in criminal conduct; (2) conduct constituting a "substantial step" towards commission of the substantive offense which strongly corroborates the actor's conduct. United States v. Joyce, 693 F.2d 838, 841 (8th Cir.1982). Whether a defendant's conduct amounts to a substantial step depends on the particular facts in the case at hand. United States v. Wagner, 884 F.2d 1090, 1097 (8th Cir.1989), cert. denied, 494 U.S. 1088, 110 S.Ct. 1829, 108 L.Ed.2d 958 (1990). This court has held that conduct consisting of ordering and receiving the equipment and chemicals necessary to manufacture methamphetamine constituted a substantial step towards manufacturing methamphetamine. See Wagner, 884 F.2d at 1096-97; United States v. Felix, 867 F.2d 1068, 1071-72 (8th Cir.1989); United States v. Mazzella, 768 F.2d 235, 239-40 (8th Cir.), cert. denied, 474 U.S. 1006, 106 S.Ct. 528, 88 L.Ed.2d 460 (1985). Possession of laboratory glassware, by itself, does not constitute a substantial step towards making methamphetamine. We have held that a defendant must at least obtain equipment and precursor chemicals before he may be convicted of attempt. See Wagner, 884 F.2d at 1096-97; Felix, 867 F.2d at 1071-72; Mazzella, 768 F.2d at 239-40. Montanye never possessed or intended to possess precursor chemicals. We therefore reverse Montanye's conviction for attempted manufacture of methamphetamine.
I. Double Jeopardy
84
Bruton challenges his conspiracy and CCE convictions on the grounds that they penalize him twice for the same conduct, and therefore violate his freedom from double jeopardy under the fifth amendment of the Constitution. We agree. Because we affirm both convictions on all other grounds, and both convictions arise out of the same conduct, they cannot both stand. United States v. Duke, 940 F.2d 1113, 1120 (8th Cir.1991). The Supreme Court in Jeffers v. United States, 432 U.S. 137, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977), held with reference to the statutes dealt with here "that Congress did not intend to impose cumulative penalties under §§ 846 and 848." Id. at 157, 97 S.Ct. at 2220. The Government concedes the error.
J. Sentencing
85
We now examine Montanye's sentence of thirty years in prison without parole. Montanye did not appeal his sentence. Normally, we deem a party's failure to raise or discuss an issue to be an abandonment of that issue. Jasperson v. Purolator Courier Corp., 765 F.2d 736, 741 (8th Cir.1985). However, where a manifest injustice would occur as a result of a sentence in a criminal trial, this court may suspend the normal requirements of Federal Rule of Appellate Procedure 28(a) and consider an issue that would otherwise not properly be before this court. See United States v. Olano, 934 F.2d 1425, 1439 (9th Cir.1991); Gramegna v. Johnson, 846 F.2d 675, 677 (11th Cir.1988) (authored by Henley, J., sitting by designation); United States v. Anderson, 584 F.2d 849, 853 (6th Cir.1978).
86
The district court calculated Montanye's base offense level to be 38, finding Montanye responsible for all 37.5 kilos of methamphetamine that the lab operated by Bruton and Cullen was capable of producing. For Montanye to be sentenced for methamphetamine produced by his co-conspirators, the production of that methamphetamine must have been (1) in furtherance of the conspiracy and (2) reasonably foreseeable to Montanye. United States v. North, 900 F.2d 131, 133 (8th Cir.1990) (citing U.S.S.G. § 1B1.3, comment.). For activities of a co-conspirator to be reasonably foreseeable to a defendant, they must fall within the scope of the agreement between the defendant and the other conspirators. See United States v. Edwards, 945 F.2d 1387, 1393 (7th Cir.1991). We must examine the agreement between Montanye and Bruton to determine whether Montanye should have been sentenced for the methamphetamine lab's potential yield of 37.5 kilos.
87
Montanye agreed to deliver glassware to Bruton from Utah. Evidence indicates that Montanye knew with certainty that he was aiding an illegal conspiracy. However, Montanye did not know how much or how little methamphetamine his co-conspirators would produce. Montanye never participated in the process of manufacturing or distributing the methamphetamine. The district court possessed insufficient evidence to find Montanye responsible for all of the methamphetamine produced. We hold that his thirty-year sentence for a simple delivery of glassware constitutes a gross miscarriage of justice. We remand Montanye's case for resentencing and suggest that resentencing be imposed consistent with the rationale of the Seventh Circuit in Edwards, and of this court in North.
88
Bruton challenges the district court's two-level enhancement of his offense level under U.S.S.G. § 2D1.1(b)(1) for "possession of a firearm during commission of the offense." We will reverse the district court's findings on this matter only for clear error. United States v. Pou, 953 F.2d 363 (8th Cir.1992). The Government moved for the firearm enhancement based on evidence it recovered from a storage facility while the trial of Bruton was taking place. The Government's search recovered an AKS 7.62mm assault rifle, a Tech 9mm semi-automatic pistol with a 50-round magazine, a .357 Magnum pistol, several jugs and jars filled with precursor chemicals, and the glassware that Montanye had delivered from Idaho. Bruton argues that no evidence connects him to the weapons found at this storage facility. To receive a firearm enhancement, a defendant need not actually have the weapon in hand; constructive ownership suffices. United States v. Haren, 952 F.2d 190, 198 (8th Cir.1991). A defendant "constructively owns" a firearm when he exercises " ' "ownership, dominion, or control" ' over the item itself, or ' "dominion over the premises." ' " United States v. Luster, 896 F.2d 1122, 1129 (8th Cir.1990) (quoting United States v. Matra, 841 F.2d 837, 840 (8th Cir.1988)).
89
The record suggests that Bruton exercised dominion over the premises of the storage area where the Government found weapons and precursor chemicals. A woman named "Pamela Witwicky" leased the storage unit. The owner of the storage facility identified this woman as Donna Sue Nelton, a woman who is a former girlfriend of Bruton's, and before that Calia's ex-wife. FBI agents observed Bruton visit the storage unit with various members of the conspiracy five times between July and November 1989. The FBI found the glassware Montanye delivered to Bruton in the same storage unit as the firearms. The district court did not err in finding that Bruton exercised dominion over the storage unit where the guns were found.
90
However, "[a] firearm's mere 'presence' is not sufficient to mandate application of the enhancement." United States v. Khang, 904 F.2d 1219, 1224 (8th Cir.1990). Application Note 3 to Section 2D1.1 of the Guidelines states that "[t]he adjustment should be applied if the weapon was present, unless it is clearly improbable that the weapon was connected with the offense." The FBI found the guns in the same storage shed that it found laboratory glass and precursor chemicals. The guns recovered were both semi-automatic weapons with large magazines. An expert testified at sentencing that only drug traffickers use those types of paramilitary weapons. Taking this evidence into account, we cannot hold that the district court clearly erred in finding that the weapons were connected with Bruton's offense.12
91
Calia also challenges the district court's enhancement of his base offense level by three levels under § 3B1.1(b) for being a manager in a criminal activity involving five or more people. Calia argues that the Government failed to show that he supervised anyone during the conspiracy. We will not disturb a finding that someone is a manager or supervisor unless the district court clearly erred. United States v. Andersen, 928 F.2d 243 (8th Cir.1991). In determining whether a defendant served as a supervisor or manager of a crime, "the sentencing court may consider such factors as the nature of his participation in the offense, whether he recruited accomplices, the extent of his involvement in planning or organizing the offense, and the nature and scope of the illegal activity." United States v. Maejia, 928 F.2d 810, 816 (8th Cir.1991).
92
The record reveals that Calia participated extensively in the conspiracy, and gave orders to at least one conspirator. Bruton referred to Calia as his "partner" on several occasions in conversations with others. Calia called Glorioso to tell him when the purchases would take place and how much would be purchased. At two different times, Bruton asked Calia "how's Harry?" (a/k/a Glorioso). Calia would then tell Bruton when Harry would be "ready." From these facts, we hold that the district court did not clearly err in finding that Calia was a manager within the meaning of section 3B1.1(b) of the Guidelines.
III. CONCLUSION
93
We affirm, except that we remand Bruton's case, No. 91-2028, for the district court to vacate Bruton's conviction for either Count I or Count II, we reverse Montanye's (No. 91-1703) conviction for attempted manufacturing of methamphetamine, and we remand Montanye's case for resentencing.
94
FAGG, Circuit Judge, concurring and dissenting.
95
I disagree with the court's decision to reverse Montanye's conviction on Count VII for attempt to manufacture methamphetamine, ante at 1346, and the court's decision to vacate Montanye's conspiracy sentence on grounds not raised on appeal, ante at 1347-48. Otherwise, I concur in the court's opinion.
96
Order.
97
July 30, 1992.
98
The suggestion for rehearing en banc is granted. The judgment and opinion filed by the panel are vacated.
99
This case will be set for argument before the court en banc at a later date.
*
The HONORABLE HENRY WOODS, United States District Judge for the Eastern District of Arkansas, sitting by designation
1
Cullen was a fugitive at the time of trial, and has yet to be apprehended
2
The district court sentenced Leal to ten years in prison for his participation in the conspiracy. Leal appealed his conviction and sentence, but died before this case was submitted
3
Hathcock was also fugitive at the time of trial
4
In 1969, Evans stole the MacFarland diamond, a 50-carat emerald cut broach, from the Whitney Museum in San Antonio
5
The district court also gave Bruton a concurrent sentence of 40 years in prison for Counts V, VII, XI, XIV and XV, a concurrent sentence of 20 years in prison for Counts II, VI and IX, and a concurrent sentence of four years in prison for Counts IV, VIII, X, XII and XIII
6
The jury responded to a special interrogatory asking them to find which part of the conspiracy each defendant aided. The jury found:
1
Bruton distributed marijuana, cocaine and methamphetamine
2
Calia distributed marijuana and methamphetamine
3
Glorioso distributed marijuana
4
Montanye aided the methamphetamine operation
7
Nearly every circuit has held that a district court does not need to instruct the jury specifically that it must unanimously decide which five people a defendant managed in a CCE. E.g., United States v. English, 925 F.2d 154, 159 (6th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2812, 115 L.Ed.2d 984 (1991); United States v. Linn, 889 F.2d 1369, 1374 (5th Cir.1989), cert. denied, --- U.S. ----, 111 S.Ct. 43, 112 L.Ed.2d 19 (1990); United States v. Jackson, 879 F.2d 85, 87-90 (3d Cir.1989); United States v. Tarvers, 833 F.2d 1068, 1073-75 (1st Cir.1987). But see United States v. Jerome, 942 F.2d 1328, 1331 (9th Cir.1991) (holding that unanimity is required)
8
The district court gave the jury the following instruction on the law of conspiracy to apply to all the defendants:
All of the defendants are charged with the crime of criminal conspiracy in Count one of the indictment. This crime has three essential elements, which are:
One, that on or after February 1988, two or more persons, including defendant Bruton, reached an agreement or understanding to distribute illegal drugs;
Two, the defendant you are considering voluntarily and intentionally joined in the conspiracy, either at the time it was first reached or at some later time while it was still in effect; and
Three, at the time the defendant joined in the conspiracy he knew the purpose of the agreement or understanding.
To convict a defendant of criminal conspiracy, the Government must prove each of these essential elements beyond a reasonable doubt as to the defendant under consideration.
Instruction No. K, II Joint App. at 438.
9
Title 21, Section 848(c) of the United States Code defines a continuing criminal enterprise as follows:
For purposes of subsection (a) of this section, a person is engaged in a continuing criminal enterprise if--
(1) he violates any provision of this subchapter or subchapter II of this chapter the punishment for which is a felony, and
(2) such violation is a part of a continuing series of violations of this subchapter or subchapter II of this chapter--
(A) which are undertaken by such person in concert with five or more other persons with respect to whom such person occupies a position of organizer, a supervisory position, or any other position of management, and
(B) from which such person obtains substantial income or resources.
10
This overlap resulting in the same evidence proving two offenses violates the Double Jeopardy clause of the fifth amendment, as we explain infra at 1346
11
The FBI found that the marijuana seized from Leal's car weighed 243 pounds. The FBI's expert who performed the weighing stated that two different scales could probably weigh the marijuana as either being 241 or 243 pounds
12
Jack Mikulenka's testimony provides an independent basis for affirming the weapons enhancement. Mikulenka testified that when he delivered marijuana to Bruton in August 1989, he witnessed a 9mm semi-automatic pistol lying on a coffee table in the room where he discussed the terms of the purchase with Bruton
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594 So.2d 1079 (1992)
STATE of Louisiana
v.
Bernard BRETAGNOLLE. (Two Cases)
consolidated with
STATE of Louisiana
v.
Bernard BRETAGNOLLE, and Alex Rivera a/k/a Alex Cruz.
Nos. 91-KA-0741, 91-KA-0937 and 91-KA-1850.
Court of Appeal of Louisiana, Fourth Circuit.
February 13, 1992.
Writ Denied April 20, 1992.
David F. Craig, Jr., New Orleans, for defendants, Bernard Bretagnolle, and Alex Rivera a/k/a Alex Cruz.
Harry F. Connick, Dist. Atty., Robyn Gulledge, Pamela S. Moran, Asst. Dist. Attys., New Orleans, for plaintiff, State.
Before BARRY, CIACCIO and LOBRANO, JJ.
BARRY, Judge.
The defendants were charged with possession of cocaine (La.R.S. 40:967), possession of Alprazolam (La.R.S. 40:969), and possession of Propoxyphene (La.R.S. 40:969). After their motions to suppress the evidence were denied, they withdrew their not guilty pleas and entered pleas of guilty to La.R.S. 40:983 relative to possession *1080 of cocaine and possession of Propoxyphene,[1] reserving their rights to appeal the denial[2] of their motions to suppress under State v. Crosby, 338 So.2d 584 (La.1976).
JURISDICTION
The defendants pleaded guilty pursuant to La.R.S. 40:983[3] and were placed on two years active probation under certain conditions. They were granted Crosby appeals. We will first determine whether the defendants have a right to an appeal.
An appeal cannot be taken by the defendants except from a conviction and sentence. La.C.Cr.P. art. 912 and its Official Revision Comment (c). This Court has held that a defendant may not take an appeal from a plea entered under La.R.S. 40:983 and has dismissed the appeals without consideration of the defendants' arguments. State v. Henry, 572 So.2d 761 (La. App. 4th Cir.1990), writ denied 576 So.2d 47 (La.1991); State v. Ruth, 470 So.2d 167 (La.App. 4th Cir.1985). However, when this Court dismissed the appeal in State v. Jupiter, 488 So.2d 1236 (La.App. 4th Cir. 1986) because the disposition under La.R.S. 40:983 was not final, the Louisiana Supreme Court granted the writ and remanded the case back to this Court for its consideration of the matter as a writ on the merits. 493 So.2d 1208 (La.1986).[4] Therefore this Court will review defendants' arguments as an application for writs. State v. Stevens, 497 So.2d 12 (La.App. 4th Cir. 1986). See also State v. Watkins, 526 So.2d 357 (La.App. 4th Cir.1988).
MOTION TO SUPPRESS
The defendants' only argument is that the trial court erred by denying their motions to suppress the evidence.
At the motion to suppress hearing Officer Moretti testified that in October, 1990 he investigated the illegal possession of *1081 narcotics at 333 Julia Street, Apt. 514. He and Officer Lajarza obtained a search warrant on October 2, 1990. The warrant application stated that on Monday, October 1, 1990 he and Officer Lajarza were contacted by Postal Inspector Kay. Inspector Kay had received a call from the U.S. Customs Service in Miami informing him that a package which contained approximately 56 grams of hashish (detected by canines) had been mailed from France and was addressed to Alex R. Cruz, 333 Julia Street, Apt. 514, New Orleans, Louisiana. Customs Agents opened the package, found 56 grams of hashish, resealed it and forwarded the package to the New Orleans Postal Inspector's Office. Inspector Kay told the N.O.P.D. officers that on October 2, 1990 he would attempt a controlled delivery of the package to the address in order to apprehend the owner of the package. The search warrant was issued. The officers obtained a copy of the apartment rental agreement and ascertained that Bretagnolle was the tenant and Rivera was the co-tenant of the apartment.
Officer Moretti stated that on October 2 surveillance was set up and Cruz was observed in the apartment when an ambulance took Bretagnolle, who was having chest pains, to the hospital. The package was placed in the apartment's mailbox and the officers waited for someone to claim it. When a second box (no testing had been done for drugs) too large for the mailbox arrived, Officer Moretti and Inspector Kay decided to leave both packages at the manager's office for pick up. The apartment was called to inform the two defendants of the two packages, but no one was home and a machine answered the call.
When Bretagnolle came home from the hospital on October 3, 1990, the office manager informed him that he had two packages, one from France and another from California. Bretagnolle picked up the packages about 3:20 p.m. and went to his apartment.
The officers went to the apartment and knocked on the door. They received no response and used a key to gain entrance so that the door would not be damaged. After opening the door, the officers announced their presence by shouting: "Police, we have a search warrant." The officers continued through the apartment as they called out that they were police officers with a search warrant.
Officer Moretti testified that he executed the warrant on October 3, 1990 and seized white powder cocaine, hashish, marijuana residue, gram scales, several tablets of Xanax and Wygesic, several tablets not readily identified, numerous papers, among other items. The officers arrested Bretagnolle at the apartment that day and Cruz was arrested the following day at the apartment. After being advised of his rights, Bretagnolle informed the police that he knew the contents of the package from France, saw that it had been opened, and flushed its contents (approximately two ounces of cocaine) down the toilet. He told them that the tablets were prescription medications for which he did not have a prescription. Cruz testified that he knew no one from France and had no knowledge of receiving drugs by mail, but he conceded that there were drugs in the apartment. Officer Moretti identified both defendants.
Officer Lajarza testified he was present only on October 2, the initial day of the investigation when Bretagnolle was taken to the hospital. He saw the other man in the apartment, but could not identify him as Cruz.
U.S. Postal Inspector Kay testified he was present when the search warrant was executed on October 3, 1990. He identified the envelope allegedly containing marijuana which had been sent to him by another postal inspector. He gave the envelope to the apartment complex receptionist who gave it to Bretagnolle. Inspector Kay said that the envelope was not delivered on October 2 because of Bretagnolle's emergency trip to the hospital and the resulting confusion.
Gina Kirwin, apartment complex manager, identified both defendants and stated that they were living in apartment 514 in 1990 and are still living there. On October 3 Rivera was not in the apartment because he was locked out while Bretagnolle was in *1082 the hospital. Bretagnolle had contacted Kirwin (who told the police) and she let Cruz (Rivera) into the apartment on October 4.
The defendants argue that there was no appropriate notice given by the police officers who knocked and then entered with a pass key before identifying themselves as the police. La.C.Cr.P. art. 224 provides:
In order to make an arrest, a peace officer, who has announced his authority and purpose, may break open an outer or inner door or window of any vehicle, autocraft, aircraft, dwelling or other structure, movable or immovable, where the person to be arrested is or is reasonably believed to be, if he is refused or otherwise obstructed from admittance. The peace officer may not announce his authority and purpose when to do so would imperil the arrest.
This article applies to the execution of search warrants pursuant to La.C.Cr.P. art. 164 which provides that a peace officer may use such means and force as are authorized for arrest. All the circumstances must be examined to determine if the force used in execution of a warrant or the method of entry was unreasonable. State v. Thomas, 329 So.2d 704 (La.1976).
Officer Moretti testified that the officers knocked on the door, no one responded, so they opened the door using a pass key and announced their presence. The officers knew that a package for Bretagnolle had just been picked up from the apartment office and it contained contraband. The officers were justified in believing that if they announced their presence sooner that would have allowed Bretagnolle to destroy the evidence. Bretagnolle admitted that he flushed the contents of both packages down the toilet before the officers could execute the warrant. The officers' entry was reasonable under those circumstances.
The trial court properly denied the motions to suppress the evidence. The defendants' writs are denied.
WRITS DENIED.
CIACCIO, J., concurs with reasons.
CIACCIO, Judge, concurring.
I concur in the result.
I do not concur in the conclusions of law expressed in Footnote 4, as Jupiter remains the law of this circuit. Accordingly, an "appeal" from a guilty plea under La. R.S. 40:983 may proceed only by writ application. State v. Henry, 572 So.2d 761 (La. App. 4th Cir.1990), writ denied, 576 So.2d 47 (La.1991).
NOTES
[1] The docketmasters in the records indicate that each defendant was charged with two counts of possession of a Schedule IV substance under La.R.S. 40:969 and one count of possession of cocaine under La.R.S. 40:967. According to the docketmaster Bretagnolle pleaded guilty to two counts under La.R.S. 40:967 on February 18, 1991 and Rivera pleaded guilty on May 17, 1991 to counts one and three pursuant to La.R.S. 40:983. According to the February 18, 1991 minute entry, Bretagnolle pleaded guilty to two counts under La.R.S. 40:967, but the guilty plea transcript indicated he was pleading to possession of cocaine and to possession of Propoxyphene (although count numbers were listed incorrectly). The May 17, 1991 minute entry indicates that Rivera pleaded guilty to counts one and three only and listed the charges as three counts under R.S. 40:967. However, his guilty plea transcript clearly shows that Rivera pleaded guilty to cocaine and Propoxyphene possession.
Propoxyphene is a Schedule IV substance according to La.R.S. 40:964 and its possession is a violation of La.R.S. 40:969. See State v. Smith, 397 So.2d 1326 (La.1981). We were not able to totally clear up the discrepancies in the records even after ordering a per curiam from the trial court. The trial court did provide this Court with the defendants' guilty plea transcripts. A review of the transcripts indicates that the defendants were informed of the charges against them and knew the charges to which they were pleading. The sentences under La.R.S. 40:967C(2) and R.S. 40:969C are identical. Therefore, the defendants were not prejudiced by these technical discrepancies.
[2] Bretagnolle previously requested review of the denial of his motion to suppress evidence in writ no. 91-K-0147, which was denied because he had an adequate remedy on appeal. Because Bretagnolle subsequently pleaded guilty under La.R.S. 40:983 his review will be by writ.
[3] La.R.S. 40:983A provides in pertinent part: "Whenever any person who has not previously been convicted of any offense under this Part pleads guilty to or is convicted of having violated R.S. 40:966(C), R.S. 40:967(C), R.S. 40:968(C), R.S. 40:969(C), R.S. 40:970(C) of this Part, and when it appears that the best interests of the public and of the defendant will be served, the court may, without entering a judgment of guilt and with the consent of such person, defer further proceedings and place him on probation upon such reasonable terms and conditions as may be required."
[4] Although the Jupiter majority dismissed the Crosby appeal of a "guilty plea" pursuant to La.R.S. 40:983, this author dissented because the judgment or ruling was appealable. La.C.Cr.P. art. 912 provides that a final judgment or ruling is appealable. Jupiter was placed on one year active probation and fined $500. A probation sentence (and fine) is certainly punishment and La.C.Cr.P. art. 871 defines a sentence as the penalty imposed by the court on a defendant upon a plea of guilty. Therefore, Jupiter's sentence was a judgment which imposed a sentence appealable under La.C.Cr.P. art. 912.
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745 A.2d 139 (2000)
TOWN OF LINCOLN et al.
v.
CITY OF PAWTUCKET et al.
No. 98-325-Appeal.
Supreme Court of Rhode Island.
February 7, 2000.
*140 Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
James P. Marusak, Peter J. McGinn, Steven M. Richard, Richard J. Welch, Providence, Holly R. Ialongo, Edmund L. Alves, Jr., Providence, Richard S. Cardozo, Gregory S. Dias., East Providence, for plaintiff.
Terence J. Tierney, Providence, Gary Powers, North Kingstown, Christopher E. Fay, Cranston, Frank J. Milos, Jr., for defendant.
OPINION
WEISBERGER, Chief Justice.
This case comes before us on the appeal of the municipalities of Lincoln, Smithfield, Cumberland, and East Providence, and Sue P. Sheppard, a resident and property owner in the Town of Lincoln (collectively referred to as plaintiffs), from a judgment entered in the Superior Court denying the plaintiffs' claims for relief. We affirm the judgment of the Superior Court. The facts of the case as found by the trial justice are as follows:
"The Narragansett Bay Commission [(NBC)] has developed a large-scale project, the object of which is to abate what are known as combined sewer overflows or CSO's which occur in the communities of Providence, Pawtucket, and Central Falls. Combined sewer overflows are overflows of storm water and sewer water which flow into one of the state's rivers when a significant rain storm occurs and the sewer system overflows.
"The overflow is made up of a combination of sewer water and storm water which otherwise would be diverted, by assistance, to the appropriate treatment facility. During a rain event, the system regulates the flow and permits the *141 overflow to discharge through the CSO outfall pipes into the river. Combined sewer overflows into the State's water systems are unlawful under the Federal Clean Water Act. Theremediation project is a multi-million dollar project, the cost of which will be spread among the rate payers that fall within the district comprising Providence, Johnston, North Providence, Pawtucket, Cranston, Central Falls, Lincoln, Cumberland, East Providence, and part of Smithfield. I don't think I've left anyone out.
"The project is designed to remediate CSO's occurring in both of the Narragansett Bay Commission service areas; that is, the Field's [sic] Point service area and the Buckland Point service area. The points at which the CSO's occur all lie within Providence, Central Falls, Pawtucket and East Providence. None occur in the towns of Cumberland[,] Lincoln, or Smithfield, nor do any occur in Johnston or North Providence. The sewer system for the NBC municipalities is such that the outlying communities of Johnston, North Providence, Smithfield, and Cumberland are upstream communities whose sanitary flows feed into the Narragansett Bay Commission interceptors which then transmit those sanitary flows to one of the two treatment facilities or into a river in the event of a rain storm causing an overflow. Lincoln, Central Falls, Pawtucket and Providence and East Providence are down stream communities in that by the time their sanitary flow joins the system, the system already contains the sanitary flow from other upstream communities. A small part of Central Falls enjoys an upstream position in that the sanitary flow joins the Moshassuck Valley interceptor to the north of Lincoln, Cumberland and Pawtucket and ultimately Providence and East Providence.
"The towns of Lincoln and Cumberland have constructed, or are in the process of constructing, sewer and storm water systems which separate storm water from sewer flow. This type of system is called a separated system. For the most part it is only sewer water which flows from these communities into the NBC interceptors. The communities who have older systems have what are call [sic] the combined systems. There, the sewer water and storm water is not separated. The effect is to increase the sanitary flow into the interceptors. It is the addition of storm water during a rain event which causes the overflow into the State's rivers. But, while it is primarily the storm water from the older combined systems which precipitates any given CSO, the sewer water component of the CSO is made up of sewer water flowing from each of the municipalities lying upstream from the site of the CSO. It is the combined sanitary flow from all of the municipalities lying upstream from the CSO which empties into the river. This includes waste water from all the upstream communities."The unrefuted testimony of Paul Pineau [sic], director of NBC, was that the sanitary flow from Cumberland, Smithfield and Lincoln increases during a rain event, although the specific cause of the increase is unknown. The sanitary flow from Cumberland, Smithfield, and Lincoln is within the capacity of the NBC interceptors, regardless of whether or not that flow is increased during a rain event.
"Broadly speaking, Lincoln, Smithfield, and Cumberland each claim that, as individuals charged rates under the NBC rate scheme, they are unfairly being charged with the cost of remediating a problem which would not exist but for the downstream combined system. It's a broad claim of all of the plaintiffs.
"While the plaintiffs here have addressed themselves to the C[S]O's occurring in Buckland Point service areas, the NBC project at issue directs itself to the remediation of C[S]O's in Providence as well as Pawtucket and Central Falls. The proposed tunnel and tank system *142 would be constructed throughout Central Falls, Pawtucket and Providence. The water users of all of the ten NBC municipalities would bear the cost of the project. Johnston, North Providence and East Providence are upstream of the Field [sic] Point Service Area. By their exhibits, their sanitary flow joins the C[S]O's in Providence."
The parties entered into sixty-four stipulations of fact, but the heart of the ultimate factual situation is adequately portrayed by the findings of the trial justice. We shall add for clarity that the parties have stipulated that the former Blackstone Valley district commission (BVDC) has now been merged into and succeeded by the Narragansett Bay water quality management district commission (NBC). This latter agency has been authorized pursuant to G.L. 1956 § 46-25-67 and § 46-25-58(l) to issue revenue bonds, notes, and obligations, to implement the remediation of combined sewer overflows (CSO's), and to make capital improvements to eliminate or palliate pollution of Narragansett Bay. The trial justice also found that NBC has developed a large-scale project, the objective of which is to abate CSO's that occur in Providence, Pawtucket, and Central Falls. CSO's are overflows of storm water and sewer water that flow into one of the state's rivers when a significant rainstorm occursand the sewer system overflows. Section 46-25-5(9) empowers NBC to assess users a reasonable charge for the use, operation, maintenance, and improvements of the system. Pursuant to § 46-25-22, NBC has the further authority to collect assessments against users in the same manner as taxes are collected by municipalities. Unpaid charges will constitute a lien against users' real estate. General Laws 1956 § 46-25.1-1(d) empowers NBC with the authority and responsibility to construct, operate, and manage sewer treatment facilities that deal with waste from the Blackstone and Moshassuck Valleys. The Legislature in § 46-25-2 made certain specific findings:
"(1) There exists [sic] in the Providence metropolitan area and Narragansett Bay severe water quality problems resulting from the discharge of pollutants, conventional, and unconventional, into Narragansett Bay.
"(2) It is further found and declared that Narragansett Bay may be the greatest natural resource of the state of Rhode Island, and continuing discharge of these pollutants jeopardizes the environmental integrity of the entire Narragansett Bay and creates severe and detrimental ecological and economic impact upon the people of the state of Rhode Island.
"(3) It is further found and declared that because of the scope and complexity of the work necessary to correct and minimize these pollution discharges and the scope of financing required, local municipal governments in the Providence metropolitan area have been unable alone to cope properly and immediately with the magnitude of the pollution discharges.
"(4) It is further found and declared that economy and efficiency dictate the desirability for an overall plan for dealing with pollution discharges in the Narragansett Bay and the Providence metropolitan area.
"(5) It is further found and declared that the most effective and efficient method to combat the discharge of pollutants in the Narragansett Bay is to create a Narragansett Bay water quality management district commission, to be charged with the acquisition, planning, construction, financing, extension, improvement, and operationand maintenance of publicly owned sewage treatment facilities in the Narragansett Bay water quality management district, with appropriate provision for a portion of the financing of the activities to be undertaken by the pledging of the full faith and credit of the state of Rhode Island.
"(6) Title 46, chapter 21 created the Blackstone Valley district commission *143 and charged it with the planning, construction, operation, and maintenance of facilities to deal with the sewage and industrial wastes which originate in municipalities and industries located in the Blackstone and Moshassuck Valleys and are discharged into the waters of the state including the Seekonk and Blackstone rivers which flow into the Narragansett Bay without proper treatment.
"(7) Economy, efficiency and technological advances dictate the desirability of having one entity to formulate, coordinate, and regulate an overall plan to reduce the discharge of sewerage and industrial wastes originating from the Blackstone and Moshassuck Valleys into the waters of this state and the discharge of pollutants into Narragansett Bay from the Narragansett Bay water quality management district.
"(8) The most effective and efficient method of effectuating such an overall plan is to merge the Blackstone Valley district commission with and into the Narragansett Bay water quality management district commission.
"(9) The most effective and efficient method of effectuating an overall plan for dealing with discharges in the watershed of the Narragansett Bay is the merger, consolidation, acquisition, operation and management of other sewage treatment facilities located in the state with or by the Narragansett Bay water quality management district commission as the commission may from time to time determine."
The NBC district is defined in § 46-25-3(5)(i) to include the City of Providence as well as the Cities of East Providence, Pawtucket, and Central Falls, the Towns of Lincoln and Cumberland, and a portion of the Town of Smithfield lying northeast of the Douglas Pike, as well as those portions of the City of Cranston and portions of the Towns of Johnston, North Providence, and Lincoln formerly served by the City of Providence sewage treatment system.
The foregoing statutory provisions authorize NBC to deal with the statewide problem of pollution of Narragansett Bay by remediating the CSO problems emanating from communities in the Blackstone Valley and other contiguous areas. The program would be financed either by revenue obligations issued by NBC, or, if deemed appropriate, by general obligation bonds pledging the full faith and credit of the State of Rhode Island. The legislative findings clearly set forth that the municipalities of the metropolitan Providence area as well as the Blackstone and Moshassuck Valley areas were unable individually to deal with the problems of discharge of sewage into the waters of the state, including rivers that flow into Narragansett Bay without proper treatment.
The plaintiffs challenge the legislation that conferred the foregoing powers on NBC and merged into that agency the communities that formerly had been in the BVDC service area. The plaintiffs assert that the CSO problems originate mainly in the older sewerage systems of Pawtucket and Central Falls, which have one-pipe construction into which both rain water and sewage are combined, unlike the newer, two-pipe systems of Cumberland, Lincoln, and Smithfield. However, according to the testimony of Paul Pinault, executive director of NBC and the only witness presented before the Superior Court, CSO problems emanate from excessive rainwater in all communities that comprise the NBC district. In their brief, plaintiffs assert that the Towns of Lincoln and Cumberland exclusively financed the expansions and upgrades to their sewer systems. However, NBC asserts otherwise, stating that the towns received substantial funding from the Department of Environmental Management, pursuant to the Sewage and Water Supply Failure Fund, G.L. 1956 chapter 44.1 of title 42.
Due Process and Equal Protection
The main thrust of plaintiffs' argument is that the Legislature has violated the due process and equal protection components *144 of both the State and Federal Constitutions in requiring residential andindustrial users of the NBC district comprising all or a portion of ten municipalities to pay the expense of remediating the CSO problems that contribute to the pollution of Narragansett Bay. The plaintiffs argue that the state, through NBC, should either assess each community only that portion of the expense relating to the remediation that arises from its contribution to the CSO problem, or, in the alternative, impose the cost of remediation upon all residents of the state, instead of just those in the NBC district. In pressing this argument, plaintiffs misconceive the previous decisions of this Court and of the Supreme Court of the United States that accord great deference to the authority of a Legislature to address problems of statewide concern on a regional basis.
First, in respect to the Federal Constitution, the Supreme Court of the United States in the case of Joslin Manufacturing Co. v. City of Providence, 262 U.S. 668, 43 S.Ct. 684, 67 L.Ed. 1167 (1923), made the following pertinent comment in respect to the distribution of a burden of obtaining a pure water supply among the City of Providence and other municipalities that might benefit thereby. The specific question was whether it violated the Federal Constitution to require the taxpayers of the City of Providence to bear the burden of acquiring land and other facilities to furnish water that then could be sold to other municipalities at regular wholesale rates.
"That the taxpayers of one municipality may not be taxed arbitrarily for the benefit of another may be assumed; but that is not the case here presented. The communities to be supplied are those within the drainage area of the waters authorized to be taken. These waters are under the primary control of the State and in allowing the City of Providence to appropriate them, it was entirely just and proper for the legislature to safeguard the necessities of other communities who might be dependent thereon, and to that end to impose upon the City of Providence such reasonable conditions as might be necessary and appropriate. Municipalities are political subdivisions of the State and are subject to the will of the legislature * * * and may be compelled not only to recognize their legal obligations but to discharge obligations of an equitable and moral nature as well. Guthrie National Bank v. Guthrie, 173 U.S. 528, 537[. 19 S.Ct. 513, 43 L.Ed. 796]. The requirement here in question is one well within the rule. Specifically, it is objected that the act does not require these other communities to bear a proportionate part of the cost of acquisition, construction and maintenance. The special facts which led the legislature to direct payment at wholesale rates, instead of upon the basis of sharing in the cost of the enterprise, or of some other, we need not consider. It may have been, as suggested, that there were inherent difficulties in the way of making such an apportionment. But it is enough to say that the method selected is one within the scope of legislative discretion and not obnoxious to the Federal Constitution. * * * The legislature is not precluded from putting a burden upon one municipality because it may result in an incidental benefit to another." Joslin Manufacturing Co., 262 U.S. at 673-74, 43 S.Ct. at 687, 67 L. Ed. at 1173-74.
Thus, it is apparent that the Legislature need not apportion expenses with the same mathematical precision that plaintiffs might urge as appropriate. The legislative power is plenary, and as long as its chosen method bears a rational relationship to the legitimate end to be achieved, neither municipalities nor individuals may challenge the legislative choice solely on the ground that they could devise a better or more accurate method. In City of Central Falls v. Halloran, 94 R.I. 189, 179 A.2d 570 (1962), this Court rejected a constitutional attack upon the validity of legislation that authorized the creation of the BVDC, the predecessor of NBC. In *145 that case the City of Central Falls complained that it was required to pay for more than their expenses connected with the operation of the BVDC. Our Court responded that a municipality has no standing to "complain on the score that its rights under the federal constitution are violated by the act." Id. at 193, 179 A.2d at 572 (citing Joslin Manufacturing Co. v. City of Providence, 262 U.S. 668, 43 S.Ct. 684, 67 L.Ed. 1167 (1923)). The Court went on to observe "[n]or has a municipality any valid reason to complain because at some indefinite time in the future some other area in the district which has not contributed to the cost of the project from the beginning may be allowed to benefit." Id.
The Court had earlier stated that it was the express intention of the Legislature to "clothe the commission with such authority as would enable it to deal effectively with the problem of pollution in the area without consulting the wishes or convenience of the municipalities involved * * *. In other words it is reasonable to construe the act as intending to make the policy of the commission paramount in all such matters." Id. at 192, 179 A.2d at 571.
In Halloran, this Court unequivocally rejected the argument that the act creating the BVDC violated either the Federal or the State Constitutions on due process grounds. It also rejected the argument that the act constituted an unreasonable delegation of power to the BVDC. Indeed, this Court expressed doubt concerning whether a municipality as a mere creature of the General Assembly had any right to challenge the legislative act as violative of the State Constitution. The Court did not decide that issue since it had not been raised. For purposes of this opinion, we shall assume without deciding, that the municipalities have the same standing to challenge the subject legislation as violative of the State Constitution as does the individual rate payer who has been joined as a party plaintiff.[1]
In respect to the challenge on equal protection grounds, it is clear that the challenged legislation is economic in nature and is designed to achieve an improvement to the public health and welfare. Such legislation does not impinge upon a fundamental right and does not involve any suspect classifications. Itis, therefore, presumed to be valid and need only pass the rational basis test. If the legislative classification is rationally related to the legitimate state interest of improving the public health and welfare by eliminating or palliating pollution of the public waters, the legislation does not offend either the State or the Federal Constitution. See, e.g., City of Cleburne, Texas v. Cleburne Living Center, Inc., 473 U.S. 432, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985) (applying rational basis test); City of New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976) (per curiam) (same); Rhode Island Insurers' Insolvency Fund v. Leviton Manufacturing Co., 716 A.2d 730 (R.I.1998) (same); In re Advisory Opinion to the House of Representatives Bill 85-H-7748, 519 A.2d 578 (R.I.1987) (same). In this case the challenged legislation has created a reasonable classification consisting of ten communities wherein the problem of pollution has arisen *146 and urgently needs, in the legislative judgment, to be remediated. This classification certainly bears a reasonable and rational relationship to a legitimate state interest in the public health and welfare. This legislation easily passes the test of both federal and state constitutional limitations in respect to their equal protection components.
Equal Burden Clause
The Rhode Island Constitution provides in article 1, section 2, that "the burdens of the state ought to be fairly distributed among its citizens." The plaintiffs have contended that this provision is violated by the legislation in question. This argument must be rejected because the Equal Burden Clause adds nothing to the requirements of the Equal Protection Clause. This section is advisory and not mandatory. It is addressed to the General Assembly for the purpose of advice and does not clothe the courts with the power of enforcing restraint on the lawmaking power. See, e.g., Opinion to the Governor, 88 R.I. 202, 145 A.2d 87 (1958) (art. 1, sec. 2, is advisory and is not a constitutional restraint upon legislative power of the General Assembly); Crafts v. Ray, 22 R.I. 179, 46 A. 1043 (1900) (same); Cleveland v. Tripp, 13 R.I. 50 (1880) (same); In re Dorrance-Street, 4 R.I. 230 (1856) (same). It has been held that the standard of review in respect to this provision is substantially identical to the determination of whether challenged legislation meets the requirements of the Equal Protection Clause. City of Warwick v. Almacs, Inc., 442 A.2d 1265, 1270 (R.I.1982). Consequently no separate analysis is required to determine that legislation meeting the standards of the Equal Protection Clause also cannot be in violation of this advisory admonition.
The Home Rule Amendment
The plaintiffs have asserted that the construction and control of a local sewage system is within the power of the local municipality and, therefore, legislation relating to the sewers cannot be adopted without the consent of the electors of the communities involved. This argument in the context of this case is without merit. It scarcely can be questioned that remediating pollution of Narragansett Bay is a matter of statewide concern (stipulation of fact number 35). Consequently, the provisions of article 13 of our State Constitution are not implicated, since by its very terms the Legislature reserves the power to act upon matters of statewide or regional concern. See, e.g., Lynch v. King, 120 R.I. 868, 877, 391 A.2d 117, 122 (1978) (noting that the Legislature reserved the power to act on statewide matters). In the case at bar, even the plaintiffs concede that the problem of pollution of Narragansett Bay is one of statewide interest and compelling concern. The legislation in question sweeps far beyond the borders of any of the individual municipalities incorporated into the NBC district. See also Newport Court Club Associates v. Town Council of Middletown, 716 A.2d 787, 790 (R.I.1998) (stating that municipalities have no inherent power to legislate on matters of statewide concern).
Delegation of Legislative Power
The plaintiffs urge that delegating legislative power to NBC is unreasonable and, therefore, illegal. This question was virtually answered by our opinion in City of Central Falls v. Halloran, supra, in which we held that the Legislature acted within its powers in creating the BVDC, the predecessor of NBC. If that case were not considered conclusive by clear implication, certainly our opinion in Milardo v. Coastal Resources Management Council, 434 A.2d 266, 271-72 (R.I.1981) (approving the creation of the Coastal Resources Management Council in the face of a challenge brought on the grounds of inappropriate and improper delegation of legislative power) would obviate plaintiffs' challenge to NBC on this ground. The statute creating this agency specifically *147 outlines the policy to be followed by NBC, and contains findings that support the need for the special expertise of this agency to achieve the goal of eliminating or palliating pollution of Narragansett Bay, which is therein denominated as our "greatest natural resource." No subject of delegation could be more appropriate and valid in the totality of the circumstances of problems to be solved.
We have considered the other issues raised by the plaintiffs and conclude that they are without merit.
For the reasons stated, the appeal of the plaintiffs is denied. The judgment entered in the Superior Court is hereby affirmed. The papers in the case may be remanded to the Superior Court.
NOTES
[1] Although we are not called upon to decide the issue in this case, it has long been settled as a matter of federal law that a municipal corporation has no standing to seek to restrain or challenge on Fourteenth Amendment grounds a statute of the state which has created it. See, e.g., Risty v. Chicago, R.I. & P. Ry. Co., 270 U.S. 378, 46 S.Ct. 236, 70 L.Ed. 641 (1926) (Fourteenth Amendment does not restrain the power of the State and its agencies over its municipal corporations); City of Trenton v. State of New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937, 29 A.L.R. 1471 (1923) (same); City of Newark v. State of New Jersey, 262 U.S. 192, 43 S.Ct. 539, 67 L.Ed. 943 (1923) (same). Further, as our Court suggested in City of Central Falls v. Halloran, 94 R.I. 189, 179 A.2d 570 (1962), it is doubtful that a municipality has standing to challenge a state statute under the Rhode Island Constitution with the probable exception that it can challenge an act of the General Assembly imposed upon it in violation of the Home Rule Amendment.
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Case: 14-31170 Document: 00513069194 Page: 1 Date Filed: 06/05/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-31170 United States Court of Appeals
Fifth Circuit
FILED
MARK MOREHOUSE, June 5, 2015
Lyle W. Cayce
Plaintiff - Appellant Clerk
v.
EDWARD R. JACKSON; JAMES A. SMITH; BURL CAIN; CHATMAN H.
REED; DAVID L. DUPLANTIER; G. LEE GRIFFIN; ROSA B. JACKSON;
ROXIE F. GOYNES-CLARK; JOHN MCLURE,
Defendants - Appellees
Appeal from the United States District Court
for the Middle District of Louisiana
Before CLEMENT, PRADO, and ELROD, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge: ∗
Plaintiff-appellant Mark Morehouse (“Morehouse”) appeals from the
district court’s judgment in favor of defendants-appellees, and its denial of his
motion to alter or amend the judgment under Federal Rule of Civil Procedure
59(e). For the reasons explained below, we VACATE the district court’s order
and REMAND with instructions to dismiss Morehouse’s complaint.
∗
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
Case: 14-31170 Document: 00513069194 Page: 2 Date Filed: 06/05/2015
No. 14-31170
FACTS AND PROCEEDINGS
Morehouse worked for the Southern University (“Southern”) Police
Department (the “Department”) at Southern’s Baton Rouge campus. The
Department dismissed Morehouse on January 2, 2004, based on allegations
that he failed to report for work during several of Southern’s football games in
the fall of 2003. Morehouse appealed to Louisiana’s Civil Service Commission
(the “Commission”) on January 17, 2004. 1 The Commission assigned the case
to Referee Roxie F. Goynes (“Goynes”). Goynes conducted a trial, but before she
entered a decision, she questioned sua sponte whether Morehouse had
obtained permanent civil servant status prior to his termination. In February
2006, Goynes held that Morehouse had not obtained permanent status, and in
March 2006, she dismissed his appeal.
After the Commission denied Morehouse’s petition for review,
Morehouse appealed to the Louisiana Court of Appeal, First Circuit. That court
reversed Goynes’s decision, holding that Morehouse had obtained permanent
status, and ordered the Commission to conduct a hearing to determine whether
the Department had cause to fire him. See Morehouse v. S. Univ., Baton Rouge
Campus, 961 So. 2d 473, 480 (La. Ct. App. 2007), review denied, 964 So. 2d 333
(La. 2007).
On remand, Goynes recused herself from the case, and the Commission
referred the dispute to Referee Paul St. Dizier (“St. Dizier”). In February 2008,
St. Dizier held that the Department had legal cause to dismiss Morehouse, and
that termination was commensurate with his offenses. St. Dizier also held that
he did not have jurisdiction to consider Morehouse’s constitutional claims. The
1 The Commission has “exclusive original jurisdiction to adjudicate removal and
disciplinary cases” involving civil service employees, “with the attendant power to appoint
referees to hear and decide cases.” La. Dep’t of Agric. & Forestry v. Sumrall, 728 So. 2d 1254,
1256 (La. 1999); see La. Const. art. 10, § 12 (vesting power over these disputes in
Commission).
2
Case: 14-31170 Document: 00513069194 Page: 3 Date Filed: 06/05/2015
No. 14-31170
Commission adopted St. Dizier’s decision in June 2008. Morehouse again
appealed to the Louisiana Court of Appeal, First Circuit, which affirmed the
Commission’s decision. See Morehouse v. S. Univ., Baton Rouge Campus, No.
2008 CA 1943, 2009 WL 839030, at *6 (La. Ct. App. Mar. 27, 2009), review
denied, 10 So. 3d 737 (La. 2009). 2
In October 2006, while his state proceeding was still pending, Morehouse
filed a federal complaint against the defendants-appellees (collectively, the
“Officials”). In Morehouse’s second amended complaint, he alleged that the
Officials had violated his state and federal rights to substantive and procedural
due process. Morehouse sought, inter alia, a declaratory judgment that the
Officials violated his state and federal substantive and procedural due process
rights; an order that the Officials reinstate him; and an order remanding his
case to the Commission for its consideration of his claims to back pay and
related benefits. 3
The Officials filed a combined motion to dismiss and for summary
judgment, and a supplemental combined motion. The district court granted the
motions for summary judgment. Morehouse filed a motion to alter or amend
the judgment under Rule 59(e), which the court denied as “an effort to
relitigate matters that were resolved to Morehouse’s dissatisfaction.”
We questioned sua sponte whether this case was moot and directed the
parties to submit letter briefs addressing the issue.
2 Even assuming St. Dizier erred by failing to address Morehouse’s due process claims,
Morehouse could have re-asserted those claims before the Louisiana court of appeal. See
Harris v. Dep’t of Police, 125 So. 3d 1124, 1128 (La. Ct. App. 2012) (holding that Louisiana
courts of appeal can consider due process claims on appeal from Commission’s determination,
even if those claims were not raised before Commission). The Louisiana Court of Appeal,
First Circuit, never addressed substantive or procedural due process in its opinion affirming
the Commission’s finding of cause, which suggests that Morehouse failed to raise those
claims. See Morehouse, No. 2008 CA 1943, 2009 WL 839030.
3 Morehouse also sought costs and fees.
3
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No. 14-31170
STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo, Rogers
v. Bromac Title Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014), and its denial
of a motion for reconsideration under Rule 59(e) for abuse of discretion, U.S.
Bank Nat’l Ass’n v. Verizon Comm’ns, Inc., 761 F.3d 409, 428 (5th Cir. 2014),
cert. denied, 135 S. Ct. 1430 (2015). We have a responsibility to address
mootness sua sponte even though neither party raises the issue. United States
v. Villanueva-Diaz, 634 F.3d 844, 848 (5th Cir. 2011).
DISCUSSION
I.
“It is a basic principle of Article III that a justiciable case or controversy
must remain ‘extant at all stages of review, not merely at the time the
complaint is filed.’” United States v. Juvenile Male, 131 S. Ct. 2860, 2864 (2011)
(quoting Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997)).
“Generally, any set of circumstances that eliminates actual controversy after
the commencement of a lawsuit renders that action moot.” Ctr. for Individual
Freedom v. Carmouche, 449 F.3d 655, 661 (5th Cir. 2006). “A case should not
be declared moot ‘[a]s long as the parties maintain a “concrete interest in the
outcome” and effective relief is available to remedy the effect of the violation.’”
Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 527 (5th Cir. 2008)
(alteration in original) (quoting Dailey v. Vought Aircraft Co., 141 F.3d 224,
227 (5th Cir. 1998)). “But a case will become moot where ‘there are no longer
adverse parties with sufficient legal interests to maintain the litigation’ or
‘when the parties lack a legally cognizable interest in the outcome’ of the
litigation.” Id. (quoting In re Scruggs, 392 F.3d 124, 128 (5th Cir. 2004)).
Mootness turns on the particular forms of relief requested by the parties.
For example, where a plaintiff could have requested damages, but requested
injunctive relief alone, the claim is moot when injunctive relief becomes
4
Case: 14-31170 Document: 00513069194 Page: 5 Date Filed: 06/05/2015
No. 14-31170
unavailable. See H.K. Porter Co. v. Metropolitan Dade County, 650 F.2d 778,
782 (5th Cir. Unit B July 1981) (explaining that “[a] damage claim . . . could
have saved this action from mootness,” but holding that case was moot because
plaintiff failed to request damages). 4
II.
Morehouse argues that Goynes’s decision contradicted this court’s
precedent and had no other legal basis. He contends that, by entering her
allegedly erroneous opinion, she violated his federal substantive due process
rights. We hold that Morehouse’s federal substantive due process claim is
moot.
Morehouse filed his federal complaint on October 6, 2006. The Louisiana
Court of Appeal, First Circuit reversed Goynes’s decision on May 4, 2007. Once
the Louisiana court reversed Goynes’s decision, it no longer had any effect on
Morehouse. 5
We dismiss Morehouse’s federal substantive due process claim for lack
of jurisdiction.
III.
Morehouse argues that the Commission’s failure to provide a timely post-
termination hearing violated his federal procedural due process rights. We
hold that this claim is also moot.
4 “Unit B cases are precedent in the Fifth Circuit.” United States v. Rojas-Martinez,
968 F.2d 415, 420 n.11 (5th Cir. 1992).
5 Even an expired court order might have ongoing effects. Cf. Juvenile Male, 131 S.
Ct. at 2864 (holding that expired juvenile sentence could have collateral effects such that
challenge to sentence was not moot). But the complaining party has the burden to identify
the ongoing injury, and to show that the injury is redressable by a favorable judicial decision.
See id. Morehouse fails to satisfy this burden.
5
Case: 14-31170 Document: 00513069194 Page: 6 Date Filed: 06/05/2015
No. 14-31170
A.
The Commission held that Southern terminated Morehouse for cause,
and that his punishment was commensurate with his offense. The
Commission’s judgment was affirmed on review in the Louisiana courts.
“Morehouse does not seek to relitigate the issue of cause for his termination,”
and he “concedes that this issue has now been decided.” Moreover, except for
the timeliness issue, Morehouse has not alleged any constitutional defects in
the hearings conducted by St. Dizier that led to the Commission’s cause
finding. Because Morehouse concedes that his termination was justified, his
injuries must flow purely from the alleged denial of procedural due process.
When a plaintiff receives a constitutionally satisfactory post-termination
hearing, and it is clear that the plaintiff’s dismissal “would ultimately have
occurred absent procedural defects,” the plaintiff “is not entitled to
reinstatement,” Wheeler v. Mental Health & Mental Retardation Auth. of
Harris Cnty., Tex., 752 F.2d 1063, 1071 & n.9 (5th Cir. 1985), or to back pay
and related benefits, Wilson v. Taylor, 658 F.2d 1021, 1035 (Former 5th Cir.
1981); accord Hill v. City of Pontotoc, Miss., 993 F.2d 422, 425 (5th Cir. 1993)
(noting that Wilson and other cases provide that “plaintiffs may not recover
back pay, even for the period between the deprivation and the validating
hearing”). 6
Considering Morehouse’s concession that his termination was justified,
and his failure to challenge the fairness of his post-termination hearing, we
6 In Wheeler, the court held that courts could award backpay “during the period
between dismissal and the date of the post-termination procedures.” 752 F.2d at 1070. This
holding was in direct conflict with Wilson, 658 F.2d at 1035, a tension we noted but chose not
to resolve in Hill, 993 F.2d at 425 & n.2. We apply the “firm rule of this circuit that we cannot
disregard the precedent set by a prior panel,” and that, “when a panel is confronted with two
contradictory holdings,” the prior case controls. Wilson, 658 F.2d at 1034-35. Wilson was
issued prior to Wheeler, and Wilson thus controls.
6
Case: 14-31170 Document: 00513069194 Page: 7 Date Filed: 06/05/2015
No. 14-31170
hold that he is not entitled to reinstatement under federal law, or to backpay
and related benefits.
B.
Accordingly, all that remains of Morehouse’s procedural due process
claim is his request for a declaration that the Officials violated his procedural
due process rights.
1.
Morehouse filed his first amended complaint on October 15, 2007. St.
Dizier issued his opinion affirming Morehouse’s termination on February 27,
2008. Once Morehouse received a constitutionally sufficient hearing and a
disposition of his appeal, the alleged due process injury was a thing of the past.
Morehouse could have sought damages for the past violation, Hill, 993 F.2d at
425, but he chose not to do so. Thus, a declaratory judgment could not now give
him relief in the underlying proceeding. Cf. County of Riverside v. McLaughlin,
500 U.S. 44, 48, 51 (1991) (explaining that the requests of inmates for
declaratory relief—who were arrested without warrants and held without a
prompt probable cause hearing—were moot because, by the time their case
came up for appeal, “they [had] either received probable cause determinations
or were released”).
2.
In his letter brief, Morehouse argues that the case is not moot because a
declaratory judgment “would allow him to recover his lost wages” in a future
state court action based on state law. Like the issue of mootness, we may
question ripeness sua sponte. Rosedale Missionary Baptist Church v. New
Orleans City, 641 F.3d 86, 90-91 (5th Cir. 2011).
To the extent Morehouse depends on a future state court proceeding to
show that his declaratory judgment claim is justiciable, we hold that his claim
is not ripe. Morehouse has not yet filed a state court action. And even if he does
7
Case: 14-31170 Document: 00513069194 Page: 8 Date Filed: 06/05/2015
No. 14-31170
file such a claim, it will probably be barred by res judicata. See La. Res. Stat. §
13:4231(2) (providing that “all causes of action existing at the time of final
judgment arising out of the transaction or occurrence that is the subject matter
of the litigation are extinguished”). Because there is no pending state court
action, and because it does not appear that Morehouse would have a right to
relief in Louisiana state court, Morehouse fails to “show that there is a
substantial controversy, between parties having adverse legal interests, of
sufficient immediacy and reality to warrant the issuance of a declaratory
judgment.” Cf. Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)
(holding that declaratory judgment action was ripe where state action was
pending, and state law gave party the right to sue the other)
C.
Morehouse concedes that Southern had cause to fire him, but he argues
that the Officials took too long to give him the hearing and decision he
deserved. Thus, he alleges a purely past violation of his procedural due process
rights. We agree with the district court that a years-long hiatus between a
termination and a post-termination disposition is far from ideal. But
Morehouse failed to request any form of relief that would remedy the alleged
past violation. And his declaratory judgment claim is not ripe.
Accordingly, we dismiss Morehouse’s federal procedural due process
claim for lack of jurisdiction.
IV.
Because we dismiss Morehouse’s federal due process claims, we must
dismiss his state substantive and procedural due process claims. See Arbaugh
v. Y&H Corp., 546 U.S. 500, 514 (2006) (explaining that “when a federal court
concludes that it lacks subject-matter jurisdiction, the court must dismiss the
complaint in its entirety,” including “pendent state-law-claims”). We dismiss
those claims for lack of jurisdiction.
8
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No. 14-31170
CONCLUSION
Because Morehouse’s claims are now moot or unripe, we VACATE the
district court’s judgment and order, and REMAND with instructions to dismiss
his complaint without prejudice for lack of jurisdiction. 7
7 See H.K. Porter, 650 F.2d at 783 n.9 (explaining that this is the proper remedy where
the district court entered judgment in a moot case).
9
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8 So.3d 1136 (2009)
HICKS
v.
STATE.
No. 1D08-1050.
District Court of Appeal of Florida, First District.
April 16, 2009.
Decision without published opinion. Affirmed.
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NUMBER 13-08-00219-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
______________________________________________________________
MATTHEW KELLY MEDLEY, APPELLANT,
v.
MOVAC SERVICE CO., INC., APPELLEE.
_____________________________________________________________
On Appeal from the 92nd District Court
of Hidalgo County, Texas.
______________________________________________________________
MEMORANDUM OPINION
Before Justices Yañez, Garza, and Vela
Memorandum Opinion Per Curiam
Appellant perfected an appeal from a judgment entered by the 92nd District Court
of Hidalgo County, Texas, in cause number C-094-08-A. Appellee has filed an amended
motion to dismiss the appeal. Appellee requests that this Court dismiss the appeal
because the trial court has signed a Joint Agreed Order Dissolving the Temporary
Injunction, rendering this appeal moot. More than ten days have passed since this motion
was filed and appellant has not filed a response; however, appellant agrees that the trial
court's order may "pretermit the need for addressing the merits of this appeal."
The Court, having considered the documents on file and appellee's amended
motion to dismiss the appeal, is of the opinion that the motion should be granted. See Tex.
R. App. P. 42.1(a). Appellee's motion to dismiss is granted, and the appeal is hereby
DISMISSED. Costs will be taxed against appellant. See Tex. R. App. P. 42.1(d) ("Absent
agreement of the parties, the court will tax costs against the appellant."). Pending motions,
if any, are likewise DISMISSED.
PER CURIAM
Memorandum Opinion delivered and
filed this the 12th day of February, 2009.
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978 So.2d 87 (2006)
CLARENCE RUDOLPH
v.
STATE.
No. CR-05-1351.
Court of Criminal Appeals of Alabama.
April 25, 2006.
Decision of the Alabama Court of Criminal Appeal Without Opinion. Dismissed.
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48 F.3d 1215NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.
Roberta J. BRYANT, Plaintiff-Appellant,v.William PERRY, Secretary of Defense, Defendant-Appellee,andU.S. DEPARTMENT OF DEFENSE, Dependents Schools; RichardSaddlemire, Principal; Patricia Matthews,Assistant Principal, Defendants.
No. 94-1545.
United States Court of Appeals, Fourth Circuit.
Submitted Jan. 31, 1995.Decided March 15, 1995.
Before WILLIAMS and MOTZ, Circuit Judges, and PHILLIPS, Senior Circuit Judge.
PER CURIAM:
1
Roberta J. Bryant appeals from the district court's orders entering judgment on the jury verdict and denying her motion for a new trial in her employment discrimination case. Our review of the record and the district court's opinion discloses no abuse of discretion and that this appeal is without merit.
2
We find no abuse of discretion in the district court's evidentiary rulings, see Persinger v. Norfolk & W. Ry., 920 F.2d 1185, 1187 (4th Cir.1990), nor in the court's limitation of the time for Bryant's summation to the jury. See Herring v. New York, 422 U.S. 853, 862 (1975). Although the challenged jury instruction did not track the language of St. Mary's Honor Ctr. v. Hicks, 61 U.S.L.W. 4782, 4784 (U.S.1993),* we find that any error in the district court's modification of Bryant's proposed jury instruction was harmless. See Fed.R.Civ.P. 61. We additionally conclude that the verdict was clearly supported by the evidence presented at trial. Herold v. Hajoca Corp., 864 F.2d 317, 319-21 (4th Cir.1988), cert. denied, 490 U.S. 1107 (1989). Accordingly, we affirm the orders of the district court. 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.
3
AFFIRMED.
*
"[A] reason cannot be proved to be 'a pretext for discrimination ' unless it is shown both that the reason was false, and that discrimination was the real reason." Hicks, 61 U.S.L.W. at 4786 (emphasis in original)
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458 F.Supp.2d 970 (2006)
Peggy DEAL, Plaintiff,
v.
CONSUMER PROGRAMS, INC., Defendant.
No. 4:04CV1789 RWS.
United States District Court, E.D. Missouri, Eastern Division.
November 18, 2005.
*971 Allen P. Press, Green and Schaaf, St. Louis, MO, for Plaintiff.
Gerald M. Richardson, Matthew B. Robinson, Lowenbaum Partnership, L.L.C., St. Louis, MO, for Defendant.
MEMORANDUM AND ORDER
SIPPEL, District Judge.
Peggy Deal was a top-level executive with CPI when the company changed hands in March of 2004. She was terminated without cause shortly thereafter. Deal had a written employment agreement and a stock option agreement with CPI, and in this action she seeks damages for *972 breach of both. After a mediation of this case, CPI paid Deal $490,000 plus interest[1] in accordance with her employment agreement. This case, however, was not finally resolved because Deal contends that she is owed additional amounts under the contract, including her unpaid base salary and a bonus. Deal also claims that CPI breached the stock option agreement by refusing her offer to exercise the option, and she seeks damages as a result. Finally, Deal seeks punitive damages for CPI's refusal to pay her severance amount in a timely fashion.[2] Deal seeks summary judgment on her breach of employment contract and breach of stock option claims.
CPI also seeks summary judgment, contending that it has now paid Deal all she was entitled to under the terms of the employment agreement. CPI further contends that Deal failed to fulfill the conditions precedent necessary to exercise the option, and it is accordingly entitled to judgment as a matter of law on her claim that it breached the stock option agreement.
The parties agree that the agreements are unambiguous and governed by Missouri law. After careful review of the entire record in light of the relevant standards, I find that Deal is entitled to her unpaid salary and bonus, but she failed to properly exercise her stock option in accordance with the terms of the agreement. My analysis follows.
Standards Governing Summary Judgment
In determining whether summary judgment should issue, I must view the facts and inferences from the facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., Alb U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The moving party has the burden to establish both the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., All U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, the non-moving party cannot rest on the allegations in his pleadings but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e). "[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323, 106 S.Ct. 2548.
Undisputed, Material Facts
On or about October 21, 2002, CPI employed Deal as an Executive Vice-President under a written employment agreement. The agreement has a one-year term with an automatic renewal for a one-year *973 period unless Deal or CPI notifies the other "in writing at least sixty (60) days prior to the commencement of such one (1) year period of an intention to terminate this Agreement." Section 3 of the agreement entitled "Term of Employment" further provides in relevant part:
Notwithstanding anything herein to the contrary, the Term of Employment shall terminate upon Executive's death or Permanent Disability ... or upon the Corporation's termination of Executive's employment for cause....
Section 5(b) agreement also provides for an annual bonus in relevant part as follows:
After a Change in Control, in addition to the Base Salary, the Executive shall be awarded for each Fiscal Year during the Term of Employment an annual bonus... in cash at least equal to the highest bonus paid or payable to the Executive in respect of any of the Fiscal Years during the three Fiscal Years immediately prior to the date of the Change of Control.
Section 6 of the agreement is entitled "Termination of Employment." It is divided into four subsections: Death or Permanent Disability; Cause; Notification Prior to One Year Extension; and, Payments for Involuntary Termination Without Cause. Subsection (d) of the agreement, "Payments for Involuntary Termination Without Cause," provides in full as follows:
(1) If prior to a Change of Control (i) the Corporation terminates Executive's employment (other than for Cause pursuant to subsection 6(b) hereof), or (ii) the Executive's employment terminates by reason of the Corporation's termination of this Agreement pursuant to subsection 6(c) hereof, the Corporation shall pay Executive following such involuntary termination her full accrued Base Salary through the date of termination of employment plus an amount equal to one hundred percent (100%) of Executive's Base Salary for the fiscal year in which the termination occurs, payable in twenty-six (26) equal bi-weekly installments or at such other intervals as salary is normally paid by the Corporation to its employees. In addition, within ninety (90) days after conclusion of the Fiscal Years in which the Executive's employment is involuntarily terminated without Cause, the Corporation shall pay the Executive the Annual Bonus she would have earned for the fiscal year, if any, prorated on the basis of the percentage of the Fiscal Year preceding such termination of Executive's employment. The payments pursuant to this Subsection 6(d)(1) and any payments to which Executive may be entitled pursuant to Subsections 5(g), 5(h), and 5(i) shall be in full discharge of any claims, actions, demands or damages of every nature and description which Executive might have or might assert against the Corporation or any Affiliated Company in connection with or arising from the termination of Executive's employment or the termination of this Agreement. (2) If following a Change of Control (i) the Corporation terminates Executive's employment (other than for Cause pursuant to Subsection 6(b) hereof), or (ii) the Executive's employment terminates by reason of the Corporation's termination of this Agreement pursuant to subsection 6(c) hereof, the Corporation shall, at the time of such involuntary termination, make a lump sum cash payment to the Executive equal to 200 % of her Base Salary for the Fiscal Year of termination. In addition to the payment pursuant to this Subsection 6(d)(2) and any payments to which Executive may be entitled pursuant to Subsections 5(g), 5(h) and 5(i), Executive shall be entitled to all remedies available under this Agreement or at law in respect of any *974 damages suffered by Executive as a result of an involuntary termination of employment without Cause.
(emphasis supplied). The parties refer to the lump-sum cash payment described in Section 6(d)(2) as a severance payment. Section 8 of the agreement also states that if Deal is terminated, she "shall not be obligated to mitigate any damages by seeking employment or otherwise, and no amount payable hereunder and no benefit or service credit for benefits shall be reduced in the event that the Executive shall accept alternative employment."
Finally, Deal's employment agreement contains two provisions relating to attorney's fees. The first, Section 12, provides that, following a change of control, "the Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof...." The second attorney's fees provision is found in Section 18(b) and states that "[i]n the event that litigation is required to enforce any provision of this Agreement, subject to the provisions of Section 12 hereof, the prevailing party shall be entitled to reasonable attorneys fees."
Deal's employment agreement was automatically renewed for one year on October 21, 2003. However, it is undisputed that on May 14, 2004, CPI terminated Deal without cause following a change in control. At the time of her termination, Deal's annual base salary was $245,000 per year, $138,891 of which she had already received. CPI did not pay Deal her severance upon her termination.
Deal and CPI were also parties to a stock option agreement which granted Deal the option to purchase 16,204 shares of CPI capital stock at $12.96 per share. Upon her termination, Deal had the right under the agreement to exercise her option. Section 5 of the stock option agreement is entitled "Manner of Exercise" and provides in full as follows:
This option shall be exercised by Optionee or his estate or beneficiary by giving written notice to the Company of the intention to exercise the option, accompanied by full payment of the purchase price of the shares with respect to which the option is exercised. Such full payment shall be tendered either (a) in cash or (b) in shares of the Company's common stock, with a certificate representing such shares duly endorsed for transfer and with any other documents that may be reasonably required by the Company to effectuate the transfer of the shares. Ownership of the shares acquired upon exercise of the option shall vest when the Company's secretary or transfer agent (as the case may be) records the transfer of such shares to Optionee on the permanent books of the Company.
(emphasis supplied). On June 25, 2004, Deal, through counsel, sent CPI written notice of her intent to exercise the stock option. It is undisputed, however, that her written notice was not accompanied by the full payment of the purchase price of the shares ($210,004) as required by the stock option agreement. Instead, the letter merely stated that Deal "is prepared to tender cash in the amount of $210,004 for her stock. Please inform me if CPI intends to perform its agreement under that contract." When CPI did not respond to the first letter, Deal's counsel sent a second letter which stated that "[u]nder the current circumstances, Ms. Deal will not pay CPI the purchase price for the stock. We assume that CPI would keep the money and refuse to issue Ms. Deal her stock." CPI did not respond to the second letter, either. This litigation ensued.
*975 After the case was filed, I ordered the parties to mediation. As a result of the mediation, CPI paid Deal her lump-sum severance of $490,000, plus interest (although Deal now disputes the calculation of interest). CPI, however, refused to pay any additional amounts to Deal under the terms of the employment agreement. Instead, CPI contends in its summary judgment motion that Deal's severance payment is in lieu of her unpaid salary and bonus payments under the plain language of the employment agreement. Deal disputes this and alleges by cross-motion for summary judgment that she is entitled to her unpaid salary and bonus payments as a matter of law. She also contends that the employment agreement requires CPI to pay her attorney's fees. Finally, Deal argues that she properly exercised her stock option agreement and moves for summary judgment on that claim as well. CPI disputes this and contends that Deal's claim fails as a matter of law because she failed to perform the conditions precedent necessary to exercise her option. As discussed below, Deal is right and CPI is wrong about her employment agreement, but CPI is right and Deal is wrong about her stock option agreement.
Discussion
The parties agree that the contracts at issue are unambiguous and governed by Missouri law. "Under Missouri law, summary judgment is appropriate [in a contract case] where the language of the contract is clear and unambiguous such that `the meaning of the portion of the contract in issue is so apparent that it may be determined from the four corners of the document.'" Family Snacks of North Carolina, Inc. v. Prepared Prods. Co., Inc., 295 F.3d 864, 867 (8th Cir.2002) (quoting Missouri Consol. Health Care Plan v. BlueCross BlueShield of Mo., 985 S.W.2d 903, 908 (Mo.Ct.App.1999)). When a contract uses plain and unequivocal language it must be enforced as written. Lake Cable, Inc. v. Trittler, 914 S.W.2d 431, 436 (Mo.Ct.App.1996). When a contract is unambiguous, the language used is given its natural, ordinary, and common-sense meaning, and the entire contract is considered to determine the intentions of the parties. Chehval v. St. John's Mercy Medical Center, 958 S.W.2d 36, 38 (Mo.Ct.App. 1997). An ambiguity does not exist merely because the parties dispute the meaning of the contract. Id. Whether language is ambiguous is a question of law for the court. Phipps v. School District of Kansas City, 645 S.W.2d 91, 100 (Mo.Ct.App.1982). If a contract is unambiguous, the intention of the parties and the legal import of the language of the contract cannot be varied by parol or extrinsic evidence. Allison v. Flexway Trucking, Inc., 28 F.3d 64, 67 (8th Cir.1994) (applying Missouri law).
Deal is Entitled to Her Unpaid Base Salary and Bonus
Applying these rules of construction, Deal is entitled to her base salary through the end of her contract term, plus her bonus. First, there is no dispute that Deal's written employment agreement was in effect when she was terminated because her employment was automatically renewed for a one-year period on October 21, 2003. Section 3 of the agreement, entitled "Term of Employment," plainly provides for a one-year term of employment, unless Deal dies, becomes disabled or is terminated for cause. It is undisputed that none of these events occurred; therefore, Deal's employment agreement was in effect through October 21, 2004.[3] Had CPI intended *976 for the term of Deal's employment to expire upon a termination without cause, the agreement could have so provided (as it did with for-cause terminations). It does not. The plain language of the agreement must be enforced. CPI was obligated to remit Deal's annual base salary in accordance with the terms of the employment agreement, and it breached the agreement by failing to do so. Deal is entitled to her unpaid base salary through the expiration of her one-year contract period in the amount of $106,009, plus interest.[4]
The same is true for Deal's bonus payment. Section 5(b) of the employment agreement states that "[a]fter a Change in Control, in addition to the Base Salary, the Executive shall be awarded for each Fiscal Year during the Term of Employment an annual bonus ... in cash at least equal to the highest bonus paid or payable to the Executive in respect of any of the Fiscal Years during the three Fiscal Years immediately prior to the date of the Change of Control." The employment agreement carves out no exceptions for payment of the bonus based upon Deal's termination without cause. Thus, Deal is entitled to her bonus payment in the amount of $12,035, plus interest.
CPI argues that the termination provisions of the employment agreement provide Deal's exclusive compensation for a termination without cause. According to CPI, the lump-sum cash payment of 200 percent of her base salary provided for in Section 6 of the agreement is awarded in lieu of Deal's unpaid salary and bonus. CPI's arguments are contrary to the unambiguous language of the contract, which contains no such limitations. Instead, the provision provides in full as follows:
(2) If following a Change of Control (i) the Corporation terminates Executive's employment (other than for Cause pursuant to Subsection 6(b) hereof), or (ii) the Executive's employment terminates by reason of the Corporation's termination of this Agreement pursuant to subsection 6(c) hereof, the Corporation shall, at the time of such involuntary termination, make a lump sum cash payment to the Executive equal to 200 % of her Base Salary for the Fiscal Year of termination. In addition to the payment pursuant to this Subsection 6(d)(2) and any payments to which Executive may be entitled pursuant to Subsections 5(g), 5(h) and 5(i), Executive shall be entitled to all remedies available under this Agreement or at law in respect of any damages suffered by Executive as a result of an involuntary termination of employment without Cause.
(emphasis supplied). According to the plain language of the employment agreement, Deal's lump-sum cash payment was awarded in addition tonot in lieu ofall other remedies she may have for breach of her employment agreement. Had the parties intended the lump-sum payment to provide Deal's exclusive remedy for unpaid salary and bonus payments upon CPI's breach of the employment agreement, they could have so provided. In fact, the previous *977 subsection, which applies to terminations without cause prior to a change in control, contains such an limitation:
(1) If prior to a Change of Control (i) the Corporation terminates Executive's employment (other than for Cause pursuant to subsection 6(b) hereof), or (ii) the Executive's employment terminates by reason of the Corporation's termination of this Agreement pursuant to subsection 6(c) hereof, the Corporation shall pay Executive following such involuntary termination her full accrued Base Salary through the date of termination of employment plus an amount equal to one hundred percent (100%) of Executive's Base Salary for the fiscal year in which the termination occurs, payable in twenty-six (26) equal bi-weekly installments or at such other intervals as salary is normally paid by the Corporation to its employees. In addition, within ninety (90) days after conclusion of the Fiscal Years in which the Executive's employment is involuntarily terminated without Cause, the Corporation shall pay the Executive the Annual Bonus she would have earned for the fiscal year, if any, prorated on the basis of the percentage of the Fiscal Year preceding such termination of Executive's employment. The payments pursuant to this Subsection 6(d)(1) and any payments to which Executive may be entitled pursuant to Subsections 5(g), 5(h), and 5(i) shall be in full discharge of any claims, actions, demands or damages of every nature and description which Executive might have or might assert against the Corporation or any Affiliated Company in connection with or arising from the termination of Executive's employment or the termination of this Agreement.
(emphasis supplied). When the two provisions are read in conjunction, it is clear that the lump-sum cash payment awarded to Deal for her termination without cause following a change in control does not limit her ability to recover her unpaid base salary and bonus payments as damages for breach of her employment agreement. Summary judgment in favor of Deal and against CPI will be entered on Deal's claim for breach of the employment agreement.
Deal Did Not Properly Exercise Her Stock Option
Although Deal is entitled to judgment as a matter of law on her employment contract claims, her breach of the stock option agreement fails because she did not meet the conditions precedent necessary to exercise the option.
Under Missouri law, "[o]ptions to purchase are strictly construed against a person whose right it is to exercise the option." Boatmen's Bank of Mid-Missouri v. Crossroads West Shopping Center, Ltd., 907 S.W.2d 800, 803 (Mo.Ct.App. 1995). "An optionee must exercise the option in strict accordance with its expressly stated terms and conditions." HGS Homes, Inc. v. Kelly Residential Group, Inc., 948 S.W.2d 251, 255 (Mo.Ct. App.1997).
In this case, the agreement requires Deal to exercise her option by "giving written notice to the Company of the intention to exercise the option, accompanied by full payment of the purchase price of the shares with respect to which the option is exercised." It is undisputed that Deal's written notice of intent was not "accompanied by full payment of the purchase price." Instead, she merely stated that she was "prepared to tender cash." This, however, does not comply with the requirement of the agreement. Because Deal did not meet the condition precedent by submitting written notice "accompanied by full payment of the purchase price," she was not entitled to exercise her option as a matter of law.
*978 Deal argues that her offer to pay met the requirements of the agreement because the next sentence states that the payment may be "tendered" in cash or shares of stock, and Black's Law Dictionary defines a "tender" as "an offer of money." Deal's reading of the stock option agreement is contrary to the plain language of the contract, which provides as follows:
This option shall be exercised by Optionee or his estate or beneficiary by giving written notice to the Company of the intention to exercise the option, accompanied by full payment of the purchase price of the shares with respect to which the option is exercised. Such full payment shall be tendered either (a) in cash or (b) in shares of the Company's common stock, with a certificate representing such shares duly endorsed for transfer and with any other documents that may be reasonably required by the Company to effectuate the transfer of the shares. Ownership of the shares acquired upon exercise of the option shall vest when the Company's secretary or transfer agent (as the case may be) records the transfer of such shares to Optionee on the permanent books of the Company.
(emphasis supplied). When these two sentences are read in conjunction and given their ordinary meaning, it is clear that the second sentencewhich requires Deal "to tender" cash or stockdescribes the method by which "the full payment of the purchase price" should be made. It does not modify the requirement that Deal must provide written notice accompanied by full payment of the purchase price to exercise her option. Because she did not comply with the terms of the agreement, Deal was not entitled to exercise her option as a matter of law.
Deal attempts to excuse her failure to comply with the condition precedent contained in the stock option agreement by arguing that CPI breached the agreement by failing to give an assurance of performance when requested to do so and by breaching the duty of good faith and fair dealing inherent in every contract.[5] Deal's reliance on these contractual duties is misplaced because options are not bilateral, enforceable contracts unless and until the optionee (here Deal) complies with the conditions precedent necessary to exercise the option. "An option consists of a continuing and irrevocable offer which the optionor cannot withdraw during a stated period." HGS Homes, Inc., 948 S.W.2d at 255. "It vests the optionee with a power of acceptance and, when the optionee accepts the offer in the prescribed manner, the option is deemed to have been exercised so as to create a binding bilateral contract. The bilateral contract so created is specifically enforceable." Id. (internal citations omitted). "However, until the optionee accepts, there is no enforceable contract." Id. Because Deal did not "accept the offer in the prescribed manner," no contract arose and CPI was under no duty to assure her of performance or respond to her requests that it do so. Accordingly, her claim that CPI breached *979 the stock option agreement fails, and summary judgment will be entered in favor of CPI on Count II of the amended complaint.
Deal Has Not Pleaded Any Basis for Recovery of Punitive Damages
Deal also argues that she has a claim for punitive damages based on CPI's breach of her employment agreement. As I previously stated, Deal has not pleaded a separate count in her amended complaint for punitive damages. Instead, her request for punitive damages can be found in paragraphs 27 and 28 of her amended complaint as follows:
27. CPI, in willful breach of the parties' Employment Agreement, has refused to pay Deal the Severance and unused vacation owed her.
28. CPI's conduct in this regard is outrageous, justifying an award of punitive damages.
Although Deal has not moved for summary judgment on this claim, I find that it should be dismissed because her pleadings contain no basis for recovery of punitive damages under Missouri law. "The general rule is that punitive damages may not be recovered in breach of contract actions. Courts have carved two exceptions to this rule. First, when the breaching party's conduct amounts to a separate, independent tort apart from an intentional breach of the contract. Second, when the breach of contract is coupled with violations of a fiduciary duty." Peterson v. Continental Boiler Works, Inc., 783 S.W.2d 896, 902-03 (Mo.1990); Wash Solutions, Inc. v. PDQ Mfg., Inc., 395 F.3d 888, 896 n. 3 (8th Cir.2005) ("[U]nder Missouri law, punitive damages are generally not available for a breach of contract claim unless the breach amounts to an independent tort, separate from the contractual claim, accompanied by allegations of legal malice.") (quoting Kelly v. Golden, 352 F.3d 344, 351 (8th Cir.2003)). Deal has not pleaded any tort claims, and her complaint is devoid of any allegations of a breach of fiduciary duty. As such, she is not entitled to pursue a claim for punitive damages for breach of the employment agreement as a matter of law. For this reason, Deal's request for punitive damages must be dismissed.
Deal is Entitled to Attorney's Fees
As the prevailing party on her breach of employment contract claim, Deal is entitled to recover attorney's fees from CPI under Section 18 of the agreement. CPI has already paid a substantial portion of Deal's attorney's fees, and I will address the remaining fee issues if necessary by motion practice in accordance with the Court's local rules.
Although my ruling today disposes of the entire case, one final issue must be resolved before the Court can enter a final judgment. I would like the parties to submit to me, within ten (10) days from the date of this Order, a joint memorandum explaining to me whether Deal is owed additional interest on her lump-sum severance payment, and if so, what the final amount of the award should be. I expect counsel to cooperate on this matter. In addition, I would like Deal to submit a proposed Final Judgment for the Court's review. The final judgment shall include all relevant calculations, including interest calculations where appropriate. CPI may file any objections to the proposed form of Judgment within five (5) days, or submit its own proposal for my review.
Finally, Deal has filed a motion to strike CPI's opposition to summary judgment because it was filed five days late. CPI has sought leave to file its opposition out of time. Because the interests of justice dictate that this case be resolved through *980 fully-briefed summary judgment motions, I will grant CPI leave to file its motion out of time and deny Deal's motion to strike.
Accordingly,
IT IS HEREBY ORDERED that plaintiffs motion for summary judgment [# 44] is granted in part and denied in part as stated above, and plaintiff shall have summary judgment on Count I of her amended complaint only.
IT IS FURTHER ORDERED that defendant's motion for summary judgment [# 47] is granted in part and denied in part as stated above, and defendant shall have summary judgment on Count II of plaintiffs amended complaint only.
IT IS HEREBY ORDERED that Counts II and III of plaintiffs amended complaint and plaintiffs claim for punitive damages are dismissed with prejudice in their entirety.
IT IS FURTHER ORDERED that the parties shall submit to me, within ten (10) days from the date of this Order, a joint memorandum addressing the issue of whether Deal is owed additional interest on her lump-sum severance payment, and if so, what the final amount of the award should be.
IT IS FURTHER ORDERED that plaintiff shall submit a proposed Final Judgment for the Court's review within ten (10) days from the date of this Order which shall include all relevant calculations, including interest calculations where appropriate. Defendant may file any objections to the proposed form of Judgment within five (5) days, or submit its own proposal for my review.
IT IS FURTHER ORDERED that defendant's motion for leave to file a response in opposition to plaintiffs motion for summary judgment [# 57-2] is granted.
IT IS FURTHER ORDERED that plaintiffs motion to strike [# 54] is denied.
NOTES
[1] Plaintiff contends that CPI improperly calculated the interest and actually owes Deal an additional $1,133.74 in interest. The parties' inability to agree even when they do agree is unfortunately typical of this case and has resulted in unnecessary hearings and motion practice before this Court. Counsel are admonished for their unprofessional demeanor and lack of civility to one another, both in the courtroom and in writing. The lawyers' continued display of hostility compromises the dignity of the practice of law and shows disrespect for this Court.
[2] Plaintiff contends that this claim (although it is not separately pleaded as such) is not before the Court on summary judgment and remains pending. Count III of plaintiff's amended complaint alleges an ERISA violation. Although plaintiff claims that she is seeking summary judgment on Count III, her motion for summary judgment is devoid of any discussion of ERISA. Plaintiff is the master of her complaint, and the Court will assume by plaintiff's briefing that she has abandoned Count III of her amended complaint and will enter judgment against plaintiff on that claim.
[3] Deal has not claimedas suggested by CPIthat Deal seeks her unpaid salary and bonus because "CPI did not provide her with sixty days notice before her agreement renewed." Instead, Deal seeks her unpaid base salary and bonus under the one-year contract that was in effect at the time of her termination. CPI is presumably referring to the "Notification Prior to One Year Extension" provision of the employment agreement, but it does not apply here. Instead, that provision allows either party to elect not to automatically renew the contract for the following year. It does not grant either party the right to terminate the existing contract prior to the one-year term simply by providing sixty days notice. Therefore, CPI's discussion of this issuelike its discussion of most of the contract provisionsis irrelevant to the motions before me.
[4] As explained above, the employment agreement specifically states that Deal is not required to mitigate her damages. Therefore, she is entitled to the full amount of her unpaid base salary.
[5] Deal also argues that CPI waived its right to enforce the condition precedent because it allegedly allowed another executive to exercise his option without accompanying his notice with full payment of the purchase price. This argument is unavailing for two reasons. First, there is no evidence in the recordno less the undisputed evidence required to obtain summary judgmentto support these allegations. Deal cites "Paragraph 34" of her statement of facts to support these claims, but her statement of facts ends at Paragraph 33. Second, Deal was not a party to that agreement and therefore cannot rely on any conduct between CPI and another executive to constitute a waiver of her conditions precedent contained in her stock option agreement.
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585 A.2d 719 (1990)
James W. RILEY, Defendant Below, Appellant,
v.
STATE of Delaware, Plaintiff Below, Appellee.
Supreme Court of Delaware.
Submitted: December 12, 1989.
Decided: December 21, 1990.
Lawrence J. Connell (argued), Postconviction Relief Clinic, Widener University School of Law, Wilmington, for appellant.
Jeffrey M. Taschner (argued), and Peter N. Letang, Deputy Attys. Gen., Dept. of Justice, Wilmington, for appellee.
Before CHRISTIE, C.J., HORSEY, MOORE, WALSH and HOLLAND, JJ., constituting the Court en Banc.
*720 HORSEY, Justice:
Defendant, James W. Riley, appeals from two decisions of Superior Court, the first, dated April 29, 1988, and a second, dated April 21, 1989, each denying defendant postconviction relief. Defendant seeks relief from his 1982 convictions in trial by jury in Superior Court of two counts of murder in the first degree, intentional murder and felony murder, and his sentence to death for felony murder. In 1985, this Court, sitting en banc on Riley's direct appeal, unanimously affirmed defendant's convictions and sentence. Riley v. State, Del.Supr., 496 A.2d 997 (1985) ("Riley I"), cert. denied, 478 U.S. 1022, 106 S.Ct. 3339, 92 L.Ed.2d 743 (1986). Though defendant raises numerous postconviction issues, we find none to have merit. Accordingly, we affirm the decisions below.
Defendant Riley was convicted and sentenced to death for the 1982 murder of a liquor store owner committed in the course of an armed robbery. In his direct appeal, Riley raised, and this Court addressed, eleven issues in the guilt phase and seven issues in the penalty phase, two raised by Riley and five raised by the amicus, The American Civil Liberties Union. In rejecting defendant's multiple claims of error, we ruled, in part, that defendant was not denied the right to trial by an impartial jury as a result of the State's asserted use of peremptory challenges to strike prospective black jurors for racial or impermissible reasons. Riley I, 496 A.2d at 1009-1013.
Thereafter Riley, after a change of counsel, sought postconviction relief, raising multiple claims. In 1988, Superior Court, after evidentiary hearing, selected out and addressed three of defendant's claims: the State's exercise of its peremptory challenges should be reviewed in the light of Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986); the adequacy of the trial court's voir dire of juror attitude on the death penalty; and a claim of ineffective assistance of counsel at the penalty phase. The court, in a twenty-seven page *721 unreported decision, rejected each of the claims as being without merit.[1]
Riley moved for reargument and docketed an appeal in this Court. The case was remanded, and defendant's motion for reargument was granted. The court determined that Riley had established a prima facie case of discrimination based on the post-Riley I standard announced in Batson and was entitled to an evidentiary hearing. After a further evidentiary hearing, however, Superior Court, in 1989, applying Batson, found no merit to Riley's claim of discrimination. The court stated:
The State in this case provided race-neutral explanations for the peremptory challenges on all three black jurors. After examining the demeanor and credibility of the witnesses and prosecutors at the evidentiary hearing, I believe the State exercised its peremptory challenges entirely within the strictures of the Fourteenth Amendment. No factual basis exists for a successful claim of an equal protection violation. The State successfully rebutted any prima facie showing of discrimination in jury selection based upon race. Therefore, the motion for reargument based upon an alleged violation of equal protection under the Fourteenth Amendment to the United States Constitution and under the State constitutional right to trial by a fair and impartial jury is denied.
The court also examined defendant's remaining claims for postconviction relief and found them to have been previously raised and rejected either by this Court in Riley I or by Superior Court in its 1988 decision. Riley then docketed this appeal. He seeks our review of not only his claims ruled upon by Superior Court in 1988 and 1989, but of his other claims for relief which that court summarily rejected in 1989.
I
Of the eight claims Riley raises, we find that four were previously addressed by us in Riley's direct appeal. Those claims are:
(1) the trial court's denial of Riley's request for appointment of co-counsel and employment of an investigator;
(2) the trial court's denial of Riley's motion for change of venue for adverse pretrial publicity deprived Riley of trial by an impartial jury;
(3) that statements of the prosecutor and of the trial court during the penalty hearing were prejudicial; and
(4) that this Court's proportionality review in Riley I was flawed.
We agree with Superior Court that each of the issues underlying these claims was addressed by this Court in Riley I, 496 A.2d at 1014-1017, 1023-1027, and therefore is precluded from reconsideration under Superior Court Criminal Rule 61(i)(4). The Rule provides:
(i) Bars to Relief.
* * * * * *
(4) Former Adjudication. Any ground for relief that was formerly adjudicated, whether in the proceedings leading to the judgment of conviction, in an appeal, in a postconviction proceeding, or in a federal habeas corpus proceeding is thereafter barred, unless reconsideration of the claim is warranted in the interest of justice.
In summary, we find no merit to defendant's challenge to the "universe" of cases from which this Court determined in 1985 that the death penalty imposed upon defendant was not disproportionate. Riley I, 496 A.2d at 1027. The issues underlying the three remaining claims were carefully addressed in Riley I; and we conclude that the interests of justice would not be served by any further consideration of them. Justice does not require that an issue that has been previously considered and rejected be revisited simply because the claim is refined or restated. See Younger v. State, Del.Supr., 580 A.2d 552, 556 (1990); Nicholson v. State, Del.Supr., 582 A.2d 936 (1990) (ORDER). To the extent that any of Riley's particularized claims were not asserted at trial and on direct appeal, we *722 decline to address them as procedurally barred under the cause and prejudice standard of Rule 61(i)(3).[2]Younger, 580 A.2d at 556.
We turn to Riley's four remaining claims for postconviction relief:
(5) that the trial court's instructions to the jury in the penalty phase were constitutionally inadequate;
(6) that Superior Court in its 1989 decision improperly applied the standards of Batson v. Kentucky in determining that the prosecution had satisfactorily explained its use of peremptory challenges to exclude all blacks from the jury;
(7) that in conducting voir dire of the jury venire, the trial court violated defendant's Eighth Amendment rights by failing to probe whether jurors would automatically impose death upon a finding of guilt; and
(8) that defendant was denied effective assistance of counsel in the penalty phase of the trial by his attorney's failure to present mitigating evidence.
II
We first take up Riley's claim that the jury instructions in the penalty phase hearing were constitutionally inadequate and not in compliance with 11 Del.C. § 4209, as construed and applied by this Court in Whalen v. State, Del.Supr., 492 A.2d 552 (1985). In Whalen, we recognized that sentencing procedures:
must not create `a substantial risk that the [death penalty will] be inflicted in an arbitrary and capricious manner'. Gregg v. Georgia, 428 U.S. 153, 188, 96 S.Ct. 2909, 2932, 49 L.Ed.2d 859 (1976) (plurality opinion). Discretion in sentencing may not be eliminated completely, but must instead be `directed and limited'. Id. at 189, 96 S.Ct. at 2932. Thus, it is the trial judge's duty to guide the jury's discretion by ensuring that they understand the bases for imposing a death sentence, and comprehend their responsibilities in applying such criteria. It is only through the careful use of jury instructions that the judge properly discharges this function.
492 A.2d at 559. Whalen then laid down a set of prerequisites against which to test the adequacy of the penalty instructions there before us. Riley seeks to employ those prerequisites for a purpose for which they were not intended. Riley reads Whalen as establishing a pattern set of penalty phase jury instructions from which no deviation will be permitted in determining whether a given set of instructions passes constitutional muster.
Riley reads more into Whalen than was intended. The short answer is that Whalen is a fact-driven decision and the flawed instructions found in Whalen are absent in Riley. Further, as will be seen, the instructions in Riley are virtually identical with those which this Court approved in Flamer just seven months before Whalen was issued. Flamer v. State, Del.Supr., 490 A.2d 104 (1983) ("Flamer I"), cert. denied (guilt phase), 464 U.S. 865, 104 S.Ct. 198, 78 L.Ed.2d 173 (1983), cert. denied (penalty phase), 474 U.S. 865, 106 S.Ct. 185, 88 L.Ed.2d 154 (1985). If we intended our analysis and rulings in Whalen to implicate Flamer I and its progeny, including Riley, we would have included Flamer I in our Whalen analysis.
Under 11 Del.C. § 4209(d), the task of the jury in determining the sentence for first degree murder is defined:
A sentence of death shall not be imposed unless the jury or judge, where appropriate, finds:
a. Beyond a reasonable doubt at least 1 statutory aggravating circumstance; and
*723 b. Unanimously recommends, after weighing all relevant evidence in aggravation or mitigation which bears upon the particular circumstances or details of the commission of the offense and the character and propensities of the offender, that a sentence of death be imposed.
11 Del.C. § 4209(d). The penalty phase instructions in Riley I and Flamer I complied with section 4209's mandate that the jury understand the two-step analysis. See Whalen, 492 A.2d at 562. Indeed, the instructions in both Flamer and Riley, in informing the jury of their task, far surpassed the instructions in Whalen. A side-by-side comparison of the complete instructions in Riley and Flamer is found at Appendices A and B. The entire Whalen penalty phase instruction is found in footnote 4 below.
Flamer I, Riley I and Whalen are in accord as to the essentials of a penalty phase jury instruction in a capital case. First, the instruction must guide the jury in the first step of their consideration of mitigating and aggravating circumstances. In this respect, the Riley and Flamer instructions used identical language:
An aggravating circumstance is a factor which tends to make the defendant's conduct more serious, or imposition of a penalty of death appropriate. A mitigating circumstance is any factor which tends to make the defendant's conduct less serious or the imposition of a penalty of death inappropriate.
Second, the court must plainly inform the jury of their crucial task (the second step) of weighing mitigating and aggravating factors in arriving at the appropriate penalty of life or death. Again, the Flamer and Riley instructions were identical:
... You are to weigh any mitigating factors against the aggravating factors to determine the penalty. If you have a reasonable doubt about the existence of any statutory aggravating circumstance, you must give the defendant the benefit of that reasonable doubt and find that that statutory aggravating circumstance does not exist.... if you are not unanimous in your recommendation to impose the death penalty, or you cannot agree unanimously as to your recommendation, then the Court is bound to impose a sentence of life imprisonment without benefit of probation or parole.
The only significant difference between the entire Riley and Flamer instructions to the jury was the case-specific portion of each charge dealing with the aggravating circumstances which the State alleged in each case.
Third, the jury must understand that it retains the option to recommend a life sentence despite a finding of a statutory aggravating circumstance. Flamer I, 490 A.2d at 128; Whalen, 492 A.2d at 562. In the penalty phase in Flamer, defendant argued on direct appeal, as Riley does in postconviction relief, that the penalty instructions were legally insufficient as to the life option: for the court's failure to apprise the jury of its retention of the option to recommend a life sentence, notwithstanding its finding of a statutory aggravating circumstance. In Flamer, this Court, in September 1984, rejected this argument, finding Flamer's penalty phase instructions adequate and sufficient as a matter of law. Flamer I, 490 A.2d at 128. We stated:
We have carefully scrutinized the six and one-half pages of jury instructions in the transcript and conclude that the jury charge constituted a correct statement of the substance of the law of sentencing in First Degree Murder cases and was not so deficient that it rises to the level of reversible error.
* * * * * *
Although the Trial Court did not instruct the jury explicitly that it could still recommend life imprisonment despite finding the presence of a statutory aggravating circumstance, we believe that the charge, viewed in toto, adequately apprised the jurors that a finding of a statutory aggravating circumstance did not automatically require them to recommend the death penalty and that life imprisonment was an available alternative.
*724 Id. The trial court's instructions in Riley are virtually identical with those which we reviewed and found sufficient in Flamer.
Whalen and Flamer are also in accord that the adequacy of a given set of instructions is a fact specific determination, to be made in the context of the charge as a whole. Finally, the guiding principle for assessing the adequacy of a jury instruction remains constant through Flamer I, Riley I and Whalen. A defendant is entitled to a correct substantive statement of the law, but not to have any particular instruction. Flamer I, 490 A.2d at 128. Jury instructions are adequate if they are "such as to enable the jury to intelligently perform its duty in returning a verdict." Storey v. Castner, Del.Supr., 314 A.2d 187, 194 (1973); Whalen, 492 A.2d at 559. Applying these rules of construction to Riley's penalty phase instructions, we hold that Riley's instructions must be sustained as not only consistent with Flamer I but with the underlying precepts of Whalen.[3]
The jury instructions given at the penalty phase in Whalen were quantitatively and qualitatively inferior[4] to those in Riley and Flamer. The Whalen instructions were inadequate because they amounted to "no more than reading the relevant portions of 11 Del.C. § 4209 to the jury." Whalen, 492 A.2d at 561. The instructions in Whalen told the jury to "consider any mitigating or aggravating circumstances" but failed to so much as define an aggravating or a mitigating factor. In contrast, the penalty phase instructions in both Flamer and Riley went far beyond the instructions given in Whalen. The Riley-Flamer instruction provided guidance to the jury in conducting the two-step analysis required by 11 Del.C. § 4209. The instruction explained the meaning and the importance of mitigating and aggravating factors to the task the jury is charged with under the statute, thus satisfying the critical concern of Whalen: that the trial judge "guide the jury's discretion by ensuring that they understand the bases for imposing a death sentence, and comprehend their responsibilities in applying such criteria." Whalen, 492 A.2d at 559. The trial court in Riley even went one step further than in Flamer in instructing the jury. The Riley court also read through *725 the interrogatories with the jury panel, further emphasizing their statutory task. See Appendix B.
The instructions to the jury in Riley and Flamer are consistent with Whalen's command that the jury carefully consider all mitigating and aggravating circumstances. The particular words used in articulating such a command are not necessarily determinative of their adequacy. Viewed as a whole, the instructions in Riley and Flamer adequately apprised the jury of their statutory task. The Whalen directive that the jury charge must include permission to "recommend against the death penalty no matter what aggravating circumstances are found to exist," 492 A.2d at 560, may be variously phrased to accomplish its purpose: the jury's careful consideration of all mitigating factors and their engaging in the weighing process required by statute. See Blystone v. Pennsylvania, ___ U.S. ___, 110 S.Ct. 1078, 1083, 108 L.Ed.2d 255, 264 (1990) ("The requirement of individualized sentencing in capital cases is satisfied by allowing the jury to consider all relevant mitigating evidence").
The principles enunciated in Whalen for measuring the adequacy of penalty phase instructions were intended only as instructional guidelines and are not to be considered as setting forth a pattern of jury instructions from which no deviation will be permitted. We decline to find Riley's instructions to be constitutionally deficient simply because the Riley instructions are phrased in a format that does not precisely mirror Whalen. More specifically, we are satisfied that the jury in Riley understood that it was required to unanimously conclude that the aggravating circumstances outweighed those in mitigation. We are also satisfied that the jury understood that, in the event of its failure to unanimously agree upon the imposition of a death penalty, an imposition of life imprisonment would result. Finally, we find no basis for concluding that the instructions confused the jury over the available aggravating statutory circumstances.
III
Riley's next contention, that the State exercised its peremptory challenges for racial reasons, we find to be simply a renewed attempt to reopen previously settled issues. In Riley I, we set forth a legal analysis functionally identical to the Supreme Court's analysis later articulated in Batson. 476 U.S. at 79, 106 S.Ct. at 1712, 90 L.Ed.2d at 69. In Riley I we found that Riley's constitutional right to an impartial jury had not been violated. 496 A.2d at 1009. The Superior Court, after an evidentiary hearing on Riley's motion for postconviction relief, held that Riley had not been denied equal protection as a result of the State's use of peremptory challenges. The court found that the State had provided race-neutral explanations for its peremptory challenges. We find no error in Superior Court's rejection of Riley's Batson claim. See Holland v. Illinois, ___ U.S. ___, 110 S.Ct. 803, 807, 107 L.Ed.2d 905, 916 (1990) (the Sixth Amendment fair cross-section requirement of an impartial jury does not deprive a party of the right to exercise peremptory challenges on racial or any other grounds from a venire that otherwise meets Sixth Amendment cross-sectional standards of representativeness). Moreover, we reaffirm our earlier decision sustaining the State's peremptory challenges on state constitutional grounds. Riley I, 496 A.2d at 1010-1013.
IV
We turn to Riley's claim that he was denied his Sixth and Eighth amendment right to an impartial jury by a flawed voir dire. Riley contends that although the jurors were queried as to whether or not they could impose a penalty of death upon a finding of guilt, they were not queried as to whether they would automatically impose a death penalty upon a finding of guilt. We find no merit in defendant's claim. The primary purpose of voir dire is to establish a juror's lack of bias or prejudice and thus secure for the defendant a jury able to vote impartially upon the evidence and the law presented at trial. Riley I, 496 A.2d at 1004. As we noted in Riley *726 I, the voir dire questions posed by the court were formulated in keeping with 11 Del.C. § 3301. That statute establishes the parameters by which the trial court can determine through voir dire the qualifications of jurors to sit in capital cases. In Hooks v. State, Del.Supr., 416 A.2d 189, 194 (1980), we found section 3301 to be consistent with the constitutional requirements of Witherspoon v. Illinois, 391 U.S. 510, 88 S.Ct. 1770, 20 L.Ed.2d 776, reh'g denied, 393 U.S. 898, 89 S.Ct. 67, 21 L.Ed.2d 186 (1968). Compare Lockhart v. McCree, 476 U.S. 162, 106 S.Ct. 1758, 90 L.Ed.2d 137 (1986) (holding that a class of prospective jurors unalterably opposed to the death penalty does not constitute a "distinctive group" for purposes of fair cross section requirement). It would be redundant to require the trial court to further interrogate the jurors as to whether they would automatically impose the death penalty upon a finding of guilt.
V
Finally, defendant argues that trial counsel was ineffective in the penalty phase of trial for failing to proffer available mitigating evidence portraying defendant's life from birth to the time of his trial. The proffer's purpose was to "individualize" defendant and thereby provide the "compassion" needed for the jury to conclude that defendant should receive a sentence of life imprisonment rather than death. Defendant's argument in mitigation is premised on evidentiary hearing testimony of three expert witnesses: two criminal law defense attorneys, a New Jersey public defender and a District of Columbia attorney whose private practice specialty was defending capital murder cases, and a state of Maryland board certified forensic psychiatrist who had testified in more than two hundred criminal cases. Based on an examination of defendant, Dr. Neil Blumberg diagnosed defendant, in 1987, as suffering from "possible organic brain damage" and from a "severe impairment of his personality as a result of the neglect he experienced as a youth ... who grew up with no adult role model for emotional or moral development."
The mitigating evidence which trial counsel should have presented, according to defendant's evidentiary hearing experts, was defendant's life story, as portrayed by Dr. Blumberg: that defendant came from a family with a substantial history of alcoholism involving his mother, his father and a brother, the brother also having a history of substance abuse; that defendant was raised by a mother who was frequently absent for extended periods from their home in Philadelphia; that defendant began drinking and using drugs at the age of twelve; that defendant's parents' alcoholism became a source of acute embarrassment to defendant who at an early age developed an antisocial behavior (fire setting) out of a feeling of anger; that defendant was a slow learner who finally dropped out of school in the tenth grade; and that by age sixteen, defendant was chronically addicted to either drugs or alcohol.
Counsel is also charged with ineffectiveness in failing to conduct a proper search for family and relatives to present defendant's life story and for failing to retain an expert in the behavioral science field, such as a forensic psychiatrist, to present to the jury a psychiatric analysis of defendant based on his life story. In particular, counsel is asserted to have been ineffective: in failing to locate defendant's sister and two uncles as possible witnesses; and for failing to call as penalty hearing witnesses defendant's mother, his uncles, and defendant himself. Without such evidence, defendant asserts that trial counsel developed no "coherent" trial strategy and provided the jury with no rational basis for exercising mercy.
Riley's claim of ineffective assistance of counsel must be reviewed under the standards set forth in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674, reh'g denied, 467 U.S. 1267, 104 S.Ct. 3562, 82 L.Ed.2d 864 (1984). To establish a claim of ineffective assistance of counsel requiring reversal, a convicted defendant has two burdens. The defendant must first "show that counsel's *727 representation fell below an objective standard of reasonableness." Strickland, 466 U.S. at 688, 104 S.Ct. at 2064, 80 L.Ed.2d at 693. Secondly, defendant must show prejudice, i.e., "that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. at 694, 104 S.Ct. at 2068, 80 L.Ed.2d at 698. In applying the dual Strickland test to Riley's claim, we must "indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance." Id. at 689, 104 S.Ct. at 2065, 80 L.Ed.2d at 694.
Superior Court, in its unreported decision following evidentiary hearing, carefully addressed each of defendant's contentions and concluded that trial counsel's conduct was not constitutionally deficient under Strickland and pertinent federal authorities. The court found that counsel's search for favorable lay witnesses from defendant's family and relatives was reasonable under the circumstances and that counsel's investigation was thwarted for reasons beyond counsel's control. The court further found that counsel's decision not to call defendant's mother and defendant himself as witnesses in the penalty hearing was reasoned and did not constitute ineffective representation. The court also found that counsel's failure before trial to request funds to retain a psychiatrist or mental health professional to develop a social history of defendant for use in the penalty phase was not, under the circumstances, constitutionally ineffective representation. Finally, the trial court was not persuaded that the recounting of defendant's reasons for resorting to alcohol and drugs would be viewed by the jury with compassion and accepted as a mitigating circumstance.
Our standard of review of a claim of ineffective assistance of counsel determined after evidentiary hearing is well defined. "This Court will not disturb conclusions of fact made by the trial judge which are supported by competent evidence." Albury v. State, Del.Supr., 551 A.2d 53, 60 (1988). Questions as to credibility of witnesses and resolution of conflicts in testimony are solely at the discretion of the trial judge. Id. (quoting Tyre v. State, Del.Supr., 412 A.2d 326, 330 (1980)). Absent an abuse of discretion, this Court will not upset the findings of fact or conclusions of law of the trial judge. Albury, 551 A.2d at 60. We apply this deferential standard in conjunction with the mandate of Strickland that we avoid the "distorting effects of hindsight." Strickland, 466 U.S. at 689, 104 S.Ct. at 2065, 80 L.Ed.2d at 694.
A.
We first address Riley's claim that trial counsel's investigation of defendant's family in preparation for trial was ineffective. Effective representation by counsel depends upon "adequate investigation and pre-trial preparation." Crisp v. Duckworth, 743 F.2d 580, 583 (7th Cir.1984), cert. denied, 469 U.S. 1226, 105 S.Ct. 1221, 84 L.Ed.2d 361 (1985). However, the cooperation of both client and family is a prerequisite. See Mitchell v. Kemp, 762 F.2d 886, 890 (11th Cir.1985), cert. denied, 483 U.S. 1026, 107 S.Ct. 3248, 97 L.Ed.2d 774 (1987). The trial court, after evidentiary hearing, concluded that any shortcomings in counsel's investigation into Riley's life and family for mitigating evidence was attributable principally to defendant's inhibited or protective attitude about his family and to their lack of accessibility. Applying established law, we must affirm the trial court's finding that defense counsel, under the circumstances, adequately investigated and presented mitigating evidence. The finding is supported by the record and clearly is not an abuse of discretion. Albury, 551 A.2d at 60.
The trial court found that trial counsel had conducted an adequate search for family members who might provide mitigating information. The court concluded that trial counsel had located Riley's sister and was not to blame for not locating Riley's two uncles. The record of the evidentiary hearing indicates that a close family friend of Riley's, and counsel's contact person, had in fact informed one of Riley's uncles of the impending trial, but the uncle did not come forward because he found the information *728 was too indefinite. The same contact gave counsel the uncle's name but did not provide counsel with his address. Riley's other uncle conceded that neither defendant nor his family would have known how to reach him in 1982. The trial court found that Riley's sister was "uncooperative."
Defendant, as well as trial counsel, had corresponded with Riley's sister in advance of trial, yet the sister was either unwilling or unable to come forward and assist in Riley's defense. On the record before us, counsel cannot be found ineffective for failing to find Riley's sister when the record clearly indicates her receipt of letters from counsel and defendant and her unwillingness to help the defendant. See Mitchell v. Kemp, 762 F.2d at 890. We decline to find that counsel was ineffective for his failure to locate defendant's uncles as possible witnesses in mitigation. See Porcaro v. United States, 641 F.Supp. 1375, 1386 (D.Mass. 1986).
However, even if defendant's two uncles had been available and willing to testify at trial, defendant has not established that they would have provided the kind of social history testimony envisioned by Dr. Blumberg. Indeed, one of defendant's two uncles testified at the evidentiary hearing that he always considered defendant to be "bright" but that he had seen him only occasionally since they were both very young, and seldom in the five years preceding the crime. This testimony runs counter to Riley's present contention that his poor background and low intelligence should have been emphasized as mitigating factors. On this record, we cannot find trial counsel's investigation of defendant's family to be constitutionally inadequate.
B.
We turn to defendant's claim that counsel was ineffective for not calling as witnesses in mitigation defendant's mother, Gladys Riley (now deceased), and defendant himself. The trial court found "excellent tactical reasons" for trial counsel's decision not to call either witness. It appears from the record that Riley had informed trial counsel in advance of trial that he did not wish to bring out at trial his mother's problems. The record also suggests that Gladys Riley, a chronic alcoholic, had been drinking heavily at the time of the trial. These facts, in addition to counsel's concern over Gladys Riley's cross-examination on the alibi defense, see Riley I, 496 A.2d at 1002, lead us to conclude that the trial court's finding that counsel's decision not to call defendant's mother was "quite reasonable under the circumstances" and cannot constitute an abuse of discretion. See Clanton v. Bair, 619 F.Supp. 1491, 1509 (E.D.Va.1985) (trial counsel not unreasonable in declining to call defendant's mother as a witness at the sentencing phase where defendant did not want mother involved and mother's earlier testimony on cross-examination at state habeas proceeding had revealed defendant's early history of drugs and crime).
Trial counsel testified that his concern over Riley's credibility from the jury's rejection of his alibi defense influenced his decision not to have Riley testify. The trial court found that trial counsel had a valid concern over defendant's credibility with the jury. The court's conclusion that counsel's decision was reasonable cannot be found to be an abuse of discretion. Trial counsel's conclusion that any potentially mitigating evidence would "cause more harm than good" was not unreasonable. A trial attorney may make a reasonable judgment to omit evidence because it is of "little persuasive value" or because it might have the effect of "opening the door for harmful cross-examination or rebuttal evidence." Stanley v. Zant, 697 F.2d 955, 965 (11th Cir.1983), cert. denied, 467 U.S. 1219, 104 S.Ct. 2667, 81 L.Ed.2d 372 (1984). Trial counsel's decision cannot be found to be unreasonable in light of the possibility that defendant's arguably "mitigating" testimony could have backfired with a damaging response from the State. See Mitchell v. Kemp, 762 F.2d at 890.
C.
We now take up trial counsel's asserted failure to secure a psychiatric evaluation *729 of defendant for the purpose of developing a "social history" of defendant as mitigating evidence. The court carefully examined counsel's conduct in this respect and concluded that trial counsel had no knowledge or reason to believe ["no inkling"] that a mental health evaluation of defendant would be appropriate or helpful. In the absence of such a predicate finding, the court concluded that trial counsel's professional judgment to forego a mental health evaluation of defendant was not ineffective conduct as a matter of law. The record and controlling law supports such a finding. Counsel met with defendant on numerous occasions before trial and prepared for trial with the belief that defendant did not suffer from any mental impairment. On the contrary, counsel appraised defendant as being both contentious and strong willed. Defendant had repeatedly differed with counsel on his pretrial strategy and had expressed his independence by preparing and filing several pretrial pro se motions with which counsel disagreed.
In examining trial counsel's conduct in this area, it is necessary to "address not what is prudent or appropriate, but only what is constitutionally compelled." Burger v. Kemp, 483 U.S. 776, 794, 107 S.Ct. 3114, 3126, 97 L.Ed.2d 638, 657, reh'g denied, 483 U.S. 1056, 108 S.Ct. 32, 97 L.Ed.2d 820 (1987) (quoting United States v. Cronic, 466 U.S. 648, 665 n. 38, 104 S.Ct. 2039, 2050 n. 38, 80 L.Ed.2d 657, 672 n. 38 (1984)). Further, "strategic choices made after less than complete investigation are reasonable precisely to the extent that reasonable professional judgments support the limitations on investigation." Strickland, 466 U.S. at 690-691, 104 S.Ct. at 2066, 80 L.Ed.2d at 695.
We agree with the trial court that it was within defense counsel's professional judgment to forego an investigation into defendant's mental health for the purposes of mitigation. In holding that defense counsel acted reasonably in concluding that a mental health evaluation would not be of assistance, we note with approval the reasoning of the Seventh Circuit:
[A] defense attorney must make decisions over what avenues of defense to pursue. These decisions, in the absence of a clear derogation from professional standards, will be respected. The Sixth Amendment does not require a defense attorney to pursue defenses that are not reasonably suggested by the apparent factual circumstances surrounding the crime charged or the subsequent demeanor and conduct of the client. While one would hope that defense lawyers would routinely reflect upon the mental capabilities of a defendant, in the absence of circumstances that would put a counsel on notice the Constitution cannot be read to mandate a specific inquiry at all times.
United States ex rel. Rivera v. Franzen, 794 F.2d 314, 317 (7th Cir.1986), cert. denied, 479 U.S. 991, 107 S.Ct. 588, 93 L.Ed.2d 590 (1986). See also Stevenson v. State, Del.Supr., 469 A.2d 797, 800 (1983). The trial court's finding that trial counsel had no indication that a psychiatric evaluation would be a worthwhile course of investigation is supported by the record. The defendant has not met his burden of showing that trial counsel's conduct is "outside the wide range of professionally competent assistance." Strickland, 466 U.S. at 690, 104 S.Ct. at 2066, 80 L.Ed.2d at 695.
D.
Finally, we address defendant's claim that trial counsel's failure to develop defendant's "social history" left defendant with no "coherent" trial strategy and no argument in mitigation. The court found that trial counsel made a deliberate choice to avoid defendant's upbringing and problems as a youth and instead relied on the character witnesses who were known and available. The trial court found reasonable counsel's choice not to emphasize defendant's background and problems as a youth growing up in Philadelphia. The court found it more likely that a Kent County jury would draw "negative inferences" from hearing a story of defendant's development from a neglected child to a "big city hoodlum." The court concluded that any additional discussion of defendant's background may have been detrimental.
*730 We find no abuse of discretion in the trial court's finding that a reasonable basis existed for counsel's declining to present evidence of defendant's background. In Burger v. Kemp, 483 U.S. at 776, 107 S.Ct. at 3114, 97 L.Ed.2d at 638, the Supreme Court confronted a similar claim of ineffective assistance of counsel based in part on counsel's failure to develop the defendant's troubled family background as a mitigating factor to a sordid crime. As in this case, counsel chose instead to emphasize a co-indictee's culpability. The Court found defense counsel's acts and omissions to be within the "range of professionally competent assistance":
[C]ounsel's decision not to mount an all-out investigation into petitioner's background in search of mitigating circumstances was supported by reasonable professional judgment. It appears that he did interview all potential witnesses who had been called to his attention and that there was a reasonable basis for his strategic decision that an explanation of petitioner's history would not have minimized the risk of the death penalty.
Id. at 794-795, 107 S.Ct. at 3126, 97 L.Ed.2d at 657.
Here as well, the record supports Superior Court's finding that trial counsel did present mitigating evidence. Counsel argued that Riley's co-defendant was the actual killer, yet he received a less severe penalty as a result of a plea bargain. Trial counsel also presented the testimony of five witnesses that defendant was a hard working, nonviolent person, and that the crime lacked the essentials of premeditation, malice or viciousness warranting the death penalty. The trial court found counsel's conduct at the penalty phase to be constitutionally acceptable. We agree. That other witnesses might have been called or that other testimony might have been elicited from those who testified is not a sufficient ground to prove ineffectiveness of counsel. Cape v. Francis, 741 F.2d 1287, 1301 (11th Cir.1984), cert. denied, 474 U.S. 911, 106 S.Ct. 281, 88 L.Ed.2d 245 (1985). Since counsel's choices appear to have been dictated by sound considerations, we must presume that counsel's actions were purposeful or strategic, absent evidence to overcome this presumption. Stanley v. Zant, 697 F.2d at 970. On the record before us, we find no abuse of discretion in the trial court's conclusion that counsel's acts and omissions were "within the wide range of reasonable professional assistance." Strickland, 466 U.S. at 689, 104 S.Ct. at 2065, 80 L.Ed.2d at 694.
* * *
For the foregoing reasons, we affirm Superior Court's denial of postconviction relief.
APPENDIX A APPENDIX B
FLAMER INSTRUCTIONS[*] RILEY INSTRUCTIONS[*]
THE COURT: Members of the THE COURT: Members of the
jury, you have now heard all jury, you have now heard all of
the evidence that is going to the evidence which is going to
be presented during the be presented during the
punishment hearing in this punishment hearing in this
case, and you have heard the case, and you have heard the
arguments of the attorneys for arguments of the attorneys for
the State and for the the State and for the
defendant. I shall not review defendant. I shall not review
the evidence which has been the evidence which has been
presented because you, the presented, because you the jury
jury, are the sole and are the sole and exclusive
exclusive judges of the facts judges of the facts of the
of the case, of the credibility case, of the credibility of the
of the witnesses and of the witnesses and of the weight and
weight and value of their value of their testimony.
testimony.
I shall now instruct you I shall now instruct you
as to the applicable principles as to the applicable principles
*731
of law governing the punishment of law governing the punishment
to be imposed in this case. No to be imposed in this case. No
single one of these single one of these
instructions states all of the instructions states all of the
law applicable to this law applicable to this
determination. Therefore, you determination. Therefore, you
should listen to and consider must listen to and consider all
all the instructions together. of these instructions together.
You are to apply the law to You are to apply the law to the
these facts and in this way facts and in this way decide
decide the punishment to be the punishment to be imposed in
imposed in the case. the case.
The criminal code says as The Criminal Code says as
follows: "Upon a conviction of follows: "Upon a conviction of
guilt of a defendant of first guilt of a defendant of first
degree murder, the Superior degree murder, the Superior
Court shall conduct a separate Court shall conduct a separate
hearing to determine whether hearing to determine whether
the defendant shall be the defendant should be
sentenced to death or to life sentenced to death or to life
imprisonment without benefit of imprisonment without benefit of
probation or parole. probation of [sic] parole.
"A sentence of death shall "A sentence of death shall
not be imposed until the jury not be imposed unless the jury
finds: finds:
"(1) Beyond a reasonable "(1) Beyond a reasonable
doubt at least one statutory doubt at least one statutory
aggravating circumstance; and aggravating circumstance; and
"(2) Unanimously "(2) Unanimously
recommend[s], after weighing recommends, after weighing all
all relevant evidence in relevant evidence in
aggravation or mitigation which aggravation or mitigation which
bears upon the particular bears upon the particular
circumstances or details of the circumstances or details of the
commission of the offense and commission of the offense and
the character and propensities the character and propensities
of the offender, that a of the offender, that a
sentence of death be imposed. sentence of death be imposed.
Where the jury submits such a Where the jury submits such a
finding and recommendation, the finding and recommendation, the
Court will sentence the Court will sentence the
defendant to death. A finding defendant to death. A finding
by the jury of a statutory by the jury of a statutory
aggravating circumstance, and a aggravating circumstance, and a
consequent recommendation of consequent recommendation of
death, supported by the death, supported by the
evidence, shall be binding on evidence, shall be binding on
the Court." the Court."
The Delaware law specifies The Delaware law specifies
certain statutory aggravating certain statutory aggravating
circumstances which the State circumstances which the State
may contend exist in a may contend exist in a
particular case. The law does particular case. The law does
not specify mitigating not specify mitigating
circumstances, but the defense circumstances, but the defense
may offer evidence relating to may offer evidence relating to
any mitigating circumstances any mitigating circumstances
which it contends exist in a which it contends exist in a
particular case. The State may particular case. The State may
likewise offer matters in likewise offer matters in
*732
aggravation besides the aggravation besides the
statutory aggravating statutory aggravating
circumstances. circumstances.
An aggravating An "aggravating
circumstance is a factor which circumstance" is a factor which
tends to make the defendant's tends to make the defendant's
conduct more serious, or the conduct more serious, or
imposition of a penalty of imposition of a penalty of
death appropriate. A death appropriate. A
mitigating circumstance is any "mitigating circumstance" is
factor which tends to make the any factor which tends to make
defendant's conduct less defendant's conduct less
serious or the imposition of a serious, or the imposition of a
penalty of death inappropriate. penalty of death inappropriate.
In this case the State In this case the defendant
contends that the following is now convicted of two charges
four statutory aggravating of first degree murder, Count I
circumstances exist: and Count V. However, the
State is proceeding in this
penalty hearing only as to
Count V of the Indictment which
pertains to the felony murder
of James E. Feeley, Sr., and is
not proceeding in this penalty
hearing on Count I which
pertains to the intentional
killing of James E. Feeley, Sr.
The State contends that the
only statutory aggravating
circumstance presented for your
consideration is as follows:
1. The murder was "(1) The murder was
committed while the defendant committed while the defendant
was engaged in the commission was engaged in the commission
of robbery. of the felony of robbery."
2. The defendant's course
of conduct resulted in the
deaths of two or more persons
where the deaths are a probable
consequence of the defendant's
conduct.
3. The murders were
outrageously or wantonly vile,
horrible or inhuman.
4. The murders were
committed for pecuniary gain.
You cannot recommend that You cannot recommend that
this defendant be sentenced to this defendant be sentenced to
death unless you find beyond a death unless you find beyond a
reasonable doubt that at least reasonable doubt that at least
one statutory aggravating one statutory aggravating
circumstance exists. circumstance exists.
In this regard an In this regard, an
applicable portion of the applicable portion of the
Delaware law provides that in Delaware law provides that in
any case where the defendant any case where the defendant
has been convicted of murder in has been convicted of murder in
*733
the first degree in violation the first degree in violation
of 11 Delaware Code, Section of 11 Delaware Code Section
636(a)(2) that conviction shall 636(a)(2) that conviction shall
establish the existence of a establish the existence of a
statutory aggravating statutory aggravating
circumstance. circumstance.
In this case the defendant In this case, the
has been convicted of violating defendant has been convicted of
11 Delaware Code, Section violating 11 Delaware Code
636(a)(2) which reads: "Murder Section 636(a)(2) which reads:
in the first degree. A person "Murder in the first degree, a
is guilty of murder in the person is guilty of murder in
first degree when in the course the first degree when: (2) In
of and in furtherance of the the course of and in
commission of a felony, he furtherance of the commission
recklessly causes the death of of a felony, he recklessly
another person." causes the death of another
person."
Therefore, that statutory Therefore, that statutory
aggravating circumstance has aggravating circumstance has
been established beyond a been established beyond a
reasonable doubt, and you are reasonable doubt, and you are
so instructed. so instructed.
The law provides that a The law provides that a
sentence of death shall not be sentence of death shall not be
imposed unless you find beyond imposed unless you find beyond
a reasonable doubt at least one a reasonable doubt at least one
statutory aggravating statutory aggravating
circumstance and unanimously circumstance and unanimously
recommend, after weighing all recommend, after weighing all
relevant evidence in relevant evidence in
aggravation, including but not aggravation, including but not
limited to the statutory limited to, the statutory
aggravating circumstance or aggravating circumstance or
circumstances that you have circumstances that you have
already found to exist, and already found to exist, and
mitigation which bears upon the mitigation which bears upon the
particular circumstances or particular circumstances or
details of the commission of details of the commission of
the offense and the character the offense and the character
and propensities of the and propensities of the
offender, that a sentence of offender, that a sentence of
death be imposed. You are to death be imposed. You are to
weigh any mitigating factors weigh any mitigating factors
against the aggravating factors against the aggravating factors
to determine the penalty. to determine the penalty.
If you have a reasonable If you have a reasonable
doubt about the existence of doubt about the existence of
any statutory aggravating any statutory aggravating
circumstance, you must give the circumstance, you must give the
defendant the benefit of that defendant the benefit of that
reasonable doubt and find that reasonable doubt and find that
that statutory aggravating that statutory aggravating
circumstance does not exist. circumstance does not exist.
I would remind you a I would remind you that
reasonable doubt means a doubt "reasonable doubt" means a
based upon good and sufficient doubt based upon good and
reason and common sense. sufficient reason and common
sense.
*734
Your unanimous Your unanimous
recommendation for the recommendation for the
imposition of the death imposition of the death
penalty, if supported by the penalty, if supported by the
evidence, is binding on the evidence, is binding on the
Court. Similarly, if you are Court. Similarly, if you are
not unanimous in your not unanimous in your
recommendation to impose the recommendation to impose the
death penalty, or you cannot death penalty, or if you cannot
agree unanimously as to your agree unanimously as to your
recommendation, then the Court recommendation, then the Court
is bound to impose a sentence is bound to impose a sentence
of life imprisonment without of life imprisonment without
benefit of probation or parole. benefit of probation or parole.
In conclusion, a sentence In conclusion, a sentence
of death shall not be imposed of death shall not be imposed
unless you, the jury, find unless you, the jury, find: (1)
beyond a reasonable doubt at Beyond a reasonable doubt at
least one statutory aggravating least one statutory aggravating
circumstance has been circumstance has been
established and unanimously established; and (2)
recommend a sentence of death Unanimously recommend that a
be imposed after weighing all sentence of death be imposed
relevant evidence in after weighing all relevant
aggravation and mitigation evidence in aggravation and
which bear upon the particular mitigation which bear upon the
circumstances and details of particular circumstances and
the commission of the offense details of the commission of
and the character and the offense and the character
propensities of the offender. and propensities of the
offender.
Should you fail to agree Should you fail to agree
unanimously to either of these unanimously to either of those
two factors, the Court shall two matters, the Court shall
sentence the defendant to life sentence the defendant to life
imprisonment without benefit of imprisonment without benefit of
probation or parole. probation or parole.
As I have previously As I have previously
instructed, you have found a instructed, you have found a
statutory aggravating statutory aggravating
circumstance by returning circumstance by returning a
verdicts of guilty of murder in verdict of guilty of murder
the first degree in violation first degree, in violation of
of 11 Delaware Code, Section 11 Delaware Code Section
636(a)(2), recklessly causing 636(a)(2). You will be given a
the death during commission of written interrogatory on which
a felony. You will be given a to indicate if you find any
written interrogatory on which additional statutory
to indicate if you find any aggravating circumstance. If
additional statutory you do not unanimously find
aggravating circumstance. If beyond a reasonable doubt the
you do not unanimously find existence of any additional
beyond a reasonable doubt the aggravating circumstance, you
existence of any additional should indicate accordingly.
aggravating circumstance, you
should indicate accordingly.
You will next indicate on You should next indicate
the written interrogatory that on the written interrogatory
will be given to you whether that will be given to you
the jury unanimously recommends whether the jury unanimously
*735
that a death sentence be recommends that a death
imposed. sentence be imposed.
If you recommend the death If you recommend the death
penalty, you will then indicate penalty, you will then indicate
on the written interrogatory on the written interrogatory
which statutory aggravating which statutory aggravating
circumstance or circumstances, circumstance or circumstances,
including the violation of 11 including the violation of 11
Delaware Code, Section Delaware Code Section
636(a)(2), you relied upon in 636(a)(2), you relied upon in
reaching your decision. reaching your decision.
You will be given a You will be given a
written interrogatory for each written interrogatory for the
of the four counts of murder in one count of murder first
the first degree. There will degree.
be four interrogatories given
to you and you will mark the This interrogatory will be
appropriate place on each of given to you and taken to the
the four interrogatories. jury room as well as the
There is one interrogatory for instructions I have just read
each of the four counts or to you.
charges for murder in the first
degree. I will read these
interrogatories to you now.
Interrogatory to the jury.
Does the jury unanimously
find beyond a reasonable doubt
that the following statutory
aggravating circumstance
existed?
One, the murder occurred
during the commission of the
felony of robbery. Yes, or no.
You will check either one or
the other here on the sheet.
If your answer to the
statutory aggravating
circumstance is "No", place a
check on the appropriate line,
sign this form on the lines
provided below and notify the
bailiff that you are ready to
return to the courtroom where
this form will be presented to
the Judge by the foreman.
If your answer to the
statutory aggravating
circumstance is "Yes", place a
check on the appropriate line
below. Answer the following
question and sign the form on
the lines provided below and
notify the bailiff that you are
ready to return to the
courtroom where this form will
be presented to the Judge by
the foreman.
*736
One, does the jury
unanimously recommend that a
sentence of death be imposed?
Yes or no.
Whatever your decision
will be, you will all have on
the second sheet Foreman, Juror
No. 2, Juror No. 3, Juror No.
4, Juror No. 5, Juror No. 6,
Juror No. 7, Juror No. 8, Juror
No. 9, Juror No. 10, Juror No.
11 and Juror No. 12. All of
you will sign it.
With that I will ask you
to retire for its deliberations
and you will have with you the
instructions and
interrogatories which I have
read to you.
NOTES
[1] The decision was rendered by the judge of Superior Court who had presided over defendant's trial in 1982. Shortly thereafter, the judge retired and the case was reassigned.
[2] Superior Court Criminal Rule 61(i)(3) provides:
(i) Bars to Relief.
* * * * * *
(3) Procedural Default. Any ground for relief that was not asserted in the proceedings leading to the judgment of conviction, as required by the rules of this Court, is thereafter barred, unless the movant shows
(A) cause for relief from the procedural default and
(B) prejudice from violation of the movant's rights.
[3] We subject the instructions in the instant case and in Flamer to scrutiny under the analysis of Whalen. We do so because Whalen does not announce a "new rule," but flows from existing case law and statutes. Whalen did not break "new ground," nor does it impose a "new obligation" on the State which would make it a new rule. Penry v. Lynaugh, 492 U.S. 302, 109 S.Ct. 2934, 2944, 106 L.Ed.2d 256, 275 (1989); Teague v. Lane, 489 U.S. 288, 301, 109 S.Ct. 1060, 1070, 103 L.Ed.2d 334, 349, reh'g denied, 490 U.S. 1031, 109 S.Ct. 1771, 104 L.Ed.2d 206 (1989).
[4] The full text of the Whalen instruction is as follows:
Ladies and gentlemen, the sole matter for your determination at this time is the penalty to be imposed upon the defendant for the conviction of first degree murder.
You have heard counsel for the State and the defendant express their positions on which penalty should be imposed. While it is proper for you to consider the position of each attorney upon this issue, the matter is entirely within your discretion after considering the evidence and applying the law contained in these instructions.
In reaching your determination, the jury may consider any mitigating or aggravating circumstances raised by the evidence either at this hearing or at the trial.
The sentence of death shall not be imposed unless you find unanimously and beyond a reasonable doubt at least one statutory aggravating circumstance and then unanimously recommend after weighing all the relevant evidence in aggravation or mitigation which bears upon the particular circumstances or details of the commission of the offense and the character and propensities of the offender that a sentence of death be imposed.
You may consider the following statutory aggravating circumstance: In this case the murder occurred during the commission of rape.
A recommendation of death is binding upon the Court. If you do not recommend the death penalty, a sentence of life imprisonment without benefit of probation or parole will be imposed.
A reasonable doubt is defined as a substantial doubt.
I will hand you a copy of these instructions and a questionnaire which your forelady will fill out. It is self-explanatory, and when you return to the courtroom it will simply be handed to the clerk and read in open court by me.
Whalen, 492 A.2d at 556. Compare Appendices A and B.
[*] These Appendices contain the full text of the jury instructions in Flamer and Riley. However, the paragraphs and spacing have been realigned for ease of comparison.
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301 F.3d 182
Martha L. PIKE; Cynthia J. Kincer, Plaintiffs-Appellees,v.Kermit L. OSBORNE, individually and in his capacity as Sheriff of Wythe County, Virginia, Defendant-Appellant.
No. 01-2050.
United States Court of Appeals, Fourth Circuit.
Argued April 4, 2002.
Decided July 29, 2002.
ARGUED: Jim Harold Guynn, Jr., Guynn Law Offices, Roanoke, Virginia, for Appellant. Donald Wise Huffman, Huffman & Nixon, P.C., Roanoke, Virginia, for Appellees. ON BRIEF: Robert Hines, Montgomery & Hines, Jonesville, Virginia, for Appellees.
Before NIEMEYER, Circuit Judge, HAMILTON, Senior Circuit Judge, and BROADWATER, United States District Judge for the Northern District of West Virginia, sitting by designation.
Reversed and remanded by published opinions. Judge NIEMEYER, Senior Judge HAMILTON, and Judge BROADWATER wrote opinions.
OPINION
NIEMEYER, Circuit Judge.
1
Cynthia J. Kincer and Martha L. Pike, former employees of the Wythe County (Virginia) Sheriff's Office, commenced this action under 42 U.S.C. § 1983 against Wythe County Sheriff Kermit L. Osborne, alleging that he failed to reappoint them because they supported his opponent in a recent election and therefore that he violated their First Amendment right not to be retaliated against based on their speech. The district court denied Sheriff Osborne's claim of qualified immunity, and he appealed. For the reasons that follow, we reverse the district court's denial of qualified immunity.
2
* Both plaintiffs in this case were dispatchers for the Wythe County Sheriff's Department, a department in which dispatchers were privy to confidential information, particularly about ongoing investigations. Cynthia Kincer was hired by former Sheriff Wayne Pike in 1992 as a part-time secretary and later was promoted to the position of dispatcher. Martha Pike was hired as a dispatcher in 1996, also by Sheriff Pike whom she later married.
3
In June 1998, Sheriff Wayne Pike resigned his position as sheriff to take a job with the Virginia Parole Board, and Kermit Osborne was appointed to complete his unfinished term. The following year, Osborne announced his intention to seek the Republican party's nomination for sheriff for the November 1999 general election. Wayne Pike's son also sought that nomination, and his campaign was supported by both Martha Pike and Cynthia Kincer. After Osborne won the Republican party nomination, Wayne Pike resigned his position with the Virginia Parole Board and ran as an independent against Osborne in the general election. Martha Pike and Cynthia Kincer openly supported Wayne Pike's campaign, and Osborne was aware of their support for his opponent. Osborne, however, defeated Wayne Pike in the general election.
4
During the month following his election, Sheriff Osborne notified the plaintiffs that they would not be reappointed when their terms expired on December 31, 1999. According to Sheriff Osborne, the plaintiffs were not rehired because of confidentiality concerns. He claimed that several months earlier, information had leaked from the dispatchers' office about a murder investigation, and Wayne Pike had made comments on the local radio station, "disclosing things that [were] in an investigative stage" and therefore confidential. Sheriff Osborne admits, however, that both plaintiffs had always received satisfactory or better job reviews.
5
After Kincer and Pike commenced this action under 42 U.S.C. § 1983 for compensatory and punitive damages, Osborne filed a motion for summary judgment. The district court granted Osborne's motion to dismiss the claims made against him in his official capacity but denied his motion, based on qualified immunity, to dismiss the claims made against him in his individual capacity. Osborne appealed, claiming that he is entitled to qualified immunity either because the plaintiffs failed to allege a constitutional violation or because the law in this area was not clearly established at the time of the alleged violation.
II
6
To resolve the qualified immunity issue in this case, we first determine whether the facts alleged, taken in the light most favorable to the plaintiffs, demonstrate that Sheriff Osborne violated a constitutional right of the plaintiffs. Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001). If we determine that the plaintiffs have alleged a violation of a constitutional right, we then determine whether the contours of the right were clearly established such that "a reasonable official would understand that what he [was] doing violate [d] that right." Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987).
7
Sheriff Osborne contends that the plaintiffs failed to show that they were not rehired because of their support for Wayne Pike's campaign and therefore that they have failed to allege a violation of their First Amendment rights. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977) (holding that the plaintiff has the initial burden of showing that his conduct was constitutionally protected and that the conduct was a "substantial factor" or a "motivating factor" in the firing decision). In this case, the evidence on which the plaintiffs relied to establish the necessary causal relationship is thin and circumstantial. It requires drawing an inference of retaliation from the timing of Osborne's actions after the election and the fact that these two women, allegedly the only employees who openly supported Wayne Pike's campaign, were the only employees who were not reappointed. Although the plaintiffs' evidence is sparse, because we must take the evidence in the light most favorable to them, we will assume that they have made a sufficient showing on this first hurdle in the qualified immunity analysis.
8
With that assumption, we proceed to determine whether the law regarding retaliatory employment decisions was clearly established such that Sheriff Osborne should have known that refusing to reappoint the plaintiffs would violate their constitutional rights. In determining whether a retaliatory employment decision violates the First Amendment, we balance "the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interests of the State, as an employer, in promoting efficiency of the public services it performs through its employees." Rankin v. McPherson, 483 U.S. 378, 384, 107 S.Ct. 2891, 97 L.Ed.2d 315 (1987) (quoting Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968); Connick v. Myers, 461 U.S. 138, 149, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983)). We have recognized that in these cases "only infrequently will it be `clearly established' that a public employee's speech on a matter of public concern is constitutionally protected, because the relevant inquiry requires a `particularized balancing' that is subtle, yet difficult to apply, and not yet well defined." DiMeglio v. Haines, 45 F.3d 790, 806 (4th Cir. 1995); see also McVey v. Stacy, 157 F.3d 271, 277 (4th Cir.1999). Given this "difficult-to-apply" balancing test, we cannot conclude that in this case a First Amendment violation was so clearly established that a reasonable official in Sheriff Osborne's position would know, without having to engage in guesswork, that the plaintiffs' interest in commenting on an issue of public concern outweighed the sheriff's interest in maintaining a loyal and efficient sheriff's department. Because the law in this area was not clearly established at the time the plaintiffs were not reappointed, Sheriff Osborne is entitled to qualified immunity.
9
For the foregoing reasons, we reverse the order of the district court denying Sheriff Osborne qualified immunity and remand with instructions to dismiss the complaint against him.
10
REVERSED AND REMANDED WITH INSTRUCTIONS.
11
HAMILTON, Senior Circuit Judge, concurring in the judgment.
12
I agree with Judge Niemeyer's apparent conclusion that, assuming, arguendo, the plaintiffs have alleged a violation of the First Amendment, Sheriff Osborne was entitled to qualified immunity because the law in December 1999 was not clearly established that a sheriff in Virginia could not lawfully terminate for political affiliation reasons a dispatcher with privity to confidential information. I write further to more fully explain my rationale for finding that Sheriff Osborne was entitled to qualified immunity.
13
The law in this circuit is clear that sheriffs in Virginia have the right to lawfully terminate their deputies for political affiliation reasons. Jenkins v. Medford, 119 F.3d 1156, 1163-65 (4th Cir.1997) (en banc) (overruling Jones v. Dodson, 727 F.2d 1329 (4th Cir.1984)). However, we have not addressed the question of whether sheriffs have the right to lawfully terminate their dispatchers for political affiliation reasons. Our decision in Jenkins sends mixed signals to sheriffs in this regard. On the one hand, a dispatcher with access to confidential information, arguably, is the equivalent of your everyday clerical worker, especially when, as in this case, each dispatcher did mostly clerical work, did not wear a uniform, did not have a badge, had no arrest authority, and had no discretionary authority. Id. at 1165 ("[D]ismissals based on today's holding [are limited] to those deputies actually sworn to engage in law enforcement activities on behalf of the sheriff. We issue this limitation to caution sheriffs that courts examine the job duties of the position, and not merely the title, of those dismissed. Because the deputies in the instant case were law enforcement officers, they are not protected by this limitation.") (footnotes omitted), id. n. 66 (citing Zorzi v. County of Putnam, 30 F.3d 885, 892 (7th Cir.1994), which held that dispatchers were not involved in law enforcement activities or making policy, and, therefore, political affiliation was not an inappropriate job requirement). On the other hand, Jenkins says privity to confidential information permits a lawful termination based on political affiliation reasons. 119 F.3d at 1164 ("If the position resembles a policy-maker, a communicator, or a privy to confidential information, then loyalty to the sheriff is an appropriate requirement for the job.") (internal quotation marks and footnote omitted).
14
Jenkins is confusing, at best, on the point of whether sheriffs in Virginia can lawfully terminate for political affiliation reasons dispatchers with privity to confidential information. Accordingly, because the law was not clearly established in December 1999 that a sheriff could not lawfully terminate for political affiliation reasons a dispatcher with privity to confidential information, Sheriff Osborne was entitled to qualified immunity.*
Notes:
*
For purposes of our discussion, Sheriff Osborne does not dispute that his decision not to reappoint plaintiffs was tantamount to a dismissal of the plaintiffs from their employment
15
BROADWATER, District Judge, concurring in the judgment.
16
I agree with Judge Niemeyer's opinion insofar as his opinion concludes that the district court's judgment should be reversed. However, I agree with the reasoning of Judge Hamilton's concurring in the judgment opinion, which correctly explains why Sheriff Osborne was entitled to qualified immunity.
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975 F.2d 1552
Testa (Frank J., Jr.)v.Hotel Employees and Restaurant Employees InternationalUnion, AFL-CIO, Hanley (Edward T.), Gerace (Frank), Silbert(Roy), Executive Bd. of Local 54, Zarus (Evelyn), Wolfson(Robert), Anderson (Betty), Bocchicchio (Felix), Burgess(Cindy), Erace (Joe), Hilferty (Timmie), Johnson (Jody),Pollack (Justin), Materio (Frank), Wilson (R.), Bader (Ed),Tenuto (Mike), Mahoney (Laurel), Rogers (Tom), Martinez (Jack)
NO. 92-5157
United States Court of Appeals,Third Circuit.
Aug 05, 1992
Appeal From: D.N.J.,
Richards, J.
1
AFFIRMED.
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10 Cal.2d 470 (1938)
FRANK MENGHETTI, Appellant,
v.
A. W. DILLON et al., Respondents.
Sac. No. 5028.
Supreme Court of California. In Bank.
January 20, 1938.
Griffin & Boone and Edward T. Taylor for Appellant.
Brown & Chamberlain for Respondents.
THE COURT.
This is a controversy based upon allegations that personal property upon which execution had been levied under a justice's court judgment for $229.80 was the property of the judgment debtor, notwithstanding a verified third party claim thereto by the other defendant, because a transfer or pledge thereof as security, claimed by defendants to have been made more than seven months before the levy, was not preceded by the recordation of notice of intention to transfer or assign, as required by the provisions of section 3440 of the Civil Code of the State of California. Plaintiff filed an equity action in the superior court, praying that defendants "be adjudged to apply the ... property to the payment of the judgment" etc., and "that defendants be enjoined from selling, transferring, assigning or interfering with said property ... pending judgment".
Issue was joined in the instant case and it went to trial. A decision in favor of plaintiff seems to have been rendered by the judge then in office but neither findings nor judgment thereon were signed. Approximately six years after the complaint was filed the case was again brought to trial before the successor of the first judge. Immediately preceding the second trial a supplemental answer of the transferee defendant was filed alleging foreclosure, sale and delivery of the property to another under a lien for services, labor and skill for the improvement and safekeeping thereof and the incidental *472 costs and charges. The second trial resulted in judgment in favor of defendants and plaintiff appealed, filing a judgment roll transcript in December, 1935.
No brief having been filed up to October, 1936, plaintiff was ordered by this court to show cause why the appeal should not be dismissed for want of prosecution. There being no appearance on the day fixed in the order the appeal was ordered dismissed, but two weeks thereafter, upon joint request and stipulation of counsel for the respective parties, the order was vacated and thirty days was allowed appellant to file brief. On September 30, 1937, brief being still unfiled, another order of the same nature was issued and in response thereto the joint brief of the parties and a stipulation to submit the cause thereon were filed. On the calling of the order to show cause, the appeal was submitted for decision, pursuant to the stipulation.
In the brief appellant argues that some of the findings of fact are inconsistent with other findings, that one of the conclusions of law is inconsistent with the code requirement for advertising above cited, and that the conclusions of law are not supported by the findings of fact. Instead of applying in the trial court within the statutory time for correction of these claimed inconsistencies and insufficiencies by invoking the broad powers of the trial judge under section 662 to change or add to the findings, or under section 663 to enter another and different judgment, appellant now urges his highly technical points on appeal and asks a reversal of the judgment.
[1] "Findings are to be read and considered together and liberally construed in support of the judgment and if possible are to be reconciled so as to prevent any conflict upon material points." (Murray v. Tulare Irr. Co., 120 Cal. 311 [49 P. 563, 52 P. 586]; Ames v. City of San Diego, 101 Cal. 390 [35 P. 1005].)
In "an appeal upon the judgment roll alone the findings are conclusively presumed to be supported by the evidence; furthermore, it is also elementary that they are to receive, if possible, such a construction as will uphold rather than defeat the judgment thereon. They are to be liberally construed and if possible any ambiguity or inconsistency will be resolved in favor of sustaining the judgment." (Ochoa v. McCush, 213 Cal. 426 [2 PaCal.2d 357]; see, also, Estate of *473 Berry, 195 Cal. 354 [233 P. 330]; Paine v. San Bernardino Valley Traction Co., 143 Cal. 654 [77 P. 659]; Gould v. Eaton, 111 Cal. 639, 644 [44 P. 319, 52 Am.St.Rep. 201]; Warren v. Hopkins, 110 Cal. 506 [42 P. 986]; Breeze v. Brooks, 97 Cal. 72 [31 P. 742, 22 L.R.A. 257].) Some of the cases in which this rule has been followed by the several District Courts of Appeal of California are: Stockton Morris Plan Co. v. Carpenter, 18 Cal.App.2d 205 [63 PaCal.2d 859]; Hartford v. Pacific Motor T. Co., 16 Cal.App.2d 378 [60 PaCal.2d 476]; Smalley v. Mountain States Life Ins. Co., 1 Cal.App.2d 747 [37 PaCal.2d 498]; Swing v. Lingo, 129 Cal.App. 518 [19 PaCal.2d 56.]
[2] Applying the foregoing rules to the findings and judgment presented in the judgment roll herein, we conclude that the judgment is fully sustained.
We are also satisfied from a view of the whole case as presented in the transcript (including the opinions of the two trial judges, which, while not properly a part of the record, supply a recital of facts not otherwise presented), that there was no miscarriage of justice in the judgment appealed from. On the contrary it is apparent because of the great lapse of time since the transfer under attack occurred, that a reversal of the judgment would work a grave injustice upon respondents. Because of the inaction of respondents, however, when they might have brought the case on for hearing or forced a dismissal of this appeal, we do not feel that they should recover costs on appeal.
The judgment is affirmed, without costs.
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-97-00428-CR
Bruce Allen Aaron, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 26TH JUDICIAL DISTRICT
NO. 97-121-K26, HONORABLE WILLIAM S. LOTT, JUDGE PRESIDING
The jury found appellant guilty of both counts of an indictment charging him with organized
criminal activity by (1) committing the offense of burglary of a habitation and (2) by committing the offense
of theft of a motor vehicle. See Tex. Penal Code Ann. §§ 71.01 and 71.02 (West 1994 & West Supp.
1998). Punishment was assessed by the jury at confinement for fifty years on the first count and at
confinement for five years on the second count. In his first two points of error, appellant asserts the
evidence is legally insufficient and factually insufficient to support the convictions. In his third point of error,
appellant contends that he did not receive effective assistance of counsel. We will overrule appellant's
points of error and affirm the judgment of the trial court.
It is undisputed that appellant and co-defendant John McQuoid entered the home of Robert
and Eileen Samford while the Samfords were away during the Christmas holidays of 1996 and took a 32-inch television, jewelry and other items. In addition, a "Blazer" vehicle was taken from the driveway.
Appellant asserts the State has failed to prove that there was sufficient evidence to show that appellant
intended to engage in organized criminal activity. Specifically, appellant contends the State failed to prove
beyond a reasonable doubt that appellant had the specific intent to participate in a combination, as that term
is defined in Penal Code section 71.01.
A person is engaged in organized criminal activity when "a person commits an offense if,
with the intent to establish, maintain, or participate in a combination or in the profits of a combination or as
a member of a criminal street gang, he commits or conspires to commit one or more of the following: . .
. burglary, theft . . . ." Penal Code § 71.02(a)(1). "'Combination' means three or more persons who
collaborate in carrying on criminal activities . . . ." Penal Code § 71.01(a).
The State contends the third person in the combination was appellant's wife, Sandra Aaron,
and that it was appellant's intent from the outset that she participate in the crime. Reviewing the evidence
favorable to the State's position, we find the following:
(1) the victims' neighbor, Dora Henry, saw appellant and Sandra outside the
victims' house while the Samfords were away and observed appellant and Sandra looking
into the Blazer vehicle;
(2) Temple police officers went to the home of Sandra and appellant in Temple
where the officers found the "Blazer" in the driveway; the officers entered the Aaron home
and recovered the television and other items identified by the victims as items taken from
their home, and Sandra was wearing one of the rings taken in the burglary;
(3) appellant's confession taken after his arrest, and after certain portions were
redacted, was admitted into evidence without objection; after admitting that he and
McQuoid entered the house, took the property in question and loaded it into the victims'
"Blazer," the confession recited: "My wife [Sandra] and I followed him [McQuoid] back
to Temple. . . [W]e kept the 32-inch TV, the Blazer and two tennis rackets. He
[McQuoid] kept the rest.";
(4) it was stipulated that co-defendants McQuoid and Sandra Aaron entered
pleas of guilty to engaging in organized criminal activity; and,
(5) under cross-examination by the prosecutor, co-defendant McQuoid testified
that when he pled guilty the day before he said that Sandra "was not only involved but she
basically pushed Bruce Aaron [appellant] into doing this because of financial problems."
Appellant, testifying in his own behalf, stated that he and McQuoid committed the burglary without
his wife's knowledge. Sandra testified that she had no knowledge of the crime until after it was completed.
In reviewing the sufficiency of the evidence, we must determine whether, viewing the
evidence in the light most favorable to the prosecution, any rational trier of fact could have found the
essential elements of the offense beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319
(1979). Under the Jackson standard, the reviewing court is not to position itself as a thirteenth juror in
assessing the evidence nor is it our place to second guess the determination made by the trier of fact. See
Collins v. State, 800 S.W.2d 267, 269 (Tex. App.--Houston [14th Dist.] 1990, no pet.). The trier of
fact (jury in this cause) is in a better place than an appellate court to weigh, accept or reject all or any
portion of any witness's testimony.
Appellant agues that the circumstantial evidence is very weak to show that appellant
intended to commit the offense in combination with anyone other than McQuoid. It is not necessary to
show that co-defendant Sandra Aaron actually took part in the breaking and entering; the statute "only
requires that the defendant 'commit' the underlying offense with intent to 'establish, maintain, or participate
in a combination.'" See McDonald v. State, 692 S.W.2d 169, 174 (Tex. App.--Houston [1st Dist.]
1985, pet. ref'd).
Appellant and Sandra were placed at the scene of the burglary viewing the house and
looking into the "Blazer" during the holiday season in which the offense occurred. Appellant's confession
reflects that Sandra left the site of the burglary with appellant. Co-defendant McQuoid stated that he
testified at his trial that Sandra "basically pushed Aaron [appellant] into this because of financial problems."
Viewing the evidence in the light most favorable to the verdict, we hold that any rational
trier of fact could have found the essential elements of the offense beyond a reasonable doubt. Appellant's
first point of error is overruled.
In his second point of error, appellant urges that the evidence is not factually sufficient to
support the conviction under this Court's standard for factual review in Stone v. State, 823 S.W.2d 375
(Tex. App.--Austin 1992, pet. ref'd, untimely filed). See Clewis v. State, 922 S.W.2d 126 (Tex. Crim.
App. 1996) (adopting Stone test). In Stone, this Court set forth the following standard for a factual review
of the evidence:
[T]he court views all the evidence without the prism of 'in the light most favorable to the
prosecution.' Because the court is not bound to view the evidence in the light most
favorable to the prosecution, it may consider the testimony of defense witnesses and the
existence of alternative hypotheses. The court should set aside the verdict only if it is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.
Stone, 823 S.W.2d at 381 (citations omitted).
After viewing all of the evidence, including the testimony of defense witnesses and the
existence of alternative hypothesis, we conclude that the jury's verdict is not so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Appellant's second point of error
is overruled.
In his third point of error, appellant contends that he was denied his constitutional right to
effective assistance of counsel. Appellant directs our attention to trial counsel's stipulating to the co-defendants' judicial admissions of guilt, failing to object to the prosecutor showing pictures of the crime
scene and the showing of a stolen video of the christening of the victims' child.
The burden of proof an accused has in proving ineffective assistance is set forth with clarity
and completeness in Ex parte Welborn, 785 S.W.2d 391, 393 (Tex. Crim. App. 1990):
The test to be applied in determining ineffective assistance of counsel is found in
Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). As
this Court has previously noted, no mechanistic formula is provided by Strickland:
The benchmark for judging any claim of ineffectiveness must be
whether counsel's conduct so undermined the proper functioning of the
adversarial process that the trial cannot be relied on as having produced
a just result.
Butler v. State, 716 S.W.2d 48, 54 (Tex. Cr. App. 1986) quoting Strickland, 104 S.Ct.
at 2064. A defendant seeking relief under Strickland must show that counsel's
performance was deficient and the defendant must show that the deficient performance
prejudiced the defense. Butler, 716 S.W.2d at 54. When clarifying the "prejudice" prong
of this two part test, the Strickland Court held:
The defendant must show that there is a reasonable probability
that, but for counsel's unprofessional errors, the result of the proceedings
would have been different. A reasonable probability is a probability
sufficient to undermine confidence in the outcome.
Ex parte Guzmon, 730 S.W.2d 724, 733 (Tex. Cr. App. 1987) quoting Strickland,
104 S.Ct. at 2068.
This standard has never been interpreted to mean that the accused is entitled to
errorless or perfect counsel. Bridge v. State, 726 S.W.2d 558, 571 (Tex. Cr. App.
1986). When reviewing a claim of ineffective assistance of counsel, judicial scrutiny of
counsel's performance must be highly deferential. 466 U.S. at 689, 104 S.Ct. at 2065,
80 L.Ed.2d at 694. Whether the Strickland standard has been met is to be judged by "the
totality of the representation." Id.; Ferguson v. State, 639 S.W.2d 307, 310 (Tex. Cr.
App. 1982). Isolated instances in the record reflecting errors of commission or omission
do not cause counsel to become ineffective, nor can ineffective assistance of counsel be
established by isolating or separating out one portion of the trial counsel's performance for
examination. Bridge, 726 S.W.2d at 571; Johnson v. State, 629 S.W.2d 731, 736 (Tex.
Cr. App. 1981). An applicant must show omissions or other mistakes made by counsel
that amount to professional errors of a magnitude sufficient to raise a reasonable probability
that the outcome of the trial would have been different but for the errors. Butler, 716
S.W.2d at 54. The test is to be applied at the time of trial, not through hindsight.
Wilkerson v. State, 726 S.W.2d 542, 548 Tex. Cr. App. 1986), cert. denied, 480 U.S.
940, 107 S.Ct. 1590, 94 L.Ed.2d 779 (1987).
At the outset, it must be recognized that defense counsel had a difficult task. The third
party in the combination, Sandra Aaron, was included in appellant's plan to commit the offense by evidence
that was difficult for defense counsel to attack. Sandra and appellant were placed at the victims' house
after the victims had left on vacation. Appellant's confession places her at the scene of the crime when it
stated that Sandra and appellant followed McQuoid in the stolen "Blazer" when they departed following
the burglary. McQuoid stated that when he entered a plea of guilty, he testified that Sandra pushed
appellant into committing the crime. In light of this evidence, it is difficult for us to imagine how defense
counsel's stipulations about McQuoid and Sandra making judicial admissions of guilt could have served
to undermine confidence in the outcome of the trial.
Pictures of the crime scene and the playing of the stolen video constituted evidence of the
offense and as such was relevant evidence. See Tex. R. Evid. 401. Depending on the number of times
the pictures were exhibited and the video played, their probative value may have been outweighed by the
danger of unfair prejudice. See Tex. R. Evid 403. It is often a question of trial tactics in determining what
affect it might have on a jury to object to the mention of matters that the jury may very well feel are
important to the case.
When viewed in the context of the entire cause, errors, if any, counsel made in the conduct
of the case in the trial court were not of such magnitude to raise a reasonable probability that the outcome
of the trial would have been different but for the errors. Appellant's third point of error is overruled.
The judgment is affirmed.
Tom G. Davis, Justice
Before Justices Jones, Kidd and Davis*
Affirmed
Filed: May 29, 1998
Do Not Publish
* Before Tom G. Davis, Judge (retired), Court of Criminal Appeals, sitting by assignment. See Tex.
Gov't Code Ann. § 74.003(b) (West 1988).
. A defendant seeking relief under Strickland must show that counsel's
performance was deficient and the defendant must show that the deficient performance
prejudiced the defense. Butler, 716 S.W.2d at 54. When clarifying the "prejudice" prong
of this two part test, the Strickland Court held:
The defendant must show that there is a reasonable probability
that, but for counsel's unprofessional errors, the result of the proceedings
would have been different. A reasonable probability is a probability
sufficient to undermine confidence in the outcome.
Ex parte Guzmon, 730 S.W.2d 724, 733 (Tex. Cr. App. 1987) quoting Strickland,
104 S.Ct. at 2068.
This standard has never been interpreted to mean that the accused is entitled to
errorless or perfect counsel. Bridge v. State, 726 S.W.2d 558, 571 (Tex. Cr. App.
1986). When reviewing a claim of ineffective assistance of counsel, judicial scrutiny of
counsel's performance must be highly deferential. 466 U.S. at 689, 104 S.Ct. at 2065,
80 L.Ed.2d at 694. Whether the Strickland standard has been met is to be judged by "the
totality of the representation." Id.; Ferguson v. State, 639 S.W.2d 307, 310 (Tex. Cr.
App. 1982). Isolated instances in the record reflecting errors of commission or omission
do not cause counsel to become ineffective, nor can ineffective assistance of counsel be
established by isolating or separating out one portion of the trial counsel's performance for
examination. Bridge, 726 S.W.2d at 571; Johnson v. State, 629 S.W.2d 731, 736 (Tex.
Cr. App. 1981). An applicant must show omissions or other mistakes made by counsel
that amount to professional errors of a magnitude sufficient to raise a reasonable probability
that the outcome of the trial would have been different but for the errors. Butler, 716
S.W.2d at 54. The test is to be applied at the time of trial, not through hindsight.
Wilkerson v. State, 726 S.W.2d 542, 548 Tex. Cr. App. 1986), cert. denied, 480 U.S.
940, 107 S.Ct. 1590, 94 L.Ed.2d 779 (1987).
At the outset, it must be recognized that defense counsel had a difficult task. The third
party in the combination, Sandra Aaron, was included in appellant's plan to commit the offense by evidence
that was difficult for defense counsel to attack. Sandra and appellant were placed at the victims' house
after the victims had left on vacation. Appellant's confession places her at the scene of the crime when it
stated that Sandra and appellant followed McQuoid in the stolen "Blazer" when they departed following
the burglary. McQuoid stated that when he entered a plea of guilty, he testified that Sandra pushed
appellant into committing the crime. In light of this evidence, it is difficult for us to imagine how defense
counsel's stipulations about McQuoid and Sandra making judicial admissions of guilt could have served
to undermine confidence in the outcome of the trial.
Pictures of the crime scene and the playing of the stolen video constituted evidence of the
offense and as such was relevant evidence. See Tex. R. Evid. 401. Depending on the number of times
the pictures were exhibited and the video played, their probative value may have been outweighed by the
danger of unfair prejudice. See Tex. R. Evid 403. It is often a question of trial tactics in determining what
affect it might have on a jury to object to the mention of matters that the jury may very well feel are
important to the case.
When viewed in the context of the entire cause, errors, if any, counsel made in the conduct
of the case in the trial court were not of such magnitude to raise a reasonable probability that the outcome
of the trial would have been different but for the errors. Appellant's third point of error is overruled.
The judgment is affirmed.
Tom G. Davis, Justice
Before Justices Jones, Kidd and Davis*
Affirmed
Filed: May 29, 1998
Do Not Publish
| {
"pile_set_name": "FreeLaw"
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The Attorney General of Texas
April 7, 1980
MARK WHITE
Attorney General
Honorable Maurice S. Pipkin Opinion No. MW-162
Executive Director
State Commission on Judicial Conduct Re: Whether or not a county clerk
Austin, Texas may assess the fees prescribed in
article 1064, Code of Criminal
Procedure, in a case in which the
proceedings have been deferred and
ultimately dismissed pursuant to
article~67Old,section 143A.
Dear Mr. Pipkim
You have asked whether the county clerk’s fees provided for in article
1064?Code of Criminal Procedure, may be assessed in cases where the judge
in hw discretion defers the proceedings to permit the defendant to complete
a defensive drivbg course after which the charges are dismissed. V.T.C.S.
art. 6701d, S 143A. There is no provision for entry of a conviction nor finding
of guilt. After dismissal the evidence of the original charge may not be used
for any puqwe-. Id Such a deferred proceeding without entry of guilt has
been held constitu&al. ‘Baker v. State, 158 S.W. 998 (Tex. Crim. App. 1913).
Article 1064, Code of Criminal Procedure, provides:
(0 The clerks of the county courts, county courts at
law and district courts shall be allowed the followhtg
fees:
ml Md”Plaza.su,,*400
SanAntonio.TX.78205
.512/-2E-4191 (a) A fee of Fifteen Dollsrs ($15.00) in each’cause
filed in said courts: for filing complaints,
‘information, for docketing and taxing costs for each
defendant, for issuing original writs, issuing
subpoenas, for swearing and impaneling a jury,
receiving and recording verdict, for filing each paper
entered in this cause, for swearing witnesses and for
aR other clerical duties in connection with such cause
in county and district courts.
(b) A fee of One Dollar (Sl.00) per psge or part of a
page, to be paid at the time each order is placed, for
issuitq each certified copy, transcript or any other
P. 519
Honorable Maurice S. Pipkin - Page Two (MW-162)
paper authorized, permitted, or required, to be issued by said
county clerk or clerk of county courts or clerk of district courts.
In a prior opinion this office has determined that the above fee may not be assessed where
the defendant has been granted a conditional discharge under the Controlled Substances
Act, article 4476-l5, V.T.C.S., section 4.12. Attorney General Opinion H-1135 (1978).
Under that Act the accused may be placed on probation without the entry of guilt. The
fees of article 1064, Code of Criminal Procedure, may be assessed only upon a conviction.
Attorney General Opinions H-ll35 (l978); -093 Q944). The deferred proceedings under
the Controlled Substances Act are not appealable since there is no entry of conviction.
George v. State, 557 S.W.2d787 (Tex. Crim. App. 1977).
Section 143A, article 6701dstates:
‘Sec. 143A. (a) When a person is charged with a misdemeanor
offense under this Act, other than a violation of Section 50 or 51,
committed while operating a motor vehicle, the courtt
‘fl) in its discretion may defer proceedings and allow the person
90 days to present evidence that, subsequent to the alleged act, the
person has successfully completed a defensive driver’s eomwe
approved by the Texas Department of. Public Safety or other
driving safety course approved by the court; or : ,
‘(2) shall defer proceedings and allow the person 90 days to
present written evidence that, subsequent to the alleged act, the
person has successfully completed a driving safety course approved
by the court, if:
‘(A) the person presents to the court an oral request or written
motion to take a course;
‘(B) the person has a valid Texas driver’s Iicense or permit; and
‘(Cl the person’s driving record as maintained by the Texas
Department of Public Safety does not indicate successful
completion of a driving safety course under this subdivision within
the two years immediately preceding the date of the alleged
offense.
‘(b) When the person complies with the provisons of Subsection (a)
of this se&ion and the evidence presented is accepted by the court,
the court shall dismiss the charge.
When a charge is dismissed under this section, the charge may
not be part of the person% driving record or used for any purpose,
but the court &all report the fact that a person has successfully
p. 520
Honorable Maurice S. Pipkin - Page Three (Mh’-162)
completed a driving safety course and the date of completion to
the Texas Department of Public Safety for inclusion in the person’s
driving record The court shall note in its report whether the
course was taken under the procedure provided by Subdivision (2) of
Subsection (a) of this section for the purpose of providing
information necessary to determine eligibility to take a subsequent
course under that subdivision.’
Althoqh the provision does not explicitly state that the proceedings are deferred “without
entering a judgment of guilt” as does the provision for conditional discharge under the
Controlled Substances Act, we believe that section 143A implies that no judgment of
conviction is entered. The section states that the %mrgen shall be dismissed and makes
no reference to setting aside a conviction. Therefore we believe the reasoning and
authorities contained in Attorney General Opinion H-R35 (1978) are applicable to the
ouestion herein posed and compel us to conclude that the fees may not be assessed.
SUMMARY
The fees provided for in article 1064, Code of Criminal Procedure,
may not be assessed where the misdemeanor proceedhtgs have been
deferred pursuant to article 67Old,section 143A, V.T.C.S.
J?wlwY&&
MARK WHITE
Attorney General of Texas
JOHN W. PAINTER,JR.
First Assistant Attorney General
TED L. HARTLEY
Rsecutive Assiitant Attorney General
Prepared by David B. Brooks
Assistant Attorney General
APPROVED:
OPINIONCOMMI’lTEE
C. Robert Heath, Chairman
David B. Brooks
Rob Gammage
Susan Garrison
Rick Gilpin
Bruce Youngblood
p. 521
| {
"pile_set_name": "FreeLaw"
} |
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
02/15/2019 01:05 AM CST
- 10 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
Robert J. Prokop, appellant and cross-appellee,
v. Lower Loup Natural R esources
District et al., appellees
and cross-appellants.
___ N.W.2d ___
Filed January 11, 2019. No. S-18-082.
1. Administrative Law: Judgments: Appeal and Error. A judgment or
final order rendered by a district court in a judicial review pursuant to
the Administrative Procedure Act may be reversed, vacated, or modified
by an appellate court for errors appearing on the record.
2. ____: ____: ____. When reviewing an order of a district court under
the Administrative Procedure Act for errors appearing on the record, the
inquiry is whether the decision conforms to the law, is supported by com-
petent evidence, and is neither arbitrary, capricious, nor unreasonable.
3. Judgments: Appeal and Error. Whether a decision conforms to law
is by definition a question of law, in connection with which an appel-
late court reaches a conclusion independent of that reached by the
lower court.
4. ____: ____. An appellate court, in reviewing a district court judgment
for errors appearing on the record, will not substitute its factual find-
ings for those of the district court where competent evidence supports
those findings.
5. Natural Resources Districts: Political Subdivisions: Legislature. A
natural resources district, as a political subdivision, has only that power
delegated to it by the Legislature, and an appellate court strictly con-
strues a grant of power to a political subdivision.
6. Natural Resources Districts. A natural resources district possesses and
can exercise the following powers and no others: first, those granted
in express words; second, those implied in or incident to the powers
expressly granted; and third, those essential to the declared objects and
purposes of the district—not simply convenient, but indispensable.
- 11 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
7. Administrative Law. Generally, for purposes of construction, a rule or
order of an administrative agency or political subdivision is treated like
a statute.
8. ____. Absent a statutory or regulatory indication to the contrary, lan-
guage contained in a rule or regulation is to be given its plain and ordi-
nary meaning.
9. ____. A rule is open for construction only when the language used
requires interpretation or may reasonably be considered ambiguous.
10. Administrative Law: Political Subdivisions: Appeal and Error. An
appellate court accords deference to an agency or political subdivision’s
interpretation of its own rules unless plainly erroneous or inconsistent.
11. Statutes. A court must attempt to give effect to all parts of a statute,
and if it can be avoided, no word, clause, or sentence will be rejected as
superfluous or meaningless.
12. Statutes: Words and Phrases. In statutory interpretation, “shall,” as
a general rule, is considered mandatory and inconsistent with the idea
of discretion.
13. Due Process. Due process principles protect individuals from arbitrary
deprivation of life, liberty, or property without due process of law.
14. ____. Procedural due process claims require a two-step analysis: (1)
whether the plaintiff has asserted a life, liberty, or property interest that
is protected by the Due Process Clause and (2) whether the plaintiff was
deprived of that interest without sufficient process.
15. Administrative Law: Due Process. A party appearing in an adjudica-
tion hearing before an agency or tribunal is entitled to due process pro-
tections similar to those given to litigants in a judicial proceeding.
16. Due Process: Notice. Due process does not guarantee an individual
any particular form of state procedure. Instead, the requirements of due
process are satisfied if a person has reasonable notice and an oppor-
tunity to be heard appropriate to the nature of the proceeding and the
character of the rights which might be affected by it.
17. Administrative Law: Due Process: Notice: Evidence. In proceedings
before an administrative agency or tribunal, procedural due process
requires notice, identification of the accuser, factual basis for the accusa-
tion, reasonable time and opportunity to present evidence concerning the
accusation, and a hearing before an impartial board.
18. Due Process: Notice. Due process requires notice reasonably calculated
to inform the party to the action of the subject and issues involved in
the proceeding.
19. Administrative Law. While similar to a judicial proceeding, an adju-
dication hearing before an agency does not guarantee an individual any
particular form of state procedure.
- 12 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
20. ____. Administrative bodies have the authority to provide discovery
which must be exercised judicially and not arbitrarily.
21. Due Process: Property: Notice. Due process involving deprivation of
a significant property interest requires notice and an opportunity to be
heard that is appropriate to the nature of the case.
22. Due Process: Notice: Time. Due process depends on, in part, whether
the notice was sufficient to provide the party a reasonable opportunity to
confront and cross-examine adverse witnesses and present evidence.
23. Administrative Law: Due Process: Natural Resources Districts:
Notice. Due process does not require that a natural resources district
provide notice of its specific evidence to a party prior to a hearing.
24. Property. A takings analysis begins with an examination of the nature
of the owner’s property interest.
25. Waters. Ground water, as defined by Neb. Rev. Stat. § 46-706 (Reissue
2010), is owned by the public, and the only right held by an overlying
landowner is in the use of the ground water.
26. Constitutional Law: Waters: Appurtenances: Property. The right of
an owner of overlying land to use ground water is an appurtenance con-
stituting property protected by Neb. Const. art. I, § 21.
27. Waters: Public Policy. Through its police power, the State has the
power to determine public policy with regard to ground water and can
alter the common law governing the use of ground water.
28. Property: Constitutional Law. The appropriate exercise of police
power occurs where an owner is denied the unrestricted use or enjoy-
ment of his property, or his property is taken from him, because his use
or enjoyment of such property is injurious to the public welfare.
29. Waters. Appropriate use of police power includes that the State place
limitations on the withdrawals of ground water in times of shortage.
30. Administrative Law: Appeal and Error. In a de novo review on the
record of an administrative order, the district court is required to make
independent factual determinations based upon the record, and the court
reaches its own independent conclusions with respect to the matters
at issue.
Appeal from the District Court for Valley County: K arin L.
Noakes, Judge. Affirmed.
Brian C. Buescher and Dwyer Arce, of Kutak Rock, L.L.P.,
for appellant.
Blake E. Johnson and Katherine J. Spohn, of Bruning Law
Group, for appellees.
- 13 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
Donald G. Blankenau and Kennon G. Meyer, of Blankenau,
Wilmoth & Jarecke, L.L.P., for amicus curiae Nebraska
Groundwater Coalition.
Heavican, C.J., Cassel, Stacy, Funke, and Papik, JJ.
Funke, J.
Robert J. Prokop appeals from the district court’s order
affirming the findings and modifying a cease and desist order
of the Lower Loup Natural Resources District (LLNRD) Board
directing Prokop to suspend use of ground water wells for
noncompliance with LLNRD’s annual reporting requirements.
Prokop challenges LLNRD’s authority under the Nebraska
Ground Water Management and Protection Act (GWMPA)1 and
LLNRD rules which require operators to provide actual crop
yield data in their annual reports and to impose sanctions for
noncompliance with LLNRD reporting requirements. Prokop
further argues that LLNRD failed to provide him sufficient
due process in its proceedings on whether he complied with
LLNRD reporting requirements and that LLNRD’s suspen-
sion of his ground water rights constituted a taking without
just compensation. Prokop additionally challenges the district
court’s refusal to receive certain exhibits during his appeal to
the district court and its failure to award him attorney fees.
LLNRD and the board cross-appeal and argue the district
court improperly reduced the duration of Prokop’s suspen-
sion of ground water access. For the reasons set forth herein,
we affirm.
I. BACKGROUND
LLNRD is a natural resources district (NRD) authorized by
GWMPA to regulate certain activities which may contribute to
ground water contamination due to nitrate nitrogen and other
contaminants.2 GWMPA enables NRD’s to establish ground
1
See Neb. Rev. Stat. §§ 46-701 to 46-756 (Reissue 2010 & Cum. Supp.
2016).
2
§ 46-704.
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Nebraska Supreme Court A dvance Sheets
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
water management areas for the protection of ground water
quality.3 GWMPA requires NRD’s to maintain a ground water
management plan that, among other obligations and to the
extent possible, identifies the levels and sources of ground
water contamination within the district; ground water quality
goals; long-term solutions necessary to prevent the levels of
ground water contaminates from becoming too high and to
reduce high levels sufficiently to eliminate health hazards; and
practices recommended to stabilize, reduce, and prevent the
occurrence, increase, or spread of ground water contamina-
tion.4 GWMPA authorizes NRD’s to adopt rules and regulations
necessary to discharge the administrative duties assigned under
GWMPA and to require such reports from ground water users
as may be necessary.5 GWMPA provides that a ground water
user who violates any controls, rules, or regulations “shall be
subject to the imposition of penalties imposed through the con-
trols adopted by the district, including, but not limited to, hav-
ing any allocation of water granted or irrigated acres certified
by the district reduced in whole or in part.”6 Cease and desist
orders may also be issued by NRD’s against ground water
users following 3 days’ notice to the person affected stating the
contemplated action and, in general, the grounds for the action
and following a reasonable opportunity to be heard.7
Pursuant to GWMPA directives, LLNRD established a
ground water management area comprising a large portion
of its geographical area, adopted water quality and pollution
control as one of its goals, and enacted rules and regulations to
implement its obligations under GWMPA. Rule 7 of LLNRD’s
“Groundwater Management Area Rules & Regulations”
directs that LLNRD is divided into 28 ground water quality
3
§ 46-712(1)(b).
4
§ 46-709.
5
§ 46-707(1).
6
§ 46-746(1).
7
§ 46-707(1)(h). See, also, § 46-746(1).
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
management subareas and provides that each subarea may be
subject to water quality controls in three separate phases based
upon median nitrate nitrogen levels. Under “Phase III,” rule
7 directs that an operator—a person with direct control over
day-to-day farming operations of the land—must, among other
obligations, “[s]ubmit, on forms provided by [LLNRD], a
report of yearly water tests, flow meter reading, water applied,
soil tests, crops planted, yield goals, nitrogen applied, and other
field operations required prior to January 31st . . . .” The forms
which LLNRD provides to operators require specific informa-
tion of farming operations, including number of acres, the crop
planted, expected yield, nitrogen readings and application,
water applied, irrigation date, and actual crop yield. Operators
are also required to sign and date the forms. To enforce compli-
ance with this obligation and other controls, rules, and regula-
tions adopted by LLNRD, rule 2 provides:
[LLNRD] shall have the authority to enforce these rules
and regulations for the . . . protection of groundwater
quality . . . by issuing cease and desist orders in accord
ance with the procedure hereinafter specified and by
bringing appropriate actions in the District Court for the
county in which any violations occur for enforcement of
such orders.
Since 1962, Prokop has operated a farm on property he
owns within LLNRD’s regulated area in which he irrigates a
significant portion of his crops. Prokop’s property is within a
phase III subarea of the district, and he is required to submit
yearly reports to LLNRD on its forms provided.
In 2013, prior to the actions underlying the present case,
Prokop was subject to an enforcement action by LLNRD in
the district court for Nance County under case No. CI 13-01.
LLNRD initiated that case against Prokop for illegal wells and
failure to submit completed forms for 2010 and 2011 by not
providing the actual crop yield data for those years. The district
court found Prokop in violation of LLNRD’s reporting require-
ments and ordered him to provide the required reports.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
1. A dministrative Action
The instant case involves Prokop’s annual reports from
2015 and 2016 and arose from LLNRD concerns about miss-
ing information from those reports, including actual crop
yield data, irrigation data, nitrogen application, and dates and
signatures. Due to these concerns, LLNRD’s board voted in
April 2017 to file a complaint against Prokop and issued a
“Notice of Intent to Issue Cease and Desist Order and Impose
Penalties for Failing to Submit Annual Reporting” which was
served on Prokop on May 2. In the notice, LLNRD alleged that
Prokop “failed to submit timely and complete annual reports
. . . for the [2015 and] 2016 crop year[s],” that “LLNRD sent
multiple notice to [Prokop] requesting he submit the annual
reports,” and that “LLNRD has reason to believe [Prokop]
has intentionally and repeatedly violated the annual reporting
requirements.” LLNRD stated its belief that Prokop “should
be subject to penalties pursuant to the GWMPA and a cease
and desist order should be issued.” The notice additionally
provided that Prokop “has until June 1, 2017 to submit the
complete annual reports” and informed Prokop of “LLNRD’s
intention to enforce the penalty provisions of the GWMPA in
the event [Prokop] fails to submit timely and complete annual
reporting in accordance with this Notice.” In particular, the
notice stated LLNRD’s intention to “de-certify [Prokop’s] irri-
gated acres” and “seek maximum civil penalties.” The notice
also informed Prokop that “a hearing is scheduled regarding
this Notice at 5:00 p.m. on May 25, 2017,” “[t]he hearing
shall be conducted on the record,” Prokop “will be given
the opportunity to present any evidence or testimony he may
have with respect to the violations identified in this Notice,”
Prokop may appear through counsel, and the board will deter-
mine whether a cease and desist order should be issued based
on the record developed at the hearing.
A hearing before the board on LLNRD’s notice was held
on May 25, 2017. At the hearing, LLNRD offered and the
board received a copy of LLNRD’s ground water rules and
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
regulations, a blank “Groundwater Management Area Annual
Report Form,” the notice, the return of service of the notice,
proofs of publication of the notice, the complaint and order in
case No. CI 13-01, Prokop’s “Groundwater Management Area
Annual Report Form” for the 2015 crop year, and Prokop’s
“Groundwater Management Area Annual Report Form” for the
2016 crop year.
LLNRD presented testimony from the assistant general man-
ager of LLNRD. He testified to the rules and regulations
adopted by LLNRD. He explained Prokop’s property is within
a subarea of the district that is designated “Phase III” and the
rules that apply to the property, including Prokop’s annual
reporting obligations as the operator.
LLNRD also presented testimony from an agronomy tech-
nician for LLNRD. He testified that the subarea in which
Prokop’s land is located has an issue with ground water
nitrates which are unsafe for consumption at certain levels.
He explained that the purpose of LLNRD’s annual reports is
to record nitrogen characteristics and develop a plan to reduce
nitrate contamination. He testified that actual crop yield data
is part of the factors that record nitrogen characteristics as it
helps determine how many pounds of nitrogen are removed
from the field.
The agronomy technician testified that he reviewed Prokop’s
2015 and 2016 reports and that the 2015 report was incom-
plete, because it failed to indicate an actual crop yield and
was missing a signature, and that the 2016 report was late and
incomplete, because it failed to indicate actual crop yields,
failed to provide the irrigation data, failed to provide the nitro-
gen applications, and was not signed or dated. He explained
that Prokop’s reporting insufficiencies are ongoing and that
LLNRD has had issues with the quality of Prokop’s reporting
since 2009.
Prokop presented no evidence or witnesses, but he made
factual arguments during the hearing and cross-examined both
LLNRD witnesses. Prokop stipulated to the receipt of the
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
notice and acknowledged publication in the newspapers of
general circulation within the district. However, Prokop repeat-
edly objected to the hearing, arguing that he was not provided
LLNRD’s evidence with sufficient time prior to the hearing to
enable a fair opportunity to develop his defense. He addition-
ally challenged the applicability of the reports’ actual crop
yield requirements, stating he “has long taken the position
that the LLNRD’s demand that farmers provide actual yield
information is unnecessary from a scientific standpoint and the
request for such information is a governmental overreach not
allowed or required by law.”8
After the presentation of evidence and argument by the par-
ties, LLNRD’s board took the matter under advisement and
delayed any action until June 22, 2017, the next regularly
scheduled meeting. The delay allowed Prokop additional time
to meet the June 1 deadline set out in the notice to Prokop.
However, Prokop failed to complete the reports and the board
voted at the June 22 meeting to find Prokop had violated
LLNRD reporting rules by failing to submit timely and com-
plete reports for the 2015 and 2016 crop years.
Pursuant to its vote on June 29, 2017, LLNRD’s board exe-
cuted a cease and desist order to impose penalties, which order
was served on Prokop July 6. Through this order, the board
found the following: Prokop’s land was located in a phase III
subarea; Prokop’s 2015 annual report failed to include data
on actual crop yields, nitrogen application, and a signature;
and Prokop’s 2016 annual report was filed after the January
31 deadline and failed to include data on actual crop yields,
nitrogen application, water applied, and Prokop’s signature.
The order also noted Prokop’s history of noncompliance with
LLNRD’s reporting requirements. In consideration of its find-
ings and Prokop’s noncompliant history, the board ordered:
1) [Prokop] and all heirs, successors, assigns, or agents
cease and desist the use of all groundwater irrigation
8
Brief for appellant at 17.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
wells on the Property for a period of four (4) years
commencing January 1, 2018 and continuing through
December 31, 2021;
2) [Prokop] to submit complete annual report forms
for the Property for the 2015 crop year and the 2016 crop
year by January 31, 2018; and
3) [Prokop] to submit timely and complete annual
report forms for the Property for all subsequent crop
years.
2. A ppeal to District Court
Prokop filed a pro se petition for review in the district court
in June 2017, prior to the board’s executing the cease and
desist order. After obtaining counsel, Prokop filed an amended
petition in July, claiming: the cease and desist order was not
supported by the evidence; LLNRD’s hearing and actions were
not conducted in accordance with Nebraska law, LLNRD’s
rules and regulations, and the requirements of due process;
the board’s order was in violation of Nebraska law, LLNRD’s
rules and regulations, and the requirements of due process; the
cease and desist order constituted a taking without just com-
pensation and the due process required for such action; and
the cease and desist order was issued for reasons not allowed
by law.
At a hearing on Prokop’s amended petition, Prokop offered
exhibits 4 and 5 to support his claims that LLNRD’s actions,
the hearing, and the cease and desist order were in violation
of his due process rights. LLNRD objected to these exhibits
because they were not part of the administrative record, while
Prokop argued these exhibits fell within an exception for evi-
dence showing a procedural due process violation.
Exhibit 4 was an affidavit from Mitch Husmann, a location
manager for a co-op, who sold Prokop and his tenants fertil-
izer and assisted Prokop in filling out the annual reports for
LLNRD. Husmann explained that he would work with Prokop
to fill out the reports, Prokop would sign them, and they would
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Nebraska Supreme Court A dvance Sheets
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
be delivered to LLNRD. While this is what occurred in 2015,
Husmann provided that the typical procedure was interrupted
in 2016 because Prokop’s new tenant purchased fertilizer
through another sales representative. Therefore, Husmann did
not have all the information necessary to fill out Prokop’s
forms, so he filled out what he could and delivered the incom-
plete 2016 report to LLNRD in mid-January under the under-
standing that Prokop would come in to complete it.
Exhibit 5 was an affidavit from Prokop detailing his rela-
tionship with Husmann and explaining that he was unaware
until the hearing that the typical procedure was not followed
for the 2016 report due to his tenant’s using a different sales
representative. The affidavit also asserted that Prokop believed
the notice concerned only his refusal to provide actual crop
yield data and that the notice failed to mention the 2016 reports
were not signed and submitted in the same manner Husmann
had submitted previous reports.
The district court entered an order on the petition in
January 2018. The court stated that exhibits 4 and 5 were
not received because they are outside the scope of the offi-
cial record. The order then affirmed the cease and desist
order’s findings. First, the court determined LLNRD rules
and GWMPA enable LLNRD to require actual crop yield
data on its annual reports as “‘other field operations’” and
suspend ground water rights for noncompliance. Second, the
court determined LLNRD complied with its due process obli-
gations. Specifically, the court found the notice adequately
informed Prokop of the purpose of the hearing and the alle-
gations against him. Because the court found Prokop was
informed of the purpose of the hearing and the court’s under-
standing that due process does not require notice of evidence
to be presented at an administrative hearing, the court found
Prokop was not denied due process as a result of insufficient
notice from LLNRD of the evidence it would present. The
court also found the order’s factual findings were supported
by the evidence. Finally, the court determined the purpose of
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the annual reports serves a substantial and legitimate govern-
ment interest in preventing ground water contamination and,
therefore, the cease and desist order is an appropriate exercise
of police power that does not deprive Prokop of property
rights without just compensation.
However, the district court’s order modified the cease and
desist order’s penalty. The district court found the suspen-
sion of 4 years to be an unreasonable use of LLNRD’s police
power under the facts of the case and determined the public
health and welfare could be preserved by imposing a less
severe restriction. Therefore, the court modified the penalty
from the 4-year suspension of Prokop’s ground water rights
to a 1-year suspension with the possibility of 3 additional
years if Prokop continues to violate LLNRD’s reporting
requirements.
II. ASSIGNMENTS OF ERROR
Prokop assigns, restated, that the district court erred in
affirming the board’s order and determining (1) LLNRD had
the authority under LLNRD rules and GWMPA to require
Prokop to provide information in his annual reports, includ-
ing actual crop yield data; (2) LLNRD had the authority under
LLNRD rules and GWMPA to impose a suspension of ground
water access as a penalty for noncompliance with LLNRD
rules; (3) LLNRD did not violate Prokop’s right to procedural
due process and deny him a reasonable opportunity to be
heard; (4) LLNRD did not erroneously limit the possibility of
competent judicial review by violating Prokop’s due process
rights; and (5) LLNRD’s suspension of Prokop’s ground water
access did not constitute a taking without just compensa-
tion. Prokop also assigns the district court erred in sustaining
LLNRD’s objection to Prokop’s exhibits 4 and 5 and failing to
award Prokop attorney fees.
LLNRD and the board assign on cross-appeal that the dis-
trict court erred in modifying the duration of the penalty
imposed by LLNRD.
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III. STANDARD OF REVIEW
[1,2] A judgment or final order rendered by a district court
in a judicial review pursuant to the Administrative Procedure
Act (APA) may be reversed, vacated, or modified by an appel-
late court for errors appearing on the record.9 When reviewing
an order of a district court under the APA for errors appearing
on the record, the inquiry is whether the decision conforms to
the law, is supported by competent evidence, and is neither
arbitrary, capricious, nor unreasonable.10
[3,4] Whether a decision conforms to law is by definition a
question of law, in connection with which an appellate court
reaches a conclusion independent of that reached by the lower
court.11 An appellate court, in reviewing a district court judg-
ment for errors appearing on the record, will not substitute its
factual findings for those of the district court where competent
evidence supports those findings.12
IV. ANALYSIS
1. LLNRD Authority to R equire
Actual Crop Yield Data
Prokop first assigns the district court erred in determining
LLNRD had authority to require Prokop to provide actual crop
yield data.
[5,6] LLNRD, as a political subdivision, has only that power
delegated to it by the Legislature, and we strictly construe
a grant of power to a political subdivision.13 An NRD pos-
sesses and can exercise the following powers and no others:
first, those granted in express words; second, those implied in
9
Medicine Creek v. Middle Republican NRD, 296 Neb. 1, 892 N.W.2d 74
(2017).
10
Id.
11
Stejskal v. Department of Admin. Servs., 266 Neb. 346, 665 N.W.2d 576
(2003).
12
Id.
13
Medicine Creek, supra note 9.
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or incident to the powers expressly granted; and third, those
essential to the declared objects and purposes of the district—
not simply convenient, but indispensable.14
As stated above, GWMPA directs NRD’s to regulate certain
activities which may contribute to ground water contamina-
tion due to nitrate nitrogen and other contaminants.15 GWMPA
authorizes NRD’s to adopt rules and regulations necessary to
discharge the administrative duties assigned under GWMPA,
require such reports from ground water users as may be neces-
sary, and issue cease and desist orders to enforce any provi-
sions of GWMPA.16
LLNRD rule 7 directs that each subarea of the district may
be subject to water quality controls in three separate phases
based upon median nitrate nitrogen levels. Under phase III, the
phase Prokop’s land was designated, rule 7 directs that an oper-
ator must “[s]ubmit, on forms provided by [LLNRD], a report
of yearly water tests, flow meter reading, water applied, soil
tests, crops planted, yield goals, nitrogen applied, and other
field operations required prior to January 31st . . . .” Among
other information, the forms which LLNRD provides to opera-
tors require actual crop yield data.
Prokop claims rule 7 fails to authorize LLNRD to collect
actual crop yield data, because the rule does not include it in
the list of operators’ reporting obligations. Prokop also argues
that actual crop yield data was not implicitly included under
the phrase “other field operations,” because actual yield data
is not an operation.
[7-10] Generally, for purposes of construction, a rule or order
of an administrative agency or political subdivision is treated
like a statute.17 Absent a statutory or regulatory indication to
14
Id.
15
§ 46-704.
16
§ 46-707(1).
17
See Nebraska Protective Servs. Unit v. State, 299 Neb. 797, 910 N.W.2d
767 (2018).
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the contrary, language contained in a rule or regulation is to
be given its plain and ordinary meaning.18 A rule is open for
construction only when the language used requires interpreta-
tion or may reasonably be considered ambiguous.19 We accord
deference to an agency or political subdivision’s interpretation
of its own rules unless plainly erroneous or inconsistent.20
Here, LLNRD’s interpretation of “other field operations”
to include actual crop yield data is not inconsistent or plainly
erroneous. The use of “other field operations” requires inter-
pretation, and LLNRD has interpreted it to include data on
actual crop yield. In the blank “Groundwater Management
Area Annual Report Form,” as well as Prokop’s reports from
crop years 2015 and 2016, LLNRD asks for actual crop
yield data along with other information from operators’ farm-
ing operations. LLNRD’s agronomy technician testified that
requiring actual crop yield is important to LLNRD’s adopted
goals of water quality and pollution control and LLNRD’s
obligations under GWMPA to implement these goals. He testi-
fied that the actual crop yield data is used in connection with
the other farming operations data to record nitrogen charac-
teristics and develop a plan to reduce nitrate contamination,
because actual crop yield data helps determine how many
pounds of nitrogen are removed from the field. LLNRD, in
requiring the data on the reports, clearly interpreted “other
field operations” to encompass actual crop yield data, which is
supported by LLNRD’s utilization of the data in implementing
its statutory duties.
Prokop contends that interpreting “other field operations” to
include actual crop yield data is inconsistent with a plain read-
ing of rule 7, because actual crop yield data is not an opera-
tion. However, such a reading is incorrect. Rule 7 lists specific
field operations, including items such as “soil tests” and “yield
18
Id.
19
Id.
20
See id.
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goals.” If actual crop yield data, which is the end product
of field operations, is not field operations data, than neither
would soil tests as the state of the soil during field operations
or yield goals which are what operators believe they will pro-
duce through field operations even though soil tests and yield
goals are explicitly included in the list of required field opera-
tions data.
Prokop additionally contends that interpreting “other field
operations” to include actual crop yield data is inconsistent
and plainly erroneous, because the purpose of rule 7 is to
implement LLNRD’s goals of water quality and pollution
control through the reduction of nitrogen contamination, and
actual crop yield data is unnecessary to do so. However, we
cannot say that requiring actual crop yield data is clearly
erroneous to reducing nitrogen contamination. Moreover, the
record contains testimony on how actual yield data is relevant
to a determination of nitrogen levels removed from the soil
and how it is helpful to LLNRD and operators in determining
other relevant data required in the annual reporting. Thus, on
the record before us, we cannot say the interpretation of “other
field operations” to include actual crop yield data was incon-
sistent and plainly erroneous due its relationship to LLNRD’s
stated goals.
In consideration of all of the above, the district court did not
err in determining LLNRD had the authority to require actual
crop yield data.
2. LLNRD Authority to Impose Suspension
of Ground Water Access
Prokop next assigns the district court erred in determining
LLNRD had authority to impose a suspension of ground water
access for a violation of LLNRD reporting requirements.
Under § 46-707(1), NRD’s may adopt rules and regulations
necessary to discharge the administrative duties assigned under
GWMPA; require such reports from ground water users as may
be necessary; and issue cease and desist orders to enforce any
provisions of GWMPA.
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Under § 46-746(1), any person who violates any controls,
rules, or regulations “shall be subject to the imposition of
penalties imposed through the controls adopted by the district,
including, but not limited to, having any allocation of water
granted or irrigated acres certified by the district reduced in
whole or in part.”
Additionally, LLNRD enacted rule 2, which addresses
enforcement of noncompliance with LLNRD rules and regula-
tions and GWMPA. Rule 2 provides:
[LLNRD] shall have the authority to enforce these rules
and regulations for the . . . protection of groundwater
quality . . . by issuing cease and desist orders in accord
ance with the procedure hereinafter specified and by
bringing appropriate actions in the District Court for the
county in which any violations occur for enforcement of
such orders.
Prokop contends the language of § 46-746(1) that
[a]ny person who violates . . . any controls, rules, or
regulations adopted by [an NRD] relating to a manage-
ment area shall be subject to the imposition of penalties
imposed through the controls adopted by the district,
including, but not limited to, having any allocation of
water granted or irrigated acres certified by the district
reduced in whole or in part
requires LLNRD to adopt rules and regulations that specifi-
cally list the penalties available. Further, Prokop argues, such
an interpretation required LLNRD to adopt rules and regula-
tions which explained that a violation of LLNRD reporting
requirements could result in the allocation of ground water
reduced in whole or in part.
[11] Contrary to Prokop’s argument, a “penalty” and a
“control” under GWMPA are separate and distinct terms.
A court must attempt to give effect to all parts of a statute,
and if it can be avoided, no word, clause, or sentence will
be rejected as superfluous or meaningless.21 The inclusion
21
Wisner v. Vandelay Investments, 300 Neb. 825, 916 N.W.2d 698 (2018).
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of both terms leads to the determination that the words are
not synonymous.
Section 46-746(1) enables an NRD to enforce a ground
water user’s obligations under GWMPA and the rules and regu-
lations of an NRD by imposing penalties, including, but not
limited to, having any allocation of water granted or irrigated
acres certified by the district reduced in whole or in part by
utilizing the procedure adopted in the rules and regulations of
an NRD. Section 46-746(1) does not require an NRD to restate
in its rules and regulations that a violation could result in a
reduction of ground water access. Instead, § 46-746(1) articu-
lates one specific penalty which an NRD can impose upon the
violator—the reduction of allocated water. As to the controls
adopted by an NRD, in this case, LLNRD adopted rule 2,
which enables LLNRD to issue cease and desist orders follow-
ing the procedure outlined in the subsequent rules.
[12] Such a determination aligns with our opinions in Loup
City Pub. Sch. v. Nebraska Dept. of Rev.22 and Goodyear
Tire & Rubber Co. v. State.23 In Loup City Pub. Sch., we
addressed the question of whether the Department of Revenue
was required to promulgate rules and regulations under Neb.
Rev. Stat. § 79-3809 (Reissue 1994).24 We concluded that
the department was required to do so.25 That statute, which
has since been amended and recodified, provided in relevant
part: “Establishment of the adjusted valuation shall be based
on assessment practices established by rule and regulation
adopted and promulgated by the Department of Revenue.”26
We noted that in statutory interpretation, “shall,” as a general
22
Loup City Pub. Sch. v. Nebraska Dept. of Rev., 252 Neb. 387, 562 N.W.2d
551 (1997).
23
Goodyear Tire & Rubber Co. v. State, 275 Neb. 594, 748 N.W.2d 42
(2008).
24
Loup City Pub. Sch., supra note 22.
25
Id.
26
§ 79-3809(1) (now codified at Neb. Rev. Stat. § 79-1016 (Supp. 2017)).
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rule, is considered mandatory and inconsistent with the idea
of discretion.27 Thus, under the plain language of that statute,
the department was required to adopt and promulgate rules
and regulations to regulate the valuation process.28 Because the
department had not adopted and promulgated rules and regula-
tions governing the valuation process, we concluded that the
adjusted valuations of the department were not in conformity
with the law.29
In contrast, in Goodyear Tire & Rubber Co., we addressed
whether the State Tax Commissioner was required to promul-
gate rules and regulations under Neb. Rev. Stat. § 77-4111
(Reissue 2003) to define “qualified property,” a term utilized in
the Employment and Investment Growth Act.30 Section 77-4111
provides that the commissioner “shall adopt and promulgate all
rules and regulations necessary to carry out the purposes of
the Employment and Investment Growth Act.” In conclud-
ing the commissioner was not required to establish rules and
regulations regarding its interpretation of “qualified property,”
we noted the language in § 77-4111 required the adoption and
promulgation of “only those rules that are necessary for carry-
ing out the purposes” of the act.31
While § 46-707(1)(a) authorizes the adoption and promulga-
tion of rules necessary to discharge the administrative duties
assigned in GWMPA, § 46-746(1) establishes that the penal-
ties for violations under GWMPA and rules and regulations of
an NRD include reducing the violator’s ground water access
in whole or in part. As such, we conclude that it is unneces-
sary for LLNRD to promulgate rules and regulations restat-
ing the potential for LLNRD to restrict a violator’s ground
water access.
27
Loup City Pub. Sch., supra note 22.
28
Id.
29
Id.
30
Goodyear Tire & Rubber Co., supra note 23.
31
Id. at 601, 748 N.W.2d at 49.
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In consideration of the above, the district court did not err
in determining LLNRD had the authority to suspend Prokop’s
ground water access under § 46-746(1).
3. Procedural Due Process
Prokop assigns LLNRD violated his due process rights by
not providing him adequate notice of the charges against him
and of the evidence to be presented.
[13,14] Due process principles protect individuals from arbi-
trary deprivation of life, liberty, or property without due proc
ess of law.32 Procedural due process claims require a two-step
analysis: (1) whether the plaintiff has asserted a life, liberty, or
property interest that is protected by the Due Process Clause
and (2) whether the plaintiff was deprived of that interest
without sufficient process.33 Here, Prokop’s interest in the use
of ground water is a property interest that is under due proc
ess protections.34 Therefore, the issue is whether Prokop was
deprived of that interest without sufficient process.
[15-17] A party appearing in an adjudication hearing before
an agency or tribunal is entitled to due process protections
similar to those given to litigants in a judicial proceeding.35
Due process does not guarantee an individual any particular
form of state procedure. Instead, the requirements of due
process are satisfied if a person has reasonable notice and an
opportunity to be heard appropriate to the nature of the pro-
ceeding and the character of the rights which might be affected
by it.36 In proceedings before an administrative agency or tri-
bunal, procedural due process requires notice, identification of
the accuser, factual basis for the accusation, reasonable time
32
Cain v. Custer Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018).
See, also, U.S. Const. amends. V and XIV; Neb. Const. art. I, § 3.
33
White v. Busboom, 297 Neb. 717, 901 N.W.2d 294 (2017).
34
See Sorensen v. Lower Niobrara Nat. Resources Dist., 221 Neb. 180, 376
N.W.2d 539 (1985) (superseded by statute on other grounds).
35
Cain, supra note 32.
36
Id.
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and opportunity to present evidence concerning the accusation,
and a hearing before an impartial board.37
(a) Notice of Factual Basis for
LLNRD’s Accusations
In its notice, LLNRD alleged that Prokop “failed to submit
timely and complete annual reports . . . for the [2015 and] 2016
crop year[s],” that “LLNRD sent multiple notice to [Prokop]
requesting he submit the annual reports,” and that “LLNRD
has reason to believe [Prokop] has intentionally and repeatedly
violated the annual reporting requirements.” The notice stated
LLNRD’s belief that Prokop “should be subject to penalties
pursuant to the GWMPA and a cease and desist order should
be issued” for the violation. The notice additionally provided
that Prokop “has until June 1, 2017 to submit the complete
annual reports” and informed Prokop of “LLNRD’s intention
to enforce the penalty provisions of the GWMPA in the event
[Prokop] fails to submit timely and complete annual reporting
in accordance with this Notice.” In particular, the notice stated
LLNRD’s intention to “de-certify [Prokop’s] irrigated acres”
and “seek maximum civil penalties.” The notice also informed
Prokop that “a hearing is scheduled regarding this Notice at
5:00 p.m. on May 25, 2017,” “[t]he hearing shall be conducted
on the record,” Prokop “will be given the opportunity to pre
sent any evidence or testimony he may have with respect to
the violations identified in this Notice,” Prokop may appear
through counsel, and the board will determine whether a cease
and desist order should be issued based on the record devel-
oped at the hearing.
Prokop acknowledges the notice accused Prokop of
“‘fail[ing] to submit timely and complete annual reports,’”
but claims that the notice provided no factual basis as to
what it alleged was deficient in the reports.38 Instead, Prokop
37
Stenger v. Department of Motor Vehicles, 274 Neb. 819, 743 N.W.2d 758
(2008).
38
Brief for appellant at 26.
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claims he was unaware of LLNRD’s allegations of missing
signatures, dates, irrigation data, and nitrogen application until
the hearing. Prokop argues that without such explanation of
deficiencies, he was deprived of the opportunity to gather evi-
dence and present witnesses on the precise allegations and was
prevented from taking action to correct any deficiency before
the hearing.
[18] However, contrary to Prokop’s claim, the notice was
sufficient to inform Prokop of LLNRD’s claims and support-
ing factual allegations. Due process requires notice reasonably
calculated to inform the party to the action of the subject and
issues involved in the proceeding.39 LLNRD’s notice alleged
Prokop “failed to submit timely and complete annual reports”
for 2015 and 2016 and that Prokop “intentionally and repeat-
edly violated the annual reporting requirements.” These allega-
tions informed Prokop that the reports for 2015 and 2016 were
deficient and incomplete. The deficiencies of missing annual
yield data, nitrogen application, water applied, and Prokop’s
signatures were apparent on the face of the reports listed in
the notice.
Prokop relies upon our decision in Blanchard v. City of
Ralston 40 to support his contention that the notice of LLNRD’s
claims and supporting factual allegations were insufficient. In
Blanchard, a city determined that a vacant house was a public
nuisance and that its nonremedy was an immediate emergency.
The city posted a notice on the house alleging only that the
building was an unsafe nuisance because of an “odor and
health-related hazards” and that the owner had 3 days to repair
or demolish it before the city would subsequently demolish the
house itself.41 The owner received no other notice and was only
made aware of the posted notice after the 3-day period lapsed
39
Robinson v. Morrill Cty. Sch. Dist. #63, 299 Neb. 740, 910 N.W.2d 752
(2018).
40
Blanchard v. City of Ralston, 251 Neb. 706, 559 N.W.2d 735 (1997).
41
Id. at 709, 559 N.W.2d at 737.
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but before the demolition occurred. A hearing was scheduled
for 1 hour prior to the demolition, with no further informa-
tion given to the owner on the specific problems posed by the
house. We determined that this violated the owner’s due proc
ess rights, because the notice failed, under the circumstances,
to give her a statutorily required reasonable amount of time
and failed to meaningfully inform her of the complicated and
substantial specific problems alleged to constitute the hazards
so that she could have an opportunity to remedy the situation
and defend her case.42
Unlike Blanchard, LLNRD’s notice alleged a specific viola-
tion—that Prokop had “intentionally and repeatedly violated
the annual reporting requirements”—and provided specific fac-
tual allegations that the 2015 and 2016 reports were incomplete
and late. The individual violations of Prokop’s missing data
were simple and readily apparent from the listed forms without
the need of an expert, in contrast to the issues alleged to con-
stitute a hazard in Blanchard.43
LLNRD’s notice was reasonably calculated to inform Prokop
about the allegations against him and the issues involved
in the proceeding. Accordingly, the notice satisfied Prokop’s
due process rights by informing him of the factual basis for
the accusation.
(b) Notice of LLNRD’s Evidence
Prokop also claims that his due process rights were violated
by not receiving notice of the evidence LLNRD intended to
present and that such violation limits the possibility of com-
petent judicial review. Prokop argues the notice appropriate to
the nature of the present case includes “notice of the evidence,
witnesses, and factual basis for the allegations against him,”44
in part due to his significant property interest to the access of
ground water.
42
Blanchard, supra note 40.
43
See id.
44
Brief for appellant at 29.
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GWMPA does not set forth a specific formal due process
hearing procedure containing the requirement that an NRD
provide the names of any witnesses who will be called to tes-
tify against the alleged violator, an opportunity to examine any
documents that will be presented at the hearing, the right to be
represented, and an opportunity to cross-examine all witnesses
and to present evidence material to the issues.45 Neither do the
rules of LLNRD set forth rules of procedure regarding prehear-
ing discovery. As a result, we must consider Prokop’s argument
under the bare minimum due process requirements.
Prokop alleges not only that LLNRD failed to provide him
notice of the evidence but also that he repeatedly requested the
evidence prior to the hearing and was denied. However, in the
record before us, there is no available evidence or stated alle-
gations that would indicate Prokop requested and was denied
access to LLNRD’s evidence prior to the hearing, including
the 2015 and 2016 reports. Thus, we consider whether LLNRD
was required to provide Prokop with notice of the evidence it
intended to present and not whether LLNRD violated its due
process obligations by refusing Prokop’s alleged request for
access to the evidence.
[19,20] There is no due process requirement that an NRD
provide notice of evidence to an adverse party prior to a hear-
ing. In Cain v. Custer Cty. Bd. of Equal.,46 we stated that,
while similar to a judicial proceeding, an adjudication hear-
ing before an agency does not guarantee an individual any
particular form of state procedure. In States v. Anderson,47 we
declined to recognize prehearing discovery as a requirement of
due process but acknowledged that administrative bodies have
the authority to provide discovery which must be exercised
judicially and not arbitrarily. And in Marshall v. Wimes,48 in
45
Compare § 46-743, with Neb. Rev. Stat. § 79-832 (Reissue 2014).
46
See, e.g., Cain, supra note 32.
47
States v. Anderson, 219 Neb. 545, 364 N.W.2d 38 (1985).
48
Marshall v. Wimes, 261 Neb. 846, 626 N.W.2d 229 (2001).
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addressing the refusal of an administrative body to issue a
subpoena for appearance at a hearing, we explained that due
process requires notice, identification of the accuser, factual
basis for the accusation, reasonable time and opportunity to
present evidence concerning the accusation, and a hearing
before an impartial board.
[21,22] We have held that due process involving deprivation
of a significant property interest requires notice and an oppor-
tunity to be heard that is appropriate to the nature of the case.49
Stated another way, due process depends on, in part, whether
the notice was sufficient to provide the party a reasonable
opportunity to confront and cross-examine adverse witnesses
and present evidence.50
Here, LLNRD’s notice was sufficient to provide Prokop a
reasonable opportunity to confront and cross-examine adverse
witnesses and present evidence. The notice was given 23 days
before the hearing, informed him of the time and location of
the hearing, provided potential penalties, informed him that
he would have the opportunity to address the charges and pre
sent evidence in his defense, and, as determined above, was
sufficient to notify him of the charges and factual allegations
supporting those charges, including that the 2015 and 2016
reports were deficient and that these deficiencies were part of
an intentional and continuing pattern.
The evidence LLNRD provided at the hearing included
the notice, proof of service and publication of the notice,
the reports specified in the notice, LLNRD rules establishing
LLNRD’s authority to require and enforce the information on
the reports, the complaint and order in Nance County District
Court case No. CI 13-01, and testimony concerning the defi-
ciencies of the reports and why the deficient material was
important. All of this evidence was either a source of author-
ity that was referenced in the notice, documents involving
49
See, Cain, supra note 32; Blanchard, supra note 40.
50
Id.
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the notice and its receipt, or factual confirmation of specific
allegations set forth in the notice. As such, the evidence pre-
sented was a natural extension of the notice and Prokop was
sufficiently informed to provide him a reasonable opportunity
to cross-examine LLNRD’s witnesses and present evidence at
the hearing.
(c) Notice of Use of Prior Violation
Prokop specifically claims his due process rights were vio-
lated by not receiving notice of LLNRD’s intended use of case
No. CI 13-01. By not receiving notice of LLNRD’s intent,
Prokop argues, he was denied the opportunity to gather evi-
dence, present witnesses, and prepare a defense concerning the
use of the prior proceedings. Further, Prokop claims case No.
CI 13-01 had nothing to do with the present allegations and
should not have been admitted and considered by the board.
[23] First, as discussed above, due process does not require
that LLNRD provide notice of its specific evidence to Prokop
prior to the hearing.51
LLNRD’s notice did inform Prokop of its allegation that
Prokop has “intentionally and repeatedly violated the annual
reporting requirements.” Case No. CI 13-01 was relevant to
LLNRD’s allegation because it was evidence of continued,
similar violations. Prokop emphasizes in his brief that case
No. CI 13-01 concerned illegal wells and alleges he would
have presented further evidence on the facts surrounding those
wells, but LLNRD used case No. CI 13-01 as evidence that
Prokop had a history of violating LLNRD’s reporting require-
ments. While case No. CI 13-01 does address the illegal wells,
it also, more relevantly, finds Prokop in violation of reporting
obligations and orders him to provide the required reports.
As such, LLNRD’s notice informing Prokop of its allegation
that he has “intentionally and repeatedly violated the annual
reporting requirements” appropriately informed him that his
51
See, e.g., Cain, supra note 32; Marshall, supra note 48; Anderson, supra
note 47.
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prior violations, including those violations under case No.
CI 13-01, would be at issue and that they would be relevant to
the Board’s consideration of a potential penalty.
4. Possibility of Competent
Judicial R eview
Prokop assigns the district court erred in finding LLNRD’s
action did not limit the possibility of competent judicial review.
Specifically, Prokop claims he was not provided adequate
notice of the claims against him and LLNRD’s intended evi-
dence, which deprived him of the opportunity to gather evi-
dence and arrange for witnesses to testify on his behalf.
Because we determined above that Prokop was provided
adequate notice of the claims against him, was not entitled to
notice of the specific evidence LLNRD intended to present,
and was given opportunity to present his own evidence and call
his own witnesses, Prokop’s assignment that he was deprived
of the possibility of competent judicial review due to lack of
notice is without merit.
5. Taking Without Just Compensation
Prokop contends LLNRD’s issuance of a cease and desist
order suspending his access to ground water, as modified by the
district court, amounts to a taking without just compensation.
[24-26] A takings analysis begins with an examination of
the nature of the owner’s property interest.52 Ground water, as
defined by § 46-706, is owned by the public, and the only right
held by an overlying landowner is in the use of the ground
water.53 As noted above, the right of an owner of overlying
land to use ground water is an appurtenance constituting prop-
erty protected by Neb. Const. art. I, § 21.54
[27-29] Through its police power, the State has the power to
determine public policy with regard to ground water and can
52
Hill v. State, 296 Neb. 10, 894 N.W.2d 208 (2017).
53
See In re Application U-2, 226 Neb. 594, 413 N.W.2d 290 (1987).
54
Sorensen, supra note 34.
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alter the common law governing the use of ground water.55 The
appropriate exercise of police power occurs where an owner
is denied the unrestricted use or enjoyment of his property, or
his property is taken from him, because his use or enjoyment
of such property is injurious to the public welfare.56 This is in
contrast to eminent domain, where property is taken from the
owner and applied to public use because the use or enjoyment
of such property is beneficial to the public.57 Appropriate use
of police power includes that the State place limitations on the
withdrawals of ground water in times of shortage.58
Here, LLNRD’s reporting requirements were implemented,
in part, to address the goals under GWMPA of water quality
and pollution control and address levels of nitrate nitrogen
and other contaminants in ground water. In order to do so,
LLNRD rules and regulations and GWMPA require various
data from operators, including actual crop yield, nitrogen
application, and water applied. This information is necessary
to create long-term solutions to prevent levels of ground water
contaminants from becoming too high and creating health
hazards.59 By not complying with the reporting requirements,
Prokop was preventing LLNRD from information necessary
to perform its duties under GWMPA. Thus, LLNRD limited
Prokop’s use, because his use or enjoyment of such property
was injurious to the public welfare and, in doing so, this was
an appropriate exercise of police power and did not amount to
a taking without just compensation.
6. Exhibits 4 and 5
Prokop assigns the district court erred in declining to receive
exhibits 4 and 5 to supplement LLNRD’s record. Prokop
55
See Bamford v. Upper Republican Nat. Resources Dist., 245 Neb. 299, 512
N.W.2d 642 (1994).
56
Strom v. City of Oakland, 255 Neb. 210, 583 N.W.2d 311 (1998).
57
Id.
58
See Bamford, supra note 55.
59
See § 46-709.
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claims these exhibits were admissible under “an exception to
the general prohibition of extra-record evidence” for evidence
of alleged procedural irregularities.60
However, exhibits 4 and 5 do not provide evidence relevant
to whether there were procedural irregularities denying Prokop
due process. Instead, Prokop purports that these exhibits dem-
onstrate what evidence he could have presented if those proce-
dural irregularities were not present. Evidence of what could
have been presented if not for the alleged procedural violations
is not evidence that would indicate whether or not such proce-
dural violations occurred. Therefore, the district court did not
err in declining to supplement LLNRD’s record and receive
exhibits 4 and 5.
In the alternative, Prokop claims the district court abused
its discretion in failing to remand the matter to the board for
further proceedings to allow Prokop the opportunity to present
the evidence from exhibits 4 and 5 in the interest of justice.
Prokop’s argument centers on the allegation that he was denied
due process and not provided sufficient notice of the claims
against him. Having determined that the notice was sufficient
to inform Prokop of the claims against him and that he was not
entitled to a notice of the evidence which LLNRD intended to
present, Prokop’s claim that the district court erred in failing
to remand the matter to allow him to supplement the record is
without merit.
7. Attorney Fees
Finally, Prokop assigns the district court erred in failing to
reverse the board’s order and failing to award attorney fees,
because LLNRD’s position was not substantially justified.
Under Neb. Rev. Stat. § 25-1803 (Reissue 2016), a court hav-
ing jurisdiction over a civil action brought by the State or an
action for judicial review brought against the State pursuant
to the APA shall award fees and other expenses to the pre-
vailing party unless the prevailing party is the State. Because
60
Brief for appellant at 33.
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we determined the district court did not err in affirming the
board’s order, Prokop was not the prevailing party and the
district court did not err in declining to award Prokop attor-
ney fees.
8. Modification of Duration of
Penalty LLNRD Imposed
On cross-appeal, LLNRD and the board assign the district
court erred in modifying the penalty from a 4-year suspension
of Prokop’s ground water rights to a 1-year suspension with the
possibility of 3 additional years if Prokop continues to violate
LLNRD’s reporting requirements. In support of this assign-
ment, LLRND asserts the district court should have given def-
erence to the board’s penalty. However, this assertion is at odds
with the district court’s standard of review.
[30] Any person aggrieved by an order of an NRD issued
pursuant to GWMPA may appeal the order, and that appeal
shall be in accordance with the APA.61 That appeal is con-
ducted by the district court without a jury de novo on the
record of the agency.62 In a de novo review on the record of
an administrative order, the district court is required to make
independent factual determinations based upon the record, and
the court reaches its own independent conclusions with respect
to the matters at issue.63
Here, the district court performed such a de novo review and
determined that the 4-year suspension was unreasonable under
the circumstances of the case and modified the penalty to a
1-year suspension with a possibility of 3 more years if contin-
ued noncompliance.
LLNRD and the board acknowledge the statutory standard
of review is de novo when a court is reviewing questions of
fact or law. However, LLNRD and the board argue that the
determination of a penalty is not a factual or legal issue but is,
61
See § 46-750.
62
Neb. Rev. Stat. § 84-917(5)(a) (Reissue 2014).
63
See Medicine Creek, supra note 9.
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instead, a policy matter. LLNRD and the board argue GWMPA
provides NRD’s deference to determine such penalties through
operation of § 46-746(1), which provides a violator “shall be
subject to the imposition of penalties imposed through the con-
trols adopted by the district, including, but not limited to, hav-
ing any allocation of water granted or irrigated acres certified
by the district reduced in whole or in part.”
We disagree with LLNRD and the board’s interpretation.
First, the language of § 46-746(1) does not limit the pos-
sibility of judicial review of the determination of penalties.
Moreover, GWMPA does not limit what parts of an order are
to be reviewed under the APA, stating “[a]ny person aggrieved
by any order . . . may appeal,”64 and the APA states “the review
shall be conducted . . . de novo,” without limiting the review
of the order.65 As stated above, a district court in reviewing an
administrative order is required to make independent factual
determinations and reach independent conclusions with respect
to the matters at issue.66 Clearly, the imposition of Prokop’s
penalty was a matter at issue in the board’s proceedings, as
evidenced by the amount of thought and consideration LLNRD
alleges the board undertook in determining the severity of the
issued penalty.
Because the district court utilized the appropriate de novo
review in considering LLNRD’s imposition of the penalty and
because the modified penalty conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious, nor
unreasonable, the district court did not err in modifying the
duration of Prokop’s penalty.
V. CONCLUSION
For the reasons stated above, the district court did not err in
determining that LLNRD had authority to require actual crop
yield data from Prokop, that LLNRD had authority to impose
64
§ 46-750.
65
§ 84-917(5)(a).
66
See Medicine Creek, supra note 9.
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a suspension of ground water access for noncompliance with
reporting requirements, that Prokop’s right to due process was
not violated in the proceedings before LLNRD’s board, that
Prokop was not denied the possibility of competent judicial
review, that the suspension of Prokop’s ground water access
was not a taking without just compensation, that exhibits 4 and
5 should not have been admitted as “extra-record evidence,”
and that Prokop was not entitled to attorney fees. The district
court also did not err in its modification of the duration of
Prokop’s penalty.
A ffirmed.
Miller-Lerman and Freudenberg, JJ., not participating.
Papik, J., concurring.
This court concludes that LLNRD had the authority to
require the submission of actual crop yield data in at least
partial reliance on the principle that courts are to afford def-
erence to an agency’s interpretation of its own regulations
unless plainly erroneous or inconsistent. We have cited and
applied this principle on many occasions over the last several
decades. See, e.g., Melanie M. v. Winterer, 290 Neb. 764,
862 N.W.2d 76 (2015); Kosmicki v. State, 264 Neb. 887, 652
N.W.2d 883 (2002); Wagoner v. Central Platte Nat. Resources
Dist., 247 Neb. 233, 526 N.W.2d 422 (1995); Department
of Banking, Receiver v. Wilken, 217 Neb. 796, 352 N.W.2d
145 (1984).
But while we have precedent for the principle that courts
defer to an agency’s interpretation of its own regulations, I am
not sure that precedent rests on stable ground. The principle
appears to have entered our jurisprudence in Wilken, supra. In
that case, we cited a case from the Eighth Circuit holding that
an agency is entitled to deference when interpreting its own
regulations. Id., citing Columbus Community Hospital, Inc. v.
Califano, 614 F.2d 181 (8th Cir. 1980). That Eighth Circuit
case, in turn, cited Bowles v. Seminole Rock Co., 325 U.S. 410,
414, 65 S. Ct. 1215, 89 L. Ed. 1700 (1945), a U.S. Supreme
Court case which stated that the administrative interpretation
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of a regulation has “controlling weight unless it is plainly
erroneous or inconsistent with the regulation.” The Court in
Seminole Rock Co. did not offer an explanation as to why the
agency would be entitled to deference in those circumstances.
See Decker v. Northwest Environmental Defense Center, 568
U.S. 597, 617, 133 S. Ct. 1326, 185 L. Ed. 2d 447 (2013)
(Scalia, J., concurring in part and in part dissenting) (observing
that Seminole Rock Co. “offered no justification whatever”).
Even so, the U.S. Supreme Court reaffirmed this principle
decades later in Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905,
137 L. Ed. 2d 79 (1997).
In recent years, however, the principle recognized in
Seminole Rock Co., supra, and reaffirmed in Auer, supra, has
been called into question. It has been criticized for lacking a
coherent rationale, see Perez v. Mortgage Bankers Ass’n, ___
U.S. ___, 135 S. Ct. 1199, 191 L. Ed. 2d 186 (Thomas, J.,
concurring in judgment); for incentivizing the promulgation
of vague regulations, see Decker, supra (Scalia, J., concurring
in part and in part dissenting), and for violating the separa-
tion of powers, Perez, supra (Thomas, J., concurring in judg-
ment). See, also, John F. Manning, Constitutional Structure
and Judicial Deference to Agency Interpretations of Agency
Rules, 96 Colum. L. Rev. 612 (1996).
The criticism leveled at Seminole Rock Co., supra, and Auer,
supra, by multiple justices of the U.S. Supreme Court (includ-
ing the author of Auer) had led some to speculate that “Auer
may not be long for this world.” Bible v. United Student Aid
Funds, Inc., 807 F.3d 839, 841 (7th Cir. 2015) (Easterbrook,
Circuit Judge, concurring in denial of rehearing en banc). See,
also, Turtle Island Restoration Network v. US DOC, 878 F.3d
725, 742 n.1 (9th Cir. 2017) (Callahan, Circuit Judge, dissent-
ing in part) (“Auer’s continued vitality is a matter of consider-
able debate”). Such speculation may prove to be prescient, as
the U.S. Supreme Court very recently granted certiorari on
the question of whether Auer and Seminole Rock Co. should
be overturned. See Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir.
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2017), cert. granted in part sub nom. Kisor v. Wilkie, No.
18‑15, 2018 WL 6439837 (U.S. Dec. 10, 2018).
We thus appear to have adopted the principle that courts are
to defer to agencies’ interpretations of their own regulations
by decades ago uncritically adopting a dubious proposition of
federal law that itself may not stand the test of time. While
that seems reason enough for reconsideration of the principle
in the appropriate case, I believe there is an additional reason
to do so: The principle also seems to be in tension, if not at
outright odds, with Nebraska’s version of the Administrative
Procedure Act (APA).
In this case, and many others like it, Nebraska courts are
called on to review the decisions of administrative agencies
under the authority granted by the APA. The APA, however,
provides that the review is to be conducted by the court “with-
out a jury de novo on the record of the agency.” Neb. Rev.
Stat. § 84‑917(5)(a) (Reissue 2014). This standard has been
interpreted to require district courts to make independent deter-
minations of both factual and legal issues. See Medicine Creek
v. Middle Republican NRD, 296 Neb. 1, 892 N.W.2d 74 (2017).
But if the APA directs district courts to independently decide
factual and legal questions without deferring to the agency, on
what basis can courts defer to the agency’s interpretation of its
own regulations? In my view, the lack of an obvious answer to
that question is yet another reason why we should reconsider
whether deference is owed to agencies’ interpretations of their
own regulations.
With all that said, the parties have not asked us to reconsider
our precedent in this case. Without the aid of argument from
the parties, I do not believe such reconsideration is appropriate
here. Therefore, I concur in this court’s decision in all respects.
For the reasons expressed above, however, I would be open to
reconsidering in a future case whether courts owe deference to
agencies’ interpretations of their own regulations.
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i i i i i i
MEMORANDUM OPINION
No. 04-07-00862-CV
TEXAS MUTUAL INSURANCE CO.,
Appellant
v.
Charles E. DURST, Jr.,
Appellee
From the 2nd 25th Judicial District Court, Guadalupe County, Texas
Trial Court No. 06-0704-CV
Honorable W. C. Kirkendall, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Karen Angelini, Justice
Rebecca Simmons, Justice
Steven C. Hilbig, Justice
Delivered and Filed: February 25, 2009
AFFIRMED
This is an appeal from a judgment in a worker’s compensation case. At trial, Texas Mutual
Insurance Co., the worker’s compensation insurance carrier, disputed the extent of Charles E. Durst’s
compensable injury. After the presentation of all the evidence, the jury returned a verdict in Durst’s
favor. The trial court then signed a judgment on the verdict. After judgment was entered, Durst’s
attorneys sought an award of attorneys’ fees against Texas Mutual. The trial court then signed an
order awarding Durst’s attorneys approximately $160,000 in attorneys’ fees. On appeal, Texas
04-07-00862-CV
Mutual contends that the trial court erred in admitting Texas Mutual’s letter preauthorizing surgery
for Durst and in awarding Durst over $160,000 in attorneys’ fees. We affirm the trial court’s
judgment.
DISCUSSION
In November 2004, Durst, an employee of The Bandit Golf Club, injured his back at work.
Texas Mutual, the worker’s compensation insurance carrier, did not dispute that Durst aggravated
his preexisting back condition while on the job, but rather, disputed the extent of the aggravation of
his injury. Specifically, Texas Mutual agreed that Durst’s injury at the L4-L5 spine level was
compensable, but disagreed that the compensable injury extended to the L3-L4 and L5-S1 spine
levels. In March 2005, Texas Mutual issued a letter preauthorizing the surgery to all three spinal
levels as medically necessary, but continued to dispute the compensability of the treatment as to all
but one spinal level. The Texas Worker’s Compensation Commission ruled in favor of Durst, finding
all three levels of the spine were aggravated by the November 2004 work-related injury. Texas
Mutual appealed the Commission’s finding to the district court, which, following a jury trial, signed
a judgment in favor of Durst.
At trial, while cross-examining Dr. William Blair, one of Texas Mutual’s expert witnesses,
Durst sought to admit Texas Mutual’s preauthorization letter. The following exchange occurred:
Q: You also disagree – in fact, you dispute whether this surgery was
appropriate and necessary.
Attorney for Texas Mutual: Objection, Judge. Beyond the
scope of the direct examination and not at issue in this case.
Court: Overruled.
A: Did I disagree with the necessity of the surgery? No.
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04-07-00862-CV
Q: Did you disagree – nice distinction, I think, what you’re trying to
make. Did you disagree that the 360-fusion ordered by the doctor,
performed by the doctor, was necessary or not?
A: For this injury, no. It’s a matter of difference in opinion.
Q: In fact, that opinion was not shared even by internal folks at Texas
Mutual about whether it was necessary or not, was it? They disagree
with you.
A: I don’t understand you – I have no idea what they – they decided.
Attorney for Durst: Your Honor, I’m required to approach
the Bench.
Court: Yes, approach the Bench.
(At the Bench, on the Record)
Court: This is for –
Attorney for Texas Mutual: You’ve already ruled on this,
Judge.
Attorney for Durst: He ruled to approach the Bench.
Court: I ruled we approach the Bench. And you’re tendering
Defendant’s Exhibit Number 4?
Attorney for Durst: It’s an inconsistent –
Court: Admission against interest.
Attorney for Durst: Yes, by Texas –
Court: Do you have an objection?
Attorney for Texas Mutual: Yes, sir, we have objection. He
already testified he doesn’t know what the people at Texas
Mutual said. It would be purely speculation as to this witness,
what Texas Mutual’s ideas and motivations were. These are
not contained in the documents that were provided to him,
Judge. He was given this in medical records.
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04-07-00862-CV
(Open court, on the Record)
Court: All right. I’m going to overrule the objection and
admit Defendant’s Exhibit 4.
In its first two issues on appeal, Texas Mutual contends the trial court committed error in
admitting the preauthorization letter because it was not relevant to any disputed fact. The letter was
not relevant because, according to Texas Mutual, it only demonstrated that Texas Mutual
acknowledged the medical necessity of Durst’s surgery, but not the extent to which Durst’s back
condition was caused by his work-related accident. Texas Mutual further argues the erroneous
admission of the letter likely led to an improper verdict because Durst’s attorney argued to the jury
that the letter proved Texas Mutual knew Durst’s disputed injuries were related to his on-the-job
injury. Texas Mutual emphasizes that Durst’s attorney focused on the preauthorization letter before
the jury as the “[m]ost single important document in this entire case.”
In response to Texas Mutual’s argument, Durst contends Texas Mutual waived its relevancy
argument. Specifically, Durst points to Texas Mutual’s relevancy objection that counsel’s question
was “not at issue in this case” and emphasizes that this objection was to the question itself, not to the
admission of the preauthorization letter. Thus, the only relevancy objection that was preserved for
appeal does not apply to the admission of the letter. And, Durst emphasizes that although Texas
Mutual objected to the admission of the preauthorization letter, the objection was not based on
relevancy.
In order to present a complaint on appeal, the record must show a timely and specific objection
that was sufficient to make the trial court aware of the complaint unless it was apparent from the
context. TEX . R. APP . P. 33.1(a)(1)(A). Additionally, an objection made during trial must mirror the
argument on appeal, or the issue will be waived. Thomas v. State, 226 S.W.3d 697, 704-05
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04-07-00862-CV
(Tex. App.—Corpus Christi 2007, pet. dism’d) (issue waived where trial objection was to relevancy
but issue on appeal was to hearsay); Trailways, Inc. v. Clark, 794 S.W.2d 479, 488
(Tex. App.—Corpus Christi 1990, writ denied) (trial objection not based on relevance or prejudicial
effect did not preserve error on these grounds). Here, Texas Mutual did not object to the admission
of the preauthorization letter on relevancy grounds, the only ground it raises on appeal.
Nevertheless, Texas Mutual argues that it did not waive its relevancy objection because,
although counsel did not specifically make a relevancy objection to the admission of the document,
the trial judge clearly understood, in context, that Texas Mutual was making a relevancy objection
because it had previously objected to questions about the document on relevancy grounds. It is
important to note, however, that Texas Mutual did, in fact, make specific objections to the admission
of the document on the grounds of speculation and lack of personal knowledge. Under these
circumstances, we cannot say it was clearly apparent to the trial judge that Texas Mutual was, in fact,
making a relevancy objection to the admission of the document. We, therefore, overrule Texas
Mutual’s first two issues.
We next turn to Texas Mutual’s complaint concerning the trial court’s award of attorneys’
fees. In its third and fourth issues on appeal, Texas Mutual argues that the trial court’s award of
attorneys’ fees was improper and unsupported by the evidence. Although recognizing that Durst was
entitled to recover reasonable and necessary attorneys’ fees pursuant to section 408.221(c) of the
Texas Labor Code, Texas Mutual nevertheless contends the trial court erred in it award to Durst for
numerous reasons: (1) Durst waived entitlement to attorneys’ fees because he failed to comply with
discovery and disclosure obligations pertaining to expert witnesses on attorneys’ fees; (2) the
evidence is insufficient to support the high hourly rates and total fees submitted by Durst; (3) the
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04-07-00862-CV
affidavit evidence Durst submitted is conclusory; (4) Durst failed to segregate time spent on the
worker’s compensation case and the bad faith case pending between the same parties; and (5) Texas
Mutual’s expert testimony is the only competent attorneys’ fee evidence presented.
Durst responds that Texas Mutual waived error with respect to the award of attorneys’ fees.
Further, Durst counters that it was not required to comply with discovery and disclosure obligations
because of the unique nature of the handling of attorneys’ fees under the Labor Code’s attorneys’ fee
provision. In other words, because the attorneys’ fees issue was not heard by the jury at trial, but
rather by the court at a post-trial hearing held months later, the usual pre-trial discovery and disclosure
rules were not applicable. And, according to Durst, because the trial court has the inherent authority
to control its docket, there was no abuse of discretion in how the trial court handled the attorneys’ fees
issue. As to Texas Mutual’s other complaints, Durst contends the trial court acted within its discretion
in its award of attorneys’ fees.
With regard to the waiver issue, we disagree with Durst that he was not required to comply
with pre-trial discovery and disclosure rules. See Tex. Mun. League Intergovernmental Risk Pool v.
Burns, 209 S.W.3d 806, 817-18 (Tex. App.—Fort Worth 2006, no pet.) (applying pre-trial discovery
and disclosure rules to attorneys’ fee award in worker’s compensation suit); Hatch v. Tex. Prop. &
Cas. Ins. Guar. Ass’n for Home Indem. Co., No. 01-06-00631-CV, 2007 WL 2011041, at *4-*6
(Tex. App.—Houston [1st Dist.] 2007, no pet.) (same). We agree, however, with Durst that Texas
Mutual waived error by failing to obtain a ruling on this issue.
A complaint is preserved for review on appeal only if the record shows the complaint was
made known to the trial court and the trial court ruled on the complaint. TEX . R. APP . P. 33.1(a). The
trial court’s ruling may be either express or implicit. Id. “A ruling is implicit if it is unexpressed but
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04-07-00862-CV
capable of being understood from something else.” Well Solutions v. Stafford, 32 S.W.3d 313, 316
(Tex. App.—San Antonio 2000, no pet.).
Here, there is no dispute the trial court did not explicitly rule on Texas Mutual’s motion to
strike for failure of Durst to comply with pre-trial discovery and disclosure rules. Thus, we must look
to the record in considering whether the trial court ruled implicitly. A review of the record shows that,
after the jury trial concluded on September 13, 2007, Durst filed a motion for approval of statutory
attorneys’ fees on October 18, 2007. In response, Texas Mutual filed a motion to strike Durst’s
motion and alternatively, a motion for continuance. In its motion to strike, Texas Mutual argued that
Durst’s motion for attorneys’ fees should be stricken because the evidence and affidavits offered post-
trial were not produced or disclosed during pre-trial discovery. Texas Mutual’s motion recites that
a hearing on Durst’s motion was set for October 24, 2007. In its alternative motion for continuance,
Texas Mutual contended that it needed additional time to respond to Durst’s motion. The record
reflects no ruling on Texas Mutual’s motion to strike or motion for continuance; however, the trial
court did conduct a hearing on the issue of attorneys’ fees, not on the previously-scheduled date of
October 24, 2007, but rather on December 14, 2007. Thus, it is apparent the trial court, while taking
no action on Texas Mutual’s motion to strike, did implicitly grant Texas Mutual’s alternative motion
for continuance.
Before the hearing on attorneys’ fees was held, on November 7, 2007, Texas Mutual filed its
opposition to Durst’s motion for approval of statutory attorneys’ fees. In that motion, Texas Mutual
argued that, for a variety of reasons unrelated to Durst’s failure to comply with pre-trial discovery and
disclosure rules, Durst’s request for attorneys’ fees should not be approved. The trial court then sent
both parties a letter, dated November 16, 2007, in which the judge stated he had “reviewed the
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04-07-00862-CV
motions for attorneys fees, the various responses thereto, and the authorities cited” and made several
enumerated findings. The findings make no reference whatsoever to Texas Mutual’s motion to strike
Durst’s motion for attorneys’ fees based on Durst’s failure to comply with pre-trial discovery and
disclosure rules. Instead, the letter denied Texas Mutual’s request for a jury trial on the attorneys’ fees
issue; overruled Texas Mutual’s objection that Durst waived his claim for attorneys’ fees by not
requesting submission to the jury; approved the hourly fees requested by both Texas Mutual’s and
Durst’s attorneys as reasonable, customary, and necessary; and set a hearing for determination of
appellate attorneys’ fees and the issue of “allegations of unnecessary, duplicative or unsegregated
fees.” That hearing was held on December 14, 2007.
At the hearing on attorneys’ fees, the issue of whether Durst complied with pre-trial discovery
and disclosure rules was never raised or addressed. The only issues raised and ruled upon concerned
the following: whether Durst’s attorneys’ hourly rates were reasonable and whether all of the work
done was necessary; the failure of Durst’s attorneys to segregate time spent on the worker’s
compensation case and time spent on the bad faith case; and the duplication of Durst’s attorneys’
work. After considering counsels’ affidavits and arguments, the trial court awarded Durst $160,454
in attorneys’ fees. It is thus apparent from the record that Texas Mutual never obtained a ruling on
its motion to strike Durst’s motion for attorneys’ fees based on Durst’s failure to comply with pre-trial
discovery and disclosure rules. Nothing in the record shows an implicit ruling by the trial court.
Therefore, Texas Mutual waived this issue on appeal.
With regard to Texas Mutual’s other complaints pertaining to the trial court’s award of
attorneys’ fees to Durst, we note that we are to review the trial court’s findings for an abuse of
discretion. See Dean Foods Co. v. Anderson, 178 S.W.3d 449, 455 (Tex. App.—Amarillo 2005, pet.
-8-
04-07-00862-CV
denied) (holding the manner and amount of attorneys’ fees awarded is within the trial court’s
discretion). And, we further note that the Labor Code sets forth the factors to be considered by the
court in approving attorneys’ fees:
(1) the time and labor required;
(2) the novelty and difficulty of the questions involved;
(3) the skill required to perform the legal services properly;
(4) the fee customarily charged in the locality for similar legal services;
(5) the amount involved in the controversy;
(6) the benefits to the claimant that the attorney is responsible for securing; and
(7) the experience and ability of the attorney performing the services.
TEX . LAB. CODE ANN . § 408.221(d) (2006).
Durst submitted evidence on the attorneys’ fees issue by attaching the affidavit of Michael P.
Doyle to his motion for approval of statutory attorneys’ fees. Doyle, one of Durst’s attorneys, set forth
his qualifications and experience as an attorney who has represented workers’ compensation
claimants on a regular basis. Based on his familiarity with the standards of practice and for calculating
reasonable and necessary attorneys’ fees in Texas, he gave his opinion that the hourly rates charges
by Durst’s attorneys in this case were reasonable, necessary, and consistent with rates charged by
comparable attorneys.1 In his affidavit, Doyle explained in detail the basis for his opinions, including
his experience in similar cases, his own research, and a salary and billing survey. Doyle also stated
1
… The hours and fees requested by Durst’s attorneys were the following:
Michael P. Doyle – 92.50 hours at $395/hr
Jeffrey Raizner – 1.50 hours at $385/hr
Henry Drewinko – 185.75 hours at $295/hr
David Q. Haag II – 74 hours at $235/hr
Dax F. Garza – 203.45 hours at $295/hr
-9-
04-07-00862-CV
that his opinions were based on the above-enumerated factors for evaluating the reasonableness of
attorneys’ fees set forth in Section 408.221(d) of the Texas Labor Code. And, Doyle affirmed that he
took into account the contingent nature of Durst’s representation.
In its response to Durst’s motion for approval of statutory attorneys’ fees, Texas Mutual
contended Durst should not recover fees for time spent on motions for which he did not prevail, time
spent trying to build Durst’s bad faith case against Texas Mutual, duplication of attorney time,
“learning curve” time, and time spent on irrelevant issues. Texas Mutual also objected to the hourly
rates as neither reasonable nor customary. Texas Mutual’s attorney, R. Scott Placek, filed an affidavit
setting forth his knowledge concerning these objections and further suggested what, in his opinion,
reasonable attorney hourly rates for Durst’s attorneys should be.2 Durst, however, filed a response
supported by an affidavit that included detailed descriptions of motions he filed, but on which he did
not prevail, and explanations of his reasons for filing them. He further explained that all depositions,
with the exception of one, led to the admission of trial testimony. And, Durst stated that some
duplication of attorney time was necessary because of a dispute between the parties at depositions
over who would be allowed to question witnesses. Durst also countered that any “learning curve” time
Texas Mutual alleged was work that was reasonable and necessary to present a proper defense for
Durst. Additionally, insofar as the failure to segregate time spent developing the worker’s
compensation case and the bad faith case, Durst argued to the trial court that many questions asked
2
… Texas M utual’s attorney opined that reasonable and necessary attorneys’ fees for Durst’s attorneys were the
following:
Michael P. Doyle – 68.05 hours at $250/hr
Jeffrey Raizner – .25 hours at $250/hr
Henry Drewinko – 134.4 hours at $210/hr
David Q. Haag – 62.0 hours at $175/hr
Dax F. Garza – 146.35 hours at $195/hr
-10-
04-07-00862-CV
in depositions were appropriate to both cases. Thus, there was no need to segregate because a part of
Durst’s trial strategy in the worker’s compensation case was to show the impact of Texas Mutual’s
refusal to pay.
After considering the evidence submitted by the parties and the parties’ arguments, the trial
judge ordered that Durst’s attorneys be awarded the following:
Michael P. Doyle – 83.50 hours at $395/hr
Jeffrey Raizner – 1.50 hours at $385/hr
Henry Drewinko – 180.75 hours at $295/hr
David Q. Haag – 74 hours at $235/hr
Dax F. Garza - 190.45 hours at $295/hr
TOTAL: $160,454.00
Thus, the trial judge reduced the amount of hours Durst requested by 27 hours.
We cannot say the trial judge acted in an arbitrary or unreasonable manner in awarding Durst
attorneys’ fees. The trial judge was presented with conflicting evidence and, as the fact-finder, was
within his discretion in awarding the attorneys’ fees in the manner and amount in which he did. See
Dean Foods, 178 S.W.3d at 455. Thus, we overrule Texas Mutual’s third and fourth issues on appeal.
CONCLUSION
We affirm the trial court’s judgment.
Karen Angelini, Justice
-11-
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IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
6804 QUINCY LLC, : No. 88 EM 2019
:
Respondent :
:
:
v. :
:
:
JUDITH LEVIN, :
:
Petitioner :
ORDER
PER CURIAM
AND NOW, this 9th day of August, 2019, the temporary stay entered on July 31,
2019 is hereby LIFTED. The Emergency Application for Temporary Stay and Review is
DENIED.
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Litigating Authority of the
Regional Fishery Management Councils
T h e leg islativ e h isto ry and g en eral s ta tu to ry fra m e w o rk o f th e F ish e ry C o n serv atio n and
M a n ag em en t A c t o f 1976 in d icate th a t C o n g re ss d id n ot in ten d the R egional F ish ery
M an ag em en t C o u n c ils to h av e litig atin g a u th o rity in d ep en d en t o f th e D e p a rtm e n t o f
Ju stice, so as to en ab le them to c h a lle n g e in c o u rt a d ecision by th e S e c re ta ry o f
C o m m e rc e taken u n d er the F C M A and relatin g to the establishm ent o f th e C o u n c ils
and th e ir functions.
T h e C o u n c ils h a v e n e ith e r express s ta tu to ry a u th o rity n o r th at freed o m from ex ecu tiv e
c o n tro l th at w o u ld g iv e rise to som e in feren c e su p p o rtiv e o f th e ir h av in g in d ep en d en t
litig atin g a u th o rity .
T h e g en eral ru le against in te r-a g e n c y and in tra -ag en c y law suits arises n ot o n ly from a
d esire fo r ce n tra liz e d c o n tro l o f litigation, but also from the co n stitu tio n al p rin cip le th at
d isp u tes b etw een en tities su b ject to th e c o n tro l o f th e P re sid en t sh o u ld be reso lv ed
w ith in th e e x e c u tiv e b ran ch .
September 17, 1980
' M EM ORANDUM OPIN IO N FOR T H E G E N ER A L COUNSEL,
N A TIO N A L O CEAN IC AND
ATM OSPHERIC AD M IN ISTRA TIO N
You have asked this Office whether Regional Fishery Management
Councils (Councils), established by the Fishery Conservation and Man
agement Act of 1976 (FCMA), 16 U.S.C. §§ 1801-82, may, on their
own behalf, challenge in court a decision by the Secretary of Com
merce (the Secretary) taken under the FCMA and relating to the
establishment of the Councils and their functions.1 We have concluded
that the Councils do not have independent litigating authority, and
cannot, therefore, challenge the Secretary’s actions in court.
The FCMA “adopts a somewhat convoluted scheme to achieve its
purposes of conservation and management of fishery resources.” Wash
ington Trollers Ass'n v. Kreps, 466 F. Supp. 309, 311 (W.D. Wash. 1979).
This is at least in part the result of Congress’ desire to effect a compro
mise between the need for federal control of the nation’s marine re
sources and the states’ desire for authority over “their” fish. See 122
Cong. Rec. 115 (1976); H.R. Rep. No. 948, 94th Cong., 2d Sess. 50
(1976); H.R. Rep. No. 445, 94th Cong., 1st Sess. 61-62 (1975);
1 In your letter you raised tw o issues. T h e first, concerning boundaries betw een adjoining Councils,
w as addressed in o u r m em orandum to you o f D ecem ber 14, 1979 [3 Op. O .L .C . 464 (1979)].
778
50 C.F.R. §601.1 (1979). As originally drafted, this legislation provided
that the Secretary and the Councils were to be coordinate authorities:
The regional Councils are, in concept, intended to be
similar to a legislative branch of government. . . . The
Secretary of Commerce is given authority under the bill
to act as the “executive,” with ultimate authority to make
decisions about management regulations for the entire
nation. . . . Finally, section 204 establishes an appellate
body, theoretically comparable to the judicial branch, the
Fishery Management Review Board. . . . The concept of
an administrative review board of this nature is not new
(i.e., the National Labor Relations Board) and will hope
fully provide an independent review process with the ease
of access and speed of decision that will give confidence
to the decisionmaking process.
S. Rep. No. 416, 94th Cong., 1st Sess. 29 (1975). The Board “would
have [had] exclusive and original jurisdiction to hear appeals from
actions of the Secretary relating to fishery management. The purpose of
the Board [was] to provide an independent review procedure for the
settlement of disputes arising from the administration of the A ct.” Id. at
38-39.
Two groups could appeal to it:
(1) Any person who is adversely affected or aggrieved by,
or who suffers legal wrong through [a final rule, regula
tion or decision of the Secretary, and,] . . .
(2) Any Council whose recommended management regu
lations were determined by the Secretary to be non-
consistent with the national standards . . . .
Id. at 58 (proposed § 204(c)(1), (2)).
This provision was included because the Senate committee believed
that:
It is inevitable that disputes will arise with respect to
fishery management decisions. To meet the need for dis
pute settlement, the bill establishes a Fishery Management
Review Board. The Board, an independent quasi-judicial
administrative body, would review disputes between the
Secretary and the Regional Councils, as well as other
disputes relating to fishery management decisions.
Id. at 5. Appeals from the Board to the Court of Appeals could only be
brought by a person “who is adversely affected or aggrieved by, or
who suffers legal wrong through, a decision of the Board . . . ,” not
by a Council. Id. at 59 (proposed § 204(g)).
779
The Board, however, did not become a part of the final version of
FCMA. The House and Senate, having passed different versions of
FCMA, deleted it in conference, stating:
The implementation process provisions follow comparable
provisions in the House bill and the Senate amendment [S.
961], except that . . . (2) the provisions in the Senate
amendment establishing a 5-member, President-appointed
“Fishery Management Review Board” to determine ap
peals from regulations promulgated by the Secretary is
not included in the conference substitute in favor of judi
cial review.
H.R. Rep. No. 948, 94th Cong., 2d Sess. 55 (1976). Judicial review
under FCMA is in accordance with the Administrative Procedure Act
(APA). 16 U.S.C. § 1855(d). Review under the APA is available to “[a]
person suffering legal wrong because of agency action, or adversely
affected or aggrieved by agency action. . . . ” 5 U.S.C. § 702. The
legislative history, therefore, indicates that Congress decided not to
permit the Councils to challenge the Secretary’s decision administra
tively.
Under the FCMA, the Councils’ staff and administrative expenses are
funded by Congress, and the disbursement of funds is controlled by the
Secretary. 16 U.S.C. § 1852(0(7). The Secretary appoints a majority of
the voting members to their three-year terms. 16 U.S.C. § 1852(b)(3).
He provides the guidelines for the fishery management plans, 50 C.F.R.
§602.1 et seq., and has final responsibility for their development, 16
U.S.C. §§ 1854, 1855, and enforcement, 16 U.S.C. §§ 1856(b), 1858,
1861, and for promulgation of regulations. The Councils, on the other
hand, have a purely advisory function under the statute. 16 U.S.C.
§ 1852(h). The Secretary can, if he wishes, develop a plan or implement
a set of regulations of which a Council disapproves. 16 U.S.C.
§§ 1854(c)(1)(B), (c)(2), 1855(c).
Given this framework, we believe that the Councils lack independent
litigating authority. The conduct of litigation involving the United
States or one of its agencies 2 is broadly reserved to the Department of
2 A gencies include "an y d epartm ent, independent establishm ent, commission, adm inistration, a u th o r
ity, board o r bureau o f the U nited States. . . 28 U.S.C. §451. All o f the opinions discussing the
C ouncils' status under various statutes appear to place them in at least one o f these categories. See
M em orandum O pinion for the G eneral C ounsel, U.S. D epartm ent o f Com m erce, N ational O ceanic and
A tm ospheric A dm inistration (N O A A ) from Leon Ulman, D eputy Assistant A ttorney G eneral, O ffice
o f Legal Counsel, O cto b er 14, 1977 [I Op. O .L .C . 239] (independent establishm ent under the Federal
T ort Claims A ct); m em orandum for the D eputy G eneral Counsel, D epartm ent o f C om m erce from the
Assistant A tto rn ey G eneral, C ivil Division, Ju ly 12, 1977 (agencies under Federal T o rt Claims Act);
m em orandum for the D eputy G eneral Counsel, N O A A , from a staff attorney, N ovem ber 30, 1976
(agency under the A dm inistrative Procedure Act); m em orandum for the G eneral Counsel, D epartm ent
o f C om m erce from the G eneral C ounsel, N O A A (same); m em orandum for the A cting G eneral
Counsel, D epartm ent o f C om m erce from the G eneral Counsel, O ffice o f M anagem ent and Budget,
M arch 22, 1977 (statutory advisory com m ittee); m em orandum for the G eneral Counsel, N O A A from
the Assistant G eneral Counsel, G eneral Services A dm inistration, Septem ber 30, 1977 (independent
780
Justice. 28 U.S.C. §516. Without express authorization, an agency or
department risks having the court dismiss its suit. Interstate Commerce
Com m ’n v. Southern Railway Co., 43 F.2d 534, 536-38 (5th Cir. 1976);
Federal Trade Commission v. Guignon, 390 F.2d 323, 324 (8th Cir.
1968); Securities & Exchange Commission v. Robert Collier & Co., 76
F.2d 939, 940 (2d Cir. 1935); Sutherland v. International Insurance Co.,
43 F.2d 969, 970-71 (2d Cir.) (L. Hand, J.), cert, denied, 282 U.S. 890
(1930).3 Under the FCMA itself, for example, the Secretary must refer
civil penalty and forfeiture proceedings to the Attorney General for
enforcement. 16 U.S.C. §§ 1858(c), 1860(b)(c). In enacting the FCMA,
Congress considered—and rejected—a statutory scheme that would
have permitted the Councils to challenge before an administrative body
the Secretary’s final decision. Congress knows how to draft a statute
that would allow an agency to challenge a final order of another
agency.4 In the absence of any such express statutory authority, the
Councils may not litigate against anyone, including the Secretary.5 This
will certainly not prevent states or individual council members from
challenging the Secretary so long as they have standing to do so. See,
State o f Maine v. Kreps, 563 F.2d 1043, 1045 n.l (1st Cir. 1977). This
reading of the Councils’ authority also is consistent with the general
principle that statutes should be construed so as to avoid doubts regard
ing their constitutionality, see generally, Kent v. Dulles, 357 U.S. 116
(1958). As discussed below, construing the Councils to have such au
thority would raise a substantial constitutional question.
This general rule against inter- and intra-agency lawsuits arises not
only from a desire for centralized control of litigation but also from the
establishment); m em orandum for the G eneral Counsel, N O A A from the Solicitor o f Labor, O c to
ber 19, 1979 (w holly ow ned instrum entality o f the U nited States under the Social S ecurity A ct and
Federal Employees* C om pensation A ct); m em orandum for the D epartm ent o f C om m erce from the
Chief, W age, Excise and A dm inistrative Provisions Branch, Internal Revenue Service, N ovem ber 22,
1977 (w holly ow ned instrum entality under Federal Insurance C ontributions A ct). But cf. m em orandum
for the Assistant Secretary for A dm inistration, D epartm ent o f C om m erce from the A cting G eneral
C ounsel, United States Civil Service Commission, A ugust 3, 1976 (public m embers not federal
employees).
3 See The Gray Jacket. 72 U.S. (5 W all.) 370, 371 (1866); 5 U.S.C. §3106; Exec. O rd e r No. 12,146,
§ 1-4, reprinted in 28 U.S.C. § 509 A pp. at 1162 (Supp. Ill 1979); Exec. O rder No. 6,166, § 5 (1933),
reprinted in 5 U.S.C. §§ 124-32 A pp. at 159 (1964); P. Bator, P. M ishkin, D. S hapiro & H. W echsler,
H art & W echsJer’s T he Federal C ourts & the Federal System 1315-20 (2d ed. 1973 8t 1977 Supp ).
4 U nder the Federal Coal M ine Safety A ct o f 1952 (the A ct), for exam ple, C ongress set up a Coal
Mine Safety Board o f R eview (the Board). 30 U.S.C. § 475 (1964). T h e Board could o verrule decisions
made by the D irecto r o f the United States Bureau o f Mines. 30 U.S.C. § 477(a) (1964). T h e A ct
specifically provided, how ever, that the D irecto r could then challenge any final o rd e r o f the Board in
the C ourt o f A ppeals. 30 U.S.C. § 478(a) (1964) (“ upon the filing in such court o f a notice o f appeal by
the D irecto r . . . .” ) See Director, United States Bureau o f Mines v. Princess Elkhorn Coal Co., 226 F.2d
570 (6th Cir. 1955); Director. United States Bureau o f Mines v. Three Fork Coal Co.. 222 F.2d 425 (4th
Cir. 1955) (appeal dismissed as untimely). T h e Board was elim inated under the Federal C oal Mine
Health and Safety A ct o f 1969. S. Rep. No. 411, 91st Cong., 1st Sess. 38 (1969). Instead, C ongress
substituted “ traditional adm inistrative and judicial procedures.*’ Id. at 37-38. See 30 U.S.C. § 8l6 (aX l)
(Supp. I ll 1979). See also Klaus, The Taft-Hartley Experiment in Separation o f N L R B Functions. 11
Indus & Lab. Rel. Rev. 371 (1958).
6 See Lee v. Civil Aeronautics Board. 225 F.2d 950, 951-52 (D .C . Cir. 1955); D avis, Standing o f a
Public Official To Challenge Agency Decisions: A Unique Problem o f State Administrative Law. 16 A d. L.
Rev. 163, 167, 168 (1964).
781
constitutional structure of our government. Disputes between parts of
the executive branch, each of which is ultimately responsible to the
President, should be resolved within the executive branch. See Execu
tive Order No. 12,146, § 1-4, reprinted in 28 U.S.C. § 509 App. at 1162
(Supp. Ill 1979). Independence of an agency from the executive’s
supervisory control may overcome this presumption.6 The Councils,
however, have neither express statutory authority nor that freedom
from executive control that would give rise to some inference support
ive of their having independent litigating authority. However independ
ent the Councils may be in their day-to-day operations, ultimate author
ity over a majority of their membership,7 budgets,8 and their major
area of concern—the fishery management plans—remains with the Sec
retary or other federal agencies. The Councils perform the basic re
search, hold hearings, draft the plan for their area, and propose regula
tions. 16 U.S.C. §§ 1852(h), 1853(c). It is the Secretary, however, to
whom the drafts and proposals are submitted and it is the Secretary
who either approves the management plan or amends it to his satisfac
tion. 16 U.S.C. § 1854. See State o f Maine v. Kreps, 563 F.2d 1052,
1055-56 (1st Cir. 1977). It is also the Secretary who reviews the
regulations to insure their legality and who implements them. 16 U.S.C.
§ 1855(c). That the Department of Commerce has found it most effi
cient to allow the Councils maximum leeway, see 50 C.F.R §601.1
(1979), does not change an analysis based on the statutory framework.
The Councils are subordinate parts of the Department of Commerce.
Any attempt on their part to sue the Secretary would therefore raise a
substantial constitutional question. .
We believe that the Councils are a part of the Departm ent-of Com
merce and subject to its overall control. In the absence of specific
contrary legislation, they must be represented in any court proceeding
by the Secretary’s lawyer, the Attorney General. Since the Councils
cannot go into court without the Attorney General, the Councils have
6 See United States v. Nixon, 418 U.S. 683, 694-95 (1974); Federal Maritime Board v. Isbrandtsen, 356
U.S. 481 (1958); Secretary o f Agriculture v. United States, 347 U.S. 645 (1954); Chapman v. FPC,- 345
U.S. 153 (1953); IC C v. Jersey City, 322 U.S. 503 (1944); United States v. ICC, 221 F. Supp. 584
(D .D .C . 1963); Benson v. United States, 175 F. Supp. 265 (D .D .C . 1959); United States v. ICC, 142 F.
Supp. 741 (D .D .C . 1956).
7 T h e S ecretary appoints a m ajority o f th e voting m em bers from lists subm itted by each state's
govern o r. 16 U.S.C. § 1852(b)(1)(B). T h e nonvoting m em bers represent various federal agencies. 16
U .S.C. f 1852(c). W h eth er th e Secretary m ay freely rem ove th e voting m em bers w hom he appoints,
16 U .S.C. § 1852(bXlXC), need not be decided. It appears, how ever, that the C ouncils’ functions are
prim arily executive, not legislative o r judicial. Wiener v. United States, 357 U.S. 349, 351-53 (1958);
Lewis v. Carter, 436 F. Supp. 958, 961 (D .D .C . 1977).
* T h e Secretary pays for th e C ouncils’ necessary staff and adm inistration. 16 U .S.C. § 1852(0(7).
782
no authority to bring suit on their own behalf to challenge a decision
by the Secretary taken under FCMA and relating to the establishment
of the Councils or their functions.
L a r r y L . S im m s
Deputy Assistant Attorney General
Office o f Legal Counsel
783
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. PD-1470-11
RAIMOND KEVON GIPSON, Appellant
v.
THE STATE OF TEXAS
ON STATE’S PETITION FOR DISCRETIONARY REVIEW
FROM THE NINTH COURT OF APPEALS
JEFFERSON COUNTY
A LCALA, J., delivered the opinion of a unanimous Court.
OPINION
Does a plea of true to failure to pay “fees” as required under conditions of community
supervision waive or forfeit a claim that the defendant was unable to make those payments?
Arguing that the answer is “yes,” the State’s petition for discretionary review challenges the
court of appeals’s judgment in favor of appellant, Raimond Kevon Gipson. See Gipson v.
State, 347 S.W.3d 893, 897 (Tex. App.—Beaumont 2011). Appellant pled true to the failure-
to-pay allegation without raising any argument or evidence that he was unable to pay and,
Gipson - 2
on appeal, makes that argument for the first time. Without addressing whether his argument
was preserved, the court of appeals determined that there was no evidence that appellant had
willfully refused to make the community-supervision payments and held that the trial court
abused its discretion by revoking his community supervision. The State argues, however, that
a court of appeals may not reverse on the merits of a claim without first determining that it
has been preserved for appeal. We agree. Because the court of appeals found the evidence
insufficient to support revocation without addressing the State’s procedural argument, we
remand the case to that court.
I. Background
A. Revocation Hearing
The trial court revoked appellant’s community supervision on the basis of appellant’s
plea of true to the failure-to-pay allegation alone. The State’s motion to revoke proceeded
on the sole allegation that appellant had “failed to pay court assessed fees as directed by the
Court,” to which he pled true. Those “fees” included a court-ordered fine; court costs; and
fees for supervision, pre-sentence investigation, and Crime Stoppers. He signed a stipulation
of evidence acknowledging that he had violated the terms and conditions of his community
supervision by failing to make these payments. Neither the motion to revoke nor the
stipulation of evidence mentioned appellant’s financial ability to pay the amounts due.
Similarly, during the hearing on the motion to revoke, the parties stood mute regarding
appellant’s financial ability to pay the amounts due. Finding the failure-to-pay allegation
Gipson - 3
true, the trial court revoked appellant’s community supervision and sentenced him to eight
years’ imprisonment for his underlying conviction of felony assault.
B. The Court of Appeals
On direct appeal, appellant raised two issues. In his first issue, he urged that the trial
court erred in revoking his community supervision because, when a trial court revokes a
defendant’s community supervision solely for failure to make required payments, Texas Code
of Criminal Procedure art. 42.12 § 21(c) requires that the State have proven that a defendant
was able to pay and did not, and no evidence showed that appellant was able to pay the
amounts due.1 See T EX. C ODE C RIM. P ROC. art. 42.12 § 21(c). We refer to this provision as
the “ability-to-pay statute.” See id. He asserted that this statute applies to all of the unpaid
amounts, including those not specifically listed in it. See id. He also challenged the State’s
contention that his plea of true satisfied the State’s burden of proof. He argued that, although
he pled true to the allegation, the State’s motion to revoke did not allege that he was able to
pay, and, therefore, his plea of true does not constitute evidence that he was able to pay.
In his second issue, he argued that the trial court “committed constitutional error” in
failing to inquire as to appellant’s reasons for not having paid. In support, he cited Bearden
1
In relevant part, the statute states,
In a community supervision revocation hearing at which it is alleged only that the
defendant violated the conditions of community supervision by failing to pay
compensation paid to appointed counsel, community supervision fees, or court costs,
the state must prove by a preponderance of the evidence that the defendant was able
to pay and did not pay as ordered by the judge.
TEX . CODE CRIM . PROC. art. 42.12 § 21(c).
Gipson - 4
v. Georgia, which held that, “in a revocation proceeding for failure to pay a fine,” the
Fourteenth Amendment requires that “a sentencing court must inquire into the reasons for
the failure to pay.” 461 U.S. 660, 672 (1983).
Addressing appellant’s issues together, the State responded that a defendant’s plea of
true precludes him from challenging the sufficiency of the evidence to support the trial
court’s revocation order and that a plea of true, standing alone, supports revocation of
community supervision. The State explained that, “in the absence of some challenge by
Appellant at the time of the hearing,” the State may rely on appellant’s plea of true to support
any requirements under the ability-to-pay statute and Bearden. See id. at 672.
Sustaining appellant’s first issue and not reaching his second, the court of appeals
reversed the trial court’s judgment. Gipson, 347 S.W.3d at 897. Interpreting appellant’s first
issue “as a challenge to the sufficiency of the evidence,” the court of appeals acknowledged
that a plea of true is “generally sufficient to support” revocation. Id. at 896-97 (citing Cole
v. State, 578 S.W.2d 127, 128 (Tex. Crim. App. 1979). The court stated, however, that
“Bearden requires that to revoke community supervision and impose imprisonment, ‘it must
be shown that the probationer willfully refused to pay or make sufficient bona fide efforts
to do so.’” Id. at 896 (quoting Lively v. State, 338 S.W.3d 140, 146 (Tex. App.—Texarkana
2011, no pet.)). The court observed that, because the motion to revoke alleged only failure
to make the required payments, appellant’s plea of true to that allegation did not satisfy the
State’s evidentiary burden under the ability-to-pay statute to prove that appellant was able
Gipson - 5
to pay. Id. at 897.
Although it acknowledged that the ability-to-pay statute explicitly includes only the
failure to pay fees for appointed counsel, community supervision, and court costs, the court
of appeals determined that the statute must be interpreted as also applying to failure to make
other payments due under community supervision in order to comply with Bearden’s
constitutional requirements. Id. at 896-97. The court determined that it was obligated to
implement this due-process requirement because courts must presume that the Legislature
intended for statutes to comply with the constitutions of this State and the United States. Id.
Based on its interpretation of the ability-to-pay statute, the court determined that the State
was required to prove a willful failure to pay, despite appellant’s plea of true. Id. It concluded
that the record contained no evidence that appellant had willfully refused to pay and that the
trial court, therefore, had erred in revoking appellant’s community supervision on that basis.
Id. at 897.
The State filed a motion for rehearing, contending that the court of appeals had erred
by deciding the merits of appellant’s sufficiency challenge without first addressing the
State’s procedural argument. The State asserted that, because appellant had pled true to the
allegation that formed the basis of revocation, any potential error was not preserved for
appeal. Without opinion, the court of appeals denied the State’s motion.
Gipson - 6
C. Parties’ Arguments on Discretionary Review
In its petition for discretionary review, the State reurges its direct-appeal arguments.2
The State contends that a defendant waives any evidence-insufficiency issue when he pleads
true to revocation allegations because no evidentiary hearing is required under those
circumstances or in the procedurally similar punishment-enhancement context. See Mitchell
v. State, 482 S.W.2d 221, 222-23 (Tex. Crim. App. 1972) (hearing not “mandatory” when
defendant pleads true to revocation allegations); Bryant v. State, 187 S.W.3d 397, 402 (Tex.
Crim. App. 2005) (stipulation to element of enhancement paragraph “barred” sufficiency
challenge). The State alternatively contends that, even if appellant did not waive the
sufficiency issue, his plea of true alone is sufficient evidence to support revocation. See
Wilson v. State, 671 S.W.2d 524, 526 (Tex. Crim. App. 1984) (“[A] plea of ‘true’ does
constitute evidence and sufficient proof to support the enhancement allegation.”).
Appellant responds by also reurging his direct-appeal arguments. He claims that the
State had the burden to prove that his failure to pay fees was willful despite his plea of true
and that, because the motion to revoke did not allege that he was able to pay the fees, his plea
2
The State’s sole issue in its petition for discretionary review asks,
Does a defendant’s plea of true to the State’s allegations in a motion to revoke
community supervision that the defendant failed to pay the court-assessed fine, costs,
and fees relieve the State and the trial court of the requirement to establish that no
payment was made despite the ability to do so, the failure to pay was willful, and no
bona fide effort to pay was made before supervision can be revoked?
The State explains that “[a]ppellant’s plea of true not only served to prove what the State alleged but
also constituted a waiver.”
Gipson - 7
of true does not constitute evidence of his ability to pay.
II. Analysis
A. Pleas of True Alone Have Generally Permitted Revocations of Community
Supervision
This Court has held that a defendant who states that he does not desire to contest a
motion to revoke may not complain, on appeal, of a trial court’s failure to hear evidence on
the motion. See Mitchell, 482 S.W.2d at 222-23; Cole, 578 S.W.2d at128 (“[S]ufficiency of
the evidence could not be challenged in the face of a plea of true”). However, these holdings
pre-dated Marin v. State, in which we explained that certain requirements and prohibitions
are absolute and that certain rights must be implemented unless expressly waived. 851
S.W.2d 275, 279 (Tex. Crim. App. 1993). These holdings also pre-dated enactment of the
ability-to-pay statute. See T EX. C ODE C RIM. P ROC. art. 42.12 § 21(c).
In Menefee v. State, we were confronted with the similar issue of whether “the
appellant procedurally defaulted his [Texas Code of Criminal Procedure] Article 1.15
sufficiency claim because he made no complaint about” any evidentiary deficiency at trial.
287 S.W.3d 9, 18 (Tex. Crim. App. 2009). “Because issues of error preservation are systemic
in first-tier review courts,” we remanded the question to the court of appeals to decide the
question within the Marin framework. Id.; see also, e.g., Patterson v. State, 204 S.W.3d 852,
857 (Tex. App.—Corpus Christi 2006, pet. ref’d) (deciding appellant’s accomplice-witness-
corroboration sufficiency challenge under Texas Code of Criminal Procedure art. 38.14 not
subject to default under Marin framework).
Gipson - 8
As in Menefee, we must remand the State’s procedural arguments to the court of
appeals to determine whether, by pleading true to an allegation that he failed to pay and by
failing to assert his inability to pay, a defendant waives or forfeits a claim that he is unable
to pay. See Menefee, 287 S.W.3d at 18. Although the court of appeals failed to address the
State’s procedural arguments, it did analyze the ability-to-pay statute and federal
constitutional requirements in its sufficiency analysis. We, therefore, must evaluate that
analysis to the extent that it may impact this case on remand.
B. Law Applicable to a Defendant’s Failure to Pay Fees Due Under Community
Supervision
Over the last twenty years, three sources of legal authority—the federal Constitution
as interpreted by Supreme Court precedent; Texas statutes; and Texas common law—have
addressed the permissibility of revocation or incarceration when a defendant is unable to pay
amounts due under community supervision. Analysis of the State’s procedural argument may
depend on which of these sources governs the substantive issue. Because we disagree with
portions of the court of appeals’s substantive analysis, and because that analysis may impact
its procedural analysis on remand, we discuss the applicable substantive law.
1. Federal-Constitutional Law
Contrary to the court of appeals’s conclusion, Bearden does not place an evidentiary
burden on the State. Rather, it sets forth a mandatory judicial directive that requires a trial
court to (1) inquire as to a defendant’s ability to pay and (2) consider alternatives to
imprisonment if it finds that a defendant is unable to pay. Bearden, 461 U.S. at 672. The
Gipson - 9
Court stated,
[I]n revocation proceedings for failure to pay a fine or restitution, a sentencing
court must inquire into the reasons for the failure to pay. If the probationer
willfully refused to pay or failed to make sufficient bona fide efforts legally to
acquire the resources to pay, the court may revoke probation and sentence the
defendant to imprisonment within the authorized range of its sentencing
authority. If the probationer could not pay despite sufficient bona fide efforts
to acquire the resources to do so, the court must consider alternative measures
of punishment other than imprisonment. Only if alternative measures are not
adequate to meet the State’s interests in punishment and deterrence may the
court imprison a probationer who has made sufficient bona fide efforts to pay.
Id. (emphasis added). The Court held that, when a defendant “has made all reasonable efforts
to pay the fine or restitution, and yet cannot do so through no fault of his own, it is
fundamentally unfair to revoke probation automatically without considering whether
adequate alternative methods of punishing the defendant are available.” Id. at 668-69.
The Supreme Court reasoned that it could be unconstitutional to deprive a defendant
of his liberty when he was unable to pay. Id. at 672-73. Noting that “[d]ue process and equal
protection principles converge in the Court’s analysis,” it concluded that, “[b]y sentencing
petitioner to imprisonment simply because he could not pay the fine, without considering the
reasons for the inability to pay or the propriety of reducing the fine or extending the time for
payments or making alternative orders, the court automatically turned a fine into a prison
sentence” in violation of the Fourteenth Amendment. Id. at 665, 674.
Appellant raised a Bearden violation by his second issue, contending that the trial
court “committed constitutional error” by failing to inquire into the reasons for his failure to
pay, but the court of appeals did not reach that issue. See Gipson, 347 S.W.3d at 897 n.2.
Gipson - 10
The court of appeals, however, discussed Bearden in its analysis of appellant’s first issue,
in which he challenged the sufficiency of the evidence to support revocation, and applied it
as the sufficiency standard of review: “Bearden requires that to revoke community
supervision and impose imprisonment, ‘it must be shown that the probationer willfully
refused to pay or make sufficient bona fide efforts to do so[,]’ and ‘[w]e will review the
sufficiency of the evidence with this as the standard.’” Gipson, 347 S.W.3d at 896 (quoting
Lively, 338 S.W.3d at 146).
We do not read Bearden so broadly for two reasons. First, as discussed, Bearden
prescribes a mandatory judicial directive, not a prosecutorial evidentiary burden. Bearden,
461 U.S. at 668-69, 672. Second, Bearden does not categorically prohibit incarceration of
indigent defendants as the court of appeals suggests; rather, it permits incarceration when
“alternative measures are not adequate to meet the State’s interests in punishment and
deterrence.” Id. By misreading Bearden as imposing an evidentiary burden on the State, the
court of appeals erred in applying it as the standard for reviewing appellant’s sufficiency
claim. On remand, therefore, Bearden will be inapplicable to analysis of appellant’s first
issue. Only if the court of appeals reaches appellant’s second issue must it analyze Bearden.
In that event, it must address the State’s procedural argument that, although Bearden requires
consideration of a defendant’s financial circumstances when he is sentenced to
imprisonment, appellant’s plea of true dispenses with that requirement.
Gipson - 11
2. Texas Statutory Law
At least a part of appellant’s sufficiency claim is governed by the ability-to-pay
statute, which requires the State to prove, at a revocation hearing, that a defendant was able
to pay and failed to pay certain fees. T EX. C ODE C RIM. P ROC. art. 42.12 § 21(c). This statute
expressly applies to fees for appointed counsel, community supervision, and court costs. Id.
The trial court revoked appellant’s community supervision, not only for failure to make those
payments explicitly listed in the statute, but also for failure to pay a fine and fees for Crime
Stoppers and pre-sentence investigation, which are not specifically listed in the statute. See
id. The court of appeals determined that the statute applied to all of the amounts unpaid by
appellant because the legislative history of the statute revealed that the Legislature intended
that it conform to the due-process requirements set forth in Bearden. Id. As discussed,
however, the court of appeals erred in construing the due-process requirement described in
Bearden as an evidence-sufficiency requirement. See Gipson, 347 S.W.3d at 896. Because
the court of appeals misapplied Bearden in its analysis of the ability-to-pay statute, we
remand this case so that the court may consider, in light of this opinion, whether the ability-
to-pay statute applies to appellant’s unpaid amounts that are not explicitly listed in the statute.
If the ability-to-pay statute does not apply to all of the amounts for which appellant’s
community supervision was revoked, then the court of appeals must consider whether
common law would apply to those amounts not statutorily enumerated and, in either event,
whether a plea of true waives or forfeits appellant’s sufficiency challenge.
Gipson - 12
3. Texas Common Law
In the event that the court of appeals determines that the ability-to-pay statute does not
apply to all of the unpaid amounts, the court may need to determine whether Texas common
law would apply to the remaining unpaid amounts to which the statute does not apply.
Applicable common law has varied over the past fifty years. Prior to the 1977
codification of the law pertaining to revocation proceedings involving failure to make
required payments, this Court, in reviewing a sufficiency challenge to revocation based on
failure to pay, routinely held that the evidence must show (1) that a defendant was able to pay
and (2) that he had acted intentionally. See Whitehead v. State, 556 S.W.2d 802, 805 (Tex.
Crim. App. 1977) (“[A]bsent a showing of a probationer’s ability to make the restitution
payments, and that his failure was intentional, it is an abuse of discretion for a court to revoke
probation on this failure to make payments.”); see also McKnight v. State, 409 S.W.2d 858,
859-860 (Tex. Crim. App. 1966) (enforcing these common-law requirements); Taylor v.
State, 353 S.W.2d 422, 424 (Tex. Crim. App. 1962) (same).
In 1977 and continuing until 2007, the Legislature made inability to pay an affirmative
defense to revocation. See former T EX. C ODE C RIM. P ROC. 42.12 § 8(c), Act of May 28,
1977, 65th Leg., R.S., ch. 342 (S.B. 32), §§ 1, 2, effective August 29, 1977. Some of this
Court’s decisions during that period interpreted the codification as disposing of the common-
law requirement that the State prove that a defendant’s failure to pay was intentional or
willful. See Jones v. State, 589 S.W.2d 419, 421 (Tex. Crim. App. 1979) (explaining that
Gipson - 13
1977 amendment made inability to pay an affirmative defense and holding that, because
“there was a complete failure to prove the affirmative defense of inability to pay by a
preponderance of the evidence[, i]t was not an abuse of discretion to revoke appellant’s
probation.”); Hill v. State, 719 S.W.2d 199, 201-02 (Tex. Crim. App. 1986). At least one
decision, however, held that the codification did not dispose of that common-law
requirement. See Stanfield v. State, 718 S.W.2d 734, 737-38 (Tex. Crim. App. 1986) (holding
that, although Legislature had made inability to pay an affirmative defense, “the State still
has the burden of proving an alleged failure to pay fees, costs and the like was intentional.”).3
If the ability-to-pay statute does not pertain to revocation for fines and fees for Crime
Stoppers and pre-sentence investigation, then the court of appeals must (1) consider whether
the common-law requirement has been statutorily superseded or whether it would still apply
to those payments and (2) decide how that determination would impact the question of
whether appellant’s sufficiency claim is procedurally barred. Because the requirements under
the ability-to-pay statute may differ from those under common law, resolution of the State’s
procedural arguments may depend upon which applies. For example, the ability-to-pay
3
In Stanfield, this Court commented that the 1977 amendment that made inability to pay an
affirmative defense “may be constitutionally questionable in light of [Bearden].” Stanfield v. State,
718 S.W.2d 734, 735 n.2 (Tex. Crim. App. 1986) (referring to Bearden v. Georgia, 461 U.S. 660,
672 (1983)). Regardless of whether the Legislature intended that its 1977 amendment supersede the
common-law requirement that the State prove intentional failure to pay, we conclude that the 2007
amendment dispensed with that requirement with respect to the payments listed in the statute
because, by its plain language, the ability-to-pay statute requires only that the State demonstrate, by
a preponderance of the evidence, that the defendant was able to pay and did not. See TEX . CODE
CRIM . PROC. art. 42.12 § 21(c). The question remains whether the statute includes only those
payments specifically enumerated or whether it applies to a fine and fees for Crime Stoppers and pre-
sentence investigation.
Gipson - 14
statute dictates what the State must show at a “hearing” at which only failure to pay is
alleged. T EX. C ODE C RIM. P ROC. art. 42.12 § 21(c). The court of appeals did not discuss
whether appellant’s plea of true and stipulation to the allegation would constitute a “hearing”
so as to trigger the evidentiary requirements of the ability-to-pay statute. By contrast, under
common law, the analysis appears to have turned on whether evidence of a defendant’s
ability to pay was introduced rather than on whether a “hearing” was held. See, e.g., Jones,
589 S.W.2d at 421.
We agree with the State that the court of appeals’s opinion fails to address the State’s
procedural challenge regarding preservation of appellant’s sufficiency claim. A court of
appeals must hand down a written opinion “that addresses every issue raised and necessary
to final disposition of the appeal.” T EX. R. A PP. P. 47.1; Keehn v. State, 233 S.W.3d 348, 349
(Tex. Crim. App. 2007) (per curiam). “[I]ssues of error preservation are systemic in first-tier
review courts”; such issues “must be reviewed by the courts of appeals regardless of whether
the issue is raised by the parties.” Menefee, 287 S.W.3d at 18; Haley v. State, 173 S.W.3d
510, 515 (Tex. Crim. App. 2005). An appellate court “may not reverse a judgment of
conviction without first addressing any issue of error preservation.” Meadoux v. State, 325
S.W.3d 189, 193 n.5 (Tex. Crim. App. 2010). Because the court of appeals did not address
the State’s procedural questions before reversing the case on insufficiency grounds, we
sustain the State’s sole issue and reverse the judgment of the court of appeals.
Gipson - 15
Conclusion
The court of appeals erred in failing to address the State’s procedural arguments
before reversing the trial court’s judgment revoking appellant’s community supervision on
sufficiency grounds. We reverse the judgment of the court of appeals and remand the case
for proceedings consistent with this opinion.
Delivered: November 14, 2012
Publish
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-6271
GARY LEWIS MILLER,
Plaintiff - Appellant,
versus
J. C. WILSON; BEATRICE TOMADAKES; SERGEANT
MOSELY; JOHN SALDI; ANDREW A. JACKSON,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern Dis-
trict of North Carolina, at Raleigh. Malcolm J. Howard, District
Judge. (CA-98-844-5-H)
Submitted: July 8, 1999 Decided: July 14, 1999
Before NIEMEYER, WILLIAMS, and KING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Gary Lewis Miller, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Gary Lewis Miller appeals the district court’s order denying
relief on his 42 U.S.C.A. § 1983 (West Supp. 1999) complaint under
28 U.S.C.A. § 1915(e) (West Supp. 1999). We have reviewed the rec-
ord and the district court’s opinion and find no reversible error.
Accordingly, we affirm on the reasoning of the district court. See
Miller v. Wilson, No. CA-98-844-5-H (E.D.N.C. Feb. 1, 1999). 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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Unable to extract the content from this file. Please try reading the original. | {
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567 F.Supp. 992 (1983)
FEDERAL TRADE COMMISSION
v.
MANUFACTURERS HANOVER CONSUMER SERVICES, INC., Credico Financial, Inc., General Finance Corporation, Domestic Finance Corporation, BarclaysAmerican Corporation, Postal Finance Co.
Misc. No. 81-363.
United States District Court, E.D. Pennsylvania.
June 30, 1983.
*993 Leslie Rice Melman, Washington, D.C., for F.T.C.
Cecelia F. Wambold, Duane, Morris & Heckscher, Philadelphia, Pa., and Joseph W. Gelb, Weil, Gotshal & Manges, New York City, for Domestic Finance Corp.
Alfred W. Putnam, Jr., Drinker, Biddle & Reath, Philadelphia, Pa., and Robert J. Lepri, McDermott, Will & Emery, Chicago, Ill., for General Finance Corp., BarclaysAmerican Corp. and Postal Finance Co.
Edward F. Mannino, Philadelphia, Pa., for Manufacturers Hanover Consumer Service, Inc.
Edward C. Toole, Jr., Clark, Ladner, Fortenbaugh & Young, Philadelphia, Pa., and Elizabeth Head, H. Jo Schneider, Kaye, Scholer, Fierman, Hays & Handler, New York City, for Credico Financial, Inc.
MEMORANDUM and ORDER
SHAPIRO, District Judge.
This proceeding arises from a nationwide investigation by the Federal Trade Commission ("FTC") into certain credit practices. The investigation and litigation it instigated were described as follows by District Judge Charles Schwartz, Jr., United States District Court for the Eastern District of Louisiana:
This proceeding was invoked by the Federal Trade Commission (Commission) pursuant to Section 20 of the Federal Trade Commission Act, 15 U.S.C. 57b-1 for an order compelling respondents to comply with civil investigative demands (CIDs) issued by the Commission during the course of an investigation to determine whether respondents may be or may have been engaged in unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 45(a)(2). Specifically, the purpose of the investigation is to determine whether finance companies, automobile dealerships or others may be engaged in unfair or deceptive acts or practices in connection with arranging for or consummating of a consumer credit transaction, including misrepresenting, directly or by implication, that the purchase of credit insurance is a prerequisite to the extension of credit.
Respondents have failed to provide the requested documents on the ground that the Commission's inquiry is an unlawful attempt to investigate and regulate the `business of insurance' which is protected by the McCarran-Ferguson Act, 15 U.S.C. § 1012(b) (McCarran Act) from review by the Federal Trade Commission.
FTC v. Dixie Finance Co., 695 F.2d 926 (5th Cir.1983; Appendix A (footnotes omitted)).
An action was filed in this district by the FTC petitioning for enforcement of the CIDs against Manufacturers Hanover Consumer Services, Inc., Credico Financial, Inc., General Finance Corporation, Domestic Finance Corporation, BarclaysAmerican Corporation and Postal Finance Co. ("enforcement action" petition). Hanover and Domestic also brought actions seeking equitable relief from the FTC investigation ("extra-enforcement" action). A prior opinion in these consolidated actions granted the FTC's motion in the extra-enforcement action *994 and denied motions for summary judgment therein without prejudice to the rights of defendants to resist in this enforcement action. Therefore, at this time defendant Credico's motion for declaratory judgment in the enforcement action and the FTC petition for enforcement remain outstanding. For the reasons that follow, Credico's motion for declaratory judgment in its favor is denied but an order enforcing the FTC petition will be deferred pending a hearing now scheduled.
The investigation does not transgress the McCarron-Ferguson Act, 15 U.S.C. § 1012(b) (the "Act"), as the activity the FTC seeks to investigate is not part of the "business of insurance." While the investigation pursuant to which the subpoena was issued is within the power of the FTC, the court will defer ordering its enforcement as issued until a hearing on whether the subpoena duces tecum should be enforced as issued or modified as overbroad and burdensome.
The FTC investigation is within the scope of its statutory authority unless the subject matter is part of the "business of insurance." If it is not, then the Act does not protect the activity from regulation, and therefore from investigation, by the FTC.[1] The Supreme Court has established criteria for this determination in two recent cases, Group Life & Health Insurance v. Royal Drug Co., 440 U.S. 205, 99 S.Ct. 1067, 59 L.Ed.2d 261 (1979) and Union Life Ins. Co. v. Pireno, ___ U.S. ___, 102 S.Ct. 3002, 73 L.Ed.2d 647 (1982).[2] The Pireno majority articulated three criteria to be used in determining whether an activity is part of the "business of insurance:"
... first, whether the practice has the effect of transferring or spreading a policyholder's risk; second, whether the practice is an integral part of the policy relationship between the insurer and the insured; and third, whether the practice is limited to entities within the insurance industry.
102 S.Ct. at 3009, 73 L.Ed.2d at 656. Applying these three criteria to the facts of the present case leads to a conclusion that the activity in question is not the business of insurance.
The first criterion is whether the practice is to spread the risk. The answer to this inquiry depends largely upon how one defines the "practice." If one defines the practice as the sale of credit insurance in connection with the sale of financed automobiles, then this practice clearly spreads risk. Many automobile purchasers pay a small premium so that the automobile purchasers unable to make finance payments and subject to loss by repossession and judgment lien are not forced to bear the entire personal risk a classic example of underwriting. See generally, Royal Drug, supra; SEC v. Nat. Sec. Ins., 393 U.S. 453, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969). At the same time, the finance company benefits by the elimination of credit risk to it at the expense of the debtor who pays for this *995 credit insurance as a part of the cost of credit. If one considers this as a credit practice, see, Dixie Finance, supra, then there is no risk spreading. Even if this court were to determine that there is a form of risk spreading, that would not require a finding that the activity being investigated is the business of insurance. Risk spreading is an indispensable element, Royal Drug, supra, 440 U.S. at 212, 99 S.Ct. at 1071, but its presence is not determinative. Pireno, supra, 102 S.Ct. at 3009, 73 L.Ed.2d at 656. Both the other criteria strongly suggest that this activity is not the business of insurance.
The second criteria is whether the practice is an integral part of the policy relationship between the insurer and the insured. This issue was the focus of the Dixie Finance decision, which held that the practice was credit related and not an integral part of the insurer/insured relationship. (Appendix A at 1979). Where a policyholder relationship is intertwined with other activities, the decision is to be made by focusing on "the gravamen of the complaint." SEC, supra, 393 U.S. at 462, 89 S.Ct. at 569. When the Dixie Finance court focused on this aspect it found that:
The Specifications set out by the Commission in its CIDs do not intrude on the insurer-insured relationship; they seek to determine only whether respondents may be making false or misleading misrepresentations to prospective borrowers that credit insurance is a prerequisite to the extension of consumer credit. The Commission is not concerned with the `reliability, interpretation and enforcement' of the insurance contract.
Appendix A to Dixie Finance 695 F.2d at 930 (emphasis added). Cf., SEC, supra (looking at the aim of a statute to determine its effect on the business of insurance). In this case the petition of the FTC asks for authority "to determine whether certain unnamed finance companies, car dealerships and others may be engaged in unfair or deceptive acts or practices in violation of Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45) in connection with the arranging for or consummating consumer credit transactions, including but not limited to misrepresenting directly or by implication that the purchase of credit insurance is a prerequisite to the extension of credit." Complaint, ¶ 11. Although the complaint does mention insurance, the gravamen is on the credit transactions. The fact that insurance is mentioned does not make the complaint, or the transactions to be investigated, primarily concerned with the business of insurance. Where possible to characterize the practice either broadly so that the activity appears to be part of the relationship between the insurer and the insured, or narrowly so that it appears otherwise, the latter path should be followed. See, St. Bernard Hospital v. Hospital Service Assn. of New Orleans, Inc., 618 F.2d 1140 (5th Cir.1980); cf., Royal Drug (the wholly separate nature of the two agreements not changed by a reference to one in the contract of the other).
A final practical consideration mitigates against characterizing the relationship to be investigated as between insurer and insured instead of between creditor and debtor or seller and buyer. If insurance sales in relation to these credit transactions remove them from the purview of FTC investigation and regulation, then any transaction would be removed from FTC investigation and regulatory authority merely by selling insurance as part of the transaction whether or not on credit. For instance, a refrigerator sale could be removed from CPSC review by selling the customer refrigerator insurance at the time of the sale. Congress did not intend such a result.
The third Pireno criteria is whether the practice is limited to entities within the insurance industry. The practice to be investigated here is not, regardless of how it is characterized. Although the automobile salesperson may be both the credit representative and insurance salesperson, the sale and credit transaction may be independent *996 of any credit insurance. But there is no way that there can be credit insurance without an extension of credit and no way to extend credit for an automobile purchase without the sale of an automobile. Wherefore, it would seem that the insurance depends on the financing transaction but the credit transaction is or may be independent of the insurance, which is, of course, what the investigation seeks to determine.
The Pireno criteria must be applied in terms of their genesis in determining exemption from antitrust laws; their application may be somewhat different in determining exemption from regulation of consumer credit transactions. The Pireno majority argued that Section 2(b) of the Act "was intended primarily to protect intra -industry cooperation in the underwriting of risks." Pireno, supra, 102 S.Ct. at 3010, 73 L.Ed.2d at 658-59, citing, Royal Drug, supra, 440 U.S. at 221, 99 S.Ct. at 1078 (emphasis added by Pireno Court). Congress was concerned that if insurance companies were subject to federal antitrust law, it would be impossible to pool actuarial data and set rates for policies. See generally, Pireno. Allowing the FTC to investigate whether the purchase of credit insurance has been involuntary rather than voluntary in the credit transactions complained of here will not affect the ability of the industry to set rates for insurance offered or sold.
In addition, if the practice sought to be investigated is characterized as the business of insurance because insurance is somehow involved, the insurance industry would be able to expand its McCarran Act protection to new activities by combining diverse activities with the sale of insurance; e.g., mortgage insurance for commercial buildings, health insurance for corporate executives, etc. The courts should guard against this possibility. Hahn v. Oregon Physicians Service, 689 F.2d 840, 843, n. 2, 1982-2 CCH Trade Cases ¶ 64,970, n. 2 (9th Cir.1982).
Two of the Pireno criteria clearly suggest this investigation is not of the business of insurance and the third can perhaps be viewed either way. Our application of the Pireno criteria results in a determination that the activity to be investigated to determine the need for regulation is not the business of insurance but the terms and conditions of provision of credit. See, Nurse Midwifery Assoc. v. Hibbett, 549 F.Supp. 1185, 1982-83 CCH Trade Cases ¶ 65,040 (M.D.Tenn.1982).[3]
The court holds that the investigation is within the power of the FTC, that is, that the investigation has a legitimate purpose and the inquiry is relevant to that purpose. There remains the issue of whether the subpoena duces tecum is overbroad and burdensome which may not have been adequately addressed. The court will hear the parties on whether the subpoenas are overbroad or unnecessarily burdensome before enforcing them as issued.
ORDER
AND NOW, this 30th day of June, 1983, upon consideration of the outstanding motions in this matter, and for the reasons set forth in the foregoing Memorandum, it is ORDERED that:
1. Defendant Credico Financial Inc.'s motion for declaratory judgment in its favor is DENIED; the Federal Trade Commission is not precluded by the McCarran-Ferguson Act, 15 U.S.C. § 1012(b), from investigating the activity in connection with which it issued the subject subpoena duces tecum.
2. A hearing will be held on August 5, 1983 at 2:00 p.m., in Courtroom 10-A, United States Courthouse, 601 Market Street, Philadelphia, Pennsylvania, at which time *997 the parties will be heard on whether the Federal Trade Commission's subpoena duces tecum should be enforced as issued or modified.
NOTES
[1] See, Union Life Ins. Co. v. Pireno, ___ U.S. ___, 102 S.Ct. 3002, 73 L.Ed.2d 647, 659 n. 9 (1982); see generally, Dixie Finance, supra.
[2] Both Royal Drug and Pireno are antitrust cases, as have been most cases discussing the "business of insurance" exemption. It is possible that more leniency should be inferred in applying the "business of insurance" exemption to non-antitrust cases, as the courts have held that antitrust exemptions must be narrowly construed; Royal Drug, supra, 440 U.S. at 231, 99 S.Ct. at 1083; see also, Schwartz v. Commonwealth Land Title Co., 374 F.Supp. 564, 573 (E.D.Pa.1974), while no like requirement exists for applications of the "business of insurance" to cases such as this one. However, the statutory language of 15 U.S.C. § 1012(b) (the Act) does not distinguish the two situations, and it has been recognized that the law has a wider scope than antitrust. Cochran v. Paco, 606 F.2d 460, 463 (5th Cir.1979). Therefore, the Supreme Court criteria developed in the antitrust cases will be applied here, keeping in mind that the tests were developed in a slightly different context. But see, Thompson v. NYL Ins. Co., 644 F.2d 439 (5th Cir.1981) (TILA case applying different standards but keeping Royal Drug in mind); Cochran, supra, 606 F.2d at 463 (TILA case "borrowing" from the antitrust jurisprudence).
[3] Nurse Midwifery is one of the few cases to apply the Pireno standards per se; the first criterion was found to be a close question, the second and third criteria suggested that the activity was not the business of insurance; it was held that the activity was not the business of insurance.
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546 F.2d 417
Healingv.Saybolt
No. 75-1428
United States Court of Appeals, Third Circuit
10/12/76
1
D.N.J.
AFFIRMED
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-2012
___________
In re: Graphics Technologies, Inc. *
*
Debtor, *
____________________ *
*
James E. Ramette, Trustee, * Appeal from the United States
* Bankruptcy Appellate Panel.
Appellee, *
* [UNPUBLISHED]
v. *
*
Digital River, Inc., *
*
Appellant. *
___________
Submitted: November 15, 2004
Filed: November 23, 2004
___________
Before WOLLMAN, HEANEY, and FAGG, Circuit Judges.
___________
PER CURIAM.
Paymentech Co., a credit card processing company, agreed to hold three to five
percent of each credit card sale of Tech Squared in reserve for six months to cover
chargebacks. After six months, Paymentech would transfer the funds to Tech
Squared. Digital River, a provider of web-hosting services and a sister company to
Tech Squared, was informally added to the merchant account with Paymentech.
Digital River and Tech Squared arranged to have all their credit card sales processed
through Tech Squared, and Tech Squared would apportion disbursements to Digital
River based on its sales. Digital River was not a party to the credit card processing
agreement with Paymentech.
In late 1999, Graphics acquired all the assets of Tech Squared and assumed
Tech Squared’s credit card processing agreement with Paymentech. Digital River
then entered into a separate agreement with Paymentech in January 2000. In the
preceding six months, several hundred thousand dollars was held by Paymentech for
Digital River’s credit card sales. Under the earlier agreement, the money was
disbursed to Graphics’s bank account, which its secured lender swept daily to apply
to Graphics’s loan balance. Digital River later entered into a repayment agreement
and Graphics began making payments to Digital River. After Graphics filed for
bankruptcy, the bankruptcy trustee brought an adversary proceedings against Digital
River to recover the payments made within ninety days before Graphics filed for
bankruptcy as avoidable preferential transfers under 11 U.S.C. § 547.
The bankruptcy court granted summary judgment for the trustee, finding the
payments were preferential transfers and Digital River was liable to the trustee for
$97,514.44. The Bankruptcy Appellate Panel (BAP) affirmed, concluding the funds
paid to Digital River in the ninety days preceding Graphic’s bankruptcy belonged to
Graphics, even though Graphics never had legal title to the funds. In re Graphics
Technology, Inc., 306 B.R. 630, 635 (8th Cir. BAP 2004). Because the last credit card
transaction that Digital River processed through Tech Squared’s agreement occurred
no later than the end of January 2000, the last disbursement including Digital River’s
funds occurred no later than August 2000. Id. at 636. Because Graphics’s bank
swept its account daily, Graphics had spent all of Digital River’s money by the
beginning of the preference period in September 2000, and none of the funds were
related to Digital River’s credit card transactions. Id. Thus, all the money held in the
reserve account during the preference period belonged to Graphics. Id. The BAP
-2-
also concluded there was no basis to impose a constructive trust in Digital River’s
favor because Graphics never held legal title to the funds and no trust res was clearly
identified in Graphics’s bankruptcy estate. Id. The BAP noted Graphics had not
taken affirmative action to wrongfully acquire Digital River’s property. Id. at 637.
Instead, Graphics acknowledged it owed Digital River the money and the parties
agreed on a method for repayment. The BAP observed Digital River bore some
responsibility because it knowingly consented to having its funds distributed to an
account over which it had no control, and did not effectively communicate with
Graphics about its ownership of the commingled funds in the account from January
to June 2000. Id.
On appeal, Digital River argues Graphics converted Digital River’s property,
the money was never a part of the bankruptcy estate, and Digital River is entitled to
a constructive trust. We review the bankruptcy court’s findings of fact for clear error
and review de novo the legal conclusions of the bankruptcy court and the bankruptcy
appellate panel. Blackwell v. Lurie (In re Popkin & Stern), 223 F.3d 764, 765 (8th
Cir. 2000). Having carefully reviewed the case, we see no clearly erroneous findings
and conclude the BAP properly analyzed the issues and properly applied Minnesota
law. We thus affirm on the basis of the BAP’s published opinion. See 8th Cir. R.
47B.
______________________________
-3-
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687 S.E.2d 869 (2009)
KOLLIE
v.
The STATE.
Brandt
v.
The State.
Nos. A09A1545, A09A1564.
Court of Appeals of Georgia.
November 19, 2009.
Reconsideration Denied December 10, 2009.
*872 Glynn R. Stepp, Mark A. Yurachek, for appellants (nos. A09A1545 and A09A1564).
Daniel J. Porter, District Attorney, Lisa A. Jones, Assistant District Attorney, for appellee.
SMITH, Presiding Judge.
William Kollie and Ryan Brandt were jointly tried by a jury and found guilty on 24 counts of a 29-count indictment for crimes that occurred on October 22, 2005 and November 4, 2005. Following the denial of their respective motions for new trial, Kollie and Brandt appeal, citing several claims of error. We have consolidated their separate appeals for purposes of judicial economy. Having reviewed their claims of error, we affirm in part and reverse in part in Case No. A09A1545. And we vacate the judgment and remand in Brandt's case, Case No. A09A1564, for the trial court to conduct a new hearing on the motion to suppress in light of the United States Supreme Court's ruling in Arizona v. Gant, ___ U.S. ___, 129 S.Ct. 1710, 173 L.Ed.2d 485 (2009).[1]
Construed in favor of the verdict, the evidence presented at trial showed the following:
The Home Invasion
On October 22, 2005, Kollie and Brandt knocked on the door of a home and asked the husband some "strange questions" concerning who was present in the home. The husband had noticed that the two parked a black pickup truck unusually close to his home. When the husband turned to close the door, Kollie attempted to force his way into the home while pointing a gun at the husband's chest. The husband tried to move the gun away to close the door, but as he tried, Kollie shot the husband in the arm. The bullet shattered the bone in the husband's arm. Brandt, wearing a red bandana over his face, and Kollie then entered the home, put a gun to the wife's head and repeatedly threatened to kill her and her husband. As they entered, the wife told her 6-year-old daughter to hide. "[A]t some point within the first few moments," Kollie took the child from her room and dragged her back to the front of the home while holding a gun to her head. Kollie and Brandt called each other by the code names "January" and "February."
Kollie and Brandt bound each member of the family with duct tape, covered their eyes with the tape, and left them lying in the foyer. The two then began ransacking the entire home and gathering items, including money, guns, jewelry, computers, and a safe. Kollie and Brandt also took the husband's and wife's wallets and credit cards, and asked them for the credit card personal identification numbers. They also threatened that if the family called the police, they would "be back to molest and kill your daughter in front of you."
Kollie and Brandt loaded their truck and the husband could hear them "going in and out of the garage ... taking bags and bags of things." Either Kollie or Brandt drove away in the black pickup truck and the other in the family's vehicle that was parked in the garage.
The Fuddruckers Robbery
On November 4, 2005, at about 1:00 a.m., a delivery driver drove his tractor-trailer to a Fuddruckers restaurant on Scenic Highway in Snellville, to make a delivery there. As he walked out of the restaurant's cooler, he was approached by two men who ordered him at gunpoint to "get down." Both men wore bandanas over their faces. One of the men wore a "hockey goalie" shirt. One of them had short hair while the other "had dreadlocks." The one with dreadlocks tied the *873 victim's hands and feet with duct tape, and asked him where the restaurant's office was located before leaving him in the cooler. After a few minutes, the men returned and took the victim to the restaurant's office where they discovered a "book that had night deposits." After a few more minutes, the two asked the victim if he had any bank cards. When the victim responded that he did not, one of the men took some keys out of the victim's back pocket that opened other Fuddruckers restaurants and asked the victim how to operate the alarm system. The two men then took the victim outside to the parking lot and locked him in the back of his trailer where he was discovered the next morning.
The Applebee's Robbery
Also on November 4, 2005, around 1:30 a.m., two off-duty employees of an Applebee's restaurant on Scenic Highway in Snellville sat outside the restaurant in their vehicles waiting for the vehicles to warm up. The two employees, a bus boy and a cook, noticed a black pickup truck circling the parking lot. The cook attempted to call the manager who was still inside the restaurant to warn her. Before he could make the call, Kollie and Brandt got out of a black pickup truck carrying guns and wearing bandanas over their faces, walked up to the employees, ordered them out of their vehicles, and commanded them to "get down on the ground." Kollie and Brandt then dragged the two victims to a dumpster in the back of the restaurant and ordered the busboy to call the manager to open the door.
When the manager opened the door, Kollie and Brandt threw the busboy and the cook to the floor and then dragged them to the bar. They ordered the victims to remove their clothing and then tied up their hands and feet with gray tape. The two took the busboy's money and debit card. The cook testified that he had left the keys inside his vehicle and that Kollie and Brandt took the vehicle when they left the restaurant.
The restaurant manager and a line cook were inside the restaurant when Kollie and Brandt entered. When the manager opened the door for the busboy and the cook, she was also pushed to the floor. Minutes later Brandt forced the manager at gunpoint to the restaurant's office to open the safe. When the manager opened the safe, Brandt took out deposit bags containing money and took the manager back out to the front of the restaurant, ordered her to remove her clothing, and tied her up with a computer cord.
While the line cook was cleaning in the kitchen, Kollie walked up to him, put a gun to his head, and dragged him from the kitchen to the front of the restaurant where the busboy, cook, and manager were being held. The line cook was also tied up with duct tape after being ordered to remove his clothing. Kollie and Brandt took the line cook's wallet and ATM card and asked for his personal identification number. The line cook testified that Kollie and Brandt called each other by the names "January" and "February."
In the early morning hours of November 4, 2005, officers received a dispatch call that an armed robbery had occurred at an Applebee's restaurant. Minutes later, officers observed a black pickup truck speeding and executed a stop of the vehicle. As the officers began checking Kollie's and Brandt's driver's licenses, they received a dispatch call advising that the two robbery suspects were black males driving a black Ford Harley-Davidson Edition pickup truck. The dispatch also gave a description of the suspects: one wearing a white shirt and black jeans and the other a light-colored shirt with a red bandana over his head. The officers noticed that Kollie and Brandt fit the description given.
The officers testified that they then conducted a "felony stop" with guns drawn and secured the two men in the back of separate police vehicles. The officers saw inside the pickup truck in plain view several liquor bottles with pour spouts attached, two handguns, and some deposit bags. Following a search of the truck, officers found a shotgun, two handguns, and some keys to Fuddruckers restaurants. It was determined that two of the weapons found belonged to the husband in the home invasion robbery.[2]
*874 1. Both Kollie and Brandt challenge the sufficiency of the evidence. On appeal from a criminal conviction we view the evidence in the light most favorable to the verdict and the defendant no longer enjoys a presumption of innocence. Short v. State, 234 Ga. App. 633, 634(1), 507 S.E.2d 514 (1998). We do not weigh the evidence or determine witness credibility, but only determine if the evidence was sufficient for a rational trier of fact to find the defendant guilty of the charged offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).
2. Kollie and Brandt were each charged with six counts of kidnapping. They argue that the evidence was insufficient to sustain those convictions in light of the Georgia Supreme Court's decision in Garza v. State, 284 Ga. 696, 670 S.E.2d 73 (2008), decided after their trial and sentencing.[3] We therefore examine each of the kidnapping convictions in turn in light of the holding in Garza.
Former OCGA § 16-5-40(a) provided that "[a] person commits the offense of kidnapping when he abducts or steals away any person without lawful authority or warrant and holds such person against his will." The Georgia Supreme Court in Garza, supra, adopted the test set forth in Govt. of Virgin Islands v. Berry, 604 F.2d 221, 16 V.I. 614 (3d Cir.1979), to determine the sufficiency of evidence of asportation in kidnapping cases. Id. at 701-702, 670 S.E.2d 73. This test
assesses four factors in determining whether the movement at issue constitutes asportation: (1) the duration of the movement; (2) whether the movement occurred during the commission of a separate offense; (3) whether such movement was an inherent part of that separate offense; and (4) whether the movement itself presented a significant danger to the victim independent of the danger posed by the separate offense.
(Citation omitted.) Id. at 702, 670 S.E.2d 73. The test assists "in determining whether the movement in question is in the nature of the evil the kidnapping statute was originally intended to addressi.e., movement serving to substantially isolate the victim from protection or rescueor merely a "criminologically insignificant circumstance" attendant to some other crime." Id.
(a) The home invasion child victim (Count 6). The evidence showed that when Kollie and Brandt entered the home, the 6-year-old child victim ran to her room to hide. Kollie went to her room, seized her, and brought her back to the foyer dragging her with a gun to her head.
While the movement of the child was relatively short and occurred during the commission of the armed robbery and burglary, it was not an inherent part of those separate offenses. And the movement presented a significant danger to the victim independent of the danger posed by the armed robbery and burglary, as the victim was assaulted with the gun and present when Kollie and Brandt threatened to "molest and kill" her if the family called police. The movement also placed the victim in additional danger by enhancing Kollie and Brandt's control over her. See Brower v. State, 298 Ga.App. 699, 707(2), 680 S.E.2d 859 (2009) (movement from area near front door to room at rear of building gave defendant more control over victims). Under these circumstances, we hold that the movement of the child victim constitutes sufficient asportation to support a kidnapping charge. See Horne v. State, 298 Ga.App. 601, 604(1), 680 S.E.2d 616 (2009) (movement of victim from closet to dining room created additional danger for victim by placing her in open space such that defendant could abuse her more easily).
(b) Applebee's busboy and cook (Counts 19 and 20). The evidence showed that Kollie and Brandt, brandishing guns, approached the two victims and ordered them to get out of their vehicle and onto the ground. The two victims were then dragged to a dumpster near the back of the restaurant where they were ordered to gain access to the restaurant.
*875 Here, the movement was short in duration, but arguably occurred prior to the armed robbery. See Abernathy v. State, 299 Ga. App. 897(1), 901, 685 S.E.2d 734 (2009) (movement of victim from yard to carport was beginning of aggravated assault). The movement was an inherent part of the crimes as the victims were used to gain access to the restaurant. But the movement from their vehicle to the back of the restaurant near a dumpster enhanced Kollie and Brandt's control over the victims and isolated them from protection or rescue. Brower, supra, 298 Ga.App. at 707(2), 680 S.E.2d 859. Therefore, there was sufficient evidence of asportation to sustain the kidnapping convictions on these counts.
(c) Applebee's manager and line cook (Counts 21 and 22). The evidence showed that the Applebee's manager and line cook were inside the restaurant when Kollie and Brandt entered. The line cook was dragged at gunpoint from the kitchen to the front of the restaurant, and the manager was forced at gunpoint from the front of the restaurant to an office in the back where she was ordered to open the safe. After taking money from the safe, Kollie and Brandt forced the manager back to the front of the restaurant.
The movements of the manager and the line cook back and forth through the restaurant were short in duration, occurred during and incidental to the armed robbery and burglary, and did not present a significant danger to the victims independent of the danger posed by those crimes. Similar movement was addressed in Garza as an example of movement constituting a "criminologically insignificant circumstance":
Thus, for example, the robber who forces his victim to move from one room to another in order to find a cashbox or open a safe technically may commit kidnapping as well as robbery. This reasoning raises the possibility of cumulative penalties or of higher sanctions for kidnapping, even though the "removal" of the victim to another place was part and parcel of the robbery and not an independent wrong.
(Citation and footnote omitted.) Garza, supra, 284 Ga. at 699(1), 670 S.E.2d 73. Because the movement of the two victims here did not constitute asportation, we must reverse Kollie's and Brandt's convictions on those counts. See id.; Crawford v. State, 297 Ga.App. 187, 190(1)(b), 676 S.E.2d 843 (2009) (conviction reversed where brief movement during and incidental to robbery did not enhance risk to victim); Grimes v. State, 297 Ga.App. 720, 722, 678 S.E.2d 167 (2009) (same).
(d) Fuddruckers delivery driver (Count 27). The evidence showed that the tractor-trailer delivery driver was approached by Kollie and Brandt as he stepped out of the restaurant freezer and ordered to "get down." They then tied the victim's ankles and hands with duct tape and took him to the restaurant's office. After a few minutes, Kollie and Brandt took the victim outside and put him in the back of his trailer, shut the door, and locked it.
The first movement of the victim, from the freezer to the office, was not sufficient evidence of asportation. See Grimes, supra. The second movement of the victim, however, from the office to the back of the trailer that was parked outside, was short in duration, but occurred after Kollie and Brandt took items from the restaurant and the keys from the victim, and was not an inherent part of the armed robbery and burglary. The movement also served to isolate the victim from rescue. Under the facts here, the element of asportation was established and the evidence was sufficient to sustain Kollie's and Brandt's convictions for kidnapping on this count of the indictment. See Dixon v. State, 300 Ga.App. 183, 184(1), 684 S.E.2d 679 (2009) (sufficient evidence of asportation where after completion of robbery victim was dragged outside and isolated from co-workers and other potential witnesses).
3. Kollie and Brandt argue that the evidence is insufficient to sustain their convictions for armed robbery against the Applebee's manager as alleged in Count 15 (and therefore insufficient to sustain their conviction for possession of a firearm during the commission of the felony of armed robbery as alleged in Count 25). But Count 15 was merged with Count 14, another armed robbery count, for sentencing purposes. "We *876 need not consider an enumeration of error which addresses the sufficiency of the evidence to convict on a count on which the trial court failed to enter judgment." (Citation and punctuation omitted.) Nelson v. State, 277 Ga.App. 92, 96(1)(b), 625 S.E.2d 465 (2005).
4. Kollie and Brandt contend that the evidence was insufficient to sustain their conviction for hijacking a motor vehicle as alleged in Count 11 because there was no evidence that the family's vehicle was taken from their presence. They argue that because the family members were bound with their eyes covered inside the home, their vehicle, which was parked in the garage, could not have been taken from their immediate presence.
OCGA § 16-5-44.1(b) provides that "[a] person commits the offense of hijacking a motor vehicle when such person while in possession of a firearm or weapon obtains a motor vehicle from the person or presence of another by force and violence or intimidation or attempts or conspires to do so." And although this Code section requires only presence and not immediate presence, "[w]e have construed similar language in the armed robbery statute, OCGA § 16-8-41(a). In that context, `immediate presence' has been held to extend `fairly far,' and robbery convictions are upheld even out of the physical presence of the victim." (Citation, punctuation and footnote omitted.) Johnson v. State, 246 Ga.App. 109, 112(3), 539 S.E.2d 605 (2000). Moreover, "when perpetrators forcibly cause the victim to be away from the immediate presence of the property at the time it is stolen, the offense ... can still be committed. Further, the concept of immediate presence is broadly construed if the object taken was under the victim's control or responsibility and the victim is not too distant." (Citations omitted.) Morgan v. State, 195 Ga.App. 732, 734(1), 394 S.E.2d 639 (1990).
Here, the evidence showed that the family's vehicle was parked in the attached garage and the husband heard Kollie and Brandt going in and out of the garage and one tell the other to take the husband's vehicle. The husband testified, "one left in the truck they drove and one left in thein my vehicle." The family members were bound and lying in the foyer of their home when the vehicle was taken. Therefore, the husband was not too distant from the vehicle, and the jury could have concluded that Kollie and Brandt took the keys to the vehicle which were under the husband's control, or that the vehicle was under the husband's control simply because it was located in the attached garage. This evidence was sufficient to show a taking from the husband's presence to sustain their convictions for hijacking a motor vehicle as alleged in Count 11. See Morgan, supra (victim fled the scene after being threatened with knife and property was taken while victim was driving away); Jennings v. State, 292 Ga.App. 149, 151-152(1)(a), 664 S.E.2d 248 (2008) (taking from immediate presence where items were taken from living room while victims were forced to remain in bedroom); Meyers v. State, 249 Ga.App. 248, 249, 547 S.E.2d 781 (2001) (taking from immediate presence where items taken from bedroom and victim held in living room at gunpoint); Heard v. State, 204 Ga.App. 757, 758(1), 420 S.E.2d 639 (1992) (taking from immediate presence where victim was forced to flee into woods before defendant took victim's car and items within car); Waters v. State, 161 Ga.App. 555, 556, 289 S.E.2d 21 (1982) (evidence sufficient to show taking from immediate presence where defendant took items from car parked on road while victim lay in gully and was close enough to car to hear defendant talking).
5. Kollie and Brandt argue that the evidence was insufficient to sustain their conviction for theft by taking as alleged in Count 24. They argue that because the vehicle in which the Applebee's cook was sitting when accosted was owned by a third person who did not testify, there was no evidence that the vehicle was taken without the owner's permission. OCGA § 16-8-2 provides that "A person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated." And we have *877 held that "while it is necessary for the State to prove that the stolen property belonged to someone other than the defendant in order to support a theft by taking conviction, the identity of the owner is not a material element of the crime that must be alleged and proved." (Citation omitted.) Brandeburg v. State, 292 Ga.App. 191, 193(1), 663 S.E.2d 844 (2008). The evidence presented here was sufficient to show that the vehicle belonged to someone other than Kollie and Brandt. See id.
6. We have reviewed the evidence with regard to the remaining counts and find it sufficient for a rational trier of fact to find Kollie and Brandt guilty as either a participant or party to the crimes of armed robbery (Counts 3-5, 14, 16-18 and 26), false imprisonment (Counts 7 and 8), burglary (Counts 12, 23 and 28), and possession of a firearm during the commission of a felony (Counts 13, 25 and 29).[4]
7. Kollie and Brandt contend that the trial court should have merged the armed robbery counts charged in connection with the home invasion. They argue that the offenses should have merged because the same items were taken from each member of the family.
"A person commits the offense of armed robbery when, with intent to commit theft, he or she takes property of another from the person or the immediate presence of another by use of an offensive weapon." OCGA § 16-8-41(a). "Robbery is a crime against possession, and is not affected by concepts of ownership." (Citation and punctuation omitted.) McCluskey v. State, 211 Ga.App. 205, 206(1), 438 S.E.2d 679 (1993). If more than one victim is robbed, a defendant may be charged with the robbery of each victim. Green v. State, 265 Ga.App. 126, 128-129(2), 592 S.E.2d 901 (2004). Here, Kollie and Brandt committed armed robbery against each member of the family by taking property from the presence of each of them, with the intent to commit theft, by the use of a handgun. The convictions on these counts therefore did not merge. See Phanamixay v. State, 260 Ga.App. 177, 180(3), 581 S.E.2d 286 (2003).
8. Kollie contends that the trial court erred in denying his request to replace his trial counsel. Kollie testified that his second appointed trial counsel did not have his "best interest at heart," screamed at him and insulted him, lied to him, failed to relay to him a threat made against his family by Brandt, and used "false methods of persuasion in an attempt to get [him] to accept the State's plea offer." Following a hearing on the matter in which counsel denied the allegations, the trial court gave Kollie the option of either hiring counsel of his choosing, representing himself, or proceeding with appointed counsel. Kollie took the option of proceeding to trial with his appointed counsel, and the trial court denied his motion to replace counsel.
We evaluate the trial court's decision on whether to replace counsel under an abuse of discretion standard. McCoy v. State, 285 Ga.App. 246, 250(5), 645 S.E.2d 728 (2007). "The Sixth Amendment guarantees effective assistance of counsel, not preferred counsel or counsel with whom a meaningful relationship can be established." (Citation, punctuation and footnote omitted.) Id. Because Kollie has not shown that appointed counsel could not provide him effective representation, the trial court did not abuse its discretion in denying his motion to replace counsel three months before the start of trial. See Middlebrooks v. State, 255 Ga.App. 541, 544(6), 566 S.E.2d 350 (2002) (where appointed counsel used racially derogatory term, court did not abuse its discretion in denying motion to discharge counsel because no showing counsel could not provide effective representation).
9. Kollie contends that the trial court erred in sentencing him for possession of a firearm by a convicted felon because he was not charged with that crime. Count 29 of the indictment charged Kollie with possession of a firearm during the commission of a felony, and the jury found Kollie guilty of *878 that offense. The original sentencing sheet states in error that Kollie was found guilty of possession of a firearm by a convicted felon. The trial court acknowledged the error during the hearing on the motion for new trial, and the sentence was amended to reflect that Kollie was sentenced for possession of a firearm during the commission of a felony. This enumeration is without merit.
10. Kollie argues that his aggregate sentence of seven consecutive life sentences plus 265 years constitutes cruel and unusual punishment.
A presumption arises when a defendant is sentenced within the statutory limits set by the legislature that such sentence does not violate the Eighth Amendment's guarantee against cruel and unusual punishment. Such presumption remains until a defendant sets forth a factual predicate showing that such legislatively authorized punishment was so overly severe or excessive in proportion to the offense as to shock the conscience.
(Citations and punctuation omitted.) Howard v. State, 262 Ga.App. 214, 216(2), 585 S.E.2d 115 (2003). The sentence for each offense here is within statutory guidelines. And "the trial court had the discretion to impose consecutive sentences for the separate offenses." (Citation omitted.) Id. Because Kollie has not made a showing that the punishment was so severe as to "shock the conscience," the presumption stands that his sentence does not constitute cruel and unusual punishment. See Reviere v. State, 231 Ga.App. 329, 332-333(4), 498 S.E.2d 332 (1998) (sentence of five consecutive life sentences within statutory limits not cruel and unusual).
11. Brandt contends that the trial court erred in failing to sever the home invasion robberies from the two restaurant robberies.[5] Specifically, Brandt argues that the trial court failed to determine whether the trier of fact would be able to fairly and intelligently judge each offense.
As explained in Stewart v. State, 277 Ga. 138, 587 S.E.2d 602 (2003), our courts have adopted the ABA Standards on Joinder of Offenses which provide:
(a) Whenever two or more offenses have been joined for trial solely on the ground that they are of the same or similar character, the defendant shall have a right to a severance of the offenses.
(b) The court, on application of the prosecuting attorney, or on application of the defendant other than under subsection (a), should grant a severance of offenses whenever: (i) if before trial, it is deemed appropriate to promote a fair determination of the defendant's guilt or innocence of each offense; or (ii) if during trial upon consent of the defendant, it is deemed necessary to achieve a fair determination of the defendant's guilt or innocence of each offense. The court should consider whether in view of the number of offenses charged and the complexity of the evidence to be offered, the trier of fact will be able to distinguish the evidence and apply the law intelligently as to each offense.
Under these Standards, a trial court must first determine whether the offenses are joined solely because they are of the same or similar character. If they are, severance is mandatory. If they are not, the court must then decide whether severance would promote a just determination of guilt or innocence as to each offense.
(Citations and punctuation omitted.) Id. at 138-139, 587 S.E.2d 602. Whether to sever offenses is within the discretion of the trial court. Id. at 139, 587 S.E.2d 602. "[I]n the exercise of that discretion [the court] must balance the interest of the defendant with the interest of the State. In so doing, a trial court must look to the number and complexity of the offenses charged and determine whether a trier of fact can parse the evidence and apply the law with regard to each charge." (Citations omitted.) Id.
Here, the trial court determined that the offenses were not joined solely because they were of a same or similar character. The *879 court found that the robberies involved a common scheme and ongoing criminal enterprise. See Miller v. State, 270 Ga. 741, 744(3), 512 S.E.2d 272 (1999) (court found common scheme in burglaries 30 months apart). Further, although the record does not contain the court's specific finding with regard to whether the jury could "parse the evidence" with regard to each charge, having reviewed the record, we cannot say that the evidence was so complex that the jury was unable to assess Brandt's guilt or innocence as to each charge. See Stewart v. State, 268 Ga.App. 243, 246, 601 S.E.2d 755 (2004).
12. Brandt argues that the trial court erroneously shifted the burden of proof in its charge to the jury on the crime of burglary. The trial court instructed the jury: "You may infer an intent to steal where the evidence shows an unlawful entry into the building where goods or valuables are present or stored or kept inside, and where there is no other apparent motive for the entry. Whether or not you make any such inference is a matter solely within your discretion." Brandt contends that in instructing the jury that it could infer intent, "the court obliterated the[ ] `separate and distinct[ ]' line between unlawful entry and intent to steal."
This argument has been decided adversely to Brandt in Johnson v. State, 277 Ga. 82, 586 S.E.2d 306 (2003), in which the Georgia Supreme Court approved the language of the court's instruction given here, holding that it did not constitute an unconstitutional shifting of the burden of proof to the defendant. Id. at 84-85(3), 586 S.E.2d 306.
13. Brandt argues that the trial court erred in not excusing a juror who admitted sleeping during trial. The juror acknowledged that he had fallen asleep. When questioned, the juror stated that he fell asleep for about 30 seconds but not while anyone was talking. He stated further that there was no reason he could not stay awake other than the fact that the chairs were comfortable, and assured the court that it would not happen again. The trial court denied Brandt's motion to remove this juror.
Under OCGA § 15-12-172, the trial court has "discretion to discharge a juror and replace him or her with an alternate at any time so long as the trial court has a sound legal basis." (Citations and punctuation omitted.) Freeman v. State, 291 Ga.App. 651, 654(3), 662 S.E.2d 750 (2008). We cannot say that the trial court abused its discretion here in refusing to discharge and replace a juror who fell asleep for only a few seconds between direct and cross-examination of a witness and assured the court it would not happen again. Compare id. (court did not err in excusing sleeping juror who stated he averaged three hours of sleep per night and could fall asleep while driving).
14. (a) Brandt contends that his convictions for the armed robbery of the husband in the home invasion and the aggravated battery of the husband should have merged. He contends that the same facts used to prove the aggravated battery were also used to prove the armed robbery.
The indictment charged Brandt with the offense of aggravated battery for shooting the husband in the arm, rendering it useless. The evidence showed that as the husband attempted to shut the door, Kollie shot him in the arm. Kollie and Brandt then entered the home and robbed the family at gunpoint. Because the aggravated battery charge was based upon firing the gun and shooting the husband in the arm and the armed robbery charge was based upon the use of the gun to rob, the offenses do not merge as a matter of fact. See Silvers v. State, 278 Ga. 45, 48(4), 597 S.E.2d 373 (2004). Moreover, because the aggravated battery was completed prior to the armed robbery, the two offenses did not merge. See Henderson v. State, 285 Ga. 240, 244(4), 675 S.E.2d 28 (2009).
(b) Brandt argues further that the trial court erred in failing to merge his convictions for the aggravated battery against the husband and the burglary of the family's home. The indictment charged Brandt with the offense of burglary for entering the home with the intent to commit an armed robbery. As explained in Division 14(a) above, the aggravated battery of the husband was complete before Kollie and Brandt entered the home. The offenses therefore did not merge. See Henderson, supra.
*880 15. Brandt challenges the trial court's denial of his motion to suppress the evidence found in the truck he and Kollie were driving when arrested. He contends that because he and Kollie were secured in the back of separate police vehicles, there was no safety concern to justify a search of the truck. He argues that therefore the search was in violation of the Fourth Amendment as held in the United States Supreme Court's recent decision of Arizona v. Gant, supra, decided after the trial court's ruling on Brandt's motion to suppress and after he filed his notice of appeal.
Because the scope of the search here falls within the scope of the Supreme Court's decision in Gant, we vacate the trial court's order denying Brandt's motion to suppress and remand this case to the trial court to conduct a hearing and consider the holding in Gant. The party adversely affected by the court's ruling may then appeal from that ruling within 30 days after its entry. Agnew v. State, 298 Ga.App. 290, 292-293(3), 680 S.E.2d 141 (2009); Simmons v. State, 299 Ga.App. 21, 681 S.E.2d 712 (2009).
Judgment affirmed in part and reversed in part in Case No. A09A1545. Judgment vacated and case remanded with direction in Case No. A09A1564.
BERNES, J., concurs.
PHIPPS, J., concurs, and concurs in the judgment only as to Division 4.
NOTES
[1] Although we vacate and remand Brandt's case for a new hearing on his motion to suppress, we nevertheless address his other claims of error. See Simmons v. State, 299 Ga.App. 21, 681 S.E.2d 712 (2009).
[2] Several other items that belonged to the family were discovered in the truck following an inventory search.
[3] We note that the legislature's amendment to the kidnapping statute, OCGA § 16-5-40, applies to crimes committed on or after July 1, 2009. Horne v. State, 298 Ga.App. 601, 603, n. 1q, 680 S.E.2d 616 (2009).
[4] Counts 1 and 2 of the indictment were severed by the trial court. Count 9 was merged with Count 10, and Count 15 was merged with Count 14 for purposes of sentencing. The trial court granted a directed verdict on Count 17.
[5] We note that the trial court did sever two counts involving a robbery of the same Applebee's that occurred on August 21, 2005.
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447 F.2d 1373
Robert E. GARNER, Trustee of Standard Milling Company, Plaintiff-Appellee,v.Joe T. BOYD, M. S. Knisely et al., Defendants-Appellants.
No. 71-1026 Summary Calendar.*
United States Court of Appeals Fifth Circuit.
August 24, 1971.
Appeal from the United States District Court for the Northern District of Texas, Halbert O. Woodward, District Judge.
Robert E. Ford, Abilene, Tex., for defendants-appellants.
John E. Vickers, Walker Metcalf, Edwin M. O'Connor, III, Lubbock, Tex., for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and INGRAHAM and RONEY, Circuit Judges.
PER CURIAM:
1
We are in agreement with the well considered memorandum opinion of the district court, Garner v. Boyd, 330 F. Supp. 22 (N.D.Tex.1970), and its judgment is affirmed.
Notes:
*
Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409
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188 U.S. 321 (1903)
LOTTERY CASE.[1]
No. 2.
Supreme Court of United States.
Argued December 15, 16, 1902.
Decided February 23, 1903.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS.
*325 Mr. William D. Guthrie for appellant, his brief being also entitled in Francis v. United States, p. 375, post.
Mr. John G. Carlisle, with whom Mr. Miller Outcalt and Mr. Thomas F. Shay were on the brief, appeared for John Francis and others, appellants in No. 80, which was argued simultaneously with this case. In that part of the brief relating to the constitutionality of the act of March 2, 1895, they argued.
Mr. Assistant Attorney General James M. Beck for the United States.
*344 MR. JUSTICE HARLAN, after making the foregoing statement of facts, delivered the opinion of the court.
The appellant insists that the carrying of lottery tickets from one State to another State by an express company engaged in carrying freight and packages from State to State, although such tickets may be contained in a box or package, does not constitute, and cannot by any act of Congress be legally made to constitute, commerce among the States within the meaning of the clause of the Constitution of the United States providing that Congress shall have power "to regulate commerce with *345 foreign nations, and among the several States, and with the Indian tribes;" consequently, that Congress cannot make it an offence to cause such tickets to be carried from one State to another.
The Government insists that express companies when engaged, for hire, in the business of transportation from one State to another, are instrumentalities of commerce among the States; that the carrying of lottery tickets from one State to another is commerce which Congress may regulate; and that as a means of executing the power to regulate interstate commerce Congress may make it an offence against the United States to cause lottery tickets to be carried from one State to another.
The questions presented by these opposing contentions are of great moment, and are entitled to receive, as they have received, the most careful consideration.
What is the import of the word "commerce" as used in the Constitution? It is not defined by that instrument. Undoubtedly, the carrying from one State to another by independent carriers of things or commodities that are ordinary subjects of traffic, and which have in themselves a recognized value in money, constitutes interstate commerce. But does not commerce among the several States include something more? Does not the carrying from one State to another, by independent carriers, of lottery tickets that entitle to holder to the payment of a certain amount of money therein specified also constitute commerce among the States?
It is contended by the parties that these questions are answered in the former decisions of this court, the Government insisting that the principles heretofore announced support its position, while the contrary is confidently asserted by the appellant. This makes it necessary to ascertain the import of such decisions. Upon that inquiry we now enter, premising that some propositions were advanced in argument that need not be considered. In the examination of former judgments it will be best to look at them somewhat in the order in which they were rendered. When prior adjudications have been thus collated the particular grounds upon which the judgment in the present case must necessarily rest can be readily determined. We may *346 here remark that some of the cases referred to may not bear directly upon the questions necessary to be decided, but attention will be directed to them as throwing light upon the general inquiry as to the meaning and scope of the commerce clause of the Constitution.
The leading case under the commerce clause of the Constitution is Gibbons v. Ogden, 9 Wheat. 1, 189, 194. Referring to that clause, Chief Justice Marshall said: "The subject to be regulated is commerce; and our Constitution being, as was aptly said at the bar, one of enumeration, and not of definition, to ascertain the extent of the power, it becomes necessary to settle the meaning of the word. The counsel for the appellee would limit it to traffic, to buying and selling, or the interchange of commodities, and do not admit that it comprehends navigation. This would restrict a general term, applicable to many objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is something more; it is intercourse. It describes the commercial intercourse between nations, and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse. . . . It has been truly said, that commerce, as the word is used in the Constitution, is a unit, every part of which is indicated by the term. If this be the admitted meaning of the word, in its application to foreign nations, it must carry the same meaning throughout the sentence, and remain a unit, unless there be some plain intelligible cause which alters it. The subject to which the power is next applied, is to commerce, `among the several States.' The word `among' means intermingled with. A thing which is among others is intermingled with them. Commerce among the States cannot stop at the external boundary line of each State, but may be introduced into the interior. It is not intended to say that these words comprehend that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other States. Such a power would be inconvenient and is certainly unnecessary. Comprehensive as the word `among' is, it may very properly be restricted to that commerce which concerns more States than one. . . . *347 The genius and character of the whole Government seem to be, that its action is to be applied to all the external concerns of the Nation, and to those internal concerns which affect the States generally; but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the Government. . . ."
Again: "We are now arrived at the inquiry what is this power? It is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution. These are expressed in plain terms, and do not affect the questions which arise in this case, or which have been discussed at the bar. If, as has always been understood, the sovereignty of Congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations, and among the several States, is vested in Congress as absolutely as it would be in a single government, having in its constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States."
Mr. Justice Johnson, in the same case, expressed his entire approbation of the judgment rendered by the court, but delivered a separate opinion indicating the precise grounds upon which his conclusion rested. Referring to the grant of power over commerce, he said: "My opinion is founded on the application of the words of the grant to the subject of it. The `power to regulate commerce,' here meant to be granted, was that power to regulate commerce which previously existed in the States. But what was that power? The States were, unquestionably, supreme; and each possessed that power over commerce, which is acknowledged to reside in every sovereign State. . . . The law of nations, regarding man as a social animal, pronounces all commerce legitimate, in a state of peace, until prohibited by positive law. The power of a sovereign State over commerce, therefore, amounts to nothing more than a power to limit and restrain it at pleasure. And since the power to prescribe *348 the limits to its freedom, necessarily implies the power to determine what shall remain unrestrained, it follows that the power must be exclusive; it can reside but in one potentate; and hence, the grant of this power carries with it the whole subject, leaving nothing for the State to act upon."
The principles announced in Gibbons v. Ogden were reaffirmed in Brown v. Maryland, 12 Wheat. 419, 446. After expressing doubt whether any of the evils proceeding from the feebleness of the Federal Government contributed more to the establishing of the present constitutional system than the deep and general conviction that commerce ought to be regulated by Congress, Chief Justice Marshall, speaking for the court, said: "It is not, therefore, matter of surprise that the grant should be as extensive as the mischief, and should comprehend all foreign commerce, and all commerce among the States." Considering the question as to the just extent of the power to regulate commerce with foreign nations and among the several States, the court reaffirmed the doctrine that the power was "complete in itself, and to acknowledge no limitations other than are prescribed by the Constitution. . . . Commerce is intercourse; one of its most ordinary ingredients is traffic."
In the Passenger Cases, 7 How. 283, the court adjudged certain statutes of New York and Massachusetts, imposing taxes upon alien passengers arriving in the ports of those States, to be in violation of the Constitution and laws of the United States. In the separate opinions delivered by the Justices there will not be found any expression of doubt as to the doctrines announced in Gibbons v. Ogden. Mr. Justice McLean said: "Commerce is defined to be `an exchange of commodities.' But this definition does not convey the full meaning of the term. It includes `navigation and intercourse.' That the transportation of passengers is part of commerce is not now an open question." Mr. Justice Grier said: "Commerce, as defined by this court, means something more than traffic it is intercourse; and the power committed to Congress to regulate commerce is exercised by prescribing rules for carrying on that intercourse." The same views were expressed by Mr. Justice Wayne, in his separate opinion. He regarded the question then before the *349 court as covered by the decision in Gibbons v. Ogden, and in respect to that case he said: "It will always be a high and honorable proof of the eminence of the American bar of that day, and of the talents and distinguished ability of the Judges who were then in the places which we now occupy." Mr. Justice Catron and Mr. Justice McKinley announced substantially the same views.
In Almy v. State of California, 24 How. 169, a statute of California imposing a stamp duty upon bills of lading for gold or silver transported from that State to any port or place out of the State was held to be a tax on exports, in violation of the provision of the Constitution declaring that "no tax or duty shall be laid on articles exported from any State." But in Woodruff v. Parham, 8 Wall. 123, 138, this court, referring to the Almy case, said it was well decided upon a ground not mentioned in the opinion of the court, namely, that, although the tax there in question was only on bills of lading, "such a tax was a regulation of commerce, a tax imposed upon the transportation of goods from one State to another, over the high seas, in conflict with that freedom of transit of goods and persons between one State and another, which is within the rule laid down in Crandall v. Nevada, and with the authority of Congress to regulate commerce among the States."
In Henderson &c. v. Mayor &c., 92 U.S. 259, 270, which involved the constitutional validity of a statute of New York relating to vessels bringing passengers to that port, this court, speaking by Mr. Justice Miller, said: "As already indicated, the provisions of the Constitution of the United States, on which the principal reliance is placed to make void the statute of New York, is that which gives to Congress the power `to regulate commerce with foreign nations.' As was said in United States v. Holliday, 3 Wall. 417, `commerce with foreign nations means commerce between citizens of the United States and citizens or subjects of foreign governments.' It means trade, and it means intercourse. It means commercial intercourse between nations, and parts of nations, in all its branches. It includes navigation, as the principal means by which foreign intercourse is effected. To regulate this trade and intercourse is *350 to prescribe the rules by which it shall be conducted. `The mind,' says the great Chief Justice, `can scarcely conceive a system for regulating commerce between nations which shall exclude all laws concerning navigation, which shall be silent on the admission of the vessels of one nation into the ports of another;' and he might have added, with equal force, which prescribed no terms for the admission of their cargo or their passengers. Gibbons v. Ogden, 9 Wheat. 190."
The question of the scope of the commerce clause was again considered in Pensacola Tel. Co. v. Western Union Tel. Co., 96 U.S. 1, 9, 12, involving the validity of a statute of Florida, which assumed to confer upon a local telegraph company the exclusive right to establish and maintain lines of electric telegraph in certain counties of Florida. This court held the act to be unconstitutional. Chief Justice Waite, delivering its judgment, said: "Since the case of Gibbons v. Ogden, 9 Wheat. 1, it has never been doubted that commercial intercourse is an element of commerce which comes within the regulating power of Congress. Post offices and post roads are established to faciliate the transmission of intelligence. Both commerce and the postal service are placed within the power of Congress, because, being national in their operation, they should be under the protecting care of the National Government. The powers thus granted are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate, at all times and under all circumstances. As they were entrusted to the General Government for the good of the nation, it is not only the right, but the duty, of Congress to see to it that intercourse among the States and the transmission of intelligence are not *351 obstructed or unnecessarily encumbered by state legislation. The electric telegraph marks an epoch in the progress of time. In a little more than a quarter of a century it has changed the habits of business, and become one of the necessities of commerce. It is indispensable as a means of intercommunication, but especially is it so in commercial transactions." In his dissenting opinion in that case Mr. Justice Field speaks of the importance of the telegraph "as a means of intercourse," and of its constant use in commercial transactions.
In County of Mobile v. Kimball, 102 U.S. 691, Mr. Justice Field, delivering the judgment of the court, said: "Commerce with foreign countries and among the States, strictly considered, consists in intercourse and traffic, including in these terms navigation and the transportation and transit of persons and property, as well as the purchase, sale, and exchange of commodities." This principle was expressly reaffirmed in Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 203.
Applying the doctrine announced in Pensacola Tel. Co. v. Western Union Tel. Co., it was held in Telegraph Co. v. Texas, 105 U.S. 460, that the law of a State imposing a tax on private telegraph messages sent out of the State was unconstitutional, as being, in effect, a regulation of interstate commerce.
In Brown v. Houston, 114 U.S. 622, 630, it was declared by the court, speaking by Mr. Justice Bradley, that "the power to regulate commerce among the several States is granted to Congress in terms as absolute as is the power to regulate commerce with foreign nations." The same thought was expressed in Bowman v. Chicago &c. Railway Co., 125 U.S. 465, 482; Crutcher v. Kentucky, 141 U.S. 47, 58, and Pittsburg Coal Co. v. Bates, 156 U.S. 577, 587.
In Pickard v. Pullman Southern Car Company, 117 U.S. 34, it was said to be settled by the adjudged cases that to tax "the transit of passengers from foreign countries or between the States, is to regulate commerce."
In Western Union Tel. Co. v. Pendleton, 122 U.S. 347, 356, the court recognized the commerce with foreign countries and among the States which Congress could regulate as including not only the exchange and transportation of commodities, or *352 visible, tangible things, but the carriage of persons, and the transmission by telegraph of ideas, wishes, orders and intelligence. See also Ratterman v. Tel. Co., 127 U.S. 411, and Leloup v. Port of Mobile, 127 U.S. 640.
In Covington &c. Bridge Company v. Kentucky, 154 U.S. 204, 218, the question was as to the validity, under the commerce clause of the Constitution, of an act of the Kentucky Legislature relating to tolls to be charged or received for passing over the bridge of the Covington and Cincinnati Bridge Company, a corporation of both Kentucky and Ohio, erected between Covington and Cincinnati. A state enactment prescribing a rate of toll on the bridge was held to be unconstitutional, as an unauthorized regulation of interstate commerce. The court, reaffirming the principles announced in Gloucester Ferry Company v. Pennsylvania, 114 U.S. 196, and in Wabash &c. Railway Company v. Illinois, 118 U.S. 557, said, among other things: "Commerce was defined in Gibbons v. Ogden, 9 Wheat. 1, 189, to be `intercourse,' and the thousands of people who daily pass and repass over this bridge may be as truly said to be engaged in commerce as if they were shipping cargoes of merchandise from New York to Liverpool. While the bridge company is not itself a common carrier, it affords a highway for such carriage, and a toll upon such bridge is as much a tax upon commerce as a toll upon a turnpike is a tax upon the traffic of such turnpike, or the charges upon a ferry a tax upon the commerce across a river."
At the present term of the court we said that "transportation for others, as an independent business, is commerce, irrespective of the purpose to sell or retain the goods which the owner may entertain with regard to them after they shall have been delivered." Hanley &c. v. Kansas City Southern Railway, 187 U.S. 617.
This reference to prior adjudications could be extended if it were necessary to do so. The cases cited however sufficiently indicate the grounds upon which this court has proceeded when determining the meaning and scope of the commerce clause. They show that commerce among the States embraces navigation, intercourse, communication, traffic, the transit of persons, *353 and the transmission of messages by telegraph. They also show that the power to regulate commerce among the several States is vested in Congress as absolutely as it would be in a single government, having in its constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States; that such power is plenary, complete in itself, and may be exerted by Congress to its utmost extent, subject only to such limitations as the Constitution imposes upon the exercise of the powers granted by it; and that in determining the character of the regulations to be adopted Congress has a large discretion which is not to be controlled by the courts, simply because, in their opinion, such regulations may not be the best or most effective that could be employed.
We come then to inquire whether there is any solid foundation upon which to rest the contention that Congress may not regulate the carrying of lottery tickets from one State to another, at least by corporations or companies whose business it is, for hire, to carry tangible property from one State to another.
It was said in argument that lottery tickets are not of any real or substantial value in themselves, and therefore are not subjects of commerce. If that were conceded to be the only legal test as to what are to be deemed subjects of the commerce that may be regulated by Congress, we cannot accept as accurate the broad statement that such tickets are of no value. Upon their face they showed that the lottery company offered a large capital prize, to be paid to the holder of the ticket winning the prize at the drawing advertised to be held at Asuncion, Paraguay. Money was placed on deposit in different banks in the United States to be applied by the agents representing the lottery company to the prompt payment of prizes. These tickets were the subject of traffic; they could have been sold; and the holder was assured that the company would pay to him the amount of the prize drawn. That the holder might not have been able to enforce his claim in the courts of any country making the drawing of lotteries illegal, and forbidding the circulation of lottery tickets, did not change the fact that *354 the tickets issued by the foreign company represented so much money payable to the person holding them and who might draw the prizes affixed to them. Even if a holder did not draw a prize, the tickets, before the drawing, had a money value in the market among those who chose to sell or buy lottery tickets. In short, a lottery ticket is a subject of traffic, and is so designated in the act of 1895. 28 Stat. 963. That fact is not without significance in view of what this court has said. That act, counsel for the accused well remarks, was intended to supplement the provisions of prior acts excluding lottery tickets from the mails and prohibiting the importation of lottery matter from abroad, and to prohibit the causing lottery tickets to be carried, and lottery tickets and lottery advertisements to be transferred, from one State to another by any means or method. 15 Stat. 196; 17 Stat. 302; 19 Stat. 90; Rev. Stat. § 3894; 26 Stat. 465; 28 Stat. 963.
We are of opinion that lottery tickets are subjects of traffic and therefore are subjects of commerce, and the regulation of the carriage of such tickets from State to State, at least by independent carriers, is a regulation of commerce among the several States.
But it is said that the statute in question does not regulate the carrying of lottery tickets from State to State, but by punishing those who cause them to be so carried Congress in effect prohibits such carrying; that in respect of the carrying from one State to another of articles or things that are, in fact, or according to usage in business, the subjects of commerce, the authority given Congress was not to prohibit, but only to regulate. This view was earnestly pressed at the bar by learned counsel, and must be examined.
It is to be remarked that the Constitution does not define what is to be deemed a legitimate regulation of interstate commerce. In Gibbons v. Ogden it was said that the power to regulate such commerce is the power to prescribe the rule by which it is to be governed. But this general observation leaves it to be determined, when the question comes before the court, whether Congress in prescribing a particular rule has exceeded its power under the Constitution. While our Government *355 must be acknowledged by all to be one of enumerated powers, McCulloch v. Maryland, 4 Wheat. 316, 405, 407, the Constitution does not attempt to set forth all the means by which such powers may be carried into execution. It leaves to Congress a large discretion as to the means that may be employed in executing a given power. The sound construction of the Constitution, this court has said, "must allow to the national legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional." 4 Wheat. 421.
We have said that the carrying from State to State of lottery tickets constitutes interstate commerce, and that the regulation of such commerce is within the power of Congress under the Constitution. Are we prepared to say that a provision which is, in effect, a prohibition of the carriage of such articles from State to State is not a fit or appropriate mode for the regulation of that particular kind of commerce? If lottery traffic, carried on through interstate commerce, is a matter of which Congress may take cognizance and over which its power may be exerted, can it be possible that it must tolerate the traffic, and simply regulate the manner in which it may be carried on? Or may not Congress, for the protection of the people of all the States, and under the power to regulate interstate commerce, devise such means, within the scope of the Constitution, and not prohibited by it, as will drive that traffic out of commerce among the States?
In determining whether regulation may not under some circumstances properly take the form or have the effect of prohibition, the nature of the interstate traffic which it was sought by the act of May 2, 1895, to suppress cannot be overlooked. When enacting that statute Congress no doubt shared the views upon the subject of lotteries heretofore expressed by this court. *356 In Phalen v. Virginia, 8 How. 163, 168, after observing that the suppression of nuisances injurious to public health or morality is among the most important duties of Government, this court said: "Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with the widespread pestilence of lotteries. The former are confined to a few persons and places, but the latter infests the whole community; it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; it plunders the ignorant and simple." In other cases we have adjudged that authority given by legislative enactment to carry on a lottery, although based upon a consideration in money, was not protected by the contract clause of the Constitution; this, for the reason that no State may bargain away its power to protect the public morals, nor excuse its failure to perform a public duty by saying that it had agreed, by legislative enactment, not to do so. Stone v. Mississippi, 101 U.S. 814; Douglas v. Kentucky, 168 U.S. 488.
If a State, when considering legislation for the suppression of lotteries within its own limits, may properly take into view the evils that inhere in the raising of money, in that mode, why may not Congress, invested with the power to regulate commerce among the several States, provide that such commerce shall not be polluted by the carrying of lottery tickets from one State to another? In this connection it must not be forgotten that the power of Congress to regulate commerce among the States is plenary, is complete in itself, and is subject to no limitations except such as may be found in the Constitution. What provision in that instrument can be regarded as limiting the exercise of the power granted? What clause can be cited which, in any degree, countenances the suggestion that one may, of right, carry or cause to be carried from one State to another that which will harm the public morals? We cannot think of any clause of that instrument that could possibly be invoked by those who assert their right to send lottery tickets from State to State except the one providing that no person shall be deprived of his liberty without due process of law. We have said that the liberty protected by the Constitution *357 embraces the right to be free in the enjoyment of one's faculties; "to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation, and for that purpose to enter into all contracts that may be proper." Allgeyer v. Louisiana, 165 U.S. 578, 589. But surely it will not be said to be a part of any one's liberty, as recognized by the supreme law of the land, that he shall be allowed to introduce into commerce among the States an element that will be confessedly injurious to the public morals.
If it be said that the act of 1895 is inconsistent with the Tenth Amendment, reserving to the States respectively or to the people the powers not delegated to the United States, the answer is that the power to regulate commerce among the States has been expressly delegated to Congress.
Besides, Congress, by that act, does not assume to interfere with traffic or commerce in lottery tickets carried on exclusively within the limits of any State, but has in view only commerce of that kind among the several States. It has not assumed to interfere with the completely internal affairs of any State, and has only legislated in respect of a matter which concerns the people of the United States. As a State may, for the purpose of guarding the morals of its own people, forbid all sales of lottery tickets within its limits, so Congress, for the purpose of guarding the people of the United States against the "widespread pestilence of lotteries" and to protect the commerce which concerns all the States, may prohibit the carrying of lottery tickets from one State to another. In legislating upon the subject of the traffic in lottery tickets, as carried on through interstate commerce, Congress only supplemented the action of those States perhaps all of them which, for the protection of the public morals, prohibit the drawing of lotteries, as well as the sale or circulation of lottery tickets, within their respective limits. It said, in effect, that it would not permit the declared policy of the States, which sought to protect their people against the mischiefs of the lottery business, to be overthrown or disregarded by the agency of interstate commerce. We should hesitate long before adjudging that an evil of such *358 appalling character, carried on through interstate commerce, cannot be met and crushed by the only power competent to that end. We say competent to that end, because Congress alone has the power to occupy, by legislation, the whole field of interstate commerce. What was said by this court upon a former occasion may well be here repeated: "The framers of the Constitution never intended that the legislative power of the Nation should find itself incapable of disposing of a subject matter specifically committed to its charge." In re Rahrer, 140 U.S. 545, 562. If the carrying of lottery tickets from one State to another be interstate commerce, and if Congress is of opinion that an effective regulation for the suppression of lotteries, carried on through such commerce, is to make it a criminal offence to cause lottery tickets to be carried from one State to another, we know of no authority in the courts to hold that the means thus devised are not appropriate and necessary to protect the country at large against a species of interstate commerce which, although in general use and somewhat favored in both national and state legislation in the early history of the country, has grown into disrepute and has become offensive to the entire people of the Nation. It is a kind of traffic which no one can be entitled to pursue as of right.
That regulation may sometimes appropriately assume the form of prohibition is also illustrated by the case of diseased cattle, transported from one State to another. Such cattle may have, notwithstanding their condition, a value in money for some purposes, and yet it cannot be doubted that Congress, under its power to regulate commerce, may either provide for their being inspected before transportation begins, or, in its discretion, may prohibit their being transported from one State to another. Indeed, by the act of May 29, 1884, c. 60, Congress has provided: "That no railroad company within the United States, or the owners or masters of any steam or sailing or other vessel or boat, shall receive for transportation or transport, from one State or Territory to another, or from any State into the District of Columbia, or from the District into any State, any live stock affected with any contagious, infectious, or communicable disease, and especially the disease known as *359 pleuro-pneumonia; nor shall any person, company, or corporation deliver for such transportation to any railroad company, or master or owner of any boat or vessel, any live stock, knowing them to be affected with any contagious, infectious, or communicable disease; nor shall any person, company, or corporation drive on foot or transport in private conveyance from one State or Territory to another, or from any State into the District of Columbia, or from the District into any State, any live stock, knowing them to be affected with any contagious, infectious, or communicable disease, and especially the disease known as pleuro-pneumonia." Reid v. State of Colorado, 187 U.S. 137, present term.
The act of July 2, 1890, known as the Sherman Anti-Trust Act, and which is based upon the power of Congress to regulate commerce among the States, is an illustration of the proposition that regulation may take the form of prohibition. The object of that act was to protect trade and commerce against unlawful restraints and monopolies. To accomplish that object Congress declared certain contracts to be illegal. That act, in effect, prohibited the doing of certain things, and its prohibitory clauses have been sustained in several cases as valid under the power of Congress to regulate interstate commerce. United States v. Trans-Missouri Freight Association, 166 U.S. 290; United States v. Joint Traffic Association, 171 U.S. 505; Addyston Pipe & Steel Company v. United States, 175 U.S. 211. In the case last named the court, referring to the power of Congress to regulate commerce among the States, said: "In Gibbons v. Ogden, supra, the power was declared to be complete in itself, and to acknowledge no limitations other than are prescribed by the Constitution. Under this grant of power to Congress, that body, in our judgment, may enact such legislation as shall declare void and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly, and not as a mere incident to other and innocent purposes, regulate to any substantial extent interstate commerce. (And when we speak of interstate we also include in our meaning foreign commerce.) We do not assent to the correctness *360 of the proposition that the constitutional guaranty of liberty to the individual to enter into private contracts limits the power of Congress and prevents it from legislating upon the subject of contracts of the class mentioned. The power to regulate interstate commerce is, as stated by Chief Justice Marshall, full and complete in Congress, and there is no limitation in the grant of the power which excludes private contracts of the nature in question from the jurisdiction of that body. Nor is any such limitation contained in that other clause of the Constitution which provides that no person shall be deprived of life, liberty or property without due process of law." Again: "The provision in the Constitution does not, as we believe, exclude Congress from legislating with regard to contracts of the above nature while in the exercise of its constitutional right to regulate commerce among the States. On the contrary, we think the provision regarding the liberty of the citizen is, to some extent, limited by the commerce clause of the Constitution, and that the power of Congress to regulate interstate commerce comprises the right to enact a law prohibiting the citizen from entering into those private contracts which directly and substantially, and not merely indirectly, remotely, incidentally and collaterally, regulate to a greater or less degree commerce among the States."
That regulation may sometimes take the form or have the effect of prohibition is also illustrated in the case of In re Rahrer, 140 U.S. 545. In Mugler v. Kansas, 123 U.S. 623, it was adjudged that state legislation prohibiting the manufacture of spirituous, malt, vinous, fermented or other intoxicating liquors within the limits of the State, to be there sold or bartered for general use as a beverage, does not necessarily infringe any right, privilege or immunity secured by the Constitution of the United States or by the amendments thereto. Subsequently in Bowman v. Chicago &c. Railway Co., 125 U.S. 465, this court held that ardent spirits, distilled liquors, ale and beer were subjects of exchange, barter and traffic, and were so recognized by the usages of the commercial world, as well as by the laws of Congress and the decisions of the courts. In Leisy v. Hardin, 135 U.S. 100, the *361 court again held that spirituous liquors were recognized articles of commerce, and declared a statute of Iowa prohibiting the sale within its limits of any intoxicating liquors, except for pharmaceutical, medicinal, chemical or sacramental purposes, under a state license, to be repugnant to the commerce clause of the Constitution, if applied to the sale, within the State, by the importer, in the original, unbroken packages, of such liquors manufactured in and brought from another State. And in determining whether a State could prohibit the sale within its limits, in original, unbroken packages, of ardent spirits, distilled liquors, ale and beer, imported from another State, this court said that they were recognized by the laws of Congress as well as by the commercial world "as subjects of exchange, barter and traffic," and that "whatever our individual views may be as to the deleterious or dangerous qualities of particular articles, we cannot hold that any articles which Congress recognized as subjects of commerce are not such." Leisy v. Hardin, 135 U.S. 100, 110, 125.
Then followed the passage by Congress of the act of August 8, 1890, 26 Stat. 313, c. 728, providing "that all fermented, distilled, or other intoxicating liquors or liquids transported into any State or Territory, or remaining therein for use, consumption, sale or storage therein, shall upon arrival in such State or Territory be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police powers, to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise." That act was sustained in the Rahrer case as a valid exercise of the power of Congress to regulate commerce among the States.
In Rhodes v. Iowa, 170 U.S. 412, 426, that statute all of its provisions being regarded was held as not causing the power of the State to attach to an interstate commerce shipment of intoxicating liquors "whilst the merchandise was in transit under such shipment, and until its arrival at the point of destination and delivery there to the consignee."
Thus under its power to regulate interstate commerce, as involved *362 in the transportation, in original packages, of ardent spirits from one State to another, Congress, by the necessary effect of the act of 1890 made it impossible to transport such packages to places within a prohibitory State and there dispose of their contents by sale; although it had been previously held that ardent spirits were recognized articles of commerce and, until Congress otherwise provided, could be imported into a State, and sold in the original packages, despite the will of the State. If at the time of the passage of the act of 1890 all the States had enacted liquor laws prohibiting the sale of intoxicating liquors within their respective limits, then the act would necessarily have had the effect to exclude ardent spirits altogether from commerce among the States; for no one would ship, for purposes of sale, packages containing such spirits to points within any State that forbade their sale at any time or place, even in unbroken packages, and, in addition, provided for the seizure and forfeiture of such packages. So that we have in the Rahrer case a recognition of the principle that the power of Congress to regulate interstate commerce may sometimes be exerted with the effect of excluding particular articles from such commerce.
It is said, however, that if, in order to suppress lotteries carried on through interstate commerce, Congress may exclude lottery tickets from such commerce, that principle leads necessarily to the conclusion that Congress may arbitrarily exclude from commerce among the States any article, commodity or thing, of whatever kind or nature, or however useful or valuable, which it may choose, no matter with what motive, to declare shall not be carried from one State to another. It will be time enough to consider the constitutionality of such legislation when we must do so. The present case does not require the court to declare the full extent of the power that Congress may exercise in the regulation of commerce among the States. We may, however, repeat, in this connection, what the court has heretofore said, that the power of Congress to regulate commerce among the States, although plenary, cannot be deemed arbitrary, since it is subject to such limitations or restrictions as *363 are prescribed by the Constitution. This power, therefore, may not be exercised so as to infringe rights secured or protected by that instrument. It would not be difficult to imagine legislation that would be justly liable to such an objection as that stated, and be hostile to the objects for the accomplishment of which Congress was invested with the general power to regulate commerce among the several States. But, as often said, the possible abuse of a power is not an argument against its existence. There is probably no governmental power that may not be exerted to the injury of the public. If what is done by Congress is manifestly in excess of the powers granted to it, then upon the courts will rest the duty of adjudging that its action is neither legal nor binding upon the people. But if what Congress does is within the limits of its power, and is simply unwise or injurious, the remedy is that suggested by Chief Justice Marshall in Gibbons v. Ogden, when he said: "The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are, in this, as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse. They are the restraints on which the people must often rely solely, in all representative governments."
The whole subject is too important, and the questions suggested by its consideration are too difficult of solution, to justify any attempt to lay down a rule for determining in advance the validity of every statute that may be enacted under the commerce clause. We decide nothing more in the present case than that lottery tickets are subjects of traffic among those who choose to sell or buy them; that the carriage of such tickets by independent carriers from one State to another is therefore interstate commerce; that under its power to regulate commerce among the several States Congress subject to the limitations imposed by the Constitution upon the exercise of the powers granted has plenary authority over such commerce, and may prohibit the carriage of such tickets from State to State; and that legislation to that end, and of that character, is not inconsistent *364 with any limitation or restriction imposed upon the exercise of the powers granted to Congress.
The judgment is
Affirmed.
MR. CHIEF JUSTICE FULLER, with whom concur MR. JUSTICE BREWER, MR. JUSTICE SHIRAS and MR. JUSTICE PECKHAM, dissenting.
Although the first section of the act of March 2, 1895, 28 Stat. 963, c. 191, is inartificially drawn, I accept the contention of the Government that it makes it an offence (1) to bring lottery matter from abroad into the United States; (2) to cause such matter to be deposited in or carried by the mails of the United States; (3) to cause such matter to be carried from one State to another in the United States; and further, to cause any advertisement of a lottery or similar enterprise to be brought into the United States, or be deposited or carried by the mails, or transferred from one State to another.
The case before us does not involve in fact the circulation of advertisements and the question of the abridgement of the freedom of the press; nor does it involve the importation of lottery matter, or its transmission by the mails. It is conceded that the lottery tickets in question, though purporting to be issued by a lottery company of Paraguay, were printed in the United States, and were not imported into the United States from any foreign country.
The naked question is whether the prohibition by Congress of the carriage of lottery tickets from one State to another by means other than the mails is within the powers vested in that body by the Constitution of the United States. That the purpose of Congress in this enactment was the suppression of lotteries cannot reasonably be denied. That purpose is avowed in the title of the act, and is its natural and reasonable effect, and by that its validity must be tested. Henderson v. Mayor &c., 92 U.S. 259, 268; Minnesota v. Barber, 136 U.S. 313, 320.
The power of the State to impose restraints and burdens on persons and property in conservation and promotion of the public *365 health, good order and prosperity is a power originally and always belonging to the States, not surrendered by them to the General Government nor directly restrained by the Constitution of the United States, and essentially exclusive, and the suppression of lotteries as a harmful business falls within this power, commonly called of police. Douglas v. Kentucky, 168 U.S. 488.
It is urged, however, that because Congress is empowered to regulate commerce between the several States, it, therefore, may suppress lotteries by prohibiting the carriage of lottery matter. Congress may indeed make all laws necessary and proper for carrying the powers granted to it into execution, and doubtless an act prohibiting the carriage of lottery matter would be necessary and proper to the execution of a power to suppress lotteries; but that power belongs to the States and not to Congress. To hold that Congress has general police power would be to hold that it may accomplish objects not entrusted to the General Government, and to defeat the operation of the Tenth Amendment, declaring that: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
The ground on which prior acts forbidding the transmission of lottery matter by the mails was sustained, was that the power vested in Congress to establish post offices and post roads embraced the regulation of the entire postal system of the country, and that under that power Congress might designate what might be carried in the mails and what excluded. In re Rapier, 143 U.S. 110; Ex parte Jackson, 96 U.S. 727.
In the latter case, Mr. Justice Field, delivering the unanimous opinion of the court, said: "But we do not think that Congress possesses the power to prevent the transportation in other ways, as merchandise, of matter which it excludes from the mails. To give efficiency to its regulations and prevent rival postal systems, it may perhaps prohibit the carriage by others for hire, over postal routes, of articles which legitimately constitute mail matter, in the sense in which those terms were used when the Constitution was adopted, consisting of letters, and of newspapers *366 and pamphlets, when not sent as merchandise; but further than this its power of prohibition cannot extend." And this was repeated in the case of Rapier.
Certainly the act before us cannot stand the test of the rule laid down by Mr. Justice Miller in the Trade-Mark Cases, 100 U.S. 82, 96, when he said: "When, therefore, Congress undertakes to enact a law, which can only be valid as a regulation of commerce, it is reasonable to expect to find on the face of the law, or from its essential nature, that it is a regulation of commerce with foreign nations, or among the several States, or with the Indian tribes. If not so limited, it is in excess of the power of Congress."
But apart from the question of bona fides, this act cannot be brought within the power to regulate commerce among the several States, unless lottery tickets are articles of commerce, and, therefore, when carried across state lines, of interstate commerce; or unless the power to regulate interstate commerce includes the absolute and exclusive power to prohibit the transportation of anything or anybody from one State to another.
Mr. Justice Catron remarked in the License Cases, 5 How. 504, 600, that "that which does not belong to commerce is within the jurisdiction of the police power of the State; and that which does belong to commerce is within the jurisdiction of the United States;" and the observation has since been repeatedly quoted by this court with approval.
In United States v. E.C. Knight Company, 156 U.S. 1, 13, we said: "It is vital that the independence of the commercial power and of the police power, and the delimitation between them, however sometimes perplexing, should always be recognized and observed, for while the one furnishes the strongest bond of union, the other is essential to the preservation of the autonomy of the States as required by our dual form of government; and acknowledged evils, however grave and urgent they may appear to be, had better be borne, than the risk be run, in the effort to suppress them, of more serious consequences by resort to expedients of even doubtful constitutionality. It will be perceived how far reaching the proposition is that the power of dealing with a monopoly directly may be exercised by the *367 General Government whenever interstate or international commerce may be ultimately affected. The regulation of commerce applies to the subjects of commerce and not to matters of internal police." This case was adhered to in Addyston Pipe and Steel Company v. United States, 175 U.S. 211, where it was decided that Congress could prohibit the performance of contracts, whose natural effect, when carried out, would be to directly regulate interstate and foreign commerce.
It cannot be successfully contended that either Congress or the States can, by their own legislation, enlarge their powers, and the question of the extent and limit of the powers of either is a judicial question under the fundamental law.
If a particular article is not the subject of commerce, the determination of Congress that it is, cannot be so conclusive as to exclude judicial inquiry.
When Chief Justice Marshall said that commerce embraced intercourse, he added, commercial intercourse, and this was necessarily so since, as Chief Justice Taney pointed out, if intercourse were a word of larger meaning than the word commerce, it could not be substituted for the word of more limited meaning contained in the Constitution.
Is the carriage of lottery tickets from one State to another commercial intercourse?
The lottery ticket purports to create contractual relations and to furnish the means of enforcing a contract right.
This is true of insurance policies, and both are contingent in their nature. Yet this court has held that the issuing of fire, marine, and life insurance policies, in one State, and sending them to another, to be there delivered to the insured on payment of premium, is not interstate commerce. Paul v. Virginia, 8 Wall. 168; Hooper v. California, 155 U.S. 648; New York Life Insurance Company v. Cravens, 178 U.S. 389.
In Paul v. Virginia, Mr. Justice Field, in delivering the unanimous opinion of the court, said: "Issuing a policy of insurance is not a transaction of commerce. The policies are simple contracts of indemnity against loss by fire, entered into between the corporations and the assured, for a consideration paid by the latter. These contracts are not articles of commerce *368 in any proper meaning of the word. They are not subjects of trade and barter offered in the market as something having an existence and value independent of the parties to them. They are not commodities to be shipped or forwarded from one State to another, and then put up for sale. They are like other personal contracts between parties which are completed by their signature and the transfer of the consideration. Such contracts are not interstate transactions, though the parties may be domiciled in different States. The policies do not take effect are not executed contracts until delivered by the agent in Virginia. They are, then, local transactions, and are governed by the local law. They do not constitute a part of the commerce between the States any more than a contract for the purchase and sale of goods in Virginia by a citizen of New York whilst in Virginia would constitute a portion of such commerce."
This language was quoted with approval in Hooper v. California, 155 U.S. 648, and it was further said: "If the power to regulate interstate commerce applied to all the incidents to which said commerce might give rise and to all contracts which might be made in the course of its transaction, that power would embrace the entire sphere of mercantile activity in any way connected with trade between the States; and would exclude state control over many contracts purely domestic in their nature. The business of insurance is not commerce. The contract of insurance is not an instrumentality of commerce. The making of such a contract is a mere incident of commercial intercourse, and in this respect there is no difference whatever between insurance against fire and insurance against `the perils of the sea.'" Or, as remarked in New York Life Insurance Company v. Cravens, 178 U.S. 389, "against the uncertainty of man's mortality."
The fact that the agent of the foreign insurance company negotiated the contract of insurance in the State where the contract was to be finally completed and the policy delivered, did not affect the result. As Mr. Justice Bradley said in the leading case of Robins v. Shelby County Taxing District, 120 U.S. 489: "The negotiation of sales of goods which are in another *369 State, for the purpose of introducing them into the State in which the negotiation is made, is interstate commerce." And see Collins v. New Hampshire, 171 U.S. 30, and other cases.
Tested by the same reasoning, negotiable instruments are not instruments of commerce; bills of lading are, because they stand for the articles included therein; hence it has been held that a State cannot tax interstate bills of lading because that would be a regulation of interstate commerce, and that Congress cannot tax foreign bills of lading, because that would be to tax the articles exported, and in conflict with Article I, § 9, cl. 5, of the Constitution of the United States, that "No tax or duty shall be laid on articles exported from any State." Fairbank v. United States, 181 U.S. 283.
In Nathan v. Louisiana, 8 How. 73, it was held that a broker dealing in foreign bills of exchange was not engaged in commerce, but in supplying an instrumentality of commerce, and that a state tax on all money or exchange brokers was not void as to him as a regulation of commerce.
And in Williams v. Fears, 179 U.S. 270, that the levy of a tax by the State of Georgia on the occupation of a person engaged in hiring laborers to be employed beyond the limits of the State, was not a regulation of interstate commerce, and that the tax fell within the distinction between interstate commerce or an instrumentality thereof, and the mere incidents that might attend the carrying on of such commerce.
In Cohens v. Virginia, 6 Wheat. 264, 440, Congress had empowered the corporation of the city of Washington to "authorize the drawing of lotteries for effecting any improvement in the city, which the ordinary funds or revenue thereof will not accomplish." The corporation had duly provided for such lottery, and this case was a conviction under a statute of Virginia for selling tickets issued by that lottery. That statute forbade the sale within the State of any ticket in a lottery not authorized by the laws of Virginia.
The court held, by Chief Justice Marshall, that the lottery was merely the emanation of a corporate power, and "that the *370 mind of Congress was not directed to any provision for the sale of the tickets beyond the limits of the corporation."
The constitutionality of the act of Congress, as forcing the sale of tickets in Virginia, was therefore not passed on, but if lottery tickets had been deemed articles of commerce, the Virginia statute would have been invalid as a regulation of commerce, and the conviction could hardly have been affirmed, as it was.
In Nutting v. Massachusetts, 183 U.S. 553, 556, Mr. Justice Gray said: "A State has the undoubted power to prohibit foreign insurance companies from making contracts of insurance, marine or other, within its limits, except upon such conditions as the State may prescribe, not interfering with interstate commerce. A contract of marine insurance is not an instrumentality of commerce, but a mere incident of commercial intercourse. The State, having the power to impose conditions on the transaction of business by foreign insurance companies within its limits, has the equal right to prohibit the transaction of such business by agents of such companies, or by insurance brokers, who are to some extent the representatives of both parties."
If a State should create a corporation to engage in the business of lotteries, could it enter another State, which prohibited lotteries, on the ground that lottery tickets were the subjects of commerce?
On the other hand, could Congress compel a State to admit lottery matter within it, contrary to its own laws?
In Alexander v. State, 86 Georgia, 246, it was held that a state statute prohibiting the business of buying and selling what are commonly known as "futures," was not protected by the commerce clause of the Constitution, as the business was gambling, and that clause protected interstate commerce but did not protect interstate gambling. The same view was expressed in State v. Stripling, 113 Alabama, 120, in respect of an act forbidding the sale of pools on horse races conducted without the State.
In Ballock v. Maryland, 73 Maryland, 1, it was held that when the bonds of a foreign government are coupled with conditions and stipulations that change their character from an *371 obligation for the payment of a certain sum of money to a species of lottery tickets condemned by the police regulations of the State, the prohibition of their sale did not violate treaty stipulation or constitutional provision. Such bonds with such conditions and stipulations ceased to be vendible under the law.
So lottery tickets forbidden to be issued or dealt in by the laws of Texas, the terminus a quo, and by the laws of California or Utah, the terminus ad quem, were not vendible; and for this reason also not articles of commerce.
If a lottery ticket is not an article of commerce, how can it become so when placed in an envelope or box or other coverting, and transported by an express company? To say that the mere carrying of an article which is not an article of commerce in and of itself nevertheless becomes such the moment it is to be transported from one State to another, is to transform a non-commercial article into a commercial one simply because it is transported. I cannot conceive that any such result can properly follow.
It would be to say that everything is an article of commerce the moment it is taken to be transported from place to place, and of interstate commerce if from State to State.
An invitation to dine, or to take a drive, or a note of introduction, all become articles of commerce under the ruling in this case, by being deposited with an express company for transportation. This in effect breaks down all the differences between that which is, and that which is not, an article of commerce, and the necessary consequence is to take from the States all jurisdiction over the subject so far as interstate communication is concerned. It is a long step in the direction of wiping out all traces of state lines, and the creation of a centralized Government.
Does the grant to Congress of the power to regulate interstate commerce impart the absolute power to prohibit it?
It was said in Gibbons v. Ogden, 9 Wheat. 1, 211, that the right of intercourse between State and State was derived from "those laws whose authority is acknowledged by civilized man throughout the world;" but under the Articles of Confederation the States might have interdicted interstate trade, yet *372 when they surrendered the power to deal with commerce as between themselves to the General Government it was undoubtedly in order to form a more perfect union by freeing such commerce from state discrimination, and not to transfer the power of restriction.
"But if that power of regulation is absolutely unrestricted as respects interstate commerce, then the very unity the Constitution was framed to secure can be set at naught by a legislative body created by that instrument." Dooley v. United States, 183 U.S. 151, 171.
It will not do to say a suggestion which has heretofore been made in this case that state laws have been found to be ineffective for the suppression of lotteries, and therefore Congress should interfere. The scope of the commerce clause of the Constitution cannot be enlarged because of present views of public interest.
In countries whose fundamental law is flexible it may be that the homely maxim, "to ease the shoe where it pinches," may be applied, but under the Constitution of the United States it cannot be availed of to justify action by Congress or by the courts.
The Constitution gives no countenance to the theory that Congress is vested with the full powers of the British Parliament, and that, although subject to constitutional limitations, it is the sole judge of their extent and application; and the decisions of this court from the beginning have been to the contrary.
"To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may, at any time, be passed by those intended to be restrained?" asked Marshall, in Marbury v. Madison, 1 Cranch, 137, 176.
"Should Congress," said the same great magistrate in McCulloch v. Maryland, 4 Wheat. 316, 423, "under the pretext of executing its powers, pass laws for the accomplishment of objects not entrusted to the Government; it would become the painful duty of this tribunal, should a case requiring such a decision come before it, to say that such an act was not the law of the land."
*373 And so Chief Justice Taney, referring to the extent and limits of the powers of Congress: "As the Constitution itself does not draw the line, the question is necessarily one for judicial decision, and depending altogether upon the words of the Constitution."
It is argued that the power to regulate commerce among the several States is the same as the power to regulate commerce with foreign nations, and with the Indian tribes. But is its scope the same?
As in effect, before observed, the power to regulate commerce with foreign nations and the power to regulate interstate commerce, are to be taken diverso intuitu, for the latter was intended to secure equality and freedom in commercial intercourse as between the States, not to permit the creation of impediments to such intercourse; while the former clothed Congress with that power over international commerce, pertaining to a sovereign nation in its intercourse with foreign nations, and subject, generally speaking, to no implied or reserved power in the States. The laws which would be necessary and proper in the one case, would not be necessary or proper in the other.
Congress is forbidden to lay any tax or duty on articles exported from any State, and while that has been applied to exports to a foreign country, it seems to me that it was plainly intended to apply to interstate exportation as well; Congress is forbidden to give preference by any regulation of commerce or revenue to the ports of one State over those of another; and duties, imposts and excises must be uniform throughout the United States.
"The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." This clause of the second section of Article IV was taken from the fourth Article of Confederation, which provided that "the free inhabitants of each of these States . . . shall be entitled to all privileges and immunities of free citizens in the several States; and the people of each State shall have free ingress and egress to and from any other State, and shall enjoy therein all the privileges of trade and commerce;" while other parts of the *374 same article were also brought forward in Article IV of the Constitution.
Mr. Justice Miller, in the Slaughter-House Cases, 16 Wall. 36, 75, says that there can be but little question that the purpose of the fourth Article of the Confederation, and of this particular clause of the Constitution, "is the same, and that the privileges and immunities intended are the same in each."
Thus it is seen that the right of passage of persons and property from one State to another cannot be prohibited by Congress. But that does not challenge the legislative power of a sovereign nation to exclude foreign persons or commodities, or place an embargo, perhaps not permanent, upon foreign ships or manufactures.
The power to prohibit the transportation of diseased animals and infected goods over railroads or on steamboats is an entirely different thing, for they would be in themselves injurious to the transaction of interstate commerce, and, moreover, are essentially commercial in their nature. And the exclusion of diseased persons rests on different ground, for nobody would pretend that persons could be kept off the trains because they were going from one State to another to engage in the lottery business. However enticing that business may be, we do not understand these pieces of paper themselves can communicate bad principles by contact.
The same view must be taken as to commerce with Indian tribes. There is no reservation of police powers or any other to a foreign nation or to an Indian tribe, and the scope of the power is not the same as that over interstate commerce.
In United States v. 43 Gallons of Whiskey, 93 U.S. 188, 194, Mr. Justice Davis said: "Congress now has the exclusive and absolute power to regulate commerce with the Indian tribes, a power as broad and free from restrictions as that to regulate commerce with foreign nations. The only efficient way of dealing with the Indian tribes was to place them under the protection of the General Government. Their peculiar habits and character required this; and the history of the country shows the necessity of keeping them `separate, subordinate, and dependent.' Accordingly, treaties have been made and laws passed *375 separating Indian territory from that of the State, and providing that intercourse and trade with the Indians should be carried on solely under the authority of the United States."
I regard this decision as inconsistent with the views of the framers of the Constitution, and of Marshall, its great expounder. Our form of government may remain notwithstanding legislation or decision, but, as long ago observed, it is with governments, as with religions, the form may survive the substance of the faith.
In my opinion the act in question in the particular under consideration is invalid, and the judgments below ought to be reversed, and my brothers BREWER, SHIRAS and PECKHAM concur in this dissent.
NOTES
[1] Docket title Champion v. Ames, No. 2. Francis v. United States, No. 80, argued simultaneously. See p. 375, post.
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821 F.2d 373
23 Fed. R. Evid. Serv. 4
Joseph YOUNG, Plaintiff-Appellant,v.James RABIDEAU and Stephen Washington, Respondents-Appellees.
No. 84-2952.
United States Court of Appeals,Seventh Circuit.
Argued Dec. 12, 1986.Decided June 1, 1987.
1
John McCarroll (Law Student), Notre Dame Law School, Notre Dame, Ind., for plaintiff-appellant.
2
Thomas A. Ioppolo, Asst. Atty. Gen. of Ill., Chicago, Ill., for respondents-appellees.
3
Before CUMMINGS and FLAUM, Circuit Judges, and GRANT, Senior District Judge.*
4
GRANT, Senior District Judge.
5
Plaintiff-Appellant Joseph Young filed a civil rights action under 42 U.S.C. Sec. 1983 against two correctional officers, alleging use of excessive force against him and confinement in an uninhabitable control cell in violation of the Eighth Amendment standard of cruel and unusual punishment. The jury returned a verdict in favor of the defendants, Sergeant James Rabideau and Officer Stephen Washington, and the court entered judgment on the verdict on October 10, 1984. After his motion for a new trial was denied, Young filed this appeal on November 13, 1984, alleging improper admission of testimony about his disciplinary record and improper exclusion of testimony concerning prison rules. We affirm.
I.
6
Joseph Young is an inmate at Stateville Correctional Center in Joliet, Illinois. The allegations of his Sec. 1983 complaint are based upon a dispute and altercation that occurred on February 13, 1981, between the prisoner Young and the guard Washington on the way to the exercise yard. Their versions of the situation were quite different.
7
Young and three other inmates, each in handcuffs, were being escorted by Washington to the exercise area. Washington claimed that Young had refused to go into the yard, and that Washington had told him to go either into the yard or back to his cell. The guard then removed a chain from the yard gate to unlock it. Young testified that he became frightened by Washington's swinging of the chain, grabbed the chain to protect himself and then dropped it. Washington testified that Young had put his finger in Washington's face to intimidate the guard and had grabbed the chain, swinging it toward the officer's face. Each accused the other of the abusive language, provocative actions and initial attack that actually caused the fight. As a result of the scuffle, Young's left eye and wrists were cut.
8
The prisoner and corrections officer went to Sergeant Rabideau's desk. After temporary placement in a shower cell, Young was taken for medical treatment. Rabideau then placed the inmate in a control cell, where he remained from February 13 until the morning of February 17, 1981. Sergeant Rabideau was responsible for the prison's control cells.
9
Testimony at trial concerning the condition of the control cell was conflicting. According to Young's description, the cell was filthy and unheated; the sink, toilet, and light did not function; and he was not provided with sheets or toiletries. Rabideau testified that he did not recall the condition of the control cell on that date, but that it was standard practice for him to make rounds at least once a day to inspect the condition of empty cells. He stated that a cell was cleaned and equipped with sheets, blankets, soap and hygiene essentials before an inmate was placed in it, and was taken out of operation if major repairs were needed.
10
The jury found the evidence and testimony of the correctional officers more credible, and returned a verdict in their favor.
11
At trial, the court refused to admit Young's direct testimony concerning prison regulations about length of detention in a control cell, and allowed defense counsel to cross-examine him concerning his prior disciplinary record in the penitentiary. In this appeal, Young has raised two issues regarding these evidentiary determinations: whether it was reversible error for the district court to prevent Young from testifying that his confinement in a control cell for more than seventy-two hours violated prison rules, and whether evidence of his prior disciplinary violations was inadmissible under Rule 404(b) of the Federal Rules of Evidence.
II.
12
During his direct testimony on the condition of the control cell, Young stated that he had been held in that cell for more than seventy-two hours. When his lawyer asked the significance of that time period, he started to explain: "According to prison rules, they can't keep...." The objection to that statement was sustained. Appellant now claims that the court's disallowance of that testimony was reversible error.
13
In his appellate brief Young asserted that evidence of a prison rule about confinement in a control cell would have established Sergeant Rabideau's personal responsibility for Young's deprivation of his constitutional rights under the eighth amendment and would have helped to negate Rabideau's claim of immunity, a defense available to him as a state prison official under Sec. 1983. The record indicates that appellant's counsel did not attempt either to explain the relevance of that evidence, when the objection was made, or to admit the evidence at another point in the trial.1 At oral argument appellant's counsel apparently recognized the futility of pursuing this point, for he argued only the second issue.
14
First, let us make clear that, on procedural grounds, defendants' objection was permissible. Young's complaint bases its constitutional claim of cruel and unusual punishment on the uninhabitable conditions of the cell rather than on any violation of the prison's regulations. It was proper for defendants in this suit to object to evidence that has no basis in the pleadings. Collateral evidence is excluded by Fed.R.Evid. 403. United States v. Buljubasic, 808 F.2d 1260, 1268 (7th Cir.1987).
15
Second, we note that the appellant had the opportunity to include evidence of prison rules before or during the trial. However, Young made no motion before trial to amend his complaint to conform the pleadings to the evidence he intended to present. Nor did he request an amendment to his pleadings at the time that the submitted evidence on the prison rule was objected to at trial. Pursuant to Rule 15(b) of the Federal Rules of Civil Procedure, the court could have considered an amendment at that time.
16
If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.
17
Now that the trial is over, appellant challenges the trial court's decision to exclude the evidence, and we must determine whether the issue can be considered on appeal.
18
The Federal Rules of Evidence clearly delineate the procedure to be followed in order to preserve a point for appeal, and the procedure was not followed by appellant. Rule 103(a)(2) requires that "error may not be predicated upon a ruling which ... excludes evidence unless a substantial right of the party is affected," and "the substance of the evidence was made known to the court by offer or was apparent from the context within which questions were asked."
19
An offer of proof is needed "so that the reviewing court could determine whether any error affected [plaintiff's] substantial rights." Fidelity and Deposit Co. of Md. v. Reliance Federal Savings and Loan Ass'n., 795 F.2d 42, 44 (7th Cir.1986). The offer need not be formal, nor the error precisely specified. United States v. Sweiss, 800 F.2d 684, 688 (7th Cir.1986), reh'g granted, 812 F.2d 1023 (7th Cir.1987). However, appellant needed to make the appropriate arguments to the district court that he now makes on appeal in order to alert the trial court to the issue. Id.
20
Appellant has failed to satisfy any of the Rule 103(a) criteria. There is no indication from the record that Young responded to the court's exclusion of his testimony with any offer of proof. And his statement was so abbreviated that the substance of his evidence is not apparent from the context. No showing was made that the exclusion of this evidence seriously hindered Young's case or adversely affected his substantial rights. Without more development of the substance of the proposed evidence or an offering of the prison rule in evidence, appellant has not made an appropriate offer of proof that would have preserved the point on appeal.
21
Although neither a timely objection nor offer of proof was made, the district court's exclusion of Young's testimony about a prison rule could be considered "plain error." Pursuant to Rule 103(d), we can take notice "of plain errors affecting substantial rights although they were not brought to the attention of the court."
22
A party challenging the exclusion of evidence has the burden of demonstrating that his substantial rights have been prejudiced by the exclusion. Ellis v. City of Chicago, 667 F.2d 606, 611 (7th Cir.1981). In both civil rights and criminal cases, the plain-error doctrine2 allows reversal in spite of the lack of an objection at trial if "the trial court's admission [or exclusion] of this evidence was a conspicuous error that was so likely to have changed the result that a retrial is necessary to avoid a miscarriage of justice." United States v. Brimberry, 744 F.2d 580, 585 (7th Cir.1984) (citing United States v. Silverstein, 732 F.2d 1338, 1348 (7th Cir.1984), cert. denied, 469 U.S. 1111, 105 S.Ct. 792, 83 L.Ed.2d 785 (1985)). See also United States v. Serola, 767 F.2d 364, 372 (7th Cir.1985); Wilson v. Attaway, 757 F.2d 1227, 1242 (11th Cir.), reh'g denied, 764 F.2d 1411 (11th Cir.1985).
23
The exclusion of Young's testimony concerning a prison regulation is not likely to have changed the result of the trial. In any case, the appellant did not meet his burden of demonstrating that his substantial rights were prejudiced by the exclusion, and we cannot find that there was a miscarriage of justice in that evidentiary ruling. Although evidence of the prison rule might have added some cumulative support to the constitutional claim, its exclusion does not rise to the level of plain error warranting us to overlook the failure of appellant's counsel to preserve the point by timely objection. Accordingly, we need not consider whether the district court erred in disallowing evidence of the prison regulations.
III.
24
Young testified on direct examination that Washington had started to swing the chain and that he had grabbed the chain in self-defense: "Well, my reflex, I just grabbed the chain to protect myself. I didn't snatch it from him or anything, I just grabbed the chain." Young also testified, on cross-examination, that his pointing of a finger in Washington's face was accidental rather than intentional.
25
The court allowed defendants, on cross-examination, to ask Young a series of questions about his prior record. The court did not allow admission of Young's disciplinary card or a reading of specific instances of disciplinary reports on the card. It permitted general questions about past discipline rather than questions about specific prior incidents. Defendants insisted that the jury did not learn the full extent of Young's record. Young responded to the questions on cross-examination by denying that he had engaged in prior assaults. He admitted previous discipline but stated that it was "retaliatory."
26
Appellant contends that the admission of evidence of his record was intended to establish his violent nature by showing that he acted in conformity with prior bad acts. Defendants argue that Young opened the door to evidence of his prior acts by testifying that he had grabbed the chain by "reflex" and that he had pointed a finger in Washington's face by "accident." They offer three purposes for admitting evidence of his past acts: to indicate Young's intent in so acting; Young's bias, hostility, and dislike of correctional officers and of institutional authority; and the absence of mistake or accident.
27
Rule 404(b) of the Federal Rules of Evidence governs admissibility of evidence of other crimes, wrongs, or acts. It forbids evidence of an individual's character to be admitted at trial, civil as well as criminal, for the purpose of proving "that he acted in conformity therewith" on a particular occasion. However, the rule permits evidence of wrongful acts to be introduced for specific purposes: "proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident."
28
Rule 403 of the Federal Rules of Evidence is inextricably related to the 404(b) determination of whether evidence of other wrongs may be offered. That rule provides that evidence may be excluded "if its probative value is substantially outweighed by the danger of unfair prejudice." Evidence is considered unfairly prejudicial, not merely because it damages the opposing party's case, but because its admission makes it likely that the jury will be induced to decide the case on an improper basis, commonly an emotional one, rather than on the evidence presented on the crime charged. United States v. Falco, 727 F.2d 659, 662 (7th Cir.1984). "Relevant evidence is inherently prejudicial; but it is only unfair prejudice, substantially outweighing probative value, which permits exclusion of relevant matter under Rule 403." United States v. Medina, 755 F.2d 1269, 1274 (7th Cir.1985) (quoting United States v. McRae, 593 F.2d 700, 707 (5th Cir.), cert. denied, 444 U.S. 862, 100 S.Ct. 128, 62 L.Ed.2d 83 (1979) (emphasis in original)).
29
A trial court possesses broad discretion in determining the relevance of proffered evidence and in balancing its probative value and unfair prejudice. United States v. Laughlin, 772 F.2d 1382, 1392 (7th Cir.1985). The decision of the district judge will be accorded "great deference," Medina, 755 F.2d at 1274, because his first-hand exposure to all the evidence and his familiarity with the course of the trial proceedings are the best qualifications available for balancing the value of the evidence in its proper context. United States v. Levy, 741 F.2d 915, 924 (7th Cir.), cert. denied, 469 U.S. 1021, 105 S.Ct. 440, 83 L.Ed.2d 366 (1984). "When the same evidence has legitimate and forbidden uses, when the introduction is valuable yet dangerous, the district judge has great discretion." United States v. Beasley, 809 F.2d 1273, 1278 (7th Cir.1987). The lower court's holding will not be disturbed on appeal absent a clear showing that the court abused its discretion. United States v. Rovetuso, 768 F.2d 809, 815 (7th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 838, 88 L.Ed.2d 809 (1986); United States v. Green, 735 F.2d 1018, 1026 (7th Cir.1984).
30
It is our role to determine whether where was a "flaw in the process" rather than in the result, "whether the district judge and the parties took the right things into account." Beasley, 809 F.2d at 1279.[T]here must be a principled exercise of discretion. The district judge must both identify the exception that applies to the evidence in question and evaluate whether the evidence, although relevant and within the exception, is sufficiently probative to make tolerable the risk that jurors will act on the basis of emotion or an inference via the blackening of the defendant's character. Discretion, when exercised, will rarely be disturbed.
31
Id.
32
This court established a four-part test for the admissibility of evidence of prior misconduct in United States v. Shackleford, 738 F.2d 776, 779 (7th Cir.1984):
33
Our decisions indicate that, under the dictates of Rules 404(b) and 403, admission of evidence of prior or subsequent acts will be approved if (1) the evidence is directed toward establishing a matter in issue other than the defendant's propensity to commit the crime charged, (2) the evidence shows that the other act is similar enough and close enough in time to be relevant to the matter in issue ..., (3) the evidence is clear and convincing, and (4) the probative value of the evidence is not substantially outweighed by the danger of unfair prejudice.
34
In analyzing whether the trial court abused its discretion in admitting evidence of Young's prior disciplinary record, we must therefore first consider whether that evidence was directed toward establishing a matter in issue other than his propensity for prison violence.
A. Bias
35
Defendants argue that Young's discipline history reflects his "bias" against authority (a category not listed in Rule 404(b)), and is relevant to explain his hostility toward correctional officers.
36
We have recognized, in criminal cases, that evidence may be admissible to support a theory of bias as long as it does not become inadmissible evidence of his character. United States v. Rovetuso, 768 F.2d at 817; United States v. DeLeon, 498 F.2d 1327 (7th Cir.1974).3 A trial judge may admit limited extrinsic evidence for the purpose of showing the bias or interest of a witness as long as that bias is not a collateral issue. However, the court must admit such evidence discreetly, always balancing the probative value and the prejudicial effect. United States v. Battaglia, 394 F.2d 304, 314 (7th Cir.1968), cert. denied, 401 U.S. 924, 91 S.Ct. 868, 27 L.Ed.2d 828 (1971). In United States v. Marzano, 537 F.2d 257 (7th Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 734, 50 L.Ed.2d 749 (1977), this court acknowledged the conflict in courts concerning admissibility of evidence showing bias, id. at 265, and affirmed the limited inclusion of bias testimony because the trial court used a voir dire procedure to substantiate various allegations before allowing possibly prejudicial material to be brought before the jury. Id. at 266.
37
Bias is an evidentiary device used to impeach the testimony of a witness and thus to affect the weight of his testimony. Bias is associated most often with criminal trials and is used against a witness rather than a party. See IIIA Wigmore on Evidence Secs. 943-948. In contrast, this is a civil rights case, not a criminal one. The party alleged to be biased is the plaintiff, not a witness who might be partial or hostile to one of the parties. The traditional use of bias is simply not an appropriate concept to apply to this circumstance.
38
Perhaps it is more proper to categorize the admissibility of Young's disciplinary record as a new Rule 404(b) exception for the purposes of establishing bias. Rule 404(b) does not exhaust the purposes for which evidence of other wrongs or acts may be admitted. United States v. Boroni, 758 F.2d 222, 224 (7th Cir.1985) (citing United States v. Jordan, 722 F.2d 353, 356 (7th Cir.1983)). Although this court has recognized that the list of exceptions is illustrative rather than exclusive, Beasley, 809 F.2d at 1279, it has been careful not to broaden the exceptions to Rule 404(b) beyond their intended scope. In Beasley, for example, we found that the rule did not list "pattern" as an exception because pattern, alone, creates "the forbidden inference that one who violated the ... laws on one occasion must have violated them on the occasion charged." Id. at 1278. Thus, "pattern" cannot, by itself or even coupled with temporal proximity of acts, justify admissibility of evidence. Nevertheless, we noted that the patterns of a person's acts "may show identity, intent, plan, absence of mistake, or one of the other listed grounds." Id.4
39
We believe that bias, like pattern, may show intent or another Rule 404(b) ground, but that it is more likely to prove bad character or a propensity toward violent behavior by inferring that the prisoner acted in conformity with his prior bad acts. And in the case herein, the evidence of appellant's prior disciplinary record fits neatly into either of two established categories of the rule; there is no reason to create a new "bias" exception. We therefore will not expand Rule 404(b) to include "bias" as a category justifying the admissibility of prior bad acts evidence.
B. Intent
40
Defendants urge that the evidence of the inmate's prior misconduct was relevant to show Young's intent, and was introduced in order to establish that his actions were intended to provoke the officer and to start the fight.
41
Evidence of other bad acts is admissible to establish specific intent when intent is an essential element of the crime charged and when the other requirements of Rules 404(b) and 403 are satisfied. United States v. Arnold, 773 F.2d 823, 832 (7th Cir.1985); United States v. Chaimson, 760 F.2d 798, 805 (7th Cir.1985). Such evidence is also allowed "when intent is only a formal issue that can be inferred from the act" if the issue of intent is raised as a defense by the party whose actions are in question. United States v. Shackleford, 738 F.2d at 781.
42
The "intent" exception to Rule 404(b) may also be used, in a broader sense, to admit prior crimes "because the repetition of the crime is itself circumstantial proof of intent, not direct proof of a propensity to commit crime." United States v. Fountain, 768 F.2d 790, 805 (7th Cir.1985) (Swygert, J., concurring in part and dissenting in part), cert. denied, --- U.S. ----, 106 S.Ct. 1647, 90 L.Ed.2d 191. The Fifth Circuit used this approach in finding that the performance evaluation report on a deputy sheriff was admissible in a Sec. 1983 action because its record of loss of temper and consequential intentional hostility toward others on earlier occasions tended to show that a similar intent to do harm was present in his conduct toward this defendant. Carson v. Polley, 689 F.2d 562, 572-73 (5th Cir.1982). Similarly, such a record of loss of temper and hostility was evident from the disciplinary reports of the appellant herein. In allowing general questions concerning Young's prior disciplinary history, but not admitting the record itself (which was very long and detailed, and could easily have aroused the emotions of the jurors), the district court was more cautious than the Carson court.
43
Admission of past misconduct is proper when presented in rebuttal to appellant's main defense that he did not intend to poke the prison guard in the face or to snatch the chain out of his hand. See United States v. Brunson, 657 F.2d 110, 115 (7th Cir.1981), cert. denied, 454 U.S. 1151, 102 S.Ct. 1019, 71 L.Ed.2d 306 (1982). We find no abuse of discretion in the district court judge's determination to allow limited cross-examination questioning of Young's prior bad acts.
C. Absence of mistake or accident
44
The "absence of mistake or accident" exception to Rule 404(b) is a close corollary of the "intent" exception: evidence of prior misconduct may be admissible for the purpose of showing that an action was intentional and not mistaken or accidental. Appellees insist that, once Young had stated that he grabbed the chain out of Washington's hand by "reflex," and that he pointed his finger in Washington's face by accident, evidence of Young's lengthy history of discipline at Stateville, for assaults as well as rule violations, was relevant to refute those statements by showing an absence of accident in that prior misconduct.
45
Young himself "opened the door" to appellees' use of Young's prison discipline record as a valid evidentiary method of contradicting his explanations of his "unintentional" actions. "Opening the door" is a risk each party assumes when planning its trial strategy and presenting testimony at trial. It is the delicate duty of the trial court to exercise its discretion in admitting evidence because previous testimony "opened the door." United States v. Draiman, 784 F.2d 248, 255 (7th Cir.1986). In this case, appellant himself asserted his "accidental" or "reflexive" movements, which appellees were permitted to contradict. Even in circumstances in which "the door was opened a little and a lot [of evidence] got through," this court has found that the trial judge did not abuse his discretion. Id. In these circumstances, the seriousness of both the direct and rebuttal testimony was well balanced so that evidence specifically refuting appellant's assertions was admitted for its probative effect.
46
Courts have admitted evidence of similar prior bad acts, as rebuttal to the witness's testimony or impeachment of his credibility, to show that the present act probably was not an accident. See, e.g., United States v. Hillsberg, 812 F.2d 328, 334 (7th Cir.1987); United States v. Pelusio, 725 F.2d 161, 168 (2d Cir.1983); United States v. Tsinnijinnie, 601 F.2d 1035, 1040 (9th Cir.1979), cert. denied, 445 U.S. 966, 100 S.Ct. 1657, 64 L.Ed.2d 242 (1980). Such evidence is admissible when it is material and there exists a dispute about it. United States v. Semak, 536 F.2d 1142, 1144 (6th Cir.1976).
47
This court has recently affirmed a district court's inclusion of evidence of two prior firings of a gun because it "tended to prove that he again fired it intentionally, that the discharge was not accidental or inadvertent." United States v. Hillsberg, 812 F.2d at 334. In our case, Young's prior similar misconduct (as indicated in disciplinary reports that included many assaults on officers) tends to negate the possibility that he put his finger in the officer's face by accident or grabbed the chain out of his hand by reflex. Such evidence is clearly relevant to contradict Young's defense of lack of intent. See United States v. Brunson, 657 F.2d at 115.
48
The Shackleford case, in which we laid down guidelines for admitting 404(b) evidence, considered a crime that did not include the element of specific intent.5 In such a situation, once one party raises the issue of lack of intent or of mistake or accident, the other party can produce evidence of intent to rebut that position. 738 F.2d at 781. Young has done just that by describing his actions as accidental and reflexive. Evidence of his prior misconduct tends to indicate that his present actions were not accidental. Such evidence is therefore admissible if it meets the four-part Shackleford test.
49
Evidence of Young's prior disciplinary record is directed toward establishing intent and lack of accident in his actions at issue, and not toward establishing a propensity to commit violent acts. His history indicates many frequent violations and assaults for which he was punished; although specific behavior was not described to the jury, the record clearly and convincingly shows that his other actions were similar enough and close enough in time to be relevant to the matter in issue. Because the district judge did not permit the record to be admitted in evidence, and only allowed general questions about his prior assaults, the danger of unfair prejudice was minimized and the probative value of the evidence dominated what risk of prejudice there might have been. We find that the questions to Young on cross-examination to establish the lack of accident or reflex in his actions were directly probative of his intent and satisfied the Shackleford test. Thus, that evidence was admissible under Rule 404(b).
50
Young's prior disciplinary record was also relevant to establish the excessiveness of the force that Young alleged was used against him. It is not disputed that there was a fight between Young and Washington, and that Young received cuts as a result. However, Young was not hospitalized, and did not complain of the severity of his injuries; the injuries alone were not a clear indication of Washington's use of excessive force. Once Young raised such allegations, the defendants could properly introduce evidence to explain the need for force and to show why the officer's actions were not excessive.
51
This court recently decided a Sec. 1983 case acknowledged by both parties to be very similar to this one. In West v. Love, 776 F.2d 170 (7th Cir.1985), the prisoner West sued correctional officer Love for injuries suffered in a fight in the segregation unit of the prison as the prisoner was being escorted back from the prison yard to his cell. We affirmed the district court's admission of character evidence as relevant to the issue of excessive force. 776 F.2d at 176.
52
The district court in West allowed evidence that Stateville Penitentiary was a maximum security prison; that the segregation unit was reserved for inmates who had demonstrated a propensity for violent behavior; and that West was housed in the segregation unit because of his history of violent behavior. The court found such evidence relevant both to the issue of the reasonableness of the force used against West under the circumstances and as a rebuttal to the inference that West had been unfairly treated. 776 F.2d at 174-75. In concluding that the trial court did not abuse its discretion, we stated that the officers' assessment of the circumstances and of the danger involved was indicative of the reasonableness of their actions and their good faith.
53
Correctional officers are not required to take excessive personal risks with inmates classified as violent. That defendants were dealing with an inmate housed in the special confinement unit rather than with a trusty housed on a prison farm is clearly relevant to their assessment of the danger posed and the amount of reasonable force to be applied. This evidence bearing on defendants' state of mind was admissible under rule 404(b).
54
Id. at 174.
55
Appellant has urged us to follow the First Circuit's decision, Lataille v. Ponte, 754 F.2d 33 (1st Cir.1985), because the facts herein are more similar to those in Lataille.6 We disagree. In Lataille, defense counsel referred to past violent acts of the prisoner in his opening and closing statements and was allowed to enter evidence of the prisoner's sixty previous disciplinary actions. The First Circuit found such evidence clearly inadmissible under Rule 404 because it was offered to show "that Lataille was a violent person and that he, therefore, must have been the aggressor and precipitated the assault." 754 F.2d at 37. In contrast, the district court conducting the West trial had narrowly limited admission of evidence to avoid undue prejudice to the prisoner. West v. Love, 776 F.2d at 175.
56
In this case, the district court also strictly limited admissibility of evidence of Young's past disciplines to avoid undue prejudice. No specific misconduct was reported. The record of his disciplinary history was excluded. The district court monitored evidence to avoid arousing the emotions of the jury. The testimony that was allowed was directly relevant to the intent of Young's actions and the excessiveness of force that Young alleged. Young's history of assaults against officers tends to bear on the reasonableness of Officer Washington's response to Young when Young poked a finger in Washington's face and grabbed the chain.
57
We hold that the district court exercised "principled discretion" in balancing the probative value and unfair prejudice of prior bad acts evidence. The court's limited inclusion of evidence of Young's disciplinary record satisfies the Shackleford test and is admissible as evidence of "absence of accident" under Rule 404(b). Accordingly, we affirm the ruling of the district court.
*
The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, is sitting by designation
1
The appellant did not attempt to admit this evidence either through the more appropriate witness, the sergeant responsible for the control cell, or through submission of the best evidence, the prison regulation itself
2
In United States v. Young, 470 U.S. 1, 105 S.Ct. 1038, 84 L.Ed.2d 1 (1985), the Supreme Court considered the plain-error doctrine of Federal Rule of Criminal Procedure 52(b). It cautioned reviewing courts against using the doctrine to weigh alleged errors not meriting appellate review absent timely objection. Id. at 16, 105 S.Ct. at 1047
3
In DeLeon, we upheld a district court's allowance of a restricted cross-examination revealing that a witness might falsely testify favorably to the Government from fear of prosecution. The district court narrowly allowed the witness to testify to specific information that was relevant to a theory of bias: his prior criminal act, the government's knowledge of the witness's illegal actions, its lack of prosecution for that act, and its promise not to prosecute. DeLeon, 498 F.2d at 1332-33. This evidence was relevant to show the witness's bias, but any further evidence of surrounding circumstances would only have gone to the inadmissible purpose of proving bad character. We found the district court's narrow admission of that testimony correct, and followed that test again in United States v. Rovetuso, 768 F.2d 809, 817 (7th Cir.1985) by disallowing extrinsic evidence to establish bias too broadly
4
In Beasley, intent was an issue: the intent for which Beasley bought drugs. This court found that the district judge did not sufficiently consider the prejudicial effect of the admitted evidence of past drug purchases in impugning the defendant's character, and therefore reversed its decision. 809 F.2d at 1279, 1281
5
Shackleford considered the offense of attempting to collect a debt by use of extortionate means in violation of Title 18, U.S.C. Sec. 894(a) (1976), a crime that does not include an element of specific intent. We noted therein the distinction between situations in which specific intent is an essential element of the crime and in which it is not. In the former case, the government could introduce evidence of prior similar bad acts or misconduct to establish intent even if the defendant had not raised the issue. 738 F.2d at 781. But in the latter situation, "intent must be more than a formal issue," and the government needed to produce evidence of intent only if the defendant raised lack of intent as a defense. Id
6
Young suggests that he, like Lataille, was not well acquainted with the corrections officer; that he did not bring into evidence the issue of his placement in the segregation unit on direct examination; that he did not testify that his treatment had been unfair; and that he admitted his disciplinary record for prison violations only on cross-examination
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444 F.Supp. 117 (1978)
Mary WESLEY, for herself and all other persons similarly situated, Plaintiff,
v.
JOHN MULLINS & SONS, INC., et al., Defendants.
No. 74-C-273.
United States District Court, E. D. New York.
January 16, 1978.
*118 John C. Gray, Jr., Brooklyn, N. Y., Brooklyn Legal Services Corp. B, South Brooklyn Branch, Douglas V. Ackerman, Brooklyn, N. Y., of counsel, Mark K. Spires, Queens Legal Services Corp., Long Island City, N. Y., Karen J. Berger, Long Island, N. Y., of counsel, for plaintiff.
Breed, Abbott & Morgan, New York City, for defendants; C. MacNeil Mitchell, Eric M. Nelson, New York City, of counsel.
BARTELS, District Judge.
This is a motion by defendant John Mullins & Sons, Inc. ("Mullins") to dismiss plaintiff's pendent state law claim or, in the alternative, to decertify the class action with respect thereto. Plaintiff filed this class suit on February 2, 1974, charging Mullins with violations of the Truth-in-Lending Act, 15 U.S.C. §§ 1601 et seq., and the New York Retail Installment Sales Act, N.Y.Pers.Prop.L. §§ 401 et seq. (McKinney 1976). The action was tentatively certified as a class action on October 24, 1975, to permit discovery to continue, and on May 14, 1976, again certified, subject to further order of the court.
When this action was instituted, the Truth-in-Lending Act provided that any creditor who failed to make the requisite disclosures would be liable for twice the amount of the finance charge, but in no case for less than $100 or greater than $1,000.[1] In 1974 the Truth-in-Lending Act was amended to render inapplicable the minimum recovery provisions of the statute to class actions and to limit the total recovery in a class action to the lesser of 1% of the creditor's net worth or $100,000 (later raised to $500,000), plus actual damages, costs and counsel fees.[2] The purpose of this amendment was "to protect small business firms from catastrophic judgments."[3]
The New York Retail Installment Sales Act incorporates the Truth-in-Lending standards,[4] and provides that in case of violation, the consumer is entitled to recover from the creditor an amount equal to the finance charge plus any delinquency, etc., *119 charges.[5] At the time this suit was instituted, New York law did not permit a class action to be maintained in cases of this nature, Hall v. Coburn, 26 N.Y.2d 396, 311 N.Y.S.2d 281, 259 N.E.2d 720 (1970). In 1975, when the New York Civil Practice Law and Rules were amended to conform its class action provisions to the federal practice, class actions to recover penalties or minimum measures of recovery were specifically prohibited, unless the statute creating the penalty or minimum recovery explicitly authorized class actions.[6] This prohibition "was apparently designed to discourage massive class actions for statutory violations where it would be difficult to identify the members of the class and where recovery of the statutory minimum by each class member results in `annihilatory punishment.'"[7] Section 414 of the Personal Property Law, the parallel provision to § 130 of the Truth-in-Lending Act, 15 U.S.C. § 1640, is entitled "Penalties" and subdivision (3) thereof specifically states that upon timely correction of noncompliance with the statute, "neither the seller nor the holder shall be subject to any penalty under this section."[8] Section 414 does not specifically authorize class actions.
The impact of these amendments was not brought to the attention of the court when it certified the class in this action predicated upon Kristiansen v. John Mullins & Sons, Inc., 59 F.R.D. 99 (E.D.N.Y.1973), decided before the amendments to the Truth-in-Lending Act and the N.Y.C.P.L.R. Indeed it did not become apparent until plaintiff informed the court that recovery per class member on the federal claims could be as low as $5.00, with a total recovery of $35-40,000 for the class,[9] while recovery on the pendent state claims could amount to $300-600,000. We are thus faced with the incongruous situation where the state law claims not only significantly exceed the federal law claims, but also could not be asserted in a class action in state court. It is this anomaly of the tail wagging the dog which gave rise to the present motion to dismiss or decertify the pendent state claims.
Mullins asserts various grounds in support of its motion, but we reach only the issue of jurisdiction. In the landmark case of United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), the Supreme Court outlined the now familiar principles of pendent jurisdiction, describing both the power of the federal courts to hear state claims closely related to a federal claim and the discretion of the court to decline to exercise this power under the proper circumstances. In that case the Court also said that the question of pendent jurisdiction remains open for adjudication throughout the litigation.
Recently the Supreme Court revisited the subject of pendent jurisdiction in Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976), where plaintiff, a discharged county clerk, brought an action under 42 U.S.C. § 1983 against the county treasurer and also asserted a claim under state law against the county, which could not be sued under § 1983 and with respect to which there was no diversity. The plaintiff argued that there was pendent party jurisdiction over the county because her claim against the county and her § 1983 claim against the treasurer arose out of a common nucleus of operative facts, but the Supreme Court affirmed the lower court's dismissal of the claim for lack of jurisdiction. In addition to pointing out the factual differences between pendent claim and pendent party jurisdiction, the Court stated that parties whom Congress excluded from liability under the federal statute cannot be brought back within the jurisdiction of the federal courts merely because the facts also *120 give rise to an ordinary civil action against them under state law. It indicated that the reach of pendent jurisdiction should be construed in light of the scope of the cause of action as to which federal judicial power has been extended by Congress.[10]
While the parallel state claim in this case does not raise any questions over the scope of federal judicial power under the Truth-in-Lending Act as to the persons who can be made parties, Congress has significantly limited the power of the federal courts as to the amount of recovery for which a defendant can be liable under that statute. We believe that by analogous reasoning, the doctrine of the Aldinger case is applicable to pendent state claims providing for recovery of an amount in excess of that permitted by the federal statute.[11]
Moreover, assuming arguendo the court had power to exercise pendent jurisdiction, it would in its discretion refuse to do so under the circumstances of this case. In view of the fact that the damages recoverable under the state class claim far outweigh those of the federal claims, the continuance of such a state class action not only offends the policies of both the federal and state governments to limit potentially overwhelming penalty recoveries, but also permits a plaintiff by a procedural device to do that which is forbidden by both federal and state law. We believe that pendent jurisdiction was never intended to permit such a result.[12]
Accordingly, the class action aspect of plaintiff's claim under N.Y.Pers.Property L. § 414(2) is hereby dismissed for lack of jurisdiction over the subject matter and the class is hereby decertified with respect thereto, without prejudice to the prosecution of plaintiff's individual claim under the state law.
SO ORDERED.
NOTES
[1] Truth-in-Lending Act, Pub.L.No. 90-321, 90th Cong., 2d Sess. § 130, 82 Stat. 157 (1968).
[2] Act of Oct. 28, 1974, Pub.L.No. 93-495, 93d Cong., 2d Sess. § 408, 88 Stat. 1519; Act of March 23, 1976, Pub.L.No. 94-240, 94th Cong., 2d Sess. § 4(3), 90 Stat. 260; 15 U.S.C.A. § 1640(a)(2) (Supp.1977).
[3] Conf.Rep.No. 93-1429, 93d Cong., 2d Sess., [1974] U.S.Code Cong. & Adm.News pp. 6148, 6153.
[4] N.Y.Pers.Prop.L. § 413(11)(d) (McKinney 1976). No assertion has been made that a claim under the New York statute becomes a federal claim because federal standards are incorporated, for "[t]he mere adoption by a State law of a United States law as a criterion or test, where the law of the United States has no force proprio vigore, does not cause a case under the State law to be also a case under the law of the United States . . .." H. Hart & H. Wechsler, The Federal Courts and the Federal System 882 (2d ed. 1973). See Louisville & Nashville R. Co. v. Western Union Telegraph Co., 237 U.S. 300, 35 S.Ct. 598, 59 L.Ed. 956 (1915); Miller v. Anderson, 150 U.S. 132, 14 S.Ct. 52, 37 L.Ed. 1028 (1893). The case is the converse of Ives v. W. T. Grant Co., 522 F.2d 749 (2d Cir. 1975), which found federal jurisdiction where the federal law had incorporated the state standard.
[5] N.Y.Pers.Prop.L. § 414(2).
[6] N.Y.C.P.L.R. § 901(b).
[7] McLaughlin, Practice Commentaries C 901:7 (McKinney 1976).
[8] Tyler v. Eastern Discount Corp., 55 Misc.2d 1002, 286 N.Y.S.2d 948 (Sup.Ct., App.Term 1968).
[9] Plaintiff also argues that the class members may have suffered significant "actual damages," but this possibility is unsupported by any evidence and is merely speculative.
[10] See Comment, Aldinger v. Howard and Pendent Jurisdiction, 77 Colum.L.Rev. 127 (1977).
[11] See id. at 147-52; Kerby v. Commodity Resources Inc., 395 F.Supp. 786 (D.Colo.1975); Van Hoomissen v. Xerox Corp., 368 F.Supp. 829 (N.D.Cal.1973).
[12] We recognize that the court might have power to exercise pendent jurisdiction over the state class claims if the amount of recovery sought thereunder were limited to that permissible under § 1640(a)(2)(B). This would emasculate the class members' recovery under the state statute, but it would go far in satisfying the federal and state policies against annihilatory penalty judgments. It would also circumvent the prohibition against class actions under C.P.L.R. § 901(b), as well as raise questions as to how the limited recovery would be distributed to the class, for N.Y.Pers.Prop.L. § 414(2) does not permit the court to consider all of the equitable factors it must consider under § 1640(a). It is thus doubtful whether it would be a proper exercise of our discretion to assert pendent jurisdiction under these hypothetical circumstances.
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346 F.2d 845
Morton O. ALPER et al., Petitioners,v.DISTRICT OF COLUMBIA, Respondent.Albert SMALL et al., Petitioners,v.DISTRICT OF COLUMBIA, Respondent.Albert SMALL et al., Petitioners,v.DISTRICT OF COLUMBIA, Respondent.David L. STERN, Petitioner,v.DISTRICT OF COLUMBIA, Respondent.Marie E. STERN, Petitioner,v.DISTRICT OF COLUMBIA, Respondent.
Nos. 18539-18543.
United States Court of Appeals District of Columbia Circuit.
Argued January 25, 1965.
Decided May 11, 1965.
Mr. Julius I. Fox, Washington, D. C., with whom Messrs. C. Richard Beyda and Irving B. Yochelson, Washington, D. C., were on the brief, for petitioners.
Mr. Henry E. Wixon, Asst. Corp. Counsel for the District of Columbia, with whom Messrs. Chester H. Gray, Corp. Counsel, Milton D. Korman, Principal Asst. Corp. Counsel, and Robert E. McCally, Asst. Corp. Counsel, were on the brief, for respondent.
Before FAHY, WASHINGTON and McGOWAN, Circuit Judges.
PER CURIAM:
1
These appeals, although not consolidated with those decided this day sub nomine Verkouteren, et al. v. District of Columbia, 120 U.S.App.D.C. ___, 346 F.2d 842 were heard on the same calendar. Although they involve the distribution in a corporate liquidation of a leasehold interest in real property as distinct from shares of stock, they present the same situation with respect to the disregard by the Tax Court of the capital gains issue presented to it by the parties upon a stipulation that such leasehold was disposed of by the appellant-stockholders, and the decision by the Tax Court to support the asserted deficiencies by a finding contrary to the stipulation. We reverse for the same reasons stated in Verkouteren, and remand for the same purpose.
2
It is so ordered.
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ANDREA DAVIS as the
Personal Representative of the
Estate of Raymond Bender,
Plaintiff,
v. Civil Action No.: 1:08-CV-01764 (PLF/JMF)
GRANT PARK NURSING
HOME, LP et al.,
Defendants.
MEMORANDUM OPINION
This case has been referred to me by Judge Friedman for the purpose of handling
discovery disputes. Currently pending before me are Plaintiff’s Motion for Sanctions for
Destruction of Electronic Communications by Defendants Coastal Administrative Services, LLC,
Grant Park Nursing Home LP, and Shoreline Healthcare Management, LLC [#76]1 and Plaintiff’s
Supplemental Motion for Sanctions for Destruction of Electronic Communications by
Defendants Coastal Administrative Services, LLC, Grant Park Nursing Home, LP and Shoreline
Healthcare Management, LLC [#89]. Upon reviewing the record and briefing before me at this
time, I have decided, sua sponte, to strike the plaintiff’s motion for sanctions without prejudice,
and to require supplemental briefing at the conclusion of the limited discovery permitted by
Judge Friedman.
Since plaintiff first moved for sanctions, I have made various rulings that have permitted
discovery to proceed. The one loose end is for Grant Park to comply with my most recent order
1
Docket numbers refer to filings in the lead case, 1:08-cv-01764 (PLF/JMF). Parties are
reminded that case 1:09-cv-02188-PLF has not been referred to Judge Facciola.
pertaining to certain documents (including electronically stored information) that are claimed to
be privileged. Order of October 25, 2010 [#92].
Assessing whether sanctions are warranted for the loss of otherwise discoverable
information is a function of whether a party has been prejudiced by that loss. D'Onofrio v. SFX
Sports Group, Inc., 06-cv-687, 2010 WL 3324964 at *11 (D.D.C. Aug. 24, 2010) (“It is only
after establishing the prejudice the plaintiff suffered that any resulting sanction will fairly address
that prejudice, consistent with this Circuit's insistence that any sanction imposed be a function of
the prejudice done to a party by its offending opponent.”) (citing Bonds v. District of Columbia,
93 F.3d 801, 808 (D.C. Cir. 1996)). Prejudice to a party can only be examined by looking at all
the information that is available, for only in that context can the nature and extent of the loss
suffered be accurately gauged. See Rimkus Consulting Group, Inc. v.Cammarata, 688 F. Supp.
2d 598, 644-45 (S.D. Tex. 2010). Accordingly, it is premature to consider the question of
sanctions until discovery ends and the Court can assess accurately what prejudice, if any, the loss
of the electronically stored information has caused. I will therefore strike the plaintiff’s motion
for sanctions without prejudice.
The importance of plaintiff’s establishing prejudice bears on the showing I expect the
parties to make. If plaintiff decides to renew her motion for sanctions after discovery ends, I
expect her submission to show as clearly as possible the nature of the prejudice done to her by
the loss of the electronically stored information. I will, of course, also expect the defendants to
make a similarly precise showing in opposition. References to the record yielded by discovery
are obviously crucial.
I will impose on plaintiff’s counsel the task of advising opposing counsel of her intention
2
to file a renewed motion for sanctions once discovery has ended. If plaintiff’s counsel so
indicates, both counsel shall meet and confer by telephone and propose for my consideration a
schedule for briefing of the motion to be filed.
A separate Order accompanies this Memorandum Opinion.
Digitally signed
by John M.
Facciola
Date: 2010.11.09
14:31:18 -05'00'
_______________________
JOHN M. FACCIOLA
UNITED STATES MAGISTRATE JUDGE
3
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Order entered April 7, 2014
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-00648-CV
EARLENE AND CHARLES MARTIN, Appellants
V.
FEDERAL NATIONAL MORTGAGE ASSOCIATION, Appellee
On Appeal from the County Court at Law No. 1
Dallas County, Texas
Trial Court Cause No. CC-1201379-A
ORDER
This Court will consider only arguments and authorities that are properly raised. See
TEX. R. APP. P. 38.3. Appellee’s Motion For Leave To File Sur-Reply is hereby DENIED.
/s/ ELIZABETH LANG-MIERS
JUSTICE
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UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued December 6, 2005
Decided December 14, 2005
Before
Hon. WILLIAM J. BAUER, Circuit Judge
Hon. JOHN L. COFFEY, Circuit Judge
Hon. TERENCE T. EVANS, Circuit Judge
No. 04-3708
CATALIN MIRON, Petition for Review of an Order
Petitioner, of the Board of Immigration
Appeals
v.
ALBERTO R. GONZALES*, Attorney General No. A73 422 640
of the United States
Respondent.
ORDER
Catalin Miron, a native of Romania, appeals from the Board of Immigration
Appeals’ denial of his second motion to reopen his asylum claim. Since Miron’s
motion to reopen was not timely filed, we deny the petition.
Miron arrived in the United States in 1994 and two years later applied for
asylum and withholding of removal. In June 2002, the BIA issued its final order
affirming the immigration judge’s denial of asylum and withholding. Miron filed an
*
Pursuant to Federal Rule of Civil Procedure 43(c)(2), we have substituted
the current Attorney General of the United States, Alberto R. Gonzales, for his
predecessor as the named respondent.
No. 04-3708 Page 2
initial motion to reopen with the BIA in September 2002 based on changed country
conditions in Romania. The BIA denied this motion in January 2003, and in 2004
Miron filed a second motion to reopen. In this motion, Miron argued that he had a
pending application for an employment-based immigrant visa and should be given
an opportunity to pursue this application before being removed. Miron also argued
that his U.S.–citizen children would suffer hardship if he was removed, particularly
his daughter Lorena, who has been suffering from separation anxiety since his
detention. The BIA denied this second motion as untimely because it was filed
more than 90 days after the BIA’s final order affirming the IJ’s denial of asylum.
Miron now appeals the denial of this second motion to reopen.
Miron concedes that his second motion to reopen was not timely filed.1
Miron’s principal argument on appeal is that the BIA should have granted his
untimely motion because of his pending visa application and the hardship his
removal would cause to his children. This argument is difficult to parse, but he
appears to argue that the BIA abused its discretion by failing to reopen his
proceedings sua sponte. Although the BIA may reopen sua sponte at any time, 8
C.F.R. § 1003.2(a), the BIA’s decision not to reopen is discretionary, and we may not
review it. Pilch v. Ashcroft, 353 F.3d 585, 586 (7th Cir. 2003); Calle-Vujiles v.
Ashcroft, 320 F.3d 472, 474–75 (3d Cir. 2003).
Miron also appears to make an undeveloped argument that the 90-day time
limit should be equitably tolled. The test for equitable tolling is “whether the
claimant could reasonably have been expected to have filed earlier,” Pervaiz, 405
F.3d at 490, but Miron does not explain why the equitable factors he mentions could
not have been presented to the BIA within the time limit. Instead, he seems to
think that the mere existence of equities in his favor means the Board should
excuse the lateness of his motion. Since this is not the legal standard for equitable
tolling, Miron’s argument fails.
Miron next argues that the Department of Homeland Security should have
joined in his motion to reopen; this would have resulted in the waiver of the time
limitation. 8 C.F.R. § 1003.2(c)(3)(iii). Miron asserts that DHS improperly refused
to join in his motion without addressing any of the factors that it is supposed to
1
It should be noted that administrative time limits on motions to reopen are
not jurisdictional. See Ajose v. Gonzales, 408 F.3d 393, 394–95 (7th Cir. 2005);
Pervaiz v. Gonzales, 405 F.3d 488, 490 (7th Cir. 2005). Further, although Miron's
motion to reopen violates the numeric limits on motions to reopen, since an alien
generally may file only one such motion, 8 C.F.R. § 1003.2(c)(2), numerical limits on
motions to reopen are also not jurisdictional, Joshi v. Ashcroft, 389 F.3d 732, 734
(7th Cir. 2004). Therefore, the BIA could have reached the merits of Miron’s motion
despite its lateness and its exceeding the number limitation.
No. 04-3708 Page 3
consider when deciding whether to join in a motion to reopen, as reflected in a
memorandum prepared by the INS General Counsel. However, this memorandum
never says the INS must join in motions to reopen under certain circumstances; the
letter says merely that it does not “create any right . . . enforceable at law by any
individual . . . in removal proceedings . . . .” Memorandum from Bo Cooper, INS
General Counsel, to INS Regional Counsels on Motions to Reopen for Consideration
of Adjustment of Status 3 (May 17, 2001).
Finally, Miron argues that the IJ erred in denying his application for asylum
and withholding of removal and that the BIA erred in failing to consider changed
country conditions in Romania. We have no jurisdiction to review these issues,
however, because Miron did not timely petition for review of either the BIA’s June
2002 order affirming the IJ’s denial of asylum and withholding or the BIA’s January
2003 order denying his first motion to reopen. Miron’s petition for review was not
filed with this court until 2004–long after the 30-day deadline for filing a petition
for review of these orders had passed. Sankarapillai v. Ashcroft, 330 F.3d 1004,
1006 (7th Cir. 2003) (per curiam).
To the extent Miron is seeking review of the denial of his second motion to
reopen, the petition for review is DENIED. To the extent he is seeking review of
the denial of his first motion to reopen and his underlying asylum claim, the
petition is DISMISSED for lack of jurisdiction. We also DENY the government’s
motion for summary affirmance.
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794 F.Supp. 223 (1992)
Nellie PERKOWSKI, Personal Representative of the Estate of Richard Perkowski, Deceased, Plaintiff,
v.
CITY OF DETROIT, a Municipal Corporation, William Hart, Inspector McIntosh, Ralph Wilkewitz, James Nowak, David Huggins, Kenneth Jones, Douglas R. White, Earl White, Hazel Spight, and George Jones, Jointly and Severally, Defendants.
Civ. A. No. 91-75808.
United States District Court, E.D. Michigan, S.D.
July 7, 1992.
Donald D. Unwin, West Bloomfield, Mich., for plaintiff.
Brenda M. Miller, Detroit, Mich., for defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
GADOLA, District Judge.
On April 24, 1992, defendants filed a motion to dismiss pursuant to Rule 12(b)(6) and Rule 12(c) of the Federal Rules of Civil Procedure and for summary judgment pursuant to Rule 56. Plaintiff filed a response May 8, 1992. Pursuant to LR 7.1(e) (E.D.Mich. Jan. 1, 1992), no oral argument was heard.
*224 BACKGROUND FACTS
The facts underlying the instant action are taken from defendants' brief in support of the instant motion. Plaintiff failed to dispute any of these facts in her response. Plaintiff's decedent, Richard Perkowski, was arrested for driving under the influence of liquor and for manslaughter with a motor vehicle after striking and killing a pedestrian at approximately 8:20 p.m. on February 2, 1989. Perkowski was arrested by City of Detroit police officers Kenneth Jones and David Huggins, both defendants in this action. After the arrest, Officer Huggins had no further contact with Perkowski.
Defendant police officer James Nowak, assigned to the 4th Precinct as the accident investigator, was called to the accident scene where Perkowski had struck the pedestrian. After defendant Nowak prepared a State of Michigan Official Traffic Accident Report, he had no further contact with Perkowski.
Perkowski was conveyed to the 4th Precinct, where defendant police officer Kenneth Jones read him his chemical test rights at 11:30 p.m. Police officer Laura Herron then conducted the first breathalyzer exam of Perkowski at 11:35 p.m. Officer Herron reported breathalyzer results at 11:35 p.m. and 11:40 p.m., approximately three hours after the accident. The results of both exams were the same, registering a blood alcohol content of 0.13%.
Officer Herron advised Perkowski of his constitutional rights at 11:40 p.m. Perkowski refused to sign or initial the certificate of notification regarding his rights, stating, "It's not in my benefit." Defendants' ex. A. Perkowski told Officer Herron that he had heard everything she said regarding the notification of his rights.
At 11:55 p.m. Officer Herron attempted to conduct an interview for the Detroit Police Department Alcoholic Influence Report. Perkowski refused to answer any questions, including those asking whether he was hurt or ill and those seeking the identity of any doctor with whom he may have been treated. Perkowski informed Officer Herron that he refused to answer questions during the interview because they were "stupid" questions. Defendants' ex. B. Officer Herron completed her interview with Perkowski at approximately 11:58 p.m.
Defendant police officer Douglas White, 4th Precinct doorman, removed all of Perkowski's personal items except his clothing and led him into Cell Block No. 2 at or about midnight. Perkowski never requested any medical treatment or attention, nor did he give any officer any indication of a potential for self-inflicted harm while he was at the 4th Precinct. Defendant Officer White indicated that Perkowski appeared "calm and slightly defiant" when placed in his cell. Defendants' ex. D. At that time Perkowski refused to sign the fingerprint card, stating, "I'm not signing anything." Id.
Between midnight and 12:10 a.m., William Black occupied the cell immediately across from Perkowski. Black issued a statement in which he described his observations during those minutes. Defendants' ex. E. Black recalled that when Perkowski asked Officer White what he was charged with, Officer White told him that he was charged with "DUIL" and that there might be more charges. Id. Black also recalled that Perkowski attempted to engage Black and an occupant of the cell next to him in conversation. Finally, Black stated that after Perkowski questioned him about his court appearance for the following day, he heard Perkowski say, "If you guys aren't going to help me." Id. At that time Black was pretending to be asleep. Id.
At 12:10 a.m. defendant Officer White discovered Perkowski hanging from the bars of his cell. Officer White requested and received assistance in providing emergency medical treatment to Perkowski from the following defendants: Officer Earl Scott, Officer Hazel Spight, and Officer George Jones. None of these defendants had any previous contact with Perkowski. Defendant Sergeant Ralph Wilkewitz was the officer in charge of the 4th Precinct desk when he was notified by Officer White of the suicide.
*225 Perkowski was taken to Detroit Receiving Hospital and admitted at 12:37 a.m. February 3, 1989. He was listed to have expired at 12:39 a.m.
Plaintiff, as personal representative of Perkowski's estate, filed the instant action under 42 U.S.C. § 1983, alleging violations of the fourth, eighth and fourteenth amendments. Plaintiff conceded in her response brief, however, that "neither the fourth or eighth amendments to the Constitution is applicable to this case." Plaintiff's resp. at 2.
STANDARD OF REVIEW
Rule 12(c) of the Federal Rules of Civil Procedure provides that
[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have [the] effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect [the] application of appropriate principle[s] of law to the rights and obligations of the parties." [Citation omitted]. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984) (quoting Black's Law Dictionary 881 (6th ed. 1979)). The court must view the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).
The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Gregg v. Allen-Bradley Co., 801 F.2d 859, 861 (6th Cir.1986). The initial burden on the movant is not as formidable as some decisions have indicated. The moving party need not produce evidence showing the absence of a genuine issue of material fact. Rather, "the burden on the moving party may be discharged by `showing' that is, pointing out to the district court that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.
To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986).
There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the [nonmovant's] evidence is merely colorable, or is not significantly probative, summary judgment may be granted.
(Citations omitted). See Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552-53; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). The standard for summary judgment mirrors the standard for a directed verdict under Fed. R.Civ.P. 50(a). Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. Consequently, a nonmovant must do more than raise some doubt as to the existence of a fact; the *226 nonmovant must produce evidence that would be sufficient to require submission to the jury of the dispute over the fact. Lucas v. Leaseway Multi Transp. Serv., Inc., 738 F.Supp. 214, 217 (E.D.Mich.1990), aff'd, 929 F.2d 701 (6th Cir.1991).
ANALYSIS
The United States Court of Appeals for the Sixth Circuit recently issued an opinion in Barber v. City of Salem, 953 F.2d 232 (6th Cir.1992). In Barber, the administrator of a pretrial detainee's estate brought suit under 42 U.S.C. § 1983, against the City of Salem, Ohio, and some of its police officers following the detainee's suicide. The Sixth Circuit affirmed the district court's order granting summary judgment to the officers and the city. The Barber decision, rendered in January 1992, is directly on point.
In Barber,
plaintiff [argued] that defendants violated the decedent's due process rights by exhibiting deliberate indifference to his medical needs in a number of ways: (1) the failure to Officers Esterly, Bradley, Hardy, and Petrachkoff to properly screen Kenneth Barber for suicidal tendencies and to take proper precautions to deter his suicide, and (2) the failure of the City of Salem, Mayor Sell, and Police Chief Sommers to train police officers to detect suicidal tendencies and to take precaution to deter suicide including the failure to modify the jail in such a way as to discourage suicides.
Id. at 236.
In the instant action, plaintiff claims that decedent suffered a deprivation of his constitutional rights to personal safety, non-punitive prison conditions and adequate medical treatment. Plaintiff's resp. at 3. Regarding decedent's right to personal safety, plaintiff relies on Davis v. Holly, 835 F.2d 1175 (6th Cir.1987), for the proposition that Perkowski had "the right to protection form [sic] self-injury...." Plaintiff's resp. at 4. However, Davis involved the rights of "a mentally retarded person confined to a state institution." Davis, 835 F.2d at 1181. Plaintiff also claims that the conditions of confinement were punitive because of the defendants' failure to provide proper intake screening, failure to adequately monitor intoxicated detainees, refusal to eliminate detainees' access to horizontal bars, and failure to remove detainees' items of dress. Plaintiff's resp. at 5. Finally, plaintiff claims that decedent was denied adequate medical treatment by defendants' failure to prevent an intoxicated, depressed detainee from committing suicide. Id. at 6. Taken in their entirety, plaintiff's claims simply constitute a restatement of the claims alleged in Barber.
In Barber the Sixth Circuit issued the following standard regarding liability in cases like these:
... the proper inquiry concerning the liability of a City and its employees in both their official and individual capacities under section 1983 for a jail detainee's suicide is: whether the decedent showed a strong likelihood that he would attempt to take his own life in such a manner that failure to take adequate precautions amounted to deliberate indifference to the decedent's serious medical needs.
Barber, 953 F.2d at 239-40. In applying this standard to the facts in Barber, the Sixth Circuit stated
In this case, the decedent did express concern over his job, his engagement, and his ability to obtain custody of his young son due to his arrest. However, such a reaction to an arrest for driving under the influence of alcohol could not be considered abnormal and would not alert the jail authorities to a strong likelihood that Kenneth Robert Barber would commit suicide. His death is indeed a sad and unfortunate occurrence. However, the failure to take special precautions in this case as to suicide prevention does not amount to a constitutional violation of deliberate indifference to Kenneth Robert Barber's serious medical needs. Moreover, where no constitutional violation exists for failure to take special precautions, none exists for failure to promulgate policies and to better train *227 personnel to detect and deter jail suicides.
Id. at 240.
In the instant action there is nothing in the pleadings or in the record, including plaintiff's 346-paragraph complaint, which represents that Richard Perkowski gave any defendant any indication whatsoever of a strong likelihood that he would take his own life. In the absence of such evidence, defendants are entitled to summary judgment.
ORDER
NOW, THEREFORE, IT IS HEREBY ORDERED that defendants' motion for summary judgment is GRANTED.
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501 N.W.2d 597 (1993)
Charles R. ROSENBLOOM, Respondent,
v.
Joel FLYGARE, et al., Petitioner, Appellants.
No. C3-92-323.
Supreme Court of Minnesota.
June 4, 1993.
*598 Michael O. Freeman, Hennepin County Atty., Karla F. Hancock, Sr. Asst. County Atty., Minneapolis, for appellants.
Jeffrey W. Thone, Saliterman & Siefferman, Minneapolis, for respondent.
Joseph D. Vass, Minneapolis, for amicus curiae MN Trial Lawyers Assoc.
Lawrence R. Altman, Minneapolis, for amicus curiae Mpls. Urban League.
Heard, considered, and decided by the court en banc.
COYNE, Justice.
Charles R. Rosenbloom brought this action against Joel Flygare, a deputy sheriff, and Hennepin County, Flygare's employer, alleging a common law battery and also alleging a violation of Minn.Stat. § 363.03, subd. 4(1) (1986), a section in the Minnesota Human Rights Act which declares it an unfair discriminatory practice "[t]o discriminate against any person in the access to * * * any public service because of race, * * *."
The jury found that Flygare had committed a battery on plaintiff Rosenbloom and that the battery had injured him. The jury then found that by reason of the battery, Rosenbloom had sustained damages of $3,693.90 for medical expenses; $30,000 for embarrassment and emotional distress; and $15,000 for pain, disability, and disfigurement. Having found that Flygare's acts showed a willful indifference to Mr. Rosenbloom's rights or safety, the jury determined that punitive damages of $65,000 were "necessary to punish the defendant, Joel Flygare, and deter others from the commission of like acts." Finally, the jury found that Flygare had discriminated against Rosenbloom "in the area of public service on the basis of race and that such discrimination caused injury to Rosenbloom."
On the basis of the special verdict the trial court ordered judgment for the compensatory and punitive damages determined *599 by the jury and, in addition, awarded $2,000 for emotional distress and $6,000 punitive damages by reason of the unfair discriminatory practice. Pursuant to Minn. Stat. § 363.071, subd. 2 (1986), plaintiff requested attorney fees of $42,295.16; the trial court awarded fees in the amount of $23,928 and denied defendants' motion for judgment notwithstanding the verdict or, in the alternative, for a new trial or remittitur.
On appeal the court of appeals ruled that because the racial epithets were coupled with the beating, showing that racial animus provided motivation for the battery, the racial discrimination and the battery were inseparable and that recovery for both constituted double recovery. Both claims, the court of appeals held, arose from a single "course of conduct cognizable under the Human Rights Act." Rosenbloom v. Flygare, 487 N.W.2d 546, 549 (Minn.App.1992). Despite the plaintiff's express reservation of the right to elect which claim he wished to pursue if put to an election, the court of appeals treated the plaintiff's request for attorney fees as an election to proceed with the Human Rights Act claim. The matter was remanded to the trial court for recalculation of damages, including any compensable damages for battery authorized by the Minnesota Human Rights Act. Because we disagree with the analysis which prompted the court of appeals' remand, we reverse and reinstate the decision of the trial court as modified herein.
The events giving rise to this action occurred on May 27, 1987, when Charles Rosenbloom went to the Hennepin County Adult Detention Center to visit his brother, a detainee. Rosenbloom testified that at the window for the control area of the visitation center he gave Deputy Flygare his driver's license and said that he wanted to visit his brother, Akbar Abdullah. According to Rosenbloom, Flygare laughed and chanted the name; Flygare and his co-worker, Deputy Sigfrinius repeated the name, Akbar Abdullah, back and forth. Rosenbloom muttered, "What a bunch of assholes." Sigfrinius heard the remark, told Flygare that Rosenbloom had called him an asshole and asked if Flygare was "going to take that?"
Flygare told Rosenbloom he could not visit his brother. Rosenbloom stated that he told Flygare he considered his conduct racist and twice asked to see Flygare's supervisor, but Flygare responded that his supervisor was too busy and that Rosenbloom should leave. Another visitor, Janet Kraft, testified that when Flygare came out into the waiting area, Rosenbloom said, "You can arrest me if you want." Kraft said Flygare suddenly put a choke hold around Rosenbloom's neck, pulled his head back and put a knee into his back, and pushed him through the double doors leading into a secured corridor.
Rosenbloom testified that while in the corridor he was repeatedly struck on the sides and stomach, that he was twice thrown to the floor and against a wall, and that while lying on the floor, he could see the shoes of several deputies standing in a semi-circle around him.
Rosenbloom and an inmate of the jail testified that Rosenbloom was addressed as "boy" and several times called "nigger" while a deputy jerked him toward a cell. Rosenbloom said he remained silent during the entire episode.
Both the trial court and the court of appeals based their decisions on Wirig v. Kinney Shoe Corp., 461 N.W.2d 374 (Minn. 1990), in which this court held that separate causes of action lie for common law battery and for sexual harassment in violation of the MHRA. While the court of appeals appears to have misapprehended the double recovery limitation articulated in Wirig, 461 N.W.2d at 379, our review of the record in the present case convinces us that both the plaintiff and the trial court made a concerted effort to comply with the Wirig admonition first, that when a common law battery claim and a claim of an unfair discriminatory practice violative of the MHRA arise from the same set of operative facts, the claims must be made separately; and then, that in order to recover punitive damages for battery, in addition to those punitive damages recoverable under *600 the MHRA, the plaintiff must show by clear and convincing proof that the misconduct on which the common law action is based differs in kind from that on which the MHRA claim rests.
Despite Wirig's innovative approach bringing both a common law action for battery and an action pursuant to the MHRA for sexual harassment Wirig did not, and perhaps could not, demonstrate by clear and convincing proof that the battery and the sexual harassment were different enough to justify two separate awards of punitive damages. The statutory definition of sexual harassment includes unwelcome sexually motivated physical contact that has the purpose or effect of substantially interfering with an individual's employment, Minn.Stat. § 363.01, subd. 41 (1992). In Wirig the offensive physical contact which constituted the battery kissing, patting, and putting an arm around the complainant was not offensive because it caused physical injury; it was offensive because it was sexually motivated contact to which Wirig did not consent.
In the present case, however, the battery was actionable not simply because it was racially motivated but because, as the jury found, Rosenbloom was physically injured. That the battery was racially motivated undoubtedly exacerbated Rosenbloom's embarrassment and emotional distress; but the fact that a beating was administered by law enforcement officers, who are duty-bound to keep the peace, upon a man who has responded in rude and uncivil language to what he took to be racial discrimination, is itself evocative of embarrassment and emotional distress. In short, the battery was actionable with or without racial animus.
On the other hand, Rosenbloom's MHRA claim is that Flygare engaged in an unfair discriminatory practice: namely, that he discriminated against Rosenbloom "in the access to, admission to, full utilization of or benefit from any public service because of race, * * *" Minn.Stat. § 363.03, subd. 4 (1992), by refusing to permit Rosenbloom to visit his brother. The plaintiff went to some pains here to limit his proof of that claim to events which occurred at the counter where Flygare was stationed and to racial epithets, particularly to those uttered in the public waiting room.
As we pointed out in Wirig, id. at 379, "[W]e do not uphold double recovery for the same harm." However, inasmuch as compensatory damages for medical expenses and for pain, disability and disfigurement were awarded here only in the battery action, there can be no complaint that there has been double recovery for the same harm. Separately, as trier of fact in the battery action, the jury also found that the plaintiff had damages for embarrassment and emotional distress in the amount of $30,000. The trial judge, as finder of fact in the MHRA action, was aware of the jury's damage award in the battery action when he found that, in addition, Rosenbloom was entitled to $2,000 damages for mental anguish or suffering. Although these compensatory damage awards in the two actions are quite generous, it cannot be said that they represent a departure from the evidence of damages which would justify our interference with the fact-finding process.
The difficult aspect of this case is the method by which claims for punitive damages were asserted and resolved. About six months before trial, plaintiff noticed a motion to amend the complaint to assert a claim for punitive damages. Plaintiff's memorandum in support of the motion seems to be directed toward amendment of the MHRA claim only, as does his concluding request for relief. The parties agreed that the motion need not be argued at the settlement conference scheduled for the same date as the hearing on the motion. In correspondence which purported to memorialize the oral agreement, counsel for the defendants indicated her understanding that plaintiff only sought punitive damages available pursuant to the MHRA. Plaintiff's counsel responded that although they had discussed the several issues outlined in defense counsel's letter, except for the agreement that the motion to amend would not be argued at the settlement conference, he did not agree that her letter accurately *601 summarized his position. However, his letter contained no express reference to punitive damages in the battery action.
On the first day of trial, the plaintiff moved for the first time, orally and without prior notice, to amend the complaint to add a request for punitive damages in the battery action. The defendants argue that the trial court erred in granting the motion. We have always accorded the trial court considerable latitude in the disposition of requests to amend pleadings; here, given the parties' inability to agree on the scope of the former motion, the oral motion could not have come as a complete surprise, and the defendants did not request a continuance. Under these circumstances we are not persuaded that the trial judge abused his discretion by permitting the amendment. However, we must comment that because Minn.Stat. § 549.191 (1992) precludes the inclusion of a claim for punitive damages in the original complaint and requires a motion to amend to claim punitive damages to be made after the complaint has been filed, it seems to us better practice to notice a motion to amend and to specifically assert therein every claim for punitive damages sufficiently in advance of trial that the defendant is afforded adequate time in which to prepare a defense.
The manner in which punitive damages were submitted to the jury raises a more serious problem. The trial court submitted to the jury special verdicts directed to liability and compensatory damages on the battery claim and instructions to return an advisory verdict with respect to liability for violation of the MHRA. The question dealing with compensatory damages stated that it related only to the battery claim, but the separate question directing the jury to decide the amount of punitive damages, if any, necessary to punish defendant Flygare and deter others from "the commission of like acts" was not limited to the battery action. In all probability this defect in the special verdict could have been cured by an appropriate instruction. But the trial court compounded the problem by setting the instructions on punitive damages so that they followed immediately on the heels of the instructions relating to violation of the MHRA by racial discrimination. And although the trial judge properly instructed the jury that it could award punitive damages only if it found by clear and convincing evidence that Flygare's acts showed a willful indifference to the rights or safety of others, he did not instruct the jurors that they could not award punitive damages to punish defendant Flygare or to deter him, and others like him, from engaging in acts of racial discrimination even if they found that defendants had violated the MHRA by discriminating against Rosenbloom because of race when they refused to permit him to visit his brother. Therefore, we cannot tell whether the jury limited its deliberation on punitive damages to the battery claim, but the size of the punitive damage award suggests that it did not.
Ordinarily the size of an award of punitive damages provides little information about the particular aspect of defendant's conduct on which the jury based the imposition. In this case, however, the fact that the punitive damage award substantially exceeds the punitive damages requested by the plaintiff, coupled with the absence of any instruction limiting punitive damages to battery, leads us to conclude that the jury misunderstood its role with respect to punitive damages.
Minn.Stat. § 549.20 (1992) not only provides for the allowance of punitive damages in certain cases, it also mandates at subdivision 3 that any award of punitive damages is to be measured by "those factors which justly bear upon the purpose of punitive damages, * * *." One of the factors identified in the statute is "the financial condition of the defendant, * * *." Id. As we have previously observed,
The purpose of punitive damages is to both punish and deter according to the gravity of the act giving rise to a punitive damage award, but an award should not exceed the level necessary to properly punish and deter.
Melina v. Chaplin, 327 N.W.2d 19, 20, fn. 1 (Minn.1982) (citations omitted). The jury *602 did not have before it any evidence of defendant Flygare's financial condition, but evidence of Flygare's annual gross and net income was presented to the trial court in connection with his motion for a new trial. That evidence discloses that the jury's punitive damage award is almost twice Flygare's annual gross income and a little more than 2½ times his annual take-home pay. Reprehensible though Flygare's conduct may have been, we are of the opinion that the amount of the punitive damages award simply exceeds any realistic appraisal of Flygare's ability to pay. Id. Accordingly, the trial judge should have ordered a $35,000 remittitur or, in the alternative, a new trial on damages.
The plaintiff would have us dismiss any consideration of Flygare's ability to pay because, he contends, Hennepin County will pay the punitive damages. The contention ignores the fact that there is a statutory prohibition against awarding punitive damages against a county. Minn.Stat. § 466.04, subd. 1 (1992). Accordingly, the order for judgment incorporating the punitive damages award is against defendant Flygare. And although Hennepin County defended Flygare pursuant to Minn.Stat. § 466.07, subd. 1 (1992) and has steadfastly asserted his innocence of malfeasance in office, willful neglect of duty, or bad faith, we cannot predict the county's position now that a jury has found that Flygare did commit a battery on Rosenbloom and that he did discriminate against Rosenbloom on the basis of race.
Moreover, it must be remembered that although judgment was ordered against both Joel Flygare and Hennepin County for all compensatory damages awarded in the two cases, punitive damages in both cases were awarded only against Flygare. Therefore, Flygare alone is liable to Rosenbloom for punitive damages. Hennepin County, on the other hand, if it has any liability with respect to punitive damages assessed against Flygare, is obligated only to indemnify Flygare not to pay Rosenbloom.
Finally, punitive or exemplary damages are not compensatory and are not damages to which a plaintiff is entitled as a matter of right, but are imposed to punish the defendant and to deter him, and others like him, from intentional wrongs and deliberate disregard of the safety or rights of others. See, e.g., Kirschbaum v. Lowrey, 165 Minn. 233, 236, 206 N.W. 171, 173 (1925). Because the punitive purpose of punitive damages is lost when such damages are paid by another on the defendant's behalf, public policy is not served by permitting transfer of the responsibility for payment of punitive damages to another. For that reason we have been most reluctant to permit insurance against liability for punitive damages. Wojciak v. Northern Package Corp., 310 N.W.2d 675, 680 (Minn.1981). Given the nature of punitive damages and the purpose for which they are assessed, the defendant's ability to pay is a factor worthy of consideration in the exercise of our supervision over such awards even if the defendant is ultimately to be indemnified by another. Certainly, our conclusion that the punitive damage award was based on the entire episode and was not confined to the battery provides ample reason for remittitur. Inasmuch as the issues of liability and compensatory damages were fairly tried, we decline to require a new trial on all issues; and we are similarly reluctant to require retrial of punitive damages only because the evidence of misconduct, already established, would have to be presented once again so that a jury could decide nothing more than its egregiousness. See Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826 (Minn.1988).
Therefore, the decision of the court of appeals is reversed and the order of the trial court from which appeal was taken is reinstated except as modified here. We direct the district court to reduce the punitive damages award in the battery action to $30,000.
Reversed and trial court decision reinstated as modified.
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984 So.2d 1258 (2008)
STRICKLAND
v.
STATE.
No. 2D07-525.
District Court of Appeal of Florida, Second District.
June 20, 2008.
Decision without published opinion. Affirmed.
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525 F.Supp.2d 214 (2007)
Amy BERRY, Plaintiff,
v.
CITY OF SOUTH PORTLAND, MAINE, Defendant.
No. 06-CV-233-P-S.
United States District Court, D. Maine.
November 19, 2007.
*215 *216 J. Joseph McKittrick, McKittrick Law Offices, N. Hampton, NH, for Plaintiff.
Melissa A. Hewey, Peter C. Felmly, Drummond, Woodsum & MacMahon, Portland, ME, for Defendant.
ORDER ON MOTION FOR SUMMARY JUDGMENT
GEORGE Z. SINGAL, Chief Judge.
Before the Court is Defendant's Motion for Summary Judgment with Incorporated Memorandum of Law. (Docket # 17.) Through this Motion, Defendant the City of South Portland, Maine seeks summary judgment on all counts alleged by Plaintiff Amy Berry arising out of her employment at the South Portland Police Department. After reviewing the parties' submissions, the Court GRANTS the Motion for the reasons explained below.
I. BACKGROUND
A. General Background
Defendant City of South Portland ("City") is a municipal entity. (Defendant's Statement of Material Facts ("Defendant's SMF") (Docket # 18) ¶ 1.) The South Portland Police Department is a police force of approximately fifty employees. (Id. ¶ 2.) At all relevant times, the Police Department has been commanded by Police Chief Edward Googins ("Chief Googins") and the City Manager has been Jeffrey Jordan. (Id. ¶¶ 3, 5)
B. Plaintiff's Employment with the Police Department
Plaintiff Amy Berry ("Deputy Chief') is the current Deputy Chief of the Police Department and has held that position for approximately six years. (Id. ¶ 6.) Plaintiff started with the South Portland. Police Department as an officer in 1977. (Id. ¶ 7.) She became the first female Sergeant in the State of Maine in 1984. (Id. ¶ 8.) During her first year as Sergeant, she was made an acting Lieutenant and was assigned to the duty of shift commander. (Defendant's SMF ¶ 8) Plaintiff was promoted to Lieutenant a year later, in October 1985.(Id.) She held the position of Lieutenant for approximately fifteen years, before being promoted to the rank of Deputy Chief in September of 2001. (Id. ¶ 10; Plaintiffs Statement of Material Facts ("Plaintiffs SMF") (Docket # 41) ¶ 6.)[1] Plaintiff was promoted to Deputy Chief *217 after scoring the highest of the candidates through the interview and testing process. (Plaintiff's SMF ¶ 7; Defendant's. Reply to Plaintiffs Statement of Material Fact (Docket # 48) ¶ 7.) The decision to promote Plaintiff to the rank of Deputy Chief was made by Jordan, with the advice and agreement of Chief Googins. (Defendant's SMF ¶ 12.) At the time of her promotion, Plaintiff was qualified for the position of Deputy Chief. (Plaintiffs SMF ¶ 6.) Plaintiff was selected to serve as Deputy Chief over two male officers, and she is the only person in the Police Department that holds the rank of Deputy Chief. (Defendant's SMF ¶ 13.) Deputy Chief Berry is the only female officer with a rank higher than Sergeant in the history of the South Portland Police Department. (Plaintiff's SMF ¶ 8.)
Prior to April 2005, Plaintiff was responsible for the day-to-day operations of the entire patrol and detective bureaus within the Police Department. (Defendant's SMF ¶ 15; Plaintiffs SMF ¶ 13.) She was responsible for oversight of command and investigations, dispatch, and the support and services division. (Defendant's SMF ¶ 15.) She supervised the three patrol Lieutenants and was responsible for, oversight of Internal Investigations, which she conducted in a professional and correct manner.[2] (Id.; Plaintiffs SMF ¶ 15.) She also oversaw the Officer of the Month and Year Programs. (Defendant's SMF ¶ 15.) In addition, while Chief Googins made the final recommendations as to discipline, the Deputy Chief made recommendations to the Chief. (Plaintiffs SMF ¶ 18; Defendant's Reply to Plaintiffs SMF ¶ 18.) Although the Chief was in ultimate command of the Police Department, he did not have daily contact, information, or supervisory responsibility over the command staff within the Department. (Defendant's SMF ¶ 4; Plaintiff's SMF ¶ 13.) Plaintiff also has served as acting Chief in the absence of Chief Googins or when he was not available. (Defendant's SMF ¶ 14.)
C. The Smith Complaint and the resulting investigation
On January 13, 2005, Sergeant David Smith, a patrol officer with the. Police Department, *218 filed a harassment complaint against Chief Googins and Deputy Chief Berry ("the Smith Complaint").[3] (Id. ¶ 16.) The Smith Complaint was submitted to the City's Director of Human Resources, Beth Drennen-Bates ("Drennen-Bates").[4] (Id. ¶ 20.) After reviewing the written complaint and the grievance in early January 2005, Drennen-Bates informed the Chief and Deputy Chief that the complaint and grievance had been filed and generally described, what the allegations were.[5] (Id. ¶ 22.) Plaintiff learned that the Smith Complaint included allegations leveled against both her and the Chief. (Id. ¶ 24.) Drennen-Bates informed the Deputy Chief that the allegations included harassment, age discrimination and hostile work environment. (Id. ¶ 26.) At the time, Drennen-Bates did not bring a copy of the complaint with her and the Deputy Chief did not ask to see a copy of it. (Defendant's SMF ¶ 25; Plaintiffs Response to Defendant's Statement of Material Facts (Docket # 46) ¶ 25.) Chief Googins was not provided with a copy of the Smith Complaint either. (Defendant's SMF ¶ 27.) He was told, however, that the allegations had to do with harassment and hostile work environment. (Id.)
Drennen-Bates then spent more than one month interviewing fifty-five people in the City's Police Department. (Id. ¶ 28; Plaintiffs Response to Defendant's SMF ¶ 28.) In her investigation, Drennen-Bates was investigating a: hostile work environment in the Police Department. (Defendant's SMF ¶ 29.) Drennen-Bates did not attempt to verify or substantiate comments made by individuals because her investigation was focused on gathering information about individuals' work place experiences and making recommendations about improvements, so verification had no role in the investigation. (Plaintiffs SMF ¶¶ 31, 32; Defendant's Reply to Plaintiffs SMF ¶¶ 31, 32.)
As a result of the investigation, it was apparent to Drennen-Bates that there was a morale issue within the Police Department. (Defendant's SMF ¶ 30.) Drennen-Bates discovered that a large percentage of the employees had one or more concerns with the working conditions within the Department. (Id.) Some members of the Police Department expressed concerns with both, the Chief and the. Deputy Chief. (Id. ¶ 31.) Many employees reported that morale was low and that they felt that their superiors, particularly Deputy Chief Berry, did not support them. (Id. *219 ¶ 35.) Specifically, several employees complained that they believed that the Deputy Chief was unapproachable, that she was unfriendly, that she favored particular employees, that she was nitpicking and that she would go out of her way to find fault. (Id. ¶ 36.) Examples included that she would look through the trash for evidence to "hang" them and that she eavesdropped on conversations. (Id.) Many of the complaints, however, involved unsubstantiated concerns or matters over which the Deputy Chief had no control. (Plaintiffs SMF ¶ 43.) Chief Googins admitted that, "[a] lot of the decisions being complained about were my own." (Id.)
The officers stated that they did not feel supported by the administration; they complained that: there seemed to be preferential treatment given to the Deputy Chiefs husband, a police officer in the Department, due to their marital relationship; the Chief did not adequately address their concerns; there was irregular communication between employees and the administration;[6] there was irregular communication between the administration and the unions;[7] and there were ongoing safety and coverage issues with the department's radios. (Defendant's SMF ¶ 32.) The Internal Affairs ("IA") process was the subject of the largest number of concerns. (Id. ¶ 39.) Deputy Chief Berry was directly responsible for administration of the IA process. (Id. ¶ 40.) Relatedly, there were a number of employees who raised concerns about the fact that Deputy Chief Berry's husband, Sergeant George Berry, would from time to time work in the role of back-up investigator to the Chief IA Investigator.[8] (Id. ¶ 41.) This led to a feeling among employees that when the Deputy Chief reviewed the work of Sergeant Berry, the Deputy Chief would be unable to be unbiased or critical of Sergeant Berry's investigation and findings. (Id.; Plaintiffs Response, to Defendant's "SMF ¶ 42.) Nonetheless, Chief Googins knew that the Deputy Chief had no supervisory authority over her husband, except in the Chiefs absence.. (Plaintiffs SMF ¶ 70; Defendant's. Reply to Plaintiff s SMF ¶ 70.) Drennen-Bates found out through the investigation, that the Deputy Chief conducted one evaluation of her husband in 1994 and one in 2001 and none thereafter because the Chief was designated to do the evaluations of Sergeant Berry. (Plaintiffs SMF ¶ 71.)
In mid-February 2005, Drennen-Bates met with Deputy Chief Berry for two to three hours to share with her the complaints raised by the Department's employees as well as to hear her side of the story.[9] (Defendant's SMF ¶ 45.) In Drennen-Bates' interview with the Deputy Chief, Plaintiff acknowledged the complaints and explained her intentions behind her actions. (Id. ¶ 46.) During that meeting, Drennen-Bates permitted the Deputy Chief to give her side of the story relating *220 to the conflict of interest charges (i.e. allegations concerning inappropriate handling of internal investigations), the allegation that she was rifling through the trash of her subordinates to get them in trouble, and the allegation that she was listening in on the conversations and reviewing e-mails of her subordinates on their laptops, (Id. ¶¶ 47, 50, 51, 52.) The Deputy. Chief also was made aware of the fact that some employees were jealous of Sergeant George Berry's position in the organization. (Id. ¶ 48.)
Drennen-Bates engaged in the smile process with Chief Googins. (Id. ¶ 55.) Drennen-Bates provided the Chief with information concerning her investigation generally, as well as the result of the investigation, and offered him an opportunity to respond with his side of the story. (Id.)
D. Meetings to discuss employees' complaints
On March 2, 2005, Drennen-Bates and Jordan met with Chief Googins to review the results of Drennen-Bates' investigation, to begin discussions on how to improve morale within the Police Department and to respond to the concerns raised by the employees during the investigation. (Defendant's SMF ¶ 56.) Chief Googins acknowledged that there were indeed problems within the Department and offered to try and formulate a series of changes and revisions to Department structure and policies that would provide a solution to the problems. (Id. ¶ 58.) Among the suggestions he made were the following: equipment upgrades, reinstituting a previous practice of having regular monthly staff meetings and regular meetings with the Patrolman's Units, and revamping or restructuring the Department's Internal Affairs procedure. (Id.)
As planned, Drennen-Bates, Jordan and Chief Googins met again on March 3, 2005. (Id. ¶ 60.) During that meeting, they brainstormed ways to improve morale in the Department and to address the complaints that Drennen-Bates had heard frequently. (Id.) Some of the ideas that were generated during that meeting were to deal with the radio issue, to re-institute regular monthly meetings between the Chief and Patrol and Command unions, and to conduct monthly command staff meetings. (Id. ¶ 61.) Deputy Chief Berry was not invited to the initial or second meeting. (Plaintiffs SMF ¶ 44.)
On March 7, 2005, Jordan, Drennen-Bates and Chief Googins met with Deputy Chief Berry to fill her in on the process. (Defendant's SMF ¶ 62.) By this time, Drennen-Bates made the Chief and Jordan aware that both of the City's Police Unions planned to hold votes of no confidence against the Police Department. (Id. ¶ 63.) Jordan shared that votes of no confidence were scheduled against both the Chief and Deputy Chief. (Id. ¶¶ 63; 64.) A vote of no confidence is an embarrassment to those against whom it is taken and creates turmoil within the Department. (Id. ¶ 65.)
During the March 7 meeting, the Deputy Chief responded to and explained her version of the allegations concerning her "snooping" through the trash and monitoring laptop communications. (Id. ¶¶ 68, 59.) She explained that she objected to some of the language used by the officers on the Departmental computers, such as "I've got to go to the station and take a crap." (Plaintiffs Response to Defendant's SMF ¶ 69.) During the series of meetings, the Deputy Chief was given the opportunity to retire. (Defendant's SMF ¶ 59; Plaintiffs SMF ¶ 61.) Retirement was presented as an option for the Deputy Chief if she believed it would be too difficult to move the *221 plan forward positively. (Defendant's SMF ¶ 59.)
On March 8, 2005, Jordan, Drennen-Bates, Chief Googins and Deputy Chief Berry met again to discuss available alternatives for handling, the employees' complaints. (Id. ¶ 70.) At this meeting, the Deputy Chiefs input was sought and all participants offered suggestions for a plan. (Id. ¶ 71.) The Deputy Chief made suggestions for changes in the Department, including the firing of some staff and elimination of the "Officer of the Month" award, (Id, ¶ 72.) When asked whether the perception that she was unfriendly was because she was a woman, the Deputy thief responded: "[N]o it's because I'm the disciplinarian." (Id. ¶ 74.) By this time, the Deputy Chief had acknowledged in her own mind that she needed to work on communicating with the officers under her control.[10] (Id. ¶ 75.) Plaintiff also believed there to be "serious" personnel issues and several equipment problems that needed to be addressed in the Police Department. (Defendant's SMF ¶ 75.) Drennen-Bates explained to the Deputy Chief that she was not going to be disciplined for her role in the Smith Complaint, but that there would need to be changes in the organization going forward. (Id. ¶ 77.)
Plaintiff also believed that the administration should confront head-on some of the issues that had been raised that she believed were unfounded. (Id. ¶ 78.) In light of the climate in the Police Department, the other members of the group believed that it was important to look forward and address the perceived problems of the rank and file without confrontation. (Id. ¶ 79.) Instead of refuting the allegations, they believed that regardless of whether the perceptions were accurate, if people thought there was a problem, they needed to fix it. (Id. ¶ 79.)
During the course of the meetings, the Deputy Chief was asked why she felt like she was the focus of the Unions' complaints. (Id. ¶ 80.) The Deputy Chief responded that she felt that the complaints would have been filed against any person Who held her position and that she felt her position was similar to that of an assistant high school principal in charge of discipline. (Defendant's SMF ¶ 80.) The Deputy Chief specifically stated that it was her belief that the complaints that had been filed against her had nothing to do with her gender. (Id. ¶ 81.)
Because a number of the complaints against the. Chief were that he was disconnected and not fully aware of what was going on in the Department, Jordan asked him to review how he could be more involved in the day-to-day operations. (Id. ¶ 82.) Chief Googins suggested reorganizing the Department so that the Patrol and Command divisions would report directly to him. (Id. ¶ 84.) Chief Googins recommended that the Detective Bureau, the Special Training, Policies, IA, Dispatch and civilian personnel would continue to report to the Deputy Chief. (Id. ¶ 85.) The. Chief suggested reorganizing the Police Department, as he explained during the March 8 meeting, primarily for three reasons: (1) he wanted to involve himself more in the day-to-day operations of the Department; (2) this was a structure he had been advocating for years;[11] and (3) *222 he wanted to remove the Deputy Chief "from the line of fire." (Id. ¶ 86.) Jordan believed that the reorganization was an appropriate response to the Serious concerns that the Chief was not sufficiently involved in the day-to-day operations of the Department. (Defendant's SMF ¶ 92.)
With regard to the comment about removing the Deputy Chief from the "line of fire," the Chief explained that removing responsibility for the Patrol Division would give Plaintiff the opportunity to focus on improving her relationship with the Dispatch Division.[12] (Id. ¶ 93.) The Chief made these comments at a time when the union was threatening to hold a vote of no confidence against the Deputy Chief, as he had some desire to protect the Deputy Chief from the union, but this was not because, the Deputy Chief was a woman. (Id.) The Chief believed that removing the Patrol Division from the Deputy Chiefs command would allow the anger and mistrust directed at the Deputy Chief to subside. (Id. ¶ 94; Plaintiff's Response to Defendant's SMF ¶ 94.) Jordan believed that as a result of the proposed organization changes and over a period of time, trust would be rebuilt, morale would improve and relations would move on. (Defendant's SMF ¶ 94.) The reorganization, however, was intended to be permanent and there would be no opportunity for Deputy Chief Berry to regain her former position. (Plaintiffs Response to Defendant's SMF ¶ 94.)
In the middle of March 2005, another meeting was scheduled. (Defendant's SMF ¶ 95.) Jordan, through Chief Googins, informed the Deputy Chief that the purpose of the meeting was to discuss management business and to craft a plan to move the Department forward. (Id. ¶ 96.) The Deputy Chief was asked to attend the meeting, but declined to do so as she was not permitted to bring an attorney because the meeting was to discuss management issues. (Id. ¶ 97.) The meeting proceeded without the Deputy Chief. (Id. ¶ 98.) At this meeting the decision was made, subject to review of the plan and the advice of counsel, to reorganize the Department in accord with a thirteen point plan. (Id.) Chief Googins was directed to prepare and present the proposed organizational changes to Jordan. (Id. ¶ 99.)
E. Results of the investigation
A staff meeting was scheduled for March 24, 2005 at which the Chief was going to explain the organizational changes. (Defendant's SMF ¶ 102.) Prior to the Chiefs announcement of the reorganization to the Department, Jordan told him that he needed to stand up in front of the troops and take responsibility for the situation. (Id. ¶ 103.) At the meeting, the Chief distributed a memorandum and made a presentation in which he acknowledged that there were problems, described the organizational changes and assured the work force that the administration was committed to addressing their concerns. Drennen-Bates, Jordan and the Deputy Chief attended the meeting but did not participate. (Id. ¶ 104.)
*223 On March 22, 2005, Drennen-Bates issued her memorandum to Jordan concerning Sergeant Smith's harassment complaint. In that memorandum, she reported that her investigation revealed "a clear sense of "ministration not supporting staff `we are guilty until proven innocent,' and `looking' for things to write officers up for." (Id. ¶ 101.) She concluded, among other things:
The incidents cited in the formal complaint do not meet the definition of hostile work environment under Federal law. However, the evidence I obtained in this investigation clearly portrays a serious managerial problem. I recommend prompt and remedial action to address this, specifically to include a letter to the Chief with notice that this is unacceptable [sic] work environment and management must immediately work on correcting this problem. Further, the Chief should provide a letter to the Deputy Chief outlining what is expected of the Deputy's performance and provide coaching suggestions to correct unacceptable behavior.
(Id.)
On April 3, 2005, Jordan sent Chief Googins a memorandum entitled, "State of Current Affairs in the South Portland Police Department" (Id. ¶ 105.) The memorandum outlined four areas of concern: communication, the internal investigations process, the reorganization plan and radios/communication in the field. (Defendant's SMF ¶ 108.) For each area, the memorandum set out an action plan for the Chief to follow. (Id.) The memorandum concluded: "With these changes I have the confidence that we can improve the working environment for our employees and restore their faith in our commitment and concern for them." (Id.)
Upon receipt of the memorandum, the Chief began preparation of a memorandum to the Deputy Chief. (Id. ¶ 109.) The memorandum to the Deputy Chief was not sent until April 13, 2005, after the decision to reorganize the Police Department had already occurred. (Id.) While acknowledging that a hostile work environment had not been found regarding the Smith Complaint, the Chief went on to state that "a number of issues were identified during the course of the investigation that require both immediate and decisive action. How we respond to these issues will have a profound impact on the future of this organization." (Id. ¶ 110.) He concluded: "[T]ogether we can improve the working environment for our employees and we can regain their trust and restore their faith in our commitment and concern for them." (Defendant's SMF ¶ 110.) Chief Googins explained to the Deputy Chief that that plan moving forward was not disciplinary in nature and specifically told her that the memorandum he sent to her was not considered to be a reprimand and would not become part of her personnel file. (Id. ¶ 111.) The Deputy Chief did not receive a letter of reprimand but did receive a directive for future action, which was not placed in Plaintiffs personnel file. (Id. ¶¶ 112, 113.)
Jordan suggested that the Deputy Chief meet with Union leadership. (Id. ¶ 123.) Jordan told the Deputy. Chief that he thought it would be nice if she apologized but that he would not order her to apologize during that meeting. (Id. ¶ 124.) He did insist that she communicate her commitment to following the thirteen point reorganization and plan for change, moving forward and addressing the serious problems within the Department. (Id.; Plaintiffs Response to Defendant's SMF ¶ 67.) The Deputy Chief met with Union officials on April 6, 2005 and acknowledged that there had been communication problems and assured the group that she wanted *224 to be part of the solution. (Defendant's SMF ¶¶ 125, 126.) The Deputy Chief also stated that she was not going to resign and that she had not been asked to resign. (Id. ¶¶ 127, 128.) She stated that she had not been disciplined and that she was not going to leave the South Portland Police Department. (Id. ¶¶ 130, 131.)
F. The Reorganization
Under the Chief's reorganization, plan, which was approved by the City Council, two new Lieutenant positions were created and the City's Police Department essentially was split into two divisions: (1) Patrol and Community Services, and (2) Investigative and Support.[13] (Id. ¶ 116.) Under the reorganization, one of the new Lieutenants was responsible for the newly created Office of Professional Standards, which encompassed internal investigations and the development of internal policies. (Id. ¶ 121.) The Chief, Drennen-Bates and Jordan have identified several different reasons for reorganizing the Department. (Plaintiff's SMF ¶ 67.)
After the reorganization, the Deputy Chief was responsible for oversight of detective investigations, communications, civilian personnel, dispatch, the administrative secretary and records, park rangers and crossing guards. (Defendant's SMF ¶ 117.) Plaintiff also oversaw the Officer of the Month and Year programs and maintained Department attendance records. (Id.) She served as a representative of the Safety Committee. (Id.) She was also given the opportunity to coordinate work on three new projects, including leading the Radio Committee, serving as representative on the regional dispatch initiative and leading an effort to replace the records management and computer aid dispatch systems. (Id.) Nonetheless, as a result of the reorganization, the Deputy Chief lost the day-to-day oversight and the majority of her duties related to the Patrol Division. (Plaintiff's SMF ¶ 59.) In addition, she was no longer responsible for Internal Investigations.[14] (Id.) The Deputy Chief was told to tell the Unions that she was willing to work to resolve the issues, but she was told not to attend any further meetings with the Unions. (Id.) The details of the Deputy Chief's restructured job were well known in the Maine Police community. (Id. ¶ 51.)
There was no change in the Deputy Chief's rate of pay or in the benefits she received. (Defendant's SMF ¶ 117.) The Deputy Chief has not been directed to cease attending staff meetings. (Id. ¶ 142.) The Deputy Chief was never told that she had to resign from the Police Department, nor has anyone ever told the Deputy Chief that they wanted her out of the Police Department because she is a woman. (Id. ¶¶ 129, 132.) Plaintiff has never been told that she could not be Chief of Police for the City of South Portland in the future. (Id. ¶ 139.)
The Deputy Chief continued to serve in the Chief's place when he was not available. Since the reorganization, the Deputy Chief has in fact taken command of the *225 Police Department when the Chief has been out of town. (Id. ¶ 118.) Under the reorganization, Chief Googins remained in overall command of the Police Department. (Id. ¶ 119.) He assumed direct supervision over the Patrol Division and supervises the three patrol Lieutenants. (Defendant's SMF ¶ 119.) He relinquished his responsibilities on coordinating work with the Radio Committee and also shared his position as representative on the regional dispatch initiative. (Id.) There was no change in his rate of pay or in the benefits he received. (Id.; Plaintiff's SMF ¶ 59.)
G. Evidence of sex discrimination in the South Portland Police Department
The City has policies prohibiting sexual discrimination and sexual harassment. (Plaintiff's SMF ¶ 143.) Since 1994, Chief Googins and Jordan have drafted and instituted an affirmative action plan in order to promote or advocate for more women in the command structure of the Police Department. (Defendant's SMF ¶ 144; Plaintiffs Response to Defendant's SMF ¶ 144.) Yet since that time, there have been no appointments of female officers to either the police command structure or to the position of Sergeant (Defendant's SMF ¶ 144; Plaintiff's Response to Defendant's SMF ¶ 144.)
In the South Portland Police Department, there is a "code of silence," that is gender related. (Plaintiff's SMF, ¶ 16.) The Deputy Chief did not follow the "code of silence" in administering the Internal Investigations process, which caused concern among those who followed the "code." (Id. ¶ 17.) In addition, members of the Police Department used the term "skirt work" to refer to clerical type work typically done by women. (Id. ¶ 50.)
Historically, Chief Googins has supported and protected his male supervisors, including Deputy Chiefs, in the Police Department from criticism and trouble. (Defendant's SMF ¶ 141.) By way of example, he protected a former officer from rumors that had been circulating about an affair. (Id.) Neither Jordan, Drennen-Bates nor the Chief publicly defended Plaintiff or attempted to correct the misinformation that was spread about her. (Plaintiffs SMF ¶ 65.)
Before the reorganization, Jordan was shown a picture of then-Assistant City Manager Lauren Carrier labeled "Asshole of the Month," which was posted on the City's intranet. (Id. ¶ 3.) Jordan took no action to have it deleted and it is still posted on the City's intranet. (Id.) Jordan neither reprimanded nor disciplined the individual responsible for posting the offensive picture. (Id. ¶ 4.) Jordan believed that the picture was a joke and done out of humor and in jest. (Id. ¶ 5; Defendant's Reply to Plaintiff's SMF ¶ 5.) The same label previously was given to City Manager Jordan. (Defendant's Reply to Plaintiff's SMF ¶ 5.)
After the reorganization, Plaintiff received an e-mail that she perceived as offensive ("the traffic accident e-mail"). (Plaintiffs SMF ¶ 48; Defendant's Reply to Plaintiff's SMF ¶ 48.) She brought the e-mail to the attention of the Chief, who believed that it was inappropriate and that it had to be dealt with, but Chief Googins did not recall the precise disposition of this incident. (Plaintiff's SMF ¶ 49; Defendant's Reply to Plaintiff's SMF ¶ 49.)
On April 10, 2005, the Deputy Chief submitted a complaint alleging harassment against Drennen-Bates and Jordan to the South Portland City Council regarding the Drennen-Bates investigation. (Defendant's SMF ¶ 133; Plaintiff's SMF ¶ 36.) Upon receipt of the Deputy Chiefs complaint, *226 the City Council hired two investigators, William McLaran and Lisa Beecher, both of whom were current or retired Chiefs of Police, to conduct an investigation into the harassment allegations. (Defendant's SMF ¶ 135; Plaintiffs SMF ¶ 37.) The Deputy Chief had a full and fair chance to explain her story to McLaran and Beecher during their investigation. (Defendant's SMF ¶ 136.) Plaintiff also attended a City Council hearing on August 29, 2005 with her attorney during which McLaran and Beecher presented their report to the City Council. (Id. ¶ 137; Plaintiff's SMF ¶ 40.)
On December 27, 2006, Plaintiff filed a Complaint naming the City of South Portland, Chief Googins and City Manager Jordan as Defendants. (Docket # 1.) On April 26, 2007, Plaintiff filed a Second Amended Complaint naming only the City of South Portland as Defendant.[15] (Docket # 12.) The Second Amended Complaint asserts causes of action for violation of federal sex discrimination laws (Count I), state sex discrimination laws (Count II), deprivation of a property right without due process (Count III) and loss of professional advantage and reputation without due process (Count IV). On July 25, 2007, Defendant City of South Portland moved for summary judgment on all counts. (Docket # 17.)
II. STANDARD OF REVIEW
Generally, a party is entitled to summary judgment if, on the record before the Court, it appears "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A "material fact" is one that has "the potential to affect the outcome of the suit under the applicable law." Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir.1993).
The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether this burden is met, the Court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor. Santoni v. Potter, 369 F.3d 594, 598 (1st Cir. 2004). Once the moving party has made a preliminary showing that no genuine issue of material fact exists, the nonmoving party must "produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue." Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir.1999) (citation, and internal punctuation omitted); Fed.R.Civ.P. 56(e). "As to any essential factual element of its claim on which the nonmovant would bear the burden of proof at trial, its failure to come forward with sufficient evidence to generate a trialworthy issue warrants summary judgment to the moving party." In re Spigel, 260 F.3d 27, 31 (1st Cir.2001) (citation and internal punctuation omitted).
III. DISCUSSION
Initially, the Court pauses to note that it is less than clear from Plaintiff§ Objection to Defendant's Motion for Summary Judgment with Incorporated Memorandum of Law ("Plaintiffs Objection to Summary Judgment") (Docket # 40) what specific *227 causes of action she is actually Pursuing. Plaintiffs Objection to Summary Judgment appears to follow the analytical framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), for disparate treatment cases under Title VII where direct evidence of discrimination is lacking. See Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 95 (1st Cir.1996). Within this discussion, however, Plaintiff suggests that there is direct evidence of discrimination, which implicates a different analysis. See id. at 95-96. Plaintiff also hints that she may have been the victim of a hostile work environment. Finally, aside from scant references to due process, which lack any legal analysis, Plaintiff has failed to address her claims for violation of due process. This confusion is compounded by the problems referenced above with respect to Plaintiffs Statement of Material Facts. Nonetheless, the Court will attempt to address each of the various causes of action in turn.
A. Sex Discrimination
Counts I and. II of Plaintiffs Second Amended Complaint assert causes of action for sex discrimination in violation of federal (Count I) and state (Count II) laws. Title VII of the Civil Rights Act ("Title VII") of 1964, 42 U.S.C. § 20000 et seq., makes it unlawful "for an employer . . . to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1), The Maine Human Rights Act ("MHRA"), 5 M.R.S.A. § 4551 et seq. (2007), similarly provides that it is unlawful employment discrimination for an employer to discriminate against an employee on the basis of sex "with respect to hire, tenure, promotion, transfer, compensation, terms, conditions or privileges of employment." 5 M.R.S.A. § 4572(1)(A) (2007). Maine courts have relied on federal case law surrounding. Title VII for the purpose of construing and applying the provisions of the MHRA, Bowen v. Dep't of Human Servs., 606 A.2d 1051, 1053 (Me.1992). Accordingly, the Court will apply the same legal standard in considering whether the case survives summary judgment under both federal and state law. See Morrison v. Carleton Woolen Mills, Inc., 108 F.3d 429, 436 n. 3. (1st Cir.1997).
1. Disparate Treatment
At the heart of this case lies the reorganization of the Police Department and the alleged disparate treatment Plaintiff received as a result. In a disparate treatment case under Title VII where direct evidence of discrimination is lacking,[16] the Court will utilize the burden-shifting framework articulated in McDonnell *228 Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Under the McDonnell Douglas framework, Plaintiff must first establish a prima fade showing of discrimination. Id. at 802, 93 S.Ct. 1817. A prima facie showing creates a presumption of discrimination, upon which the burden of production shifts to. Defendant to show a legitimate, nondiscriminatory reason for the adverse employment action. Ayala-Gerena, 95 F.3d at 95. Once the employer has offered an alternative reason for the adverse employment action, "[al that remains is for the plaintiff to show that the adverse employment action was the result of discriminatory animus." Che v. Mass. Bay Transp. Auth., 342 F.3d 31, 39 (1st Cir.2003).
For Plaintiff to establish a presumption of gender discrimination, she must show: (1) that she is a member of a protected class; (2) that she performed her job satisfactorily; (3) that she was subjected to an adverse employment action; and (4) that she was treated differently from similarly situated men. McDonnell Douglas Corp., 411 U.S. at 802, 93 S.Ct. 1817; Straughn v. Delta Air Lines, Inc., 250 F.3d 23, 33 (1st Cir.2001). Defendant City of South Portland does not contest that Plaintiff is a member of a protected class and that she performed her job satisfactorily.[17] Defendant contends, however, the Plaintiff did not suffer an adverse employment action.
"To be adverse, an action must materially change the conditions of plaintiff['s] employ. Material changes include demotions disadvantageous transfers or assignments, refusals to promote, unwarranted negative job evaluations, and toleration of harassment by other employees." Gu v. Boston Police Dep't, 312 F.3d 6, 14 (1st Cir.2002) (internal citations and quotations omitted). The inquiry into whether an employment action was materially adverse is case-by-case and must be cast in objective terms. Blackie v. Maine, 75 F.3d 716, 725. (1st Cir.1996), "Work places are rarely idyllic retreats, and the mere fact that an employee is displeased by an employer's act or omission does not elevate that act or omission to the level of a materially adverse employment action." Id.
Here Plaintiff claims that she was actually and constructively demoted. Specifically, Plaintiff states that prior to the reorganization, she effectively ran the entire Police Department, including the Detective Bureau, Internal Investigations, the Dispatchers, civilian employees and the Patrol Division. After the reorganization of the Police Department, Plaintiff was no longer responsible for the Patrol Division or Internal Investigations. In addition, Plaintiff was told not to attend further meetings with the Unions. Plaintiff asserts that this decrease in responsibilities and supervisory authority amounts to a material change in her employment.
Even with the loss of Patrol and Internal Investigations, Plaintiff maintained a large amount of supervisory authority within the Department. The First Circuit has made clear that only a dramatic decrease in supervisory authority will constitute an adverse employment action. See Gu, 312 F.3d at 14 (finding that the loss of some supervisory authority as a result of a restructuring is insufficient for an adverse employment action). After the reorganization, the Deputy Chief was responsible for oversight of detective investigations, communications, civilian personnel, dispatch, the administrative secretary and records, park rangers, crossing guards, oversaw *229 the Officer of the Month and Year programs, maintained Department attendance record and served as a representative of the Safety Committee. The changes to Plaintiffs supervisory responsibilities after the reorganization do not amount to an adverse employment action. See id
Plaintiff remains the Deputy Chief of Police for the South Portland Police Department and has served in place of the Chief in his absence. In addition, following the reorganization, Plaintiff was given the new additional opportunities of leading the Radio Committee, serving as representative on the regional dispatch initiative and directing an effort to replace the records management and computer aid dispatch systems. Plaintiff claims that this reorganization resulted in a decrease of seventy-five percent of her responsibilities and an actual demotion. On the summary judgment record, Plaintiff has failed to substantiate that the reorganization resulted in such a decrease of responsibility.
Rather, it is clear that the reorganization resulted in a reshuffling of responsibilities among the Police Department administration. The Chief assumed greater day-to-day control and contact with the Department while giving up other responsibilities, such as coordinating work with the Radio Committee. Similarly, Plaintiff relinquished some responsibilities and gained others. A mere reshuffling of responsibilities, on its own, is insufficient to establish an adverse employment action.[18] As the First Circuit has stated, "[w]hen a general reorganization results in some reduction in job responsibilities without an accompanying decrease in salary, or grade, those changes cannot be dubbed adverse employment actions." Gu, 312 F.3d at 14. Further, it is clear from the summary judgment record that the Plaintiff did not suffer a decrease in pay or benefits. See Grady v. Liberty Nat'l Bank & Trust Co., 993 F.2d 132, 136 (7th Cir.1993) (cited approvingly in Marrero v. Goya of Puerto Rico, Inc., 304 F.3d 7, 23 (1st Cir.2002) ("[A] materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation.")). Objectively, the reorganization did not result in a material change in Plaintiff's employ. While her responsibilities were changed, "a materially adverse change in the terms and conditions of employment must be more disruptive than a mere inconvenience or an alteration of job responsibilities." Grady, 993 F.2d at 136.
Plaintiff also claims that the details of her restructured employment were well known in the police community and thus she suffered a loss of prestige. Yet, there is no support for her claim of loss of prestige other than her argument that she was demoted. Plaintiff cites the recent Fifth Circuit decision, Alvarado v. Texas Rangers, for support. 492 F.3d 605 (5th *230 Cir.2007).[19] There, the Court stated that "[a] plaintiffs subjective perception that a demotion has occurred is not enough." Id. at 614 (quotations and citations omitted). Here, Plaintiffs subjective belief alone supports that she has been demoted and that she has suffered a loss of prestige. It is not enough that Plaintiff felt that she had been disciplined by the reorganization and had lost prestige in her employment. See Marrero, 304 F.3d at 25 ("It is not enough that [the plaintiff] felt stigmatized and punished by the transfer. A more tangible change in duties or working conditions is needed, before we can conclude that the transfer was, in substance, a demotion." (internal quotations omitted)). As the First Circuit has indicated in relation to a Title VII constructive discharge claim, Title VII does not protect a worker's ego. See Caputo v. City of Haverhill, 67 Fed.Appx. 1, 4 (1st Cir.2003). Therefore, Plaintiff has failed to raise a genuine issue of material fact with regard to whether she suffered an adverse employment action. Plaintiff has failed to establish a prima facie case of discrimination, and the Court need go no further. Defendants are entitled to summary judgment on any claim of disparate treatment.
2. Hostile Work Environment
Defendant claims that Plaintiffs. Second Amended Complaint "only charges that the city engaged in a discrete act of discrimination when it reorganized the police department." (Defendant's Reply Memorandum in Support of its Motion for Summary Judgment (Docket # 47) at 5.) Plaintiffs Objection to Summary Judgment, however, indicates that she may be attempting to pursue a claim for hostile work environment. Although the exact contours of Plaintiffs hostile work environment claim are not obvious or apparent, the Court will nonetheless briefly consider the underlying argument.
In order to establish a claim for hostile work environment, the plaintiff must present facts to establish the following:
(I) that she (or he) is a member of a protected class; (2) that she was subjected to unwelcome sexual harassment; (3) that the harassment was based upon sex; (4) that the harassment was sufficiently severe or pervasive so as to alter the conditions of plaintiffs employment and create an abusive work environment; (5) that sexually objectionable conduct was both objectively and subjectively offensive, such that a reasonable person would find it hostile or abusive and the victim in fact did perceive it to be so; and (6) that some basis for employer liability has been established.
O'Rourke v. City of Providence, 235 F.3d 713, 728 (1st Cir.2001). Defendant does not contest that Plaintiff is a member of a protected class. Although Plaintiff fails to specifically articulate those actions that she believes constitute actionable sexual harassment, the Court understands from Plaintiffs argumentation that this claim encompasses, at most, a gender-related "code of silence," the "Asshole of the Month" picture, references to "skirt work," a traffic accident e-mail and a denial of support from the administration.[20]
*231 "Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at discrimination because of sex." Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 80, 118 S.Ct. 998, 140 L.Ed.2d 201 (1998). Thus, at the threshold Plaintiff must show that the discrimination was because of her sex. This is not a ease where "the, inference of discrimination is easy to draw [as] in most malefemale sexual harassment situations . . . [where] the challenged conduct typically involves explicit or implicit proposals of sexual activity. . . ." Id. At the same time, the harassing conduct need not have been "overtly sex-specific in content to be actionable under Title VII." Rivera-Martinez v. Puerto Rico, ___ Fed.Appx. ___, ___, 2007 WL 16069, at *3, 2007 U.S.App. LEXIS 160, at *8 (1st Cir. Jan. 4, 2007). "The critical issue, Title VII's text indicates, is whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed." Oncale, 523 U.S. at 80, 118 S.Ct. 998.
Plaintiff must also establish that the harassment was "sufficiently severe or pervasive [as] to alter the conditions of [her] employment." Conto v. Concord Hosp., Inc., 265 F.3d 79, 82 (1st Cir.2001) (internal quotations and citations omitted). There is no "mathematically precise test" for determining when conduct in the workplace moves beyond the "merely offensive" and enters the realm of unlawful discrimination. Harris v. Forklift Sys., Inc., 510 U.S. 17, 21-23, 114 S.Ct. 367, 126 L.Ed.2d 295 (1993). Rather, the question whether the environment is objectively hostile or abusive must be answered by reference to all the circumstances, including the "frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." Id. at 23, 114 S.Ct. 367; see also Oncale, 523 U.S. at 81-82, 118 S.Ct. 998.
For several of Plaintiffs proffered instances of sexual harassment, Plaintiff has failed to provide sufficient evidence on the record with regard to the "because of sex" and/or the "severe or pervasive" requirements. With regard to the "code of silence," Plaintiff baldly states that her failure to follow the "code of silence" caused concern among those who followed the code. The Court is aware of the general meaning of a "code of silence," but here Plaintiff fails to articulate any context for the gender-related "code of silence," how it is gender-related, its contours, frequency, implications or consequences. Cf. Pomales v. Celulares Telefonica, Inc., 447 F.3d 79, 83-84 (1st Cir.2006) (noting that the inquiry into whether harassment is sufficiently severe or pervasive is a fact specific inquiry that should consider the frequency, severity *232 and whether it interfered with an employee's work performance). Similarly, while the label "Asshole of the Month" may be offensive, Plaintiff has simply indicated that some form of the picture remains on the City's intranet, but has failed to state how this harassment was because of her sex or how it impacts her employment in any way. See Lee-Crespo v. Schering-Plough Del Caribe, Inc., 354 F.3d 34, 46 (1st Cir.2003) (affirming summary judgment for the employer in a hostile work environment case where there was no evidence that the harassment was "an impediment to [Plaintiff's] work performance"). The Court notes that the label was given to the male City Manager one year and the female Assistant City Manager the following year. Plaintiffs proffers related to the "code of silence" and the "Asshole of the Month" picture leave the Court with little to consider or analyze owing simply to Plaintiffs failure to provide evidence on the summary judgment record related to these events. Setting aside those instances of harassment for which Plaintiff fails to provide sufficient evidentiary support to show that the harassment was because of her sex or severe or pervasive, the Court is left with references to "skirt work," the traffic accident e-mail and the general allegations related to the denial of support by the administration.
It is clear that isolated incidents (unless extremely serious) and offhand comments are not sufficient to establish a hostile work environment. O'Rourke, 235 F.3d at 729. Plaintiff asserts that the Department referred to administrative and/or clerical work as "skirt work." Yet beyond one instance of use of the term by a female employee of the Department, Plaintiff fails to provide the frequency, the manner or the conditions under which references to skirt work were made. Plaintiff has failed to show that references to "skirt work" were anything more than offhand comments. Similarly, after the reorganization, Plaintiff received an e-mail with an offensive traffic accident video. She brought the e-mail to the attention of the Chief, who believed that it was inappropriate and that it, had to be dealt with, but Chief Googins did not recall the precise disposition of the incident. Plaintiff has not indicated that this was part of a pattern of offensive e-mails or that it was physically threatening or humiliating. In short, Plaintiff has failed to show, or claim, that the traffic accident e-mail was more than a single isolated incident.
In addition, Plaintiff asserts that the failure of Googins, Jordan and Drennen-Bates to dissuade members of the Department of their erroneous conclusions supports her claim of hostile work environment. In evaluating a hostile environment claim, the Court is encouraged to consider all of the circumstances. Oncale, 523 U.S. at 81, 118 S.Ct. 998; Harris, 510 U.S. at 23, 114 S.Ct. 367. Plaintiff points out that Chief Googins had supported and protected his male supervisors from criticism, including an incident where the Chief attempted to put an end to rumors regarding a prior Deputy Chiefs affair. The Court notes that the specific examples are not sufficiently similar to form a valid basis for comparison. Further, the Court cannot view the failure of Googins, Jordan or Drennen-Bates, to correct perceived wrong conclusions in isolation. While a denial of support can contribute to a hostile work environment, O'Rourke, 235 F.3d at 730, here the broader context of the morale problems within the Department and the following reorganization is relevant. Defendant explains that confronting individuals regarding any erroneous beliefs would further harm the morale within the Department. Thus, the failure to support was limited to a difficult time *233 within the Police Department and a desire to limit the reach of the bad morale. In addition, Plaintiff has failed to indicate how the denial of support was because of her sex as required. See Oncale, 523 U.S. at 80, 118 S.Ct. 998.
The Court is unable to find a trialworthy issue here. Taking the sufficiently supported harassment collectively, the Court finds that Plaintiff has failed to generate a genuine issue of material fact as to whether the harassment was severe or pervasive. Instead, Plaintiff's hostile environment claim suffers from a deficiency common to this case, Plaintiff's reliance on conclusory allegations and unsubstantiated argumentation. Thus, while Plaintiff's experience may have been unpleasant at times, the record does not support the inference that the environment was objectively hostile to Plaintiff because she was a female.
Plaintiff has failed to raise a genuine issue of material fact with regard to either disparate treatment or hostile work environment sex discrimination. Because the standard is the same under both federal and state law, Plaintiff has failed on both Counts I and II. Therefore, Defendant, City of South Portland, is entitled to summary judgment on Counts I and IL
B. Due Process
Counts III and IV of Plaintiffs Second Amended Complaint assert causes of action for violation of Plaintiffs due process rights. Plaintiff's Objection to Summary Judgment fails to address why summary judgment should not be granted on these claims as requested by Defendant. Indeed, Plaintiff makes only passing references to potential violations of due process and fails to substantiate the claims to any extent. Plaintiff has therefore waived, any claim premised on a violation of her due process rights. See Grenier v. Cyanamid Plastics, Inc., 70 F.3d 667, 678 (1st Cir. 1995) ("Even an issue raised in the complaint but ignored at summary judgment may be deemed waived. `If a party fails to assert a legal reason why summary judgment should not be granted, that ground is waived and cannot be considered or raised on appeal.'" (quoting Vaughner v. Polito, 804 F.2d 873, 877 n. 2 (5th Cir.1986))); Muniz-Cabrero v. Ruiz, 23 F.3d 607, 609 (1st Cir.1994) ("A party opposing a summary judgment motion must inform the trial judge of the reasons, legal or factual, why summary judgment should not be entered." (citation and quotations omitted)). Therefore, Defendant is entitled to summary judgment on these claims.
IV. CONCLUSION
For the foregoing reasons, Defendant's Motion for Summary Judgment is GRANTED (Docket # 17).
SO ORDERED.
NOTES
[1] Plaintiff's Statement of Material Facts suffers from a number of deficiencies. First, ¶¶ 7, 10, 25, 28, 56, 63 and 64 of Plaintiff's Statement of Material Facts rely in whole or in part on documents that inexplicably are missing from the record in this case. After reviewing the entire docket, the Court was unable to locate the documents on which these statements rely. Thus, the statements of fact on which those documents rely have not been considered by the Court for summary judgment.
Second, Defendant alleges that numerous statements of material fact by Plaintiff (¶¶ 11, 29, 30, 21, 35, 38, 39, 44, 53, 54, 56, 62, 68, 69, 71, 72) should be stricken because the underlying documents have not been properly authenticated as required by Federal Rule of Evidence 901. Federal Rule of Evidence 901 provides that [t]he requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." With respect to each of the challenged documents, there is nothing on the summary judgment record to allow the Court to determine that "the matter in question is what its proponent claims." Fed.R.Evid. 901(a). For that reason, the Court did not include or consider those statements of material fact for the purpose of determining the present Motion.
Third, Local Rule 56 requires a party opposing summary judgment CO admit, deny or qualify each fact and "shall support each denial or qualification by a record citation as required by this rule." Local Rule 56(c). Local Rule 56(f) requires that lain assertion of fact set forth in a statement 4 material facts shall be followed by a citation to the specific page or paragraph of identified record material supporting the assertion. The court may disregard, any statement of fact not supported by a specific citation to record material properly considered on summary judgment. The court shall have no independent duty to search or consider any part of the record not specifically referenced in the parties' separate statement of facts,", Id. at 56(f). In Plaintiff's Statement of Material Facts ¶¶ 12, 21 and 22, Plaintiff proffers an assertion followed by a citation to documents that are either forty-five or twenty-one pages. The citations contain not a single citation to a specific page or paragraph. In accord with Local Rule 56, the Court declines to wade through the exhibits to locate support for those assertions.
[2] The Chief had wanted some changes made to Internal Investigations, and there had been some improvement. (Plaintiff's SMF ¶ 14.) In addition, the City had been complimented for the job that it was doing on. Internal Investigations. (Id. ¶ 19.)
[3] The Smith Complaint alleged that both the Chief and Deputy Chief: (1) had engaged in harassment, discrimination and created a hostile work environment; (2) had used different standards in their treatment of different employees; and (3) that there were issues with certain equipment used in the Department. (Defendant's SMF ¶ 16.) At approximately the same time, the South Portland Police Command and Supervisory Unit union filed a grievance on Sergeant Smith's behalf, which concerned the way an Internal Affairs investigation of Sergeant Smith was handled. (Id. ¶ 17.) The crux of that grievance was that the Deputy Chief conducted an investigation of Sergeant Smith without first informing him of the complaint. (Id. ¶ 18.) Prior to the union filing the grievance, Chief Googins advised the union that the administration found no problem with the handling of the investigation. (Id. ¶ 19.)
[4] Drennen-Bates had not previously been involved in any paramilitary organization investigation. (Plaintiff's SMF ¶ 30; Defendant's Reply to Plaintiff's SMF ¶ 30.) Neither Drennen-Bates nor Jordan had experience with, or knowledge of, the inner workings of a Police Department. (Plaintiff's SMF ¶ 42.) Drennen-Bates also handled the union grievance. (Defendant's SMF ¶ 20.)
[5] The Deputy Chief was aware of the circumstances underlying the Smith Complaint and thus was not surprised to hear that Sergeant Smith had tiled a complaint. (Defendant's SMF ¶ 23.)
[6] Employees complained that the Chief had stopped the regular meetings that historically had been held between administration and the command staff. (Defendant's SMF ¶ 34.)
[7] The unions were dissatisfied that the Chief had stopped holding executive board meetings with union leadership, which provided an opportunity for the union to share their concerns, with the Chief. (Defendant's SMF ¶ 33.)
[8] In addition, at an earlier point in time, Chief Googins learned that the Deputy Chief's husband was receiving unauthorized overtime; after the Chief confronted him about it, the unauthorized overtime stopped. (Plaintiff's SMF ¶ 33; Defendant's Reply to Plaintiff's SMF ¶ 33.)
[9] Plaintiff's denial is not supported by Plaintiff's Exhibit 4, while the other citation does not reference a, specific page number. See supra note 1.
[10] Drennen-Bates offered to assist the Deputy Chief with her relationships with other officers. (Defendant's SMF ¶ 76.) Drennen-Bates stated to the Deputy Chief that they were "a team." (Id. ¶ 77.)
[11] Chief Googins had previously advocated a change in the reporting structure wherein there would be two. Deputy Chiefs. (Defendant's SMF ¶ 87; Plaintiff's Response to Defendant's SMF ¶ 87.) In 2001, Chief Googins had recommended a similar reorganization to the City Manager; the proposed changes, however, were not accepted at that time for fiscal reasons because the proposal required the addition of a new supervisory-level position. (Defendant's SMF ¶ 88.) Chief Googins had also been trying to institute an office of Professional Standards for some time. (Id. ¶ 89.)
[12] The Patrol Division and the Dispatch Division were the two divisions that were reportedly unhappy with the Deputy Chief. (Defendant's SMF ¶ 93.) Eighty-five percent of the officers in the Patrol. Division expressed concern with regard to the Deputy Chief. (Id. ¶ 43.)
[13] A copy of the reorganization plan was presented to the South Portland City Council during the budget process because it recommended that two Sergeant's positions be upgraded to Lieutenant's positions. (Defendant's SMF ¶ 115)
[14] In Plaintiffs Statement of Material Fact ¶ 52, Plaintiff proffers that "while Deputy. Chief Berry retained the titular rank of Deputy Chief, she was, in fact, demoted to the actual rank of Lieutenant." (Plaintiff's SMF ¶ 52.) In support, Plaintiff cites the deposition of Chief Googins, wherein he indicated that the Deputy Chief has substantially fewer assignments than she did before the reorganization. This does not support,' however, Plaintiff's Statement of Material Fact ¶ 52.
[15] On January 31, 2007, Plaintiff filed an Amended Complaint that did not name Chief Googins or City Manager Jordan as Defendants.
[16] As previously stated, Plaintiff suggests at one point that there is direct evidence of discrimination in this case. Again, it is less than clear from Plaintiff's Objection to Summary Judgment what exactly she claims constitutes direct evidence. Nonetheless, the First Circuit has stated that "the term `direct evidence' normally contemplates only those `statements by a decisionmaker that directly reflect the alleged animus and bear squarely on the contested employment decision,'" Vesprini v. Shaw Contract Flooring Servs., Inc., 315 F.3d 37, 41 (1st Cir.2002) (quoting Melendez-Arroyo v. Cutler-Hammer de P.R. Co., 273 F.3d 30, 35 (1st Cir.2001)); see also Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 96 (1st Cir.1996) (stating that "direct evidence is evidence which, in and of itself, shows a discriminatory animus"), After a thorough review of the summary judgment record, there is simply no direct evidence that a decisionmaker made a statement that directly reflected the animus of sex and bore squarely on the decision to reorganize the Police Department.
[17] Nonetheless, Plaintiff inexplicably spends three of eighteen pages arguing that she is a member of a protected class and performed her job adequately.
[18] Similarly, in Torres-Martinez v. Puerto Rico Dep't of Cons., Plaintiff asserted claims for political discrimination and violations of the Fourteenth Amendment due process rights. 485 F.3d 19, 21 (1st Cir.2007). Although the demonstration of an adverse employment action requires a showing that the employment decision resulted "in conditions `unreasonably inferior' to the norm for that position" under a claim for political discrimination, the case is nonetheless instructive. Id. at 23 (internal citations and quotations omitted). In Torres-Martinez, Plaintiff's supervisor decided to exercise more of the duties that he shared with her, which left Plaintiff with fewer responsibilities. Id. at 23-24. The First Circuit held that the "perceived slights and alleged alterations in duties" was insufficient to establish an adverse employment action. Id. at 24.
[19] In Alvarado, the Fifth Circuit addressed "what distinguishes a lateral transfer from a promotion" and stated that "[t]o be equivalent to a demotion, a transfer need not result in a decrease in pay, title, or grade; it can be a demotion if the new position proves objectively worse such as being less prestigious or less interesting or providing less room for advancement." Id. at 612, 613 (quoting Sharp v. City of Houston, 164 F.3d 923, 933 (5th Cir.1999) (emphasis added)).
[20] Plaintiff further argues that the Police Department has a documented history of hostility toward women, but Plaintiff failed to provide admissible evidence to substantiate that claim. For example, at various points, Plaintiff states that Jordan has himself been the subject of sex discrimination complaints and tolerates an environment hostile to women. The record on summary judgment, however, does not support Plaintiff's characterization. Instead, the record supports that at some point in the past, five employees made a complaint that the former Assistant City Manager, Lauren. Carrier, was creating a hostile work environment and that Jordan's relationship with her made it difficult for him to be objective in overseeing her. (Plaintiff's SMF ¶ 2; Defendant's Reply to Plaintiff's SMF ¶ 2.) An independent investigation was conducted into the allegations, and no action of any kind was taken against Jordan as a result of the complaint. (Id.) In addition, some of the documents on which Plaintiff relies to substantiate this allegation are those missing from the docket and the record while others appear to be entire police files, which the Court declines to wade through without the assistance of Plaintiff.
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ACCEPTED
01-15-00246-CR
FIRST COURT OF APPEALS
HOUSTON, TEXAS
10/21/2015 8:17:17 AM
CHRISTOPHER PRINE
CLERK
NO. 01-15-00246-CR
IN THE
FILED IN
1st COURT OF APPEALS
COURT OF APPEALS HOUSTON, TEXAS
FIRST JUDICIAL DISTRICT 10/21/2015 8:17:17 AM
CHRISTOPHER A. PRINE
HOUSTON, TEXAS Clerk
__________________________________________________________________
DORSEY NATHANIEL CARR, III,
FILED IN
Appellant 1st COURT OF APPEALS
HOUSTON, TEXAS
Vs. 10/21/2015 8:17:17 AM
CHRISTOPHER A. PRINE
THE STATE OF TEXAS, Clerk
Appellee
__________________________________________________________________
ON APPEAL IN CAUSE NO. 74,219
239th JUDICIAL DISTRICT COURT, BRAZORIA COUNTY, TEXAS
HONORABLE PATRICK SEBESTA, JUDGE PRESIDING
__________________________________________________________________
BRIEF FOR THE STATE
__________________________________________________________________
JERI YENNE DAVID BOSSERMAN
CRIMINAL DISTRICT ATTORNEY Assistant Criminal District Attorney
BRAZORIA COUNTY, TEXAS 111 E. Locust, Suite 408A
Angleton, Texas 77515
(979) 864-1230
(979) 864-1525 (Fax)
Bar Card No. 02679520
[email protected]
ATTORNEYS FOR APPELLEE Oral Argument is Not Requested
DATE: OCTOBER 21, 2015
NO. 01-15-00246-CR
IN THE
239TH JUDICIAL DISTRICT COURT § COURT OF APPEALS
OF § FIRST JUDICIAL DISTRICT
BRAZORIA COUNTY, TEXAS § HOUSTON, TEXAS
DORSEY NATHANIEL CARR, III,
Appellant
Vs.
THE STATE OF TEXAS,
Appellee
__________________________________________________________________
BRIEF FOR THE APPELLEE
__________________________________________________________________
TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS:
The State of Texas, the prosecuting authority in Cause No. 74,219 in the
239th Judicial District Court of Brazoria County, Texas, respectfully submits this
brief in reply to the brief of Defendant-Appellant, DORSEY NATHANIEL CARR,
III, and would respectfully show the Court the following:
ii
SUBJECT INDEX
Parties To The Case................................................................................................iv
List of Authorities....................................................................................................v
Statement Of The Case............................................................................................1
Statement Of Facts..................................................................................................1
Summary Of Argument..........................................................................................6
First Point of Error..............................................................................................6
Second Point of Error..........................................................................................7
STATE’S REPLY TO APPLEANT’S FIRST POINT OF ERROR...................8
The Appellant claims trial counsel was ineffective in failing to file
a motion to suppress the stop, claiming there was no reasonable
suspicion to justify it. There was reasonable suspicion to justify
the stop and trial counsel was not ineffective in failing to file
a motion to suppress the stop..............................................................................8
DISCUSSION...........................................................................................................8
Ineffective Assistance – Standard of Review......................................................8
Ineffective Assistance by Failure to Present Motion to Suppress...................10
Investigative Detention......................................................................................11
Analysis..............................................................................................................13
Burden to Show Prejudice from the Record.....................................................18
STATE’S REPLY TO APPELLANT’S SECOND POINT OF ERROR.........20
The Appellant claims that the evidence in the record of the
Appellant’s ability to pay his attorney fees was insufficient
to support the assessment of these fees against him. The
State concedes error...........................................................................................20
DISCUSSION.........................................................................................................20
CONCLUSION......................................................................................................21
CERTIFICATE OF COMPLIANCE..................................................................22
CERTIFICATE OF SERVICE............................................................................22
iii
PARTIES TO THE CASE
APPELLANT: DORSEY NATHANIEL CARR, III
Attorney for Appellant at Trial:
Name: Laura Dagley Dowdy
Address: 801 Congress, Ste. 400
Houston, TX 77002
Attorney for Appellant on Appeal:
Name: John Davis
Address P.O. Box 787
Angleton, TX 77516-0787
APPELLEE: THE STATE OF TEXAS
Attorney for the State at Trial:
Name: Aaron Perry, Lilian Martinez
Address: Brazoria County Criminal District Attorney’s Office
Brazoria County Courthouse
111 E. Locust, Suite 408A
Angleton, Texas 77515
(979) 864-1230
(979) 864-1525 (Fax)
Attorney for the State on Appeal:
Name: David Bosserman
Assistant Criminal District Attorney
Address: Brazoria County Criminal District Attorney’s Office
Brazoria County Courthouse
111 E. Locust, Suite 408A
Angleton, Texas 77515
(979) 864-1230
(979) 864-1525 (Fax)
[email protected]
iv
LIST OF AUTHORITIES
Cases
Bone v. State, 77 S.W.3d 828 (Tex. Crim. App. 2002) .................................... 10, 18
Derichsweiler v. State, 348 S.W.3d 906 (Tex. Crim. App. 2011) ..........................12
Garcia v. State, 57 S.W.3d 436 (Tex. Crim. App. 2001), cert. denied,
123 S.Ct. 1351 (2003).........................................................................................10
Hathorn v. State, 848 S.W.2d 101 (Tex. Crim. App. 1992), cert. denied,
113 S.Ct. 3062 (1993) ............................................................................................9
Hernandez v. State, 988 S.W.2d 770 (Tex. Crim. App. 1999) .................................8
Hiibel v. Sixth Judicial Dist. Court, 542 U.S. 177, 124 S.Ct. 2451,
159 L.Ed.2d 292 (2004)........................................................................................11
In re Daniel, 396 S.W.3d 545 (Tex. Crim. App. 2013)..........................................21
Jackson v. State, 877 S.W.2d 768 (Tex. Crim. App. 1994) ......................................9
Jackson v. State, 973 S.W.2d 954 (Tex. Crim. App. 1998) ....................................10
Kesaria v. State, 148 S.W.3d 634 (Tex. App. - Houston [14th Dist.]
2004), aff’d, 189 S.W.3d 270 (2006) .....................................................................9
Louis v. State, 825 S.W.2d 752 (Tex. App. - Houston [14th Dist.]
1992, pet. ref'd) .....................................................................................................16
Mayer v. State, 309 S.W.3d 552 (Tex. Crim. App. 2010) .......................................20
McFarland v. State, 845 S.W.2d 824 (Tex. Crim. App. 1992), overruled on
other grounds, 915 S.W.2d 9 (1994), cert. denied, 113 S.Ct. 2937 (1993) ...........9
Mitchell v. State, 68 S.W.3d 640 (Tex. Crim. App. 2002)......................................10
Mount v. State, 217 S.W.3d 716 (Tex. App. - Houston
[14th Dist.] 2007, no pet.) ....................................................................................16
v
Orsag v. State, 312 S.W.3d 105 (Tex. App. – Houston [14th Dist.]
2010, pet. ref’d) ....................................................................................................15
Roberson v. State, 852 S.W.2d 508 (Tex. Crim. App. 1993)..................................10
State v. Kerwick, 393 S.W.3d 270 (Tex. Crim. App. 2013).....................................9
Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984) .8
Terrell v. State, ___ S.W.3d ___, No. 14-14-00390-CR, 2015 WL 4594054,
at (Tex. App. – Houston [14th Dist.] July 30, 2015, no pet.)...............................11
Thompson v. State, 9 S.W.3d 808 (Tex. Crim. App. 1999) ................................9, 18
Wert v. State, 383 S.W.3d 747 (Tex. App. – Houston [14th Dist.]
2012, no pet.) ................................................................................................11, 18
Codes
Tex. Crim. Proc. Code Ann. Art. 26.05 (Vernon Supp. 2013)...........................20
vi
STATEMENT OF THE CASE
The Appellant was indicted for the offense of felony driving while
intoxicated, enhanced (CR 1 at 5). After hearing the evidence and the argument of
counsel, the jury found him guilty as charged beyond a reasonable doubt (CR 1 at
43, 53, 54; RR 5 at 51-52). At the punishment phase, the State admitted evidence
of several prior convictions for driving while intoxicated. The Jury assessed
punishment at 10 years imprisonment (CR 1 at 50, 53, 54; RR 6 at 5).
STATEMENT OF FACTS
The evidence showed the Appellant was stopped after a citizen called the
police to report his reckless driving. Based on personal observation and field
sobriety tests, Officers determined he was intoxicated. This was further confirmed
by a blood test.
On July 20, 2014, Jordan Brooks was driving back to his house in Angleton
from Surfside beach with his wife and children, a six and seven year old. He was
driving on Highway 523 (RR 3 at 25-27). A red van came up behind them and
almost rear-ended their car. The driver of the van then drove around them. When
he came back into his lane of travel, the Appellant almost clipped the front of their
vehicle. The van then went off the road and came back. When the driver came back
on the road, he went into oncoming traffic, almost hit another car head on, and then
swerved back into his lane. Mr. Brooks felt it was best to drive around this vehicle
1
and just get away from him (RR 3 at 27, 28). This occurred at about 6:00 pm. The
driver of the van was a white male (RR 3 at 28, 35, 36). There was only one person
in the van. The van was a nineties model red Plymouth or Chrysler van. Mr.
Brooks was not able to get a license plate (RR 3 at 28).
The reckless driver drove down Highway 523 towards Angleton and then
turned at Stratton Ridge Road toward Clute. When he made this turn, he did not
slow down, and his van almost flipped (RR 3 at 28, 29). Stratton Ridge Road is
also known as Highway 226 (RR 3 at 38). Mr. Brooks called 911 when the
Appellant first recklessly passed him. He did not want anyone to get hurt,
including himself or his family (RR 3 at 29). The State admitted the 911 call as
State’s exhibit one (RR 3 at 30).
In State’s exhibit one, Mr. Brooks describes the vehicle as a nineties model
red Chrysler minivan (RR at SX1 at 1:28). He told dispatch that the driver was on
Highway 523; had just turned onto Stratton Ridge Road; and was driving toward
Clute (RR at SX1 at :55, 1:10, 1:40, 2:30). He only made reference to a single
driver with no reference to any passengers (RR at SX1).
On July 20, 2014, around 6:00 or 6:30 pm, Patrol Officer Edward Burnett
with the Clute Police Department was notified by dispatch of a reckless driver in a
red minivan traveling into Clute from Stratton Ridge Road (RR 3 at 130-132). He
did not remember all the details as to how dispatch described the vehicle (RR 3 at
2
159). While on Main Street, he saw two vehicles matching the description given
him by dispatch. Stratton Ridge Road becomes Main Street. He first drove to the
vehicle which pulled into a convenience store because the other vehicle was
heading towards the police station (RR 3 at 133). However, the vehicle at the
convenience store was driven by a Hispanic male with two children, so he
immediately knew it was the wrong vehicle (RR 3 at 133). He did not talk to this
driver more than 10 to 15 seconds (RR 3 at 156). He then double backed toward
the other vehicle and saw it pulling into a bar. The bar was about a block and a half
to two blocks from where he first saw the two red vans (RR 3 at 163, 164).
Sergeant Soley, who he had been in radio contact with, pulled in first (RR 3 at 134,
135, 157). Officer Soley came in contact with the Appellant and gave him
standardized field sobriety tests (RR 3 at 138). Officer Burnett later transported the
Appellant to Brazosport Hospital for a blood draw (RR 3 at 139). The Appellant
voluntarily gave his consent for the blood draw. He signed the consent form which
was admitted into evidence (RR 3 at 140-145). Nurse Anel Casas drew the
Appellant’s blood (RR 3 at 145, 150, 151, 169-173).
Patrol Sergeant Jessie Soley with the Clute Police Department received a
dispatch of a report of a reckless driver that had turned onto Stratton Ridge Road
coming into Clute (RR 3 at 49). This was on July 20, 2014. Around 6:30 pm he
came in contact with a nineties model red Plymouth or Dodge minivan (RR 3 at
3
46-48, 76, 77). This matched the description given to him by dispatch (RR 3 at 49,
112). It was driven by a white male, which also matched the information given him
by dispatch (RR 3 at 112). Sergeant Soley identified the Appellant as the driver of
the vehicle (RR 3 at 48). The video from his patrol unit of the incident was
admitted as State’s exhibit three (RR 3 at 73, 74).
When the Sergeant made contact with the Appellant, he was getting out of
the driver’s seat of the vehicle. The Appellant was the only person in the vehicle.
The Appellant told him he was coming from Surfside beach (RR 3 at 49, 50, 76);
(RR at SX3 at :30, 1:55). When asked if he had been driving recklessly earlier, he
stated that he did not know, but then denied it (RR 3 at 51); (RR at SX3 at 1:00).
The Appellant had a strong odor of alcohol coming from his person; his speech
was very slurred; his balance unstable; and his eyes were red and bloodshot. He
admitted that he drank 5 beers (RR 3 at 52, 53); (RR at SX3 at 1:25). He agreed to
do field sobriety testing (RR 3 at 54, 55); (RR at SX3 at 3:00).
The Appellant had difficulty with the sobriety tests. First, he did not
complete the horizontal gaze nystagmus test. The Sergeant believed this is because
of lack of cooperation, but he was not sure. The Appellant would not focus on the
Officer’s pen during the test even though the Officer tried to administer the test
repeatedly (RR 3 at 56, 59) (RR at SX3 at 3:55). The Appellant had earlier
indicated problems with his eyes (RR 3 at 55). When the Appellant attempted the
4
walk and turn test, he lost his balance during the instructional phase; said he was
not able to do the test; and stopped (RR 3 at 60-62) (RR at SX3 at 5:30). During
the one legged stand test, he lifted his right foot off the ground about 3 inches;
immediately put it back down; and said that he couldn't do the test (RR 3 at 62, 63)
(RR at SX3 at 6:30). When asked to recite the alphabet, the Appellant left out a
letter (RR 3 at 64) (RR at SX3 at 7:15). Sergeant Soley then placed the Appellant
into custody. After the test, the Sergeant asked him how intoxicated he believed
himself to be on a scale of one to 10 and he answered that he was a 6 or 7 (RR 3 at
65) (RR at SX3 at 8:00). In the Officer’s opinion, the Appellant was intoxicated
(RR 3 at 66, 67, 78, 79).
The Appellant was transported to the station, given his DIC-24 warnings,
and there consented to give a blood sample (RR 3 at 66-69, 72). The Sergeant
asked for a blood sample rather than a breath test because it is difficult to get an
intoxilyzer operator to the jail to conduct a breath test (RR 3 at 91). Officer Burnett
transported Appellant to Brazosport Regional Hospital for the blood draw (RR 3 at
77). When the Appellant was brought back from blood draw, he urinated on the
floor in the holding cell even though he had been allowed to use the restroom
shortly before the blood draw (RR 3 at 78).
Paul Van Dorn, who works as director for the Brazoria County Sheriff's
Office Crime Laboratory, did the analysis of the Appellant’s blood (RR 4 at 10-
5
13). He determined the Appellant’s ethanol level to be 0.255 grams per 100
milliliters of blood, which is over three times the legal limit in Texas. In his
opinion, the Appellant was intoxicated (RR 4 at 17, 18).
SUMMARY OF ARGUMENT
First Point of Error
The Appellant claims trial counsel was ineffective in failing to file a motion
to suppress because he contends there was no reasonable suspicion to justify the
stop of his vehicle. He specifically claims that there was insufficient evidence to tie
in the Appellant with observations by a citizen witness that he was driving
recklessly. Trial counsel was not ineffective. The Appellant cannot meet his burden
to show prejudice because the Officer involved had reasonable suspicion to make
the stop. The evidence at trial showed:
1) A civilian, Jordan Brooks, observed a red 1990 model Plymouth or
Chrysler van being driven recklessly by a white male, who was by himself, at
approximately 6:00 pm on July 20, 2014.
2) Mr. Brooks observed the van driving on Highway 523 towards Angleton
and turning onto Stratton Ridge Road toward Clute.
3) The van almost rear ended Mr. Brook’s vehicle; almost clipped his
vehicle when it passed; ran off the road; drove back into oncoming traffic; almost
6
hit another vehicle head on; then almost flipped when it turned onto Stratton Ridge
Road.
4) Mr. Brooks called 911, telling them of the reckless driving. He described
the vehicle as a nineties model red Chrysler minivan; which had just turned onto
Stratton Ridge Road; and was driving toward Clute.
5) On July 20, 2014, around 6:00 or 6:30 pm, Patrol Officer Edward Burnett
with the Clute Police Department was notified by dispatch of a reckless driver in a
red minivan traveling into Clute from Stratton Ridge Road. While on Main Street,
which becomes Stratton Ridge Road, he observed the Appellant’s vehicle, which
met this description. The vehicle pulled into the parking lot of a bar. Sergeant
Soley, who Officer Burnett had been in radio contact with, pulled in the bar and
made contact with the Appellant. This contact subsequently resulted in the
Appellant’s arrest for the instant offense. The Appellant cannot show ineffective
assistance by not filing a motion to suppress because there was reasonable
suspicion for the stop.
Second Point of Error
The Appellant claims that the evidence in the record of the Appellant’s
ability to pay his attorney fees was insufficient to support the assessment of these
fees against him. The State concedes error on this claim.
7
STATE’S REPLY TO APPELLANT’S FIRST POINT OF ERROR
The Appellant claims trial counsel was ineffective in failing to file a
motion to suppress the stop, claiming there was no reasonable suspicion to
justify it. There was reasonable suspicion to justify the stop and trial counsel was
not ineffective in failing to file a motion to suppress the stop.
DISCUSSION
Trial counsel was not ineffective in failing to file a motion to suppress. The
Appellant claims there was no reasonable suspicion to justify the stop. He claims
that there was insufficient evidence to tie the Appellant in with observations by a
citizen witness that he was driving recklessly. Trial counsel was not ineffective.
Ineffective Assistance – Standard of Review
The Appellate Courts use a two-pronged test to review claims of ineffective
assistance of counsel. A defendant must show trial counsel’s actions were not
reasonable and that the defendant suffered prejudice as a result of these
unreasonable acts. Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 2064,
80 L.Ed.2d 674 (1984; Hernandez v. State, 988 S.W.2d 770, 774 (Tex. Crim. App.
1999). First, a defendant must show that his counsel's representation fell below an
objective standard of reasonableness. Strickland, 104 S.Ct. at 2064. To prove this
deficiency in representation, the defendant must demonstrate that his counsel's
performance deviated from prevailing professional norms. Id. at 2065; McFarland
8
v. State, 845 S.W.2d 824, 842-43 (Tex. Crim. App. 1992), overruled on other
grounds, 915 S.W.2d 9 (1994), cert. denied, 113 S.Ct. 2937 (1993).
Second, the defendant must show prejudice. Strickland, 104 S.Ct. at 2064.
This requires the defendant to show that there is a reasonable probability that, but
for his counsel's unprofessional errors, the result of the proceeding would have
been different. Id. at 2068. A reasonable probability is a probability sufficient to
undermine confidence in the outcome. Id. at 2068. Both prongs of the Strickland
test must be met before a case may be reversed for ineffective assistance of
counsel. Id. at 2064. A defendant bears this burden of proof by a preponderance of
the evidence. Thompson v. State, 9 S.W.3d 808, 813 (Tex. Crim. App. 1999).
Judicial scrutiny of counsel's performance must be highly deferential.
Appellate courts indulge a strong presumption that counsel was effective. Jackson
v. State, 877 S.W.2d 768, 771 (Tex. Crim. App. 1994). Isolated failures of counsel,
by themselves, do not constitute ineffective assistance of counsel. McFarland v.
State, 845 S.W.2d at 843; Hathorn v. State, 848 S.W.2d 101, 118 (Tex. Crim.
App. 1992), cert. denied, 113 S.Ct. 3062 (1993). When evaluating an allegation of
ineffective assistance, an appellate court looks to the totality of the representation
and the particular circumstances of each case. Thompson v. State, 9 S.W.3d 808,
813 (Tex. Crim. App. 1999); Kesaria v. State, 148 S.W.3d 634, 638 (Tex. App. -
Houston [14th Dist.] 2004), aff’d, 189 S.W.3d 270 (2006). The fact that another
9
attorney may have acted in a different manner will not be sufficient to prove
ineffective assistance. Kesaria, 148 S.W.3d at 638. An error in trial strategy will
be considered inadequate only if counsel's actions lack any plausible basis. Id.
A claim of ineffective assistance must be firmly founded in the record. Bone
v. State, 77 S.W.3d 828, 835 (Tex. Crim. App. 2002). Generally, the record on
direct appeal is not sufficient to establish a claim of ineffective assistance of
counsel because a silent record cannot rebut the presumption that counsel's
performance was based on sound or reasonable trial strategy. Mitchell v. State, 68
S.W.3d 640, 642 (Tex. Crim. App. 2002); Kesaria, 148 S.W.3d at 638. In the
absence of a record explaining trial counsel's actions, a reviewing court most likely
cannot conclude trial counsel's performance fell below an objective standard of
reasonableness unless the conduct was so outrageous that no competent attorney
would have engaged in it. Garcia v. State, 57 S.W.3d 436, 440 (Tex. Crim. App.
2001), cert. denied, 123 S.Ct. 1351 (2003); Kesaria, 148 S.W.3d at 638.
Ineffective Assistance by Failure to Present Motion to Suppress
A defendant cannot show trial counsel is ineffective in failing to present a
motion to suppress unless he shows that the motion had merit and that a ruling on
the motion would have changed the outcome of the case. Jackson v. State, 973
S.W.2d 954, 957 (Tex. Crim. App. 1998); Roberson v. State, 852 S.W.2d 508,
510–12 (Tex. Crim. App. 1993). He must show by a preponderance of the evidence
10
that the motion to suppress would have been granted and that the remaining
evidence would have been insufficient to support his conviction. Wert v. State, 383
S.W.3d 747, 753 (Tex. App. – Houston [14th Dist.] 2012, no pet.). To meet this
burden, a defendant is required to produce evidence that defeated the presumption
of proper police conduct. Jackson v. State, 973 S.W.2d at 957; Wert v. State, 383
S.W.3d at 753. That there may be questions about the validity of a search is not
enough. Jackson v. State, 973 S.W.2d at 957.
Investigative Detention
In the instant case, the Appellant cannot show that trial counsel was
ineffective because the stop was a proper investigative detention. Under the Fourth
Amendment, a warrantless detention of a person that amounts to less than a full
custodial arrest must be justified by reasonable suspicion. State v. Kerwick, 393
S.W.3d 270, 273 (Tex. Crim. App. 2013). Terrell v. State, ___ S.W.3d ___, No.
14-14-00390-CR, 2015 WL 4594054, at *2 (Tex. App. – Houston [14th Dist.] July
30, 2015, no pet.). “[A] law enforcement officer's reasonable suspicion that a
person may be involved in criminal activity permits the officer to stop the person
for a brief time and take additional steps to investigate further.” Hiibel v. Sixth
Judicial Dist. Court, 542 U.S. 177, 185, 124 S.Ct. 2451, 2458, 159 L.Ed.2d 292
(2004). Reasonable suspicion to detain a person exists if an officer has specific,
articulable facts that, combined with rational inferences from those facts, would
11
lead him or her to reasonably conclude that the person detained is, has been, or
soon will be engaged in criminal activity. State v. Kerwick, 393 S.W.3d at 273.
These facts must show unusual activity, some evidence that connects the detainee
to the unusual activity, and some indication that the unusual activity is related to a
crime, but the likelihood of criminal activity need not rise to the level required for
probable cause to arrest. Id. at 273, 274. The test for reasonable suspicion is an
objective one that focuses solely on whether an objective basis exists for the
detention and disregards the officer's subjective intent. Id. at 274. A reasonable-
suspicion determination must be based on the totality of the circumstances, and
reasonable suspicion may exist even if the circumstances presented are as
consistent with innocent activity as with criminal activity. Id.
Moreover, the detaining officer need not be personally aware of every fact
that objectively supports a reasonable suspicion to detain. Rather, “the cumulative
information known to the cooperating officers at the time of the stop is to be
considered in determining whether reasonable suspicion exists.” Derichsweiler v.
State, 348 S.W.3d 906, 914 (Tex. Crim. App. 2011). A 911 police dispatcher is
ordinarily regarded as a “cooperating officer” for purposes of making this
determination. Id.
Finally, information provided to police from a citizen-informant who
identifies himself and may be held to account for the accuracy and veracity of his
12
report may be regarded as reliable. Id. at 914, 915. In such a scenario, the only
question is whether the information that the known citizen-informant provides,
viewed through the prism of the detaining officer's particular level of knowledge
and experience, objectively supports a reasonable suspicion to believe that criminal
activity is afoot. Id. at 915.
Analysis
The testimony presented at trial showed:
1) Jordan Brooks observed a red 1990 model Plymouth or Chrysler van
driven by a white male who was by himself at approximately 6:00 pm on July 20,
2014 (RR 3 at 25-27, 28, 35, 36).
2) Mr. Brooks observed the van driving on Highway 523 towards Angleton
and turning onto Stratton Ridge Road toward Clute (RR 3 at 25- 29).
3) The van was driven in a reckless manner. It almost rear ended Mr.
Brook’s vehicle; it almost clipped his vehicle when it passed; it ran off the road
into oncoming traffic, almost hitting another vehicle head on; then it almost flipped
when it turned onto Stratton Ridge Road (RR 3 at 27-29).
4) Mr. Brooks called 911, telling the dispatcher of the reckless driving. The
State admitted the 911 call as State’s exhibit one (RR 3 at 30). In State’s exhibit
one, Mr. Brooks described the vehicle as a nineties model red Chrysler minivan
(RR at SX1 at 1:28). He told dispatch that the driver was on Highway 523; had just
13
turned onto Stratton Ridge Road; and was driving toward Clute (RR at SX1 at :55,
1:10, 1:40, 2:30). He only makes reference to a single driver with no reference to
any passengers (RR at SX1).
5) On July 20, 2014, around 6:00 or 6:30 pm, Patrol Officer Edward Burnett
with the Clute Police Department was notified by dispatch of a reckless driver in a
red minivan traveling into Clute from Stratton Ridge Road (RR 3 at 130-132). He
did not remember all the details as to how dispatch described the vehicle (RR 3 at
159). While on Main Street, he saw two vehicles matching the description given
him by dispatch. Stratton Ridge Road becomes Main Street, so he was on the same
road that Mr. Brooks observed the Appellant turn onto. Officer Burnett first drove
to the vehicle which pulled into a convenience store (RR 3 at 133). However, the
vehicle at the convenience store was driven by a Hispanic male with two children,
so he immediately knew it was the wrong vehicle (RR 3 at 133). He did not talk to
this driver more than 10 to 15 seconds (RR 3 at 156). He then double backed
toward the other vehicle and saw it pulling into the parking lot of a bar. The bar
was about a block and a half to two blocks from where he first saw the two red
vans (RR 3 at 163, 164). Sergeant Soley, who he had been in radio contact with,
pulled in and came in contact with the vehicle (RR 3 at 134, 135, 157).
6) Patrol Sergeant Jessie Soley with the Clute Police Department received a
dispatch of a report of a reckless driver that had turned onto Stratton Ridge Road
14
coming into Clute (RR 3 at 49). This was on July 20, 2014. Around 6:30 pm he
came in contact with a nineties model red Plymouth or Dodge minivan (RR 3 at
46-48, 76, 77). This matched the description given to him by dispatch (RR 3 at 49,
112). It was driven by a white male, which also matched the information given him
by dispatch (RR 3 at 112). When the Sergeant made contact with the Appellant, he
was getting out of the driver’s seat of the vehicle. The Appellant was the only
person in the vehicle. The Appellant told him he was coming from Surfside beach
(RR 3 at 49, 50, 76); (RR at SX3 at :30, 1:55). When asked if he had been driving
recklessly earlier, he first stated that he did not know, but then denied it (RR 3 at
51); (RR at SX3 at 1:00). The Appellant had a strong odor of alcohol coming from
his person; his speech was very slurred; his balance unstable; and his eyes were red
and bloodshot. He admitted that he drank 5 beers (RR 3 at 52, 53); (RR at SX3 at
1:25). From this point field sobriety tests and a blood test confirmed the
Appellant’s intoxication.
The above evidence was more than sufficient to provide reasonable
suspicion for an investigative stop. In Orsag v. State, 312 S.W.3d 105 (Tex. App. –
Houston [14th Dist.] 2010, pet. ref’d), the defendant claimed there was insufficient
reasonable suspicion to stop him. He claims the information linking his vehicle to a
speeding vehicle observed earlier by another officer was inadequate to support the
stop. The officer who conducted the stop testified that dispatch informed him that a
15
blue Toyota pickup was seen speeding on Highway 59 in Houston about ten
minutes travel time away from where a second officer observed him. This was on a
Friday night. The Toyota was traveling in the arresting officer’s direction and this
officer saw him very soon after the dispatch. He had no other information
regarding the vehicle and had no separate reason to be suspicious of the vehicle.
But there were no other blue Toyota pickups in his area. The Court of Appeals held
that this information provided the officer sufficient reasonable suspicion to support
the Stop. Id. at 110-112 ; See also Mount v. State, 217 S.W.3d 716, 728, 729 (Tex.
App. - Houston [14th Dist.] 2007, no pet.) (finding reasonable suspicion sufficient
to stop “light colored” Cadillac pickup seen within minutes after officer received
call about a stolen white Cadillac pickup); Louis v. State, 825 S.W.2d 752, 756
(Tex. App. - Houston [14th Dist.] 1992, pet. ref'd) (finding reasonable suspicion
sufficient to stop three black males in light tan colored Cadillac based on report of
two black males driving away from a robbery in a white Oldsmobile).
In reaching its decision, the court considered six factors in reviewing the
sufficiency of the nexus between the first officer’s observations of speeding and
the subsequent location and stop of the suspect: (1) the particularity of the
description of the offender or the vehicle in which he fled; (2) the size of the area
in which the offender might be found, as indicated by such facts as the elapsed
time since the crime occurred; (3) the number of persons in that area; (4) the
16
known or probable direction of the offender's flight; (5) observed activity by the
particular person stopped; and (6) knowledge or suspicion that the person or
vehicle stopped has been involved in other criminality of the type presently under
investigation. Orsag v. State, 312 S.W.3d at 111. The court noted, however, that
the primary test is consideration of the totality of the circumstances and that the
factors may vary in different cases. Id. at 112.
In the instant case, the Appellant was stopped while driving in the same
direction, on the same road as where he had been observed driving recklessly
shortly prior to when he was stopped. The area he was stopped would be
considerably less crowded than Highway 59 in Houston on a Friday night. The
information relayed to dispatch in the instant case included the color, year, make,
and model of the vehicle; more information than that possessed by the officer in
the Orsag case. The record also suggests that Jordan Brooks gave information to
dispatch beyond the portion of the 911 tape admitted. Mr. Brooks testified that the
suspect vehicle was driven by a white male on who was by himself (RR 3 at 25-27,
28, 35, 36). Officer Burnett apparently had this information because he testified
that he immediately knew the first van he stopped was the wrong vehicle because it
was driven by a Hispanic male with two children (RR 3 at 133). In addition,
Sergeant Soley stated that dispatch informed him the van was driven by a white
17
male (RR 3 at 112). The evidence in the instant case was sufficient to show
reasonable suspicion for the stop.
Burden to Show Prejudice from the Record
Finally, the Appellant cannot meet his burden to show prejudice from the
record. The vagueness of some of the evidence presented at trial regarding the stop
demonstrates this flaw with the Appellant’s claim. Because the issue of reasonable
suspicion for the stop was not fully developed at trial, the Appellant cannot show
prejudice because his claim of ineffective assistance is not “firmly founded in the
record.” See Bone v. State, 77 S.W.3d 828, 835 (Tex. Crim. App. 2002). For
example, the admission of the dispatch records as to the exact time the 911 call
was received and the exact time Sergeant Soley came in contact with the Appellant
was not presented to the trial court. This information would have aided the trial
court in determining reasonable suspicion for the stop. The record could, however,
be developed as part of a post-conviction writ.
The instant claim is not an appeal of a denial of a motion to suppress, but an
ineffective assistance of counsel claim. The Appellant, not the State, has the
burden to show prejudice. Thompson v. State, 9 S.W.3d 808, 813 (Tex. Crim.
App. 1999). The Appellant must show by a preponderance of the evidence that the
motion to suppress would have been granted. Wert v. State, 383 S.W.3d 747, 753
(Tex. App. – Houston [14th Dist.] 2012, no pet.). To meet this burden, he is
18
required to produce evidence that defeats the presumption of proper police
conduct. Id. Any claim of ineffective assistance must be firmly founded in the
record. Bone v. State, 77 S.W.3d at 835. Because no motion to suppress the
detention was filed, the State did not develop evidence at trial to show reasonable
suspicion for the stop. The Appellant’s motion to suppress the blood does claim
lack of identification of the Appellant’s vehicle; but the Appellant argued in this
motion that this resulted in an inability to show the Appellant was driving in a
public place as required under section 724.012 of the Transportation Code (CR at
10, 11). Because Officer Burnett personally observed the Appellant driving,
whether the Appellant was driving recklessly earlier was inconsequential. There
was no need for the State to link the Appellant personally with the earlier reckless
driving observed by Mr. Brooks in order to show he was driving on a public road.
Because the issue of whether the stop was based on reasonable suspicion was not
fully developed, the Appellant cannot meet his burden to show, from the record,
that he was prejudiced by his counsel’s failure to file a motion to suppress. He
failed to meet the second prong of the Strickland test to show prejudice.
19
STATE’S REPLY TO APPELLANT’S SECOND POINT OF ERROR
The Appellant claims that the evidence in the record of the Appellant’s
ability to pay his attorney fees was insufficient to support the assessment of these
fees against him. The State concedes error.
DISCUSSION
The Appellant complains that the Court assessed attorney fees in violation of
Article 26.05(g) of the Code of Criminal Procedure. That article provides:
(g) If the court determines that a defendant has financial resources that
enable him to offset in part or in whole the costs of the legal services
provided, including any expenses and costs, the court shall order the
defendant to pay during the pendency of the charges or, if convicted,
as court costs the amount that it finds the defendant is able to pay.
Tex. Crim. Proc. Code Ann. art. 26.05 (Vernon Supp. 2013).
The Judgment reflects the Appellant was assessed $2,954.53 in attorney fees
(CR 1 at 53, 54). Prior to trial, the Appellant filed an affidavit of indigence and
attorney Laura Dagley Dowdy was appointed to represent him at trial (CR at 4-8).
At the conclusion of trial, the trial court found that the Appellant was indigent and
did not have sufficient funds to pay for the appellate record or to pay for an
attorney on appeal. These were provided without cost to the Appellant (CR at 69,
69, 74). The record contains no indication of a hearing to determine if the
Appellant had the financial resources to pay for his trial attorney, nor does the
record reflect that this determination was made. In Mayer v. State, 309 S.W.3d 552
(Tex. Crim. App. 2010), the Court of Criminal Appeals held that in order to
20
comply with article 26.05, the record must contain evidence supporting a finding
that a defendant was able to pay his attorney fees. Id. at 557. Because this is a
matter of sufficiency of the evidence, the Appellant need not preserve error by
objecting before the trial court. Id. at 556. Once a defendant is determined by the
court to be indigent, he is presumed to remain indigent for the remainder of the
proceedings. Id. The State concedes that the evidence was insufficient to support
the assessment of attorney’s fees. The remedy is to delete the assessment of these
fees. See In re Daniel, 396 S.W.3d 545, 549 (Tex. Crim. App. 2013).
CONCLUSION
WHEREFORE, the State of Texas prays that judgment of conviction against
Appellant be upheld by the Court of Appeals for the First Judicial District of
Texas.
Respectfully submitted,
/S/ Jeri Yenne
JERI YENNE
CRIMINAL DISTRICT ATTORNEY
BRAZORIA COUNTY, TEXAS
SBN 04240950
/S/ David Bosserman
DAVID BOSSERMAN
Assistant Criminal District Attorney
SBN 02679520
111 East Locust, Suite 408A
Angleton, Texas 77515
21
(979) 864-1230
(979) 864-1525 (Fax)
ATTORNEYS FOR THE STATE OF TEXAS
CERTIFICATE OF COMPLIANCE
I hereby certify that Appellant Brief for the State, as calculated under
Appellate Rule 9.4(i), contains 5,184 words as determined by the Word program
used to prepare this document.
/S/ David Bosserman
DAVID BOSSERMAN
CERTIFICATE OF SERVICE
The undersigned Attorney for the State of Texas certifies that a true copy of
this brief was served by E-service in compliance with Local Rule 4 of the Court of
Appeals or was served by fax in compliance with Article 9.5 of the Rules of
Appellate procedure on John Davis, attorney for the Appellant, who offices at 205
N. Chenango, Angleton, Texas, this 21st day of October, 2015.
/S/ David Bosserman
DAVID BOSSERMAN
22
| {
"pile_set_name": "FreeLaw"
} |
177 F.Supp.2d 169 (2001)
GABRIEL CAPITAL, L.P., a Delaware Limited Partnership, and Ariel Fund Ltd., a Cayman Islands Corporation, Plaintiffs,
v.
NATWEST FINANCE, INC., f/k/a Gleacher Natwest Inc.; Natwest Capital Markets Limited; National Westminster Bank PLC; McDonald Investments Inc, f/k/a McDonald & Company Securities, Inc.; and Steel Dynamics Inc., Defendants.
No. 99 CIV. 10488(SAS).
United States District Court, S.D. New York.
October 4, 2001.
*170 James R. Safley, Esq., Thomas B. Hatch, Esq., Randall Tietjen, Esq., Corey L. Gordon, Esq., Robins, Kaplan, Miller & Ciresi L.L.P., Minneapolis, MN, David G. Glasser, Esq., Levin & Glasser, P.C., New York City, for Plaintiffs.
Adam Ziffer, Esq., Frank C. Razzano, Esq., Howard Schiffman, Esq., Adam Proujansky, Esq., Dickstein Shapiro Morin & Oshinsky LLP, Michael T. Tomanio, Jr., Esq., Sullivan & Cromwell, Ian Hochman, Esq., Willkie Farr & Gallagher, W. Patrick Loughlin, Esq., Latham & Watkins, New York City, for Defendants.
MEMORANDUM OPINION AND ORDER
SCHEINDLIN, District Judge.
Plaintiffs Gabriel Capital, L.P. ("Gabriel Capital") and Ariel Fund Ltd. ("Ariel Fund") sued defendants NatWest Finance, Inc. ("NatWest"), McDonald Investments Inc. ("McDonald"), and Steel Dynamics Inc. ("SDI") for securities fraud arising from plaintiffs' purchase of bonds issued by a Thailand corporation, Nakornthai Strip Mill Public Company Limited (the "NSM Notes").[1] Plaintiffs alleged that NatWest violated section 10(b) of the Securities and Exchange Act of 1934 (the "1934 Act"), 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, by making or participating in the making of untrue statements and by omitting material facts in order to induce plaintiffs to purchase the NSM Notes. Plaintiffs also alleged that through the same conduct, NatWest committed common law fraud, conspired to commit fraud, and aided and abetted fraud in violation of New York law.
On May 8, 2000, this Court denied NatWest's and McDonald's motion to dismiss plaintiffs' first Amended Complaint and granted in part and denied in part SDI's motion to dismiss. See Gabriel Capital, L.P. v. NatWest Finance, Inc., 94 F.Supp.2d 491, 512 (S.D.N.Y.2000) ("Gabriel I"). On May 30, 2000, plaintiffs filed their Second Amended Complaint ("SAC"), which added claims against two new defendants, NatWest Capital Markets Limited ("NatWest Capital") and National Westminster Bank PLC ("NatWest Bank"), and attempted to cure the deficiencies in the allegations against SDI. SDI, NatWest Capital and NatWest Bank moved to dismiss the SAC. These motions were also denied. See Gabriel Capital, L.P. v. NatWest Finance, Inc., 122 F.Supp.2d 407, 437 (S.D.N.Y.2000) ("Gabriel II").
Currently before this Court is a motion for summary judgment brought by NatWest, NatWest Capital and NatWest Bank *171 (collectively the "NatWest defendants" or "defendants") seeking to dismiss all aspects of the SAC that rely upon any alleged misrepresentations contained in the Offering Memorandum and conveyed during the "road show" presentation.[2] The NatWest defendants claim that plaintiffs cannot prove that they relied on such misrepresentations and that summary judgment in their favor should be granted. For the following reasons, defendants' motion is granted in part and denied in part.
I. BACKGROUND
The allegations in the Amended Complaint have already been exhaustively summarized in Gabriel I, see 94 F.Supp.2d at 495-98, as have the allegations in the SAC, see Gabriel II, 122 F.Supp.2d at 411-17. Familiarity with both opinions and the facts contained therein is assumed for purposes of this motion. For the sake of brevity, only the facts uniquely relevant to this motion will be reiterated.
A. The Alleged Misrepresentations
Plaintiffs allege that the NatWest defendants made misrepresentations in both the Offering Memorandum and the road show presentation concerning the following:
(i) the status of the hot mill, see SAC ¶¶ 25 and 26;
(ii) the design of the mini-mill, see id. ¶¶ 27 and 28;
(iii) the ability of NSM to secure an adequate supply of scrap metal, see id. ¶¶ 29 and 30;
(iv) the existence of "off-take" agreements, see id. ¶¶ 31 and 32; and
(v) the management of NSM, see id. ¶¶ 33-35.
Additionally, plaintiffs allege that the Offering Memorandum contained misrepresentations concerning the use of proceeds from the Offering. See id. ¶¶ 36 and 37
B. Evidence Concerning Reliance
1. The Offering Memorandum
Gabriel Capital admits that it was provided with the March 2, 1998 Offering Memorandum after "March 2, 1998 (i.e. after Gabriel had made its investment decision)" to purchase the NSM Notes.[3] Plaintiffs' Response to the NatWest Defendants' Statement of Material Facts Pursuant to Local Rule 56.1, ¶ 4. In the section entitled "Risk Factors," the Offering Memorandum states:
An investment in the securities being offered by this Offering Memorandum involves a high degree of risk. In addition to the other information contained in this Offering Memorandum, the following factors, certain of which are not typically associated with investing in securities of companies located in the United States, should be carefully considered by prospective investors in evaluating an investment in the securities offered hereby.
Offering Memorandum, Ex. D to the Declaration of Andres Colon ("Colon Decl."), attorney for NatWest defendants, at 19. *172 The Offering Memorandum then discloses in detail the types of risks that potential investors could face. See id. at 19-37. In addition, the Offering Memorandum contains the following disclaimers:
NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY THE INITIAL PURCHASERS AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH HEREIN, AND NOTHING CONTAINED IN THIS OFFERING MEMORANDUM IS, OR SHOULD BE RELIED UPON AS, A PROMISE OR REPRESENTATION, WHETHER AS TO THE PAST OR THE FUTURE. THE INITIAL PURCHASERS DO NOT ASSUME ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
. . . . .
THIS OFFERING MEMORANDUM INCLUDES CERTAIN STATEMENTS, ESTIMATES AND PROJECTIONS PROVIDED BY THE ISSUERS, THE COMPANY AND OTHER SOURCES BELIEVED BY THE ISSUERS AND THE COMPANY TO BE RELIABLE.... SUCH STATEMENTS, ESTIMATES AND PROJECTIONS REFLECT VARIOUS ASSUMPTIONS BY THE ISSUERS AND THE COMPANY CONCERNING ANTICIPATED RESULTS AND ARE SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE ISSUERS AND THE COMPANY. ... THE ISSUERS AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF SUCH STATEMENTS, ESTIMATES OR PROJECTIONS CONTAINED IN THIS OFFERING MEMORANDUM OR THAT ANY FORECAST CONTAINED HEREIN WILL BE ACHIEVED.
Id. at iii.
In addition to the above disclaimers that Mayer doubted he even reviewed, see Mayer Dep. at 243, there is little evidence that either Mayer or Cebeci-Gulcelik read, much less relied upon, the Offering Memorandum. For instance, Mayer could not recall whether he read parts of the Offering Memorandum or the Preliminary Offering Memorandum, but admitted that he did not fully read either document. See Deposition of Jack Mayer ("Mayer Dep."), Ex. C to the Andres Decl., at 52. Furthermore, Mayer basically conceded that he did not base his investment decision on the Offering Memorandum. He testified as follows:
Q. Did you do any independent analysis of NSM or did you rely on Ms. Cebeci for that?
A. I relied on Ms. Cebeci and my discussions with Ms. Cebeci as well as the presentation. Mostly the presentation.
Id. at 120. Cebeci-Gulcelik, who was opposed to the NSM investment from the start, fares no better. She stated that "she must have glanced through" the Offering Memorandum and could only recall seeing the map contained therein. See Deposition of Selin Cebeci-Gulcelik ("Cebeci-Gulcelik Dep."), Ex. B to the Colon Decl., at 90-91.
2. The Road Show
On February 23, 1998, before plaintiffs made the decision to purchase the NSM Notes, three NatWest representatives, a McDonald employee, and the Chief Executive Officer of NSM met with Mayer and *173 Cebeci-Gulcelik to pitch the investment. At this presentation, Mayer and Cebeci-Gulcelik were presented with written materials about the NSM project, including a bound set of approximately fifty slides. See Declaration of Jack N. Mayer ("Mayer Decl.") ¶ 2 & Ex. A. Various topics were discussed at this presentation, including:
A discussion of the fact that it was a high quality place; discussion that it was proven technology, discussion that this was the SDI technology plus certain improvements; discussion of offtake agreements; discussion of the operation of the port; discussion of the availability and pricing of scrap; discussion of the location of the plant; ... discussion of this management team that was coming in; ... Some discussion in general of mini-mills.
Mayer Dep. at 63. Specifically, Mayer was told that the technology to be used at the mill was proven SDI technology and that SDI would be a managing owner. See id. at 64, 77-78. Mayer was also assured that the off-take agreements were in place and that there was a "plentiful supply of scrap near the facility at attractive pricing." Id. at 67.
In deciding to purchase the NSM Notes, Mayer "directly relied on the information contained in [the] slides and presented to [him] orally at the road show." Mayer Decl. ¶ 2. This is consistent with Mayer's deposition testimony where he stated that the "presentation was very impressive." Mayer Dep. at 112. In particular, Mayer stated that
based on the presentation that we had heard, based on what was said about the technology, based on the whole presentation, we were kind of prepared to give this the benefit of the doubt ...
* * * * * *
We had heard a presentation. The presentation was very impressive. It seemed as though they had tried to cover all the risk bases and that was critical and it was a very important part of the presentation.
Id. at 114, 118. And while Mayer admitted that he did not conduct an independent analysis of NSM, he stated that he relied mostly upon the road show presentation as well as his discussions with Cebeci-Gulcelik. See id. at 120.
II. DISCUSSION
A. Summary Judgment Standard
Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "An issue of fact is `material' for these purposes if it `might affect the outcome of the suit under the governing law[,]' [while] [a]n issue of fact is `genuine' if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 97 (2d Cir.2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
In assessing the record to determine whether genuine issues of material fact are in dispute, a court must resolve all ambiguities and draw all reasonable factual inferences in favor of the non-moving party. See Parkinson v. Cozzolino, 238 F.3d 145, 150 (2d Cir.2001). "Although the moving party bears the initial burden of establishing that there are no genuine issues of material fact, once such a showing is made, the non-movant must `set forth specific facts showing that there is a genuine issue for trial.'" Weinstock v. Columbia *174 Univ., 224 F.3d 33, 41 (2d Cir.2000) (quoting Anderson, 477 U.S. at 256, 106 S.Ct. 2505). However, the non-moving party may not "rest upon ... mere allegations or denials." St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir.2000). "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a properly supported motion for summary judgment." Bickerstaff v. Vassar Coll., 196 F.3d 435, 452 (2d Cir.1999), cert. denied, 530 U.S. 1242, 120 S.Ct. 2688, 147 L.Ed.2d 960 (2000); see also Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir.1998) ("If the evidence presented by the non-moving party is merely colorable, or is not significantly probative, summary judgment may be granted.") (quotation marks, citations, and alterations omitted).
B. Reliance as an Element
To win a federal securities claim under section 10(b) and Rule 10b-5, a plaintiff must show that the defendant knowingly made a misrepresentation of material fact or failed to disclose a material fact, that plaintiff relied on the misrepresentation or omission, and that plaintiff suffered a loss as a result. See AUSA Life Ins. Co. v. Ernst & Young, 206 F.3d 202, 208 (2d Cir.2000). The reliance element does not require complex legal analysis and may be satisfied simply by plaintiff's testimony. See, e.g., McMahan & Co. v. Wherehouse Entm't, Inc., 859 F.Supp. 743, 753-54 (S.D.N.Y.1994) (denying summary judgment where plaintiffs explained under oath that they relied on misrepresentations in purchasing debentures), rev'd on other grounds, 65 F.3d 1044 (2d Cir.1995). Similarly, to recover for common law fraud in New York, a plaintiff must demonstrate a misrepresentation of material fact made with knowledge of falsity, justifiable reliance on such misrepresentation, and damages. See Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 646 N.Y.S.2d 76, 80, 668 N.E.2d 1370 (1996).
There are a number of reasons why plaintiffs cannot possibly prove that they relied on the alleged misrepresentations contained in the Offering Memorandum. First, despite Mayer's declaration that he "read, and relied on, parts of one of the offering memoranda," Mayer Decl. at ¶ 2, the evidence shows that he did not read the entire Offering Memorandum. If he had, he would have read the substantial "Risk Factors" section as well as the earlier disclaimers. There is no need to decide, however, whether the disclaimers contained in the Offering Memorandum are sufficient to preclude reliance on representations in that document. Here, Gabriel Capital admitted that it was provided with the final Offering Memorandum after it decided to purchase the NSM Notes. Consequently, it could not have relied on the Offering Memorandum in making this investment decision.[4] As plaintiffs' Second Amended Complaint only refers to false and misleading statements made in the Offering Memorandum, and not to statements made in the Preliminary Offering Memorandum, see e.g., SAC ¶¶ 25a, 27b, c, d & e, 29a, 31a, 33a & b, 34b, there could be no reliance on the Offering Memorandum as a matter of law. Belated reliance cannot support a federal securities claim or a claim under New York common law. Accordingly, any claims regarding misrepresentations made in the Offering Memorandum are dismissed.
The situation is quite different with respect to the alleged misrepresentations *175 made during the road show, both orally and in the slides. There is substantial evidence that Mayer, if not Cebeci-Gulcelik, placed a great deal of confidence in what was presented at the road show. In fact, Mayer expressly stated that he relied on the oral information presented at the road show as well as the information contained in the slides. This in itself is sufficient to raise a material issue of fact regarding plaintiffs' reliance.
Defendants claim that plaintiffs' failure to read the Offering Memorandum "defeats any claim that they were mislead by alleged misstatements made at promotional `road shows.'" Reply Memorandum in Further Support of the NatWest Defendants' Motion for Summary Judgment at 4. This argument, however, was raised previously and decided in the context of defendants' first motion to dismiss, albeit in slightly different form. In Gabriel I, NatWest and McDonald argued
that any prior [road show] representations were contradicted by the Offering Memorandum, making reliance on those representations unreasonable.... Although NatWest and McDonald do identify several contradictions between earlier representations and the Offering Memorandum, their list is by no means exhaustive. Plaintiffs have identified a number of allegedly false representations in the slides that are not contradicted by the Offering Memorandum. ... The representations made at the road show and in the slides contained no disclaimer analogous to the ones in the Offering Memorandum. As a result, plaintiff[s] could justifiably rely on those representations.
94 F.Supp.2d at 507-08 (emphasis added). Gabriel I held that contradictions and disclaimers in the Offering Memorandum could not defeat reliance on the road show representations as a matter of law. It stands to reason, similarly, that a failure to read the Offering Memorandum cannot defeat plaintiffs' claim of reliance on road show misrepresentations or omissions as a matter of law. However, a jury may conclude that the timely receipt of the Offering Memorandum defeats plaintiffs' claim of reliance on material presented at the road show. Therefore, all of plaintiffs' claims regarding misrepresentations made at the road show must be decided at trial.[5] As limited by this Opinion, the trial shall proceed as scheduled.
SO ORDERED.
NOTES
[1] Defendants McDonald and SDI have since been voluntarily dismissed from this lawsuit pursuant to Rule 41 of the Federal Rules of Civil Procedure.
[2] The "road show" was the sales presentation recommending the purchase of NSM Notes made by various representatives of NatWest, McDonald and NSM to Jack Mayer, a Gabriel Capital portfolio manager, and Selin Cebeci-Gulcelik, a former analyst at Gabriel Capital who worked under Mayer's direction.
[3] Plaintiffs allege that they "reviewed and relied upon the written materials provided to them by the defendants, as well as the oral representations made by the defendants, in making the decision to invest in the NSM Notes. Based upon these representations, on or about March 2, 1998, the plaintiffs together purchased $15.5 million in principal value of 12% NSM Senior Steel Mortgage Notes due 2006." SAC ¶ 18.
[4] This point was conceded by plaintiff's counsel, Thomas B. Hatch, during a telephone conference held on September 28, 2001.
[5] Plaintiffs also state that "the record shows several material omissions." Memorandum in Opposition to the NatWest Defendants' Motion for Summary Judgment at 18. See, e.g., purported omissions regarding the quality of steel produced and the availability of working capital. The citations supporting these omissions refer to various expert reports rather than the Second Amended Complaint. See Expert Report of Ralph O. Hellmold, Chairman, The Private Investment Banking Co., Ex. A to the Declaration of Randall Tietjen, plaintiffs' attorney, ("Teitjen Decl."), at 19-23; Expert Report of Arthur H. Cobb, Cobb & Associates, Ltd., Ex. C of Teitjen Decl., at 9-10. But these expert reports state that these omissions are from the Offering Memorandum, not the road show. Plaintiffs may therefore conform the pleadings to the proof by filing a Third Amended Complaint identifying the pertinent omissions and when they were allegedly omitted within 10 days of the date of this Order.
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11 N.J. Super. 197 (1950)
78 A.2d 143
ALBERT SACCO, PLAINTIFF,
v.
GEORGE SCHALLUS, JR., BY HIS GUARDIAN AD LITEM, GEORGE SCHALLUS, SR., DEFENDANT.
Superior Court of New Jersey, Chancery Division.
Decided December 15, 1950.
*198 Mr. John B. Baratta, attorney for plaintiff.
Mr. Edward V. Martino, attorney for defendant.
*199 HANEMAN, J.S.C.
This is a motion by the defendant to dismiss the action herein commenced because the complaint fails to state a claim against him upon which relief can be granted. The facts set forth in the complaint upon which relief is demanded are as follows:
In the latter part of December, 1948, the plaintiff and the defendant orally agreed to be partners in the business of buying and selling at retail groceries, meats, produce and provisions in a store to be erected on property the purchase of which the said parties then had in contemplation. Under the terms of the agreement the parties were obliged to contribute equal amounts of cash for the purchase of the real estate; the construction of a building to be erected thereon; the purchase of all necessary fixtures, equipment, merchandise and other requisites of said business. In addition, the said parties were to contribute services in connection with the construction of the building contemplated, for which they were to be compensated as follows plaintiff at the rate of $2.50 per hour and defendant at the rate of 90c per hour, and their eventual respective capital interests in the partnership were to be predicated not only upon the actual cash contributed but upon the value of the services so rendered. The defendant was to keep a full, complete and accurate account of the business of the partnership. At the time the contract of partnership was entered into the defendant was 18 years of age and will not attain his majority until February 17, 1951. There is no allegation in the complaint that the defendant fraudulently misrepresented his age or that the plaintiff did not have knowledge at the time the agreement was entered into that the defendant was a minor. For all that appears in the said complaint, the plaintiff knew at the time the contract was entered into that the defendant was a minor. The liquid assets are presently of the value of approximately $500 and the debts approximately $1,000. The business has been conducted for some time past at a loss.
Plaintiff demands a dissolution of the partnership; contribution from the defendant for the monies he allegedly agreed to contribute and has failed to contribute; an assumption *200 of a share of the debts of the partnership; an ascertainment of the respective interests of the plaintiff and defendant in said partnership, and an accounting from the defendant.
The defendant has filed an answer and counterclaim in which he admits that there was an agreement of partnership entered into and that the parties were to contribute equally toward the purchase of real estate, construction of a building and the purchase of fixtures, equipment and merchandise. Defendant denies that he was to contribute additional capital, and that the furnishing of the actual labor for the construction of the building was to be paid for as plaintiff sets forth, but alleges that the plaintiff and defendant were to share the work on an equal basis and have an equal interest in the structure when completed. Defendant denies that he kept the books of the partnership.
By way of counterclaim, the defendant disavows the contract because of his infancy and seeks the recovery of the actual cash contributed by him to the partnership, and of the reasonable value of his services.
The gist of the defendant's motion is that in view of the fact that the plaintiff admits defendant's infancy, and in further view of the fact of defendant's disavowal of the contract, plaintiff is barred from any relief.
Plaintiff's argument in opposition thereto bases his right to relief upon the contention that the defendant, upon a disavowal of the contract, is required to put him in statu quo. Paraphrased, this can only mean that the infant cannot retain the benefits while disavowing the contract. By this argument, he contemplates that the defendant must make further contributions of cash allegedly not heretofore made in accordance with the terms of the contract, and that the defendant should share proportionately in the losses sustained in the operation of the business and have an interest in the assets of the business in such proportions as the court may find the agreement called for.
The question here involved, therefore, is whether the plaintiff is entitled, under the facts pleaded, to the relief demanded.
*201 It must, at the outset, be conceded that generally all contracts of infants are voidable. La Rosa v. Nichols, 92 N.J.L. 375, 105 A. 201 (E. & A. 1918); Levine v. Mallon Oldsmobile Co., Inc., 127 N.J.L. 197, 21 A.2d 852 (Sup. Ct. 1941); R.J. Goerke Co. v. Nicolson, 5 N.J. Super. 412, 69 A.2d 326 (App. Div. 1949); Carter v. Jays Motors, Inc., 3 N.J. Super. 82, 65 A.2d 628 (App. Div. 1949).
There is no requirement that a disavowal of a contract by an infant shall fill any prescribed form or ceremonial, and the filing of an answer by an infant disaffirming the contract is sufficient in and of itself to accomplish that result. Bankers Trust Co. v. Bank of Rockville, &c., 114 N.J. Eq. 391, 168 A. 733 (E. & A. 1933).
Generally, in connection with a purchase of a chattel, an infant may disaffirm or disavow his contract and recover back the money paid thereon, less proper offsets for diminution in the value of the chattel. As has sometimes also been stated, recovery by an infant cannot be had without a restoration to the other party of the consideration received, or an allowance from such recovery as compensation for the benefit conferred upon the infant seeking to void the contract. Levine v. Mallon Oldsmobile Co., Inc., supra; Reggiori v. Forbes, 128 N.J.L. 391, 26 A. 2d 145 (Sup. Ct. 1942); R.J. Goerke Co. v. Nicolson, supra.
An infant can, in a proper case, be estopped from a recovery. The infant will not be permitted to set up the privilege of his infancy arising because of his fraudulent conduct. La Rosa v. Nichols, supra; Reggiori v. Forbes, supra. There is present in the case sub judice, however, no allegation of any such conduct on the part of the infant as would serve to estop him from disavowing or disaffirming the contract.
It is to be noted that in all of the cases above cited where the infant was estopped from taking advantage of a disavowal or disaffirmance of the contract, or where the infant was obliged to place the adult who was a party to the contract in statu quo, the infant had entered into a contract of purchase. This is true with the exception of the case of Reggiori *202 v. Forbes, supra, which is distinguishable from the case sub judice.
There is no reason that the principle of disavowal involved in a contract of partnership should not be identical with the principles applicable in the case of any other contract. 27 Am. Jur. 771; 31 C.J. 1084; 43 C.J.S. 199.
The difficulty of the determination of the problem with which we are now faced, however, is the question of the infant's rights upon the disavowal of the partnership contract. There is no case in New Jersey in which this question has been determined. In foreign jurisdictions, however, there is no unanimity about an infant's right to recover his initial contribution upon a disavowal of the partnership contract. The foreign jurisdictions exhibit two schools of thought: (1) that the infant may recover such contributions, less the amounts received by him, and (2) that he cannot recover such contributions unless he was induced to enter into the contract through the fraudulent representations of the adult.
Although all of the reported cases are in accord that a contract of partnership is voidable at the instance of the infant, there is no reported authority for the principle that an adult partner can recover against said infant upon such avoidance for the executory features of the contract, i.e., promises to make future contributions or assume future liabilities. 58 A.L.R. 1368; 31 C.J. 1085; 43 C.J.S. 199; 27 Am. Jur. 771, 788.
Plaintiff relies heavily upon the following language in Reggiori v. Forbes, supra:
"Williston on Contracts (Rev. Ed.) 705, sec. 238, says: `Though the weight of authority still permits an infant vendee to recover the price paid merely upon offering to return the property, if any, remaining in his hands, without accounting to the vendor for its depreciation or use, there is an increasing number of jurisdictions which allow the vendor to deduct for such depreciation and use. In view of the general education and early sophistication of youth, when minors commonly transact a considerable volume of business on their own behalf, the latter view which rests upon the equitable basis that, if the contract is fair and reasonable, then the minor should not be permitted to overreach any more than the adult seems clearly the better.'
*203 "The adoption of such a rule would be in accord with the wise counsel of Lord Mansfield as quoted in Hall v. Butterfield, supra: `Great inconveniences must arise to others if infants were bound by no act. The law, therefore, at the same time that it protects their imbecility and indiscretion from injury through their own imprudence, enables them to do binding acts for their benefit. * * *. A third rule, deducible from the nature of the privilege that is given as a shield and not a sword, is, that it never shall be turned into an offensive weapon of fraud or injustice.'"
The most that can be said for the quoted language, as applicable to the present case, is that the defendant may be required to return the benefits received under the contract before he may be discharged from liability. The only benefit which the defendant here received were several payments of cash, which he has offered to credit upon any sum found due him.
The courts have been most zealous in protecting the estate of an infant. It would be entirely inconsistent to require a parent to be appointed a guardian, file bond before investing his minor child's funds and then to so invest only in designated securities, and by the same token permit an adult to receive the money for investment from the infant himself without let, hindrance or liability. Now, can we say that an infant may do on his own behalf, without any supervision, what the parent could not do without obtaining prior judicial authority?
To determine that the infant is to be held to his contract and required to place an adult in what it is here urged constitutes status quo would open the door to fraud and imposition upon the infant.
Courts have always been very vigilant to protect the infant from liabilities resulting from a "business" venture with an adult. As early as 1811, in Houston v. Cooper, 3 N.J.L. 431 (Sup. Ct. 1811), the court said as follows:
"That an infant undertakes to trade for himself does not cure the incapacity of his infancy. It is the real or supposed incapacity of mind in the infant, to make judicious contracts, that the law renders invalid his bargains, and the more contracts he makes the more danger of injury and ruin to himself, which the law is intended to guard against; * * *."
*204 The defendant admittedly contributed upwards of $3,600 in cash as his capital contribution, and is now faced with an investment in an allegedly insolvent business. The fact that the business venture was here unsuccessful is of no moment in connection with the determination of the applicable law, except that it demonstrates the dangers attendant upon any determination other than that an infant may disavow a partnership contract without being called upon either to make further contributions or to assume further liabilities.
It is of utmost importance that where an adult, knowing of the minority of an infant, enters into a business venture with him, that the infant be protected against imposition and from the errors of his own judgment arising because of his lack of experience. An adult so dealing with an infant must do so at his own risk. It is more important to protect the infant than to circumvent his disability by affirming his contract with the adult in the guise of placing the adult in statu quo. Therefore, in so far as the plaintiff here seeks the determination of his proportionate interest in the partnership and the recovery of both additional contributions toward the capital structure of the partnership and for the additional liability resulting from the operation of the partnership, plaintiff has no cause of action.
The plaintiff is, however, entitled to both a dissolution of the partnership and an accounting from defendant. It would be inequitable to permit the defendant to disavow the contract without accounting for his management of the business.
The motion will therefore be denied, in so far as the plaintiff's demand for a dissolution and accounting of defendant's operation of the partnership business are concerned, but will be granted in so far as the other relief which is demanded is concerned.
Judgment will be entered accordingly.
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United States Court of Appeals
For the First Circuit
No. 18-2032
UNITED STATES OF AMERICA,
Appellee,
v.
ROSS MCLELLAN,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. District Judge]
Before
Howard, Chief Judge,
Torruella, and Thompson, Circuit Judges.
Martin Weinberg, with whom Kimberly Homan were on brief, for
appellant.
Stephen E. Frank, Assistant United States Attorney, with whom
Andrew E. Lelling, United States Attorney, was on brief, for
appellee.
May 20, 2020
TORRUELLA, Circuit Judge. Ross McLellan ("McLellan")
appeals his convictions of securities and wire fraud as well as
conspiracy to commit securities and wire fraud for his leadership
role in a scheme to defraud overseas institutional investors by
applying hidden commissions on the buying and selling of U.S.
securities. First, McLellan disputes that there was sufficient
evidence to sustain his securities fraud convictions under 15
U.S.C. §§ 78j(b), 78ff(a), and 17 C.F.R. § 240.10b-5 (hereinafter
"Rule 10b-5") and objects to the district court's jury instruction
on the elements of said offense. Second, he protests that his
wire fraud conviction under 18 U.S.C. § 1343 was the product of an
improper extraterritorial application of the wire fraud statute,
and relatedly, he submits that it was error for the district court
not to instruct the jury that it had to find a domestic application
of the statute to convict. Third, he contends that the district
court erred by not compelling the U.S. government to exercise its
powers under Mutual Legal Assistance Treaties ("MLATs") with the
United Kingdom and the Republic of Ireland to seek evidence that
could have been favorable to his defense. See Mutual Legal
Assistance Treaty, U.S.-U.K. and N. Ir., Jan. 6, 1994 (hereinafter
"U.S.-U.K. MLAT"); Mutual Legal Assistance Treaty, U.S.-Ir.,
Jan. 18, 2001 (hereinafter "U.S.-Ireland MLAT").
Because we hold that the relevant securities law covers
misrepresentations of the commissions to be applied to securities
-2-
trades by transition managers under the agency model, we find that
the evidence was sufficient to sustain McLellan's convictions and
that to the extent that the jury instructions may have been
overbroad, any error was harmless. Moreover, we need not address
whether § 1343 applies extraterritorially because McLellan was
convicted under a proper domestic application of the statute, and
to that end, the district court's jury instructions on wire fraud
nevertheless required the jury to find a domestic application.
Finally, because the district court correctly determined that it
lacked the authority to order the government to lodge MLAT requests
on behalf of a private party, we find no reversible error.
Accordingly, we affirm McLellan's convictions on all counts.
I. Factual Background
A. State Street's Transition Management Services
Because McLellan challenges the sufficiency of the
evidence, we summarize the evidence in the light most favorable to
the verdict. See United States v. Kanodia, 943 F.3d 499, 501 (1st
Cir. 2019).
McLellan, a former executive vice president of State
Street Bank ("State Street"), a Boston-based corporation, was
charged with committing securities and wire fraud for his part in
a scheme intended to defraud six institutional investors.
In his position, McLellan was the global head of State
Street's Portfolio Solutions Group ("PSG"), which included its
-3-
transition management services, until October 2011. During
McLellan's tenure, State Street was one of numerous firms that
competed to provide transition management services to
institutional clientele. When large institutional investors, such
as pension funds, transition from one asset manager to another,
they typically hire a transition manager to restructure their
portfolios so as to minimize the "implementation shortfall."
Transition management firms specialize in buying and selling
securities on the open market on behalf of their clientele so as
to reduce as much as possible the monetary losses that the supply
and demand pressures of securities markets can cause during
transitions.
Two models dominate the transition services market: the
"principal" model and the "agency" model. Under the principal
model, the firm directly buys securities from and sells securities
to its client. While a transition manager in the principal model
assumes the risk that it will have to make unprofitable trades to
complete the transition for the client, it is also able to keep
any profit made on those trades for itself. Under the agency
model, the firm acts as an intermediary that facilitates the buying
or selling of securities for its clients through a third-party
broker-dealer. Firms utilizing the agency model profit from
transition services through two means: an upfront flat fee for the
entire transition or a disclosed fee per trade. The client -- not
-4-
the transition management firm -- selects the securities to be
sold and bought on the open market. During the relevant time
period, State Street followed the "agency model." State Street
promoted this model to its clients through its advertising
materials and assured them that it would function as a fiduciary
while trading on their behalf.
As overseer of State Street's transition management
services, McLellan engaged Boston-based traders to buy and sell
U.S. securities for State Street clients. State Street's clients
in Europe, the Middle East, and Africa contracted with State Street
through the London-based State Street Bank Europe Ltd. ("SSBEL").
Edward Pennings ("Pennings"), a critical government witness at
trial, headed SSBEL's transition management group first as vice
president and then as senior managing director; he reported
directly to McLellan. Pennings spoke with McLellan daily about
State Street's clients and trades as the transactions at issue
progressed. Rick Boomgaardt ("Boomgaardt") headed SSBEL's
transition management desk in London. Although he reported
directly to Pennings, Boomgaardt periodically communicated with
McLellan about ongoing negotiations and transitions.
In the aftermath of the 2008 economic recession in the
United States, McLellan, Pennings, and Boomgaardt devised a scheme
to promise low commissions, or a flat fee, to potential clients
with the intention of embedding large hidden commissions in the
-5-
price of the securities as reported to the clients during the
transition. McLellan directed Pennings and Boomgaardt to pursue
this scheme for large bond-based deals because those securities
were reported to clients on a "net" basis, which incorporated the
commissions into the price of the security as it was represented
to the client at the end of the transaction. This reporting
practice would make it difficult for clients to notice the hiked-up
charge. Conversely, commissions on stocks are typically reported
separately from the price of the stock, allowing the client to see
the precise purchase or sale price and the commission that the
firm took from the transaction. On occasion, Pennings, while in
his position at SSBEL, would represent to other State Street
employees that the commissions were approved by the European
management and were legal. At times, Pennings also relayed to
other members of the team that the contracts were sufficiently
vague to allow the taking of undisclosed markups despite having
made affirmative representations to the contrary.
B. The Relevant Transitions
The government's case against McLellan hinged on seven
discrete transitions that State Street handled for six clients.
Those clients were: Kuwait-based Kuwait Investment Authority
("KIA"); Netherlands-based Dutch Doctors; Ireland-based National
Treasury Management Agency ("NTMA"); U.K.-based Sainsbury's;
Ireland-based Eircom; and U.K.-based Royal Mail. Each of those
-6-
six clients had a master transition management agreement ("TMA")
with State Street that governed the terms of all subsequent
transactions.
Institutional investors, such as these six clients,
solicit bids from transition management firms through a request
for proposals ("RFP"). Transition managers then submit estimates
of the implementation shortfall to the prospective client in the
hopes of winning its business. For each of these clients, Pennings
and Boomgaardt prepared all of the responses to RFPs, directly
negotiated the contracts for transitions, and prepared periodic
notices and pre-trade estimates. McLellan did not directly
communicate or negotiate with any of the six defrauded investors.
However, McLellan directed the scheme from the United States,
contacted traders in the United States to oversee and implement
the application of hidden commissions, and shaped the team's
response to the discovery of the scheme by attempting to cover it
up.
1. First KIA Transition
In March 2010, KIA, a Kuwaiti sovereign wealth fund,
selected State Street to manage a transition involving $2 billion
in bonds. Pennings negotiated the deal with a KIA representative
named Das. During the negotiations, Pennings represented to Das
that State Street would conduct the transition without taking any
commissions whatsoever even though Pennings always intended
-7-
otherwise. Boomgaardt testified that he and McLellan decided to
make a zero-commission quote in order to compete with other banks
bidding on the KIA transition. After submitting the bid, Pennings
represented to KIA that State Street would make money on "the other
side of the transaction." At trial, Pennings testified that this
explanation to KIA was "nonsense" and meaningless because there
was no way to make money on "the other side of the transactions."
Pennings did tell Das that, absent a commission, State Street would
take a "spread," but he never explained how it would be applied or
how the spread would impact KIA. Pennings and Boomgaardt both
testified that they were not sure if Das understood how State
Street was going to make money on the deal. After the negotiations
were completed, Pennings sent a periodic notice to Das with the
terms of the transition agreement. This document represented in
a footnote that all bonds would be priced "net" per market
convention. The periodic notice, however, did not disclose that
a commission would be charged on each trade. Ultimately, KIA
commissioned State Street to handle half the transition and
commissioned a competitor, Nomura, to handle the other half of the
transition.
McLellan played an active behind-the-scenes role
throughout the KIA transition. Pennings and Boomgaardt testified
that the decision to submit the "zero commission" bid to KIA was
not only "discussed" with McLellan but also "came from" him.
-8-
Pennings told McLellan through email that McLellan was "[g]onna
have to be creative," which Pennings testified meant that McLellan,
as the lead State Street executive in Boston, was going to have to
apply hidden commissions on the securities transactions in the
United States. After KIA accepted the bid, McLellan -- who
happened to be in London at the time -- contacted Stephen Finocchi,
a Boston-based trader, and asked for a report of the highest daily
prices at which the bonds in question were traded. According to
Boomgaardt, McLellan sought this information to ensure that the
price charged with the added commissions was below the daily high
to avoid tipping KIA off to the hidden commissions. Boomgaardt
further testified that he and McLellan looked at the data together
and decided how much commission to add to each of the bonds in the
KIA transition. Despite McLellan's precautions, State Street
still charged KIA above the reported daily high on some of the
bonds, which KIA did not question. In total, State Street skimmed
off $2.6 million in undisclosed commissions across the entire
transition. The final cost of the transition for KIA came in
approximately 0.07 percent below the original pre-trade estimate.
If State Street had not applied hidden commissions, KIA would have
made a net profit of roughly half a million dollars from the
transition.
-9-
2. Dutch Doctors Transition
In June 2010, Dutch Doctors, a Netherlands-based pension
fund for doctors, hired State Street to transition $1.6 billion in
European bonds. Pennings told Dutch Doctors that State Street
would conduct the transition for a commission of 1 basis point, or
0.01 percent of the aggregate value of the assets traded. After
securing the contract, McLellan and Pennings learned that Dutch
Doctors was contractually obligated to reserve all rights to
futures trading to its asset manager, JP Morgan, which meant that
the deal would yield less profit for State Street in the long run.
To cover the expected losses, Pennings secretly raised the charge
to 1.5 basis points, which ultimately translated to a total profit
to State Street of several million dollars, including $1 million
in hidden commissions.
Again, although McLellan did not communicate directly
with Dutch Doctors, he was intimately involved in the scheme and
the transition. On June 10, 2010, Pennings informed McLellan via
email that he was going to bid on a Dutch Doctors contract, which
Pennings claimed was necessary to enlist McLellan in a "push in
the U.S. . . . to make sure that [State Street Global Advisors, an
asset management affiliate of State Street,] would help us win
this deal." In response, McLellan encouraged Pennings to "[j]ust
win, baby," implying that Pennings should secure the contract and
a good deal for State Street by any means necessary. To that end,
-10-
McLellan was in the loop about and encouraged Pennings's plan to
secretly raise the basis point for commissions to compensate State
Street for the loss that it would incur in futures trading.
3. Second KIA Transition
In October 2010, KIA opened bidding for a second
transition involving $4 billion in assets. State Street, through
Pennings, again submitted a zero-commission bid to KIA and won the
transition contract. Once again, Pennings intended to take
undisclosed commissions on the transactions involved in the
trading. Pennings testified that he believed that Das knew how
State Street would make money on the deal.
For his part, McLellan approved Pennings's
zero-commission bid before it was submitted to KIA. After landing
the deal, McLellan requested that Pennings forward him a copy of
the TMA and the periodic notice. McLellan communicated with
various players throughout the transition about the commissions to
be taken in the United States. He personally approved a
London-based trader's instruction to take 18 basis points on the
buy side and 2 basis points on the sell side of each of the
transactions for KIA in the United States.
During the second KIA transition, State Street's newly
established "rates desk," an office within State Street that would
directly buy and sell bonds for clients, sought permission to
participate in the transition. McLellan and Pennings opposed their
-11-
inclusion because of the risk that their scheme would be uncovered
by others within State Street. McLellan asked Pennings if "legal"
had looked at the TMA with KIA, to which Pennings responded:
"[A]bsolutely not. Nor did they look at the periodic notice. This
can of worms stays closed." McLellan agreed with Pennings that
they could not disclose the spread to others within State Street.
Ultimately, however, McLellan did share the agreement with State
Street's legal department. Pennings testified that the legal
department did in fact sign off on the rates desk's involvement
and that he did not know if anyone noticed the zero-commission
language. According to Pennings, State Street earned "$2.6 million
or thereabouts" from the second KIA transition but disclosed
"[z]ero, nothing" to KIA. Since the implementation shortfall of
$2,047,000 was well below the initial estimate, KIA would have
actually made a profit on the transition had State Street not
pocketed the hidden commissions.
4. NTMA Transition
In December 2010, NTMA, an Irish government employee
pension fund, sought to transition $4 billion in assets through
the sale of a combination of stocks and bonds because Irish banks
needed a cash injection at the time. Pennings submitted a bid for
the transition with a management fee of 1.25 basis points and no
commissions despite his intention to apply hidden commissions.
According to Boomgaardt, he did so to beat competitors for the
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bid. NTMA ultimately selected State Street to handle half of the
transition. With the negotiations for the contract completed,
Pennings instructed Boomgaardt not to inform NTMA transition
managers of the hidden commissions.
Pennings eventually renegotiated the fee to 1.65 basis
points based on complications associated with the trades that NTMA
sought to make. An NTMA official testified that the pension fund
believed that 1.65 basis points would be the only cost of the
transition and that additional commissions would not be applied.
In later communications, Pennings informed McLellan of his
intention to secretly increase the markup. At the conclusion of
trading, the transition came in below the estimated shortfall that
Pennings provided to NTMA. However, NTMA's representative
testified that it would not have selected State Street if it had
known that additional hidden commissions were going to be applied
because a competitor, Citibank, would have been less expensive.
Once again, McLellan oversaw the transition from the
United States. While McLellan never communicated directly with
NTMA, he did approve the bid with no commission and told Pennings
that the price charged to the client would have to include a hidden
commission in order for State Street to make a profit, and he spoke
directly with Pennings about the implementation of the scheme.
McLellan reviewed the TMA and periodic notice and determined that
nothing in the documents affirmatively prevented a broker-dealer
-13-
from taking commissions on the trades. He then agreed to
Pennings's proposed commissions on the transition -- 10 to 12 basis
points on fixed income trades and 3 basis points on U.S. equities
-- and directed traders to use a rarely-consulted stock trading
account to evade State Street's automated systems for reporting
equities trades, which would have broken down the trade by market
price and commission charge in the documents given to the client.
He further oversaw the trading in Boston and told traders what
markdowns and markups to take on each of the transactions. At the
end of the transition, State Street had taken millions in
undisclosed commissions on trades for NTMA.
5. Sainsbury's Transition
In January 2011, Boomgaardt received an RFP from
Sainsbury's, a pension-fund for a large supermarket chain in the
United Kingdom, which he forwarded to Pennings. Boomgaardt sent
Sainsbury's a proposal that offered to conduct the
multimillion-dollar transition for a flat fee of £350,000.
Boomgaardt submitted this bid under the assumption that
competitors were also submitting low bids. Boomgaardt, however,
believed that his superiors -- i.e., Pennings and McLellan --
intended to take undisclosed commissions on transactions during
the transition. Pennings reaffirmed Boomgaardt's belief that
McLellan had approved their proposal for the transition. The TMA
with Sainsbury's provided that any commissions taken on the
-14-
transition had to be detailed in the periodic notice, and the
relevant periodic notice provided that State Street would take no
commissions on the transition. A Sainsbury's representative
testified that he understood State Street's proposal to mean that
there would be no difference between the buy or sell cost and the
cost as represented in the final documents submitted to them. At
the conclusion of trading, the transition came in roughly 19.2
basis points below the original shortfall estimate. Nevertheless,
the Sainsbury's representative testified that the company would
not have hired State Street had it known that $1.1 million of
additional commissions would be applied, and it would have given
its business to a competitor, JP Morgan, instead. Once again,
State Street collected millions of dollars in hidden commissions.
6. Eircom Transition
In March 2011, Eircom, a telecommunications company in
Ireland, sought bids for transitioning approximately $1 billion in
assets. Boomgaardt proposed to conduct a transition for a flat
fee of €400,000, and Eircom awarded State Street the contract.
Pennings indicated to Boomgaardt that the contract did not prohibit
commissions and directed him to apply additional hidden
commissions on trades. Pennings testified that McLellan personally
approved the scheme to apply hidden commissions, which Boomgaardt
understood as well. In an email to Boomgaardt in May 2011,
McLellan mentioned the prospect of $1 million in revenue, which
-15-
could only be achieved through the application of hidden
commissions.
7. Royal Mail Transition
In March 2011, Boomgaardt and Pennings proposed a flat
fee of 1.75 basis points to Royal Mail, a pension fund for postal
workers in the United Kingdom, for its transition of $3.2 billion
in assets. Again, Pennings intended to take undisclosed
commissions of roughly 1 basis point on U.S. trades and 2 basis
points on European trades. Pennings, however, forwarded a periodic
notice to Royal Mail that only outlined a flat management fee for
the entire transition and did not inform Royal Mail of his
intention to take commissions. In an email to Royal Mail
representatives, Pennings confirmed that the flat fee was the total
cost for the transition. Royal Mail testified that it would not
have hired State Street if it had known that hidden commissions
were going to be charged.
McLellan, once again, was operating behind the scenes on
the transition. Before bidding on the contract, Pennings told
McLellan of the opportunity, to which McLellan emailed in response:
"thin to win." Pennings understood this email to be an endorsement
of a low bid with hidden commissions to beat competitors in the
market and earn substantial profits. Pennings, however, never
communicated to McLellan that he had made a representation
regarding the flat fee as equating the total costs. Pennings
-16-
nevertheless did notify McLellan of his intent to take commissions
of 1.5 to 2 basis points beyond the flat fee that he proposed.
McLellan coordinated trades in the United States and instructed
U.S. traders to place hidden commissions on the trades.
A Boston-based trader understood that the instruction was a
directive to mislead Royal Mail as to the price of the securities.
State Street collected over $1 million in revenue through
undisclosed commissions throughout the Royal Mail transition.
After receiving the final financial report on the
transition in June 2011, Royal Mail contacted Pennings and inquired
into State Street's charges because it appeared that additional
commissions had been applied to the transition. Pennings initially
denied that commissions had been applied but agreed to investigate
the matter and then discussed the issue with McLellan. McLellan
and Pennings decided to disclose only the commissions taken on
trades in the United States and not those in the European market
to Royal Mail. Pennings then carried out this plan and disclosed
to Royal Mail that the commissions were only an issue in the United
States. Boomgaardt testified that McLellan independently told him
to use the term "fat-finger trading error" when discussing the
commissions issue with Royal Mail. In an email, McLellan stated
that those in State Street should describe the commissions as an
"inadvertent commissions applied" error. Subsequently, McLellan
-17-
authorized Pennings and Boomgaardt to refund the commissions on
U.S. trades, totaling $1 million.
After receiving these disclosures, Royal Mail hired an
independent auditor, Inalytics, to investigate the transition.
McLellan and Pennings instructed Boomgaardt not to forward
information to Inalytics that would disclose the European markups.
Absent this information, Inalytics requested that State Street
sign off on the propriety of the transition, and McLellan asked
Pennings to draft a compliance letter that omitted the commissions
on European securities. McLellan reviewed the letter, which
provided that only $1 million had been taken in commissions and
directed Boomgaardt to send it to Royal Mail. Boomgaardt, however,
refused and told a London-based State Street executive about the
commissions and the scheme.
In August, McLellan sought all information from
Boomgaardt pertaining to Royal Mail including the RFP, the TMA,
and the periodic notice. On a subsequent phone call between
McLellan, Boomgaardt, and Pennings, McLellan discussed how to
"message" a Royal Mail consultant "that we may have the same
booking issue in the U.K. as we do in the States." At that time,
Pennings and McLellan suggested taking the position that the
agreements permitted them to take hidden commissions on trades.
After this phone call, McLellan, however, decided that all
commissions would be refunded to Royal Mail. McLellan then
-18-
directed Pennings to inform Inalytics of the European commissions
and that Pennings should "come clean for everything."
II. Procedural Background
McLellan was indicted on one count of federal conspiracy
under 18 U.S.C. § 371 based on predicates of securities and wire
fraud (Count 1), two counts of securities fraud under 15 U.S.C.
§§ 78j(b), 78ff(a), and 17 C.F.R. 240.10b-5 (Counts 2-3), two
counts of wire fraud under 18 U.S.C. § 1343 (Counts 4-5), and one
count of wire fraud affecting a financial institution under 18
U.S.C. § 1343 (Count 6).
During the pre-trial phase, McLellan requested that the
district court issue letters rogatory to the United Kingdom and
Ireland to obtain documents from NTMA and Eircom. He sought
internal communications from those firms pertaining to: (1) TMA
compensation terms with State Street and the victims'
understanding of those terms; (2) the victims' perception of the
fees; (3) all competing bids; and (4) the victims' perception of
State Street's overcharges. The district court granted the request
and issued nine letters rogatory, see 28 U.S.C. § 1781, each of
which noted in part that McLellan demonstrated "that justice cannot
completely be done amongst the parties without the production of
the documents requested." Those letters were sent to NTMA, Royal
Mail, Sainsbury's, Eircom, Inalytics, Mercer (a U.K. entity that
acted as a consultant to Eircom), Aon (another U.K. entity that
-19-
acted as a consultant to Sainsbury's), Nomura, and Goldman Sachs.
Additionally, the court granted a seven-month continuance of the
trial to provide McLellan with ample time to obtain the documents
requested via letters rogatory. While McLellan concedes that he
did "receive partial compliance with the letters rogatory from
some of the subpoenaed parties," he maintains that he was unable
to access "contemporaneous internal communications that would have
reflected the considerations that went into the selection of State
Street," and he did not receive any material directly from NTMA.
In January 2018, the Judicial Authority of Ireland
notified the district court that it declined to enforce the letters
and determined that an MLAT request was the only means of producing
the materials. McLellan then moved for the district court to order
the Executive Branch to make a request pursuant to the U.S.-Ireland
MLAT. McLellan further requested that the district court order
the government to exercise its MLAT powers to request documents
from U.K. entities when the production of evidence was stalled
within the U.K. police department.1 If the district court
declined, McLellan requested that the court exclude all evidence
1 We note that, prior to trial, McLellan also moved to order the
Attorney General to submit a request to depose a witness located
in the Netherlands who did not respond to the court's Rule 15
deposition order pursuant to the U.S.-Netherlands MLAT, which the
district court denied. However, he does not challenge this
decision on appeal.
-20-
on NTMA and Eircom. The government opposed McLellan's request to
compel it to exercise its treaty powers.
The district court denied McLellan's motion to compel on
the ground that it lacked authority to do so. Additionally, it
found no valid basis to grant McLellan's request to exclude the
government's evidence solely because of his inability to procure
additional evidence. However, the district court did note that
"the more limited power available to McLellan to compel production
of witnesses or documents from outside the United States as
compared to within the United States potentially raise[d] fairness
or due process considerations."
At trial, McLellan objected to the district court's jury
instructions regarding the "in connection with" and "materiality"
elements of the securities fraud charge on the ground that they
were overly broad. Specifically, he argued that the jury should
have been instructed that the "in connection with" element was
only met if the fraud was "material to a decision by one or more
individuals to buy or to sell a covered security." On the wire
fraud counts, the district court held that 18 U.S.C. § 1343, or
the wire fraud statute, applies extraterritorially and denied
McLellan's proposed instruction that would have limited the wire
fraud statute to domestic conduct. Ultimately, the jury convicted
McLellan of securities fraud, wire fraud, and conspiracy (Counts
1-5) and acquitted him of wire fraud affecting a financial
-21-
institution (Count 6). The district court then denied McLellan's
motion for a judgment of acquittal or a new trial.
At sentencing, the district court was "not persuaded"
that "there was an intent to defraud" on the first KIA transition
and thus did not include it in the loss calculation. The district
court then sentenced McLellan to eighteen months of imprisonment
to be followed by two years of supervised release and assessed a
$5,000 fine. McLellan filed a timely notice of appeal the very
same day.
On appeal, McLellan challenges each of his convictions
on the same grounds that he raised below. He asserts that the
district court erred in its interpretation of both the securities
fraud and wire fraud statutes as well as when it refused to compel
the government to exercise its powers under the U.S.-U.K. and
U.S.-Ireland MLATs. We take each of these challenges in turn.
III. Securities Fraud
A. Sufficiency of the Evidence
On appeal, McLellan challenges the sufficiency of the
evidence supporting his securities fraud convictions.
Specifically, he argues that Security Exchange Commission ("SEC")
Rule 10b-5 does not prohibit the misrepresentations for which he
is responsible, which, in his view, were not made "in connection
with" the purchase or sale of any covered securities but rather
-22-
were merely intended to induce prospective clients to retain State
Street's transition management services.
We review challenges to the sufficiency of evidence de
novo. See United States v. Mehanna, 735 F.3d 32, 42 (1st Cir.
2013). "This review eschews credibility judgments and requires us
to take the facts and all reasonable inferences therefrom in the
light most favorable to the jury's verdict." Id. After reviewing
the record, "a guilty verdict need not be an inevitable outcome;
rather, 'it is enough that the finding of guilt draws its essence
from a plausible reading of the record.'" Id. (quoting United
States v. Sepúlveda, 15 F.3d 1161, 1173 (1st Cir. 1993)).
Importantly, McLellan's sufficiency challenge does not take aim at
the factual record itself. Instead, he challenges whether the
facts in the record are sufficient to sustain a conviction for
securities fraud premised on a Rule 10b-5 theory as a matter of
law.
1.
The Securities Exchange Act of 1934 ("Exchange Act")
"forbids the use of any manipulative or deceptive devices or
contrivances 'in connection with the purchase or sale of any
security.'" Hidalgo-Vélez v. San Juan Asset Mgmt., Inc., 758 F.3d
98, 104 (1st Cir. 2014) (quoting 15 U.S.C. § 78j(b)). As part of
its enforcement mechanisms, the Exchange Act grants the SEC the
authority to promulgate regulations, such as Rule 10b-5, "which
-23-
likewise prohibits fraud in connection with the purchase or sale
of securities." Id. (citing 17 C.F.R. § 240.10b-5).2 The purpose
of the Exchange Act and complementary SEC regulations is "to insure
honest securities markets and thereby promote investor
confidence." Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 390
(2014) (quoting United States v. O'Hagan, 521 U.S. 642, 658
(1997)). Congress's view was that the statutory scheme would
"protect investors against manipulation of stock prices," Basic
Inc. v. Levinson, 485 U.S. 224, 230 (1988) (citing S. Rep. No.
73-792, at 1-5 (1934)), and rein in "dishonest practices of the
market place [that] thrive upon mystery and secrecy." Id. (quoting
H.R. Rep. No. 73-1383, at 11 (1934)).
To make out a criminal case of securities fraud under
Rule 10b-5, the government must prove that the defendant, acting
willfully, knowingly, and with intent to defraud, made a material
2 Specifically, Rule 10b-5 declares it unlawful:
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to
omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which
they were made, not misleading, or
(c) To engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any
person,
in connection with the purchase or sale of any security.
17 C.F.R. § 240.10b-5.
-24-
misstatement or omission in connection with the purchase or sale
of any security. See United States v. Vilar, 729 F.3d 62, 88
(2d Cir. 2013); see also SEC v. Tambone, 597 F.3d 436, 447 n.9
(1st Cir. 2010) (noting that in public enforcement actions under
Rule 10b-5, as opposed to private civil enforcement actions, the
government need not prove reliance). Because McLellan lays siege
to his securities fraud conviction on the ground that his fraud
was not in connection with the purchase or sale of a security, we
train our analysis on that element of the offense.
The "in connection with" element requires the government
to prove that the alleged misrepresentation was "material to a
decision by one or more individuals (other than the fraudster) to
buy or to sell a 'covered security.'" Hidalgo-Vélez, 758 F.3d at
106 (quoting Troice, 571 U.S. at 387). This is "satisfied only
'where the misrepresentation [would make] a significant difference
to someone's decision to purchase or to sell a covered security.'"
Id. (quoting Troice, 571 U.S. at 387).3 We have at times referred
to the "in connection with" element as the "transactional nexus"
inquiry, and under this framework, we determine whether the alleged
3 Because Hidalgo-Vélez was a civil case in which the plaintiff
had to prove reliance, it made sense there (as in Troice) to say
that the plaintiff had to prove that the fraud actually made a
difference to a statutorily relevant investment decision; by
contrast, in a criminal case (as we have explained), the government
need only prove that the misrepresentation would have been material
to a reasonable investor.
-25-
scheme to defraud and the security transaction are sufficiently
close to warrant application of Rule 10b-5. Calderón Serra v.
Banco Santander P.R., 747 F.3d 1, 5 (1st Cir. 2014) (noting that
the "in connection with" element should not be read "so broadly as
to convert every common-law fraud that happens to involve
securities into a violation of § 10(b)" (quoting SEC v. Zandford,
535 U.S. 813, 820 (2002))).
In Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit,
the Supreme Court interpreted parallel "in connection with"
language in the Securities Litigation Uniform Standards Act
("SLUSA"), which gave it occasion to explain that Rule 10b-5's
transactional nexus required merely that "the fraud alleged
'coincide' with a securities transaction." 547 U.S. 71, 85 (2006)
(quoting United States v. O'Hagan, 521 U.S. 642, 656 (1997)); see
also Hidalgo-Vélez, 758 F.3d at 105-06. Subsequently, in Troice,
the Supreme Court reaffirmed Dabit and clarified that a "fraudulent
misrepresentation or omission is not made 'in connection with'"
the purchase or sale of covered securities "unless it is material
to a decision by one or more individuals (other than the fraudster)
to buy or to sell a 'covered security.'" Troice, 571 U.S. at 387
(emphasis added); see also Calderón Serra, 747 F.3d at 5 (treating
the question as whether the fraud was "in connection with" inducing
customers to take out loans or to purchase securities). Notably,
Troice reasoned that it did not modify the Dabit standard because
-26-
"[e]very one of [the Supreme Court's prior cases] concerned a false
statement (or the like) that was 'material' to another individual's
decision to 'purchase or s[ell]' a statutorily defined 'security'
or 'covered security.'" Troice, 571 U.S. at 393 (alteration in
original) (quoting Dabit, 547 U.S. at 75-77). We have since
interpreted Troice to infuse the transactional nexus analysis with
a determinative inquiry into materiality. See Calderón Serra, 747
F.3d at 6. Although Troice did not modify Dabit, we have understood
the case to mean that the alleged fraud must reach a certain
threshold of materiality to be deemed made "in connection with" a
transaction in securities. See Troice, 571 U.S. at 387-88.
In an attempt to dissolve the nexus between his fraud
and the discrete purchases and sales of securities, McLellan urges
us to find that his up-front misrepresentations to clients that
State Street would not be charging commissions were only material
to those clients' decisions to select State Street as a transition
manager and not to their decisions to buy or sell particular
securities. At its core, this argument is twofold. On the law,
McLellan argues that under Troice, a misrepresentation which goes
only to the selection of a transition manager is insufficient to
establish securities fraud. On the facts, McLellan maintains that
there is no evidence that State Street's zero-commissions
misrepresentations would have affected a reasonable investor's
decision about whether to buy or sell a statutorily covered
-27-
security. Neither assertion persuades us. After careful review,
we hold that a broker-agent who misrepresents to his prospective
clients how much they will pay, or what value they will receive,
for each securities trade that he makes on their behalf, commits
securities fraud within the meaning of Rule 10b-5.
2.
On a global level, McLellan mistakenly treats this case
as if there is only one investment decision at issue for each
transition: the client's macro-level decision that, over some
period of time, it would like to transition its investment in
Asset X to an investment in Asset Y. While McLellan's
misrepresentations may not have influenced that one macro-level
decision for any of the transitions, we do not understand an
investor's choice between transition managers to be the legal
equivalent of choosing between brokers to execute a purchase of a
single share of stock at the prevailing price at any given time.
To the contrary, as the record demonstrates, the idiosyncrasies of
transition management services (as compared to run-of-the-mill
brokerage services) belie McLellan's attempt to escape liability
for his fraudulent misrepresentations.
Investors that hire transition managers are preparing to
transition sizeable investment portfolios (often valued in the
hundreds of millions if not billions of dollars) from one set of
assets to another. Under the agency model, when the investor hires
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a transition manager to handle a transition, the investor turns
over its portfolio to the transition manager, who enters an
extended series of individual securities transactions on behalf of
the investor. That the clients did not actually make those
micro-level decisions themselves, instead entrusting them to State
Street, does not relieve McLellan of securities fraud liability.
In our view, even if a client had already made a macro-level
decision about the securities it wished to buy or sell before
hiring State Street, the micro-level trading decisions that the
client delegates to State Street as the transition manager under
the agency model -- i.e., the choices of when, at what price, and
in what quantities to trade -- are "decision[s] to purchase or to
sell a covered security" within the meaning of Troice, 571 U.S. at
387.
It follows that McLellan's up-front misrepresentations
that he would not charge commissions were "material" to those
when-and-how decisions because they reasonably induced the clients
to delegate those decisions to State Street as their transition
manager. See Hidalgo-Vélez, 758 F.3d at 106. Moreover, while
McLellan's after-the-fact price reports themselves may not be
material to (i.e., not reasonably capable of influencing) any of
the micro-level decisions that State Street made on its clients'
behalf, McLellan's up-front no-commission lies understated the
total price that clients would ultimately pay or receive for the
-29-
securities that State Street bought and sold on their behalf. In
other words, those lies also translated into back-end price
inflation, which was necessary to conceal and complete the fraud.
And it is well-settled that the price of a security is material to
a reasonable investor's buy-sell decision. See Rayner v. E*Trade
Fin. Corp., 899 F.3d 117, 122 (2d Cir. 2018) ("It is frivolous to
suggest that negatively influencing the price and quantity at which
clients may buy and sell securities would not 'make[] a significant
difference to someone's decision to purchase or to sell a covered
security." (alteration in original) (quoting Troice, 571 U.S. at
387)).
Together, this is enough to satisfy Rule 10b-5's
transactional nexus requirement.
3.
We find clear support for this position in several lines
of precedent. First, we look to SEC v. Zandford, where the client
gave the defendant-broker control over his investment account, and
the broker then "sold the [client's] securities while secretly
intending from the very beginning to keep the proceeds." 535 U.S.
813, 824 (2002). There, the Supreme Court held that the fraud
satisfied the "in connection with" requirement because a broker
"who sells customer securities with intent to misappropriate the
proceeds, violates [Section] 10(b) and Rule 10b-5," even though
the fraudster did not misrepresent the value of any security or
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fraudulently induce the customer to enter a securities
transaction. Id. at 819–20. The Court explained that the
"connection between the deception and the sale" was identical to
a case in which the defendant "sold [the victim] a security ([an]
option) while secretly intending from the very beginning not to
honor the option." Id. at 823-24 (quoting Wharf (Holdings) Ltd.
v. United Int'l Holdings, Inc., 532 U.S. 588, 597 (2001)). In
both cases, the fraud "deprived the [victim] of the benefit of the
sale" that the fraudster had expressly or impliedly promised to
deliver. Id. at 824. Those promises were "material to a transaction
in the relevant securities by or on behalf of someone other than
the fraudster" and met the "in connection with" requirement.
Troice, 571 U.S. at 393 (citing Zandford, 535 U.S. at 822 and
Wharf, 532 U.S. at 590–92); see also Superintendent of Ins. of
N.Y. v. Bankers Life & Cas. Co., 404 U.S. 6, 9 (1971) (controlling
shareholders committed securities fraud when they duped company
into authorizing sale of treasury bonds with the misrepresentation
that "it, the seller, would receive the proceeds").
And that is just what happened here; McLellan induced
clients to delegate to him a whole set of investment decisions --
i.e., the micro-level decisions about when and how to execute the
trades -- by promising them the full proceeds from each trade while
planning all along to pocket the undisclosed commissions. Indeed,
McLellan (unlike Zandford, who just sold his clients' securities
-31-
and pocketed the proceeds), made an affirmative, up-front
misrepresentation that overstated the benefit that State Street's
clients would derive from each trade. On that score, his case is
even more straightforward than the one the Supreme Court considered
in Zandford. McLellan tries to distinguish Zandford because there,
he says, each sale breached the broker's fiduciary duty and "in
and of itself was a fraud upon the client," so the fraud "perfectly
coincided" with Zandford's sales of securities; whereas here, the
government did not pursue the same theory; instead, it focused on
McLellan's no-commission lies, which were made to clients after
they had already decided which securities to trade as part of the
transition, before they decided to hire State Street, and before
State Street executed any trade on their behalf. However, in
truth, McLellan's lies were about the trades themselves. He
misrepresented to the clients how much State Street would charge
for each trade it made on their behalf, and the alleged fraud was
not complete until he followed through on the scheme by taking an
unauthorized cut of the proceeds from each trade. Because the
lies overstated the benefit that clients would get from every
purchase and sale, and the complete fraud coincided with each
trade, it had the close nexus to those transactions that we have
required for securities fraud under Rule 10b-5. Hidalgo-Vélez,
758 F.3d at 105; Calderón Serra, 747 F.3d at 6.
-32-
The Second Circuit's decision in United States v. Litvak
is also consistent with our conclusion. 808 F.3d 160, 167-68
(2d Cir. 2015) (Litvak I). To lay out the facts, Litvak was a
residential mortgage-backed securities ("RMBS") broker-dealer who
acted as a principal, buying and reselling RMBS to investor-buyers
(the victims). In one of his schemes, he bought RMBS from
third-party sellers for one price, then lied to the investor-buyers
by saying that he had paid a higher price, effectively hiding an
undisclosed markup. See Litvak I, 808 F.3d at 167-68. The Second
Circuit held that there was enough evidence for a securities fraud
conviction because, in the opaque market for RMBS (where investors
have to rely on brokers to tell them what prices the securities
are selling for), a broker-dealer's misrepresentations to
investor-buyers about the price he paid for the RMBS can inflate
the price at which the investor-buyer ultimately agrees to pay for
it. See id. at 167-68 nn.5-7, 175-76. Therefore, although the
buyer-victims in Litvak did not pay Litvak any more than the price
they negotiated to pay him, they would have negotiated a lower
price if they had known Litvak had bought cheaper than he let on
(or so a jury could find). Id.; see also United States v. Litvak,
889 F.3d 56, 67 (2d Cir. 2018) (Litvak II). As here, the broker
fraudulently induced the victims to pay more per trade (in the
amount of a hidden markup) than they would have paid otherwise.
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Along those lines, McLellan cites a pair of Eleventh
Circuit decisions to support his contention that, legally, a
misrepresentation which goes only to the selection of a transition
manager is insufficient to establish securities fraud: Brink v.
Raymond James & Assocs., Inc., 892 F.3d 1142 (11th Cir. 2018); and
SEC v. Goble, 682 F.3d 934 (11th Cir. 2012). However, a closer
inspection leads to the conclusion that McLellan's case is actually
even clearer than Litvak, and distinct from Goble and Brink,
because State Street's clients, unlike the victims in the Eleventh
Circuit cases, did not know "how much [they were] being charged
for costs associated with each [securities] transaction" and were
"charged more than [they] agreed to pay." Brink, 892 F.3d at 1149.
In Goble, the owner of a brokerage firm directed an
employee to record a fake transaction in the company's books in
order to avoid SEC regulations requiring businesses to set aside
a certain amount of funds. 682 F.3d at 939-40. The Eleventh
Circuit determined that this activity was a "misrepresentation
that would only influence an individual's choice of
broker-dealers," and it was therefore not material to an investment
decision to purchase or sell securities. Id. at 944. In Brink,
a broker misrepresented to clients the purpose of a "processing
fee" by indicating that the fee was used to facilitate securities
trades but then also built a commission into the fee. 892 F.3d at
1144-45. The Eleventh Circuit held that a misrepresentation that
-34-
only goes to "the choice of a type of investment account . . . is
not intrinsic to the investment decision itself." Id. at 1148-49.
However, the Eleventh Circuit emphasized in Brink that the
defendant "did not 'mislead [its] customers as to what portion of
the total transaction cost was going toward purchasing securities
versus the cost of the broker's involvement.'" Id. at 1149
(quoting Litvak I, 808 F.3d at 176) (alteration in original).
Thus, because the fee was fully disclosed prior to the transaction,
the Eleventh Circuit could conclude that "a reasonable investor
would [not] have made different investment decisions." Id.
These factual distinctions between McLellan's fraud
(i.e., that of a transition manager under the agency model) and
the misrepresentations at issue in Brink and Goble are critical.
While the fraud in Brink and Goble may have been relevant to an
investor when deciding whether to do business with the broker
generally, the Eleventh Circuit determined that it did not
influence the narrower decision to purchase or sell the securities
through that transaction, and thus it lacked the close nexus
required to prove Rule 10b-5 securities fraud. In those cases,
however, the investors were not misled as to the value or price of
a security, nor did the broker apply undisclosed markups.
Cf. Litvak I, 808 F.3d at 175-76. Instead, the brokers
misrepresented ancillary facts about their businesses, such as the
nature of a processing fee and the financial state of the firm.
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These types of misrepresentations could be fairly regulated by
competition in the marketplace (as opposed to the Exchange Act)
because, knowing the full cost up front, the customer could always
seek the services of another firm to help purchase or sell the
desired securities. See id.
By contrast, McLellan's misrepresentations concerned the
costs of the trades themselves and required McLellan to distort
the prices of the securities that his firm traded on the back end
to conceal (and complete) the fraud. That is precisely why, under
the agency model of transition management services, McLellan's
no-commission lies have a tight-enough nexus to the relevant
securities transactions to fit "comfortably within the confines of
the 'in connection with' requirement." Hidalgo-Vélez, 758 F.3d at
107. For the foregoing reasons, misrepresentations that influence
the choice of a transition manager under the agency model, unlike
the choice of a run-of-the-mill broker-dealer, necessarily affect
who makes the micro-level trading decisions, and therefore, the
statutorily relevant investment decisions themselves.
Circling back to Litvak, McLellan also tries to
distinguish the case on its facts because there, he suggests, the
fraud influenced the victims' decisions about whether to buy or
sell the covered securities at all, not just what price to pay or
when to trade. But from Zandford, we know that there need not "be
a misrepresentation about the value of a particular security in
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order to run afoul of the [Exchange] Act"; inducing the victim to
let you sell its securities, then pocketing the proceeds you
promised to pass on, is enough. See 535 U.S. at 820. And the
victims in Litvak did not testify they would have foregone the
trades if Litvak had not lied -- only that they would have paid
less, just as the State Street clients would have here. See
Litvak I, 808 F.3d at 167-68 nn.5-7.
Moreover, from Dabit, we know that the choice of when to
buy or sell a security, which itself often affects how much you
pay or receive from the sale, is itself a significant investment
decision that the Exchange Act and Rule 10b-5 protect. Dabit
involved a holder action, in which the plaintiffs alleged that
Merrill Lynch's analysts intentionally overvalued stocks held by
its investment banking clients and caused its brokers and their
clients to "continue[] to hold their stocks long beyond the point
when, had the truth been known, they would have sold." Dabit, 547
U.S. at 75. When the truth was revealed, the stock prices tanked.
Id. The brokers and their clients sued alleging that they were
"fraudulently induced, not to sell or purchase, but to retain or
delay selling their securities" and thereby suffered losses. Id.
at 77. The Supreme Court held that this fraud met the "in
connection with" requirement even though the plaintiffs were not
"defrauded into purchasing or selling particular securities." Id.
at 85, 85 n.10. And as we have explained, the Court in Troice,
-37-
right after establishing that the "fraudulent misrepresentation or
omission [must be] . . . material to a decision by one or more
individuals (other than the fraudster) to buy or sell a 'covered
security,'" the Court qualified that "[w]e do not here modify
Dabit." Troice, 571 U.S. at 387.
4.
Our conclusion that McLellan's up-front
misrepresentations satisfy the "in connection with" requirement is
also bolstered by the long line of cases finding that the taking
of undisclosed markups constitutes securities fraud. See Grandon
v. Merrill Lynch & Co., 147 F.3d 184, 193 (2d Cir. 1998) (finding
that undisclosed excessive markups violated Rule 10b-5); SEC v.
First Jersey Sec., Inc., 101 F.3d 1450, 1469 (2d Cir. 1996) ("[A]
broker-dealer who charges customers retail prices that include an
undisclosed, excessive markup violates . . . § 10(b) of the
securities laws."); Bank of Lexington & Tr. Co. v. Vining-Sparks
Sec., Inc., 959 F.2d 606, 613 (6th Cir. 1992) ("[T]he failure to
disclose exorbitant mark-ups violates section 78j(b) and Rule
10b-5."); Ettinger v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
835 F.2d 1031, 1033-36 (3d Cir. 1987) (reversing a grant of summary
judgment because it had "no doubt" that taking undisclosed
excessive markups violated Rule 10b-5). McLellan argues that these
cases are inapplicable for two reasons. First, he contends that
they all deal with "excessive" markups, but there is no showing
-38-
that State Street's markups were "excessive." Second, he submits
that Troice changed the legal landscape so as to foreclose his
conviction.
First, to be sure, McLellan is right that there is no
finding that the commissions were "excessive" in some abstract
sense. There is no allegation here that State Street's markups
were not "reasonably related to prices charged in an open and
competitive market." Grandon, 147 F.3d at 189. However, the
rationale underlying the undisclosed markup cases is that
broker-dealers make an "implied representation that [they] charge
their customers securities prices that are reasonably related to
the prices charged in an open and competitive market." Id. Here,
McLellan expressly misrepresented the markups he planned to
charge, charging the clients a higher markup than he represented.
If a broker's failure to disclose an abnormally high markup is a
material omission, McLellan's affirmative promise that he would
charge a lower markup than he planned to charge must be a material
misstatement.
Second, there are reasons to be skeptical that Troice
had such a major impact on what conduct is prosecutable as
securities fraud. For instance, in Troice, the Supreme Court
"specif[ies] at the outset that [the] holding does not limit the
Federal Government's authority to prosecute frauds like the one
here," or otherwise "limit[] the Federal Government's prosecution
-39-
power in any significant way." 571 U.S. at 381 (internal quotation
marks omitted). McLellan essentially asks that we ignore that
language and apply Troice to limit the Federal Government's ability
to prosecute anyway. We decline the invitation.
5.
Finally, we note that McLellan's behavior is the type of
fraudulent behavior which was meant to be forbidden by the Exchange
Act and Rule 10b-5. Unlike the defendant in Troice, State Street
defrauded "victims who took, who tried to take, who divested
themselves of, who tried to divest themselves of," and "who
maintained an ownership interest" in covered securities. Troice,
571 U.S. at 378; see also id. at 388–89 ("The regulatory statutes
refer to persons engaged in securities transactions that lead to
the taking or dissolving of ownership positions. And they make it
illegal to deceive a person when he or she is doing so."). The
clients sought to "reap the benefit of trading in [those] covered
securities," Hidalgo-Vélez, 758 F.3d at 108, and McLellan deprived
them of part of that benefit, as in Zandford. His fraud therefore
implicates "[t]he purpose of § 10(b) and Rule 10b-5," which is "to
protect persons who are deceived in securities transactions -- to
make sure that buyers of securities get what they think they are
getting and that sellers of securities are not tricked into parting
with something for a price known to the buyer to be inadequate,"
or in the case of State Street, for a deal that is "not to be what
-40-
it purports to be." Chem. Bank v. Arthur Andersen & Co., 726 F.2d
930, 943 (2d Cir. 1984). And in Troice, the Supreme Court was
clear that brokers, accountants, investment advisors, and others
who "give advice, counsel, and assistance in investing in the
securities markets" remain subject to the federal securities laws
unless they "do not sell or participate in selling securities
traded on U.S. national exchanges." Troice, 571 U.S. at 390.
Transition management services are important to institutional
investors restructuring huge portfolios, and if those investors
cannot trust transition managers to tell them how much the
transition will cost, their services lose much of their value to
the national securities markets and their participants,
potentially influencing investors' decisions about whether to move
at all. See Zandford, 535 U.S. at 823 (noting that if investors
"cannot rely on a broker to exercise [its] discretion for their
benefit, then the [brokerage] account loses its added value").
So by our lights, a broker-agent's misrepresentation is
material to statutorily relevant investment decisions if it would
reasonably influence an investor's choice to entrust the agent
with the decisions of when, at what price, and in what quantities
to trade the securities. And a lie that clients will receive more
of the benefit of each purchase and sale, when in fact, the
broker-agent intends to (and does) charge hidden commissions on
each trade, is "material" to that choice and, therefore, to the
-41-
myriad investment decisions that it influences. That McLellan's
fraud misled clients about the costs of each trade, and therefore
"depended heavily on misrepresentations about [the] transactions
in covered securities," confirms a tight-enough nexus to those
transactions to satisfy the "in connection with" requirement.
Hidalgo-Vélez, 758 F.3d at 107 (citation omitted).
We therefore conclude that the Troice standard is
satisfied, and we decline to find that misrepresentations that
only affect the selection of a transition manager necessarily lack
a tight-enough nexus to qualify as securities fraud within the
meaning of Rule 10b-5. Accordingly, the evidence was sufficient
to support McLellan's securities fraud convictions.
B. Instructional Error
Relatedly, McLellan takes issue with the district
court's instruction to the jury regarding the "in connection with"
element of Rule 10b-5. Our approach to claims of instructional
error is "two-tiered": we review questions about whether jury
instructions "conveyed the essence of the applicable law" de novo
and questions about whether the district court's "choice of
language was unfairly prejudicial" for abuse of discretion. United
States v. Tkhilaishvili, 926 F.3d 1, 14 (1st Cir. 2019) (quoting
United States v. Sabean, 885 F.3d 27, 44 (1st Cir. 2018)). An
incorrect instruction, however, "will not require us to set aside
-42-
a verdict if the error is harmless." United States v. Sasso, 695
F.3d 25, 29 (1st Cir. 2012).
As to Rule 10b-5's "in connection with" requirement, the
district court instructed the jury:
This requirement is satisfied if you find that Mr.
McLellan's alleged conduct in some way touched upon
or coincided with a securities transaction; that is,
that the alleged fraud or deceit had some relationship
to the individual sales or purchases.
(emphasis added). The court further instructed the jury that it
could find the materiality component of the "in connection with"
element satisfied if there was a "substantial likelihood that a
reasonable investor engaging a transition manager would view the
statement as significantly altering the total mix of information
available." McLellan objected to both instructions as overbroad
because they could have enabled the jury to convict him based on
a theory of misrepresentations that do not satisfy the updated and
narrower "in connection with" requirement. Instead, McLellan
requested to have the jury instructed that the "in connection with"
element was only met if the fraud was "material to a decision by
one or more individuals to buy or to sell a covered security." He
further requested that "material" be defined as "meaningfully
affect[ing] a reasonable investor's consideration about whether to
buy or sell a security, and at what price."
On its face, the framing used by the district court in
its "in connection with" jury instructions displays some degree of
-43-
overbreadth. We have indeed interpreted Troice to cabin the "in
connection with" requirement, such that the fraud (as we have
explained above) must be one that would make a significant
difference to a reasonable investor's decision to purchase or sell
securities rather than merely touch upon or coincide with a
discrete securities transaction. See Hidalgo-Vélez, 758 F.3d at
106. In other words, the government must establish that the
misrepresentation would make "a significant difference to
someone's decision to purchase or to sell a covered security," not
merely that it was, in some sense, related to that decision. Id.
(quoting Troice, 571 U.S. at 386-87). Nevertheless, it is not
clear either that Troice should be read to require a narrower jury
instruction. For one, the instructional language here is drawn in
part from Dabit, which Troice explicitly indicated that it did not
modify. Plus, Dabit rejected the proposition that the "in
connection with" element is satisfied "only when the plaintiff
himself was defrauded into purchasing or selling particular
securities" and holds that to find securities fraud, "it is enough
that the fraud alleged 'coincide' with a securities transaction."
Dabit, 547 U.S. at 85.
However, even assuming the instructions were overbroad,
such a finding would not warrant overturning the conviction if the
potential error in the jury instruction were harmless. Where a
potentially erroneous instruction deals with an "essential element
-44-
of the crime," United States v. Doherty, 867 F.2d 47, 58 (1st Cir.
1989), it is harmless if "it appears beyond a reasonable doubt
that the error complained of did not contribute to the verdict
obtained." United States v. Wright, 937 F.3d 8, 30 (1st Cir. 2019)
(internal quotation marks omitted). "An erroneous instruction on
an element of the offense can be harmless beyond a reasonable
doubt, if, given the factual circumstances of the case, the jury
could not have found the defendant guilty without making the proper
factual finding as to that element." Doherty, 867 F.2d at 58; see
also Pope v. Illinois, 481 U.S. 497, 503 (1987). The government
bears the burden of proving "that an instruction that is
constitutionally flawed is harmless." Wright, 937 F.3d at 30. In
order to engage in this inquiry, we must "review[] the entire
record" and "consider[] the likely impact of the error on the minds
of the jurors." Doherty, 867 F.2d at 58; see also Neder v. United
States, 527 U.S. 1, 19 (1999).
After doing so, we having little difficulty concluding
that, even assuming the "in connection with" jury instructions
were overboard, any potential error was harmless beyond a
reasonable doubt. The government's case was premised on McLellan's
up-front misrepresentations that State Street would not take
commissions from the securities trades it made on behalf of its
clients as part of their transition, which as a matter of law,
satisfy the transactional nexus requirement under Rule 10b-5. The
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jury was free to believe Pennings, Boomgaardt, and other witnesses
when they testified about the structure and intent of the scheme
to hide commissions, or the jury could have determined that these
witnesses were not credible, in which case they would have
acquitted McLellan. The jury was not free, however, to extrapolate
from Pennings and Boomgaardt's testimony that some other scheme,
not advanced by the government and not supported by the evidence,
was the fraud alleged to have occurred.4 From the confines of the
evidence produced at trial, we find no evidence from which the
jury could rationally have reached a conclusion to convict under
these instructions on a ground other than that McLellan directed
misrepresentations as to commissions, which where material to the
statutorily relevant trading decisions of State Street's clients.
As noted in the previous section, the government's case thus fell
firmly within the scope of Rule 10b-5, and the jury's conclusion
would have remained the same even with a tailored jury instruction.
Therefore, to the extent that the jury instruction as to
the "in connection with" element of Rule 10b-5 might have been
4 This case is thus distinguishable from cases such as Wright,
where the government advanced the theory on which the defendant
was potentially erroneously convicted. See Wright, 937 F.3d at
30. While the government need not advance the erroneous theory
for an instructional error to be harmful, there must be something
in the record from which a jury could have reached a legally
erroneous, but rational, decision to convict. We find nothing in
the record that would support such a rational decision based on
the potentially overbroad instruction.
-46-
overbroad, any potential error was ultimately harmless.
Accordingly, we affirm McLellan's securities fraud convictions.
IV. Wire Fraud
Next, McLellan challenges his conviction for wire fraud.
He argues that the federal wire fraud statute, 18 U.S.C. § 1343,5
does not apply extraterritorially, and that the district court
erred by failing to provide an instruction that would have required
the jury to find a domestic application of the statute. We need
not decide whether § 1343 applies extraterritorially because the
facts underlying McLellan's conviction suffice to establish a
domestic application of § 1343 inasmuch as he committed each
required element of wire fraud from the United States through
domestic wires. As the instructions required the jury to find
that McLellan utilized a wire in the United States, we find that
the district court did not err in refusing to supply a domestic
application instruction.
5 The wire fraud statute, 18 U.S.C. § 1343, provides that:
Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money
or property by means of false or fraudulent pretenses,
representations, or promises, transmits or causes to
be transmitted by means of wire, radio, or television
communication in interstate or foreign commerce, any
writings, signs, signals, pictures, or sounds for the
purpose of executing such scheme or artifice, shall
be fined under this title or imprisoned not more than
20 years, or both.
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"A district court's refusal to give a requested
instruction is reviewed de novo." United States v. Figueroa-Lugo,
793 F.3d 179, 191 (1st Cir. 2015) (emphasis added). The defendant
must present evidence sufficient to show "that he was entitled to
the instruction." Id. "The initial threshold determination we
must make is whether the evidence, viewed in the light most
favorable to the defense, 'can plausibly support the theory of the
defense.'" Id. (quoting United States v. Gamache, 156 F.3d 1, 9
(1st Cir. 1998)). If the evidence is sufficient, we then move onto
a three-part test where the district court is reversed only if the
proffered instruction was "(1) substantively correct as a matter
of law, (2) not substantially covered by the charge as rendered,
and (3) integral to an important point in the case so that the
omission of the instruction seriously impaired the defendant's
ability to present his defense." United States v. Baird, 712 F.3d
623, 628 (1st Cir. 2013).
McLellan's argument that he is entitled to the domestic
application instruction he seeks is only plausible if the wire
fraud statute does not apply extraterritorially. Otherwise he may
properly be convicted based on foreign conduct, "barring some other
limitation." RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090,
2101 (2016) (quoting Morrison v. Nat'l Aus. Bank Ltd., 561 U.S.
247, 267 n.9 (2010)).
-48-
A. Extraterritorial Reach of § 1343
We review the extraterritorial application of a statute
in two steps. First, "we ask whether the presumption against
extraterritoriality has been rebutted." RJR Nabisco, 136 S. Ct.
at 2101. "Absent clearly expressed congressional intent to the
contrary, federal laws will be construed to have only domestic
application." Id. at 2100. The threshold question is "whether
Congress has affirmatively and unmistakably instructed that the
statute" will apply extraterritorially. Id. In the clearest case,
this intent is evinced when the statute affirmatively proscribes
activities that "tak[e] place outside the United States." Id. at
2101 (alteration in original) (quoting 18 U.S.C. § 1957(d)(2)).
While such "an express statement . . . is not essential," id. at
2102, we nevertheless "assume that Congress legislates with an
awareness of the presumption against extraterritorial
application." Carnero v. Bos. Sci. Corp., 433 F.3d 1, 7 (1st Cir.
2006).6 "If the statute is not extraterritorial, then at the
6 "The presumption serves at least two purposes." Carnero, 433
F.3d at 7. First, it prevents "unintended clashes between our
laws and those of other nations." Id. (quoting Equal Emp't Opp.
Comm'n v. Arabian Am. Oil Co. ("Aramco"), 499 U.S. 244, 248
(1991)). Second, it is premised on the notion that Congress is
primarily concerned with domestic conditions. Id. In analyzing
a statute, we consult a statute's "text, context, structure, and
legislative history." Id.; see also RJR Nabisco, 136 S. Ct. at
2101 (employing same approach).
-49-
second step we determine whether the case involves a domestic
application of the statute." RJR Nabisco, 136 S. Ct. at 2101.
While it is "usually . . . preferable for courts to
proceed in [this] sequence," we may "start[] at step two in
appropriate cases." Id. at 2101 n.5. We do so when it is "plain"
that a domestic application is present but the statute itself gives
rise to complex questions of congressional intent. Cf. Pearson v.
Callahan, 555 U.S. 223, 236-37 (2009) (noting efficiency benefits
of skipping to second step of qualified immunity analysis). "One
reason to exercise that discretion is if addressing step one would
require resolving 'difficult questions' that do not change 'the
outcome of the case,' but could have far-reaching effects in future
cases." WesternGeco LLC v. Ion Geophysical Corp., 138 S. Ct. 2129,
2136 (2018) (quoting Pearson, 555 U.S. at 236-37).
Because § 1343 contains difficult questions about
whether Congress intended the statute to apply extraterritorially,
we skip to the second step and determine that the present case is
a domestic application of the statute. Compare European Cmty. v.
RJR Nabisco, Inc., 764 F.3d 129, 141 n.11 (2d Cir. 2014), rev'd on
other grounds, 136 S. Ct. 2090 (2016) (finding § 1343 does not
apply extraterritorially), with United States v. Lyons, 740 F.3d
702, 718 (1st Cir. 2014) (finding Wire Act applies
extraterritorially); and United States v. Georgiou, 777 F.3d 125,
137-38 (3d Cir. 2015) (holding § 1343 applies extraterritorially).
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B. Domestic Application of § 1343
We determine whether the wire fraud statute applies
domestically based on the facts at hand "by identifying the
statute's focus and asking whether the conduct relevant to that
focus occurred in United States territory." WesternGeco LLC, 138
S. Ct. at 2136 (internal quotation marks omitted). A statute's
"focus" is the "object of its solicitude." Id. at 2137 (noting
that the "focus" includes the "conduct it seeks to regulate, as
well as the parties and interests it seeks to protect or vindicate"
(alternations and internal quotation marks omitted)).
In McLellan's view, the "focus" of § 1343 is the fraud
simpliciter that the transmission of communications through wires
seeks to advance and not the use of the wires themselves. Under
that theory, he maintains that there is no possible domestic
application of the wire fraud statute, since the alleged fraud
transpired in a foreign country through Pennings and Boomgaardt's
use of foreign wires. For the following reasons, we disagree.
To be convicted of wire fraud, the government must
establish (1) "a scheme to defraud"; (2) "knowing and willful
participation in the scheme with the intent to defraud";
and (3) "the use of interstate or foreign wire communications to
further that scheme." United States v. Valdés-Ayala, 900 F.3d
20, 33 (1st Cir. 2018) (internal quotation marks omitted). As we
have previously found, the structure, elements, and purpose of the
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wire fraud statute indicate that its focus is not the fraud itself
but the abuse of the instrumentality in furtherance of a fraud.
See United States v. Gordon, 875 F.3d 26, 37 (1st Cir. 2017) ("[I]n
enacting the mail and wire fraud statutes, Congress took aim at
the means of conducting a substantive offense, not at the
substantive offense itself."); see also Pasquantino v. United
States, 544 U.S. 349, 358 (2005) ("[T]he wire fraud statute
punishes fraudulent use of domestic wires."); Bascuñán v. Elsaca,
927 F.3d 108, 122 (2d Cir. 2019) (analyzing the elements of § 1343
and finding that "the regulated conduct is not merely a 'scheme to
defraud,' but more precisely the use of the mail or wires in
furtherance of a scheme to defraud" (emphasis omitted)); United
States v. Driver, 692 F. App'x 448, 449 (9th Cir. 2017) (rejecting
argument that the scheme to defraud is the focus of the wire fraud
statute because "[t]he focus of [the mail and wire fraud statutes]
is upon the misuse of the instrumentality of communication"
(quoting United States v. Garlick, 240 F.3d 789, 792 (9th Cir.
2001))).
A statute is applied domestically "[i]f domestic conduct
satisfies every essential element to prove a violation . . . even
if some further conduct contributing to the violation occurred
outside the United States." European Cmty., 764 F.3d at 142; see
also RJR Nabisco, 136 S. Ct. at 2101 ("If the conduct relevant to
the statute's focus occurred in the United States, then the case
-52-
involves a permissible domestic application even if other conduct
occurred abroad.").
This framework is easily met in this case. The district
court instructed the jury that it could only convict McLellan if
a "wire communication" was sent by him or was caused to have been
sent by him. The district court defined "wire communication" to
include only "a telephone communication or email from one state to
another or between the United States and another country." It
finally instructed the jury that the wire communication need not
be "essential to the scheme" but "must have been made for the
purpose of carrying out the scheme."
While McLellan argues that he could have been convicted
for one stray domestic wire, this glosses over the indictment and
the district court's instructions. The § 1343 counts pinpointed
two specific email communications between McLellan and Pennings.
The first was an April 5, 2011 email from Pennings to McLellan
that noted plans to "increase the spread" on NTMA trades. The
second was a June 22, 2011 email, which told Pennings to inform
Royal Mail that "inadvertent commissions" were applied in the
United States.
Given the instructions, the jury was required to find
(1) that the emails were sent or caused to be sent to, from, or
within the United States, (2) with the intent to defraud, and (3)
that the emails were for the purpose of carrying out the scheme to
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defraud. A jury, then, could only convict McLellan if it
determined McLellan sent or caused another to send a domestic wire
that met each of these requirements. In doing so, the jury in
effect would be concluding that McLellan abused a domestic
instrumentality while in the United States. Therefore, the
instructions as presented sufficiently ensured a domestic
application of the wire fraud statute. See Baird, 712 F.3d at
628. This conclusion disposes of McLellan's claim that the district
court erred in refusing to apply a domestic application
instruction. To prevail on this claim, he needed to present
evidence sufficient to show that the proffered instruction was
"not substantially covered by the charge as rendered." Id. He
falters on this prong because the instruction he desired was
substantially covered by the one given by the court.
As we deal with an instance where a domestic defendant
sent or received communications on behalf of a domestic corporation
through domestic wires in a scheme that was in part implemented
domestically, we need not at this stage determine where the precise
line is between domestic and foreign activity "because wherever
that line should be drawn, the conduct alleged here clearly states
a domestic cause of action." European Cmty., 764 F.3d at 142.7
7 In a case where a foreign defendant is alleged to have committed
wire fraud against a foreign victim, and the use of domestic wires
was merely "incidental" to the overall scheme, additional inquiry
may be necessary to ensure a domestic application of the statute.
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However, we make clear what is implied in the Second Circuit
decisions. Where a defendant is charged with wire fraud based on
having sent or received wire communications while in the United
States for the purpose of carrying out a scheme to defraud, the
wire fraud statute has been applied domestically even if the victim
is located outside of the United States. See European Cmty., 764
F.3d at 139 (rejecting conclusion that the presumption against
extraterritoriality "insulat[es] purely domestic conduct from
liability simply because the defendant has acted in concert with
a foreign enterprise"); see also Elbaz, 332 F. Supp. 3d at 974
("[I]t does not matter if the bulk of the scheme to defraud
involves foreign activity[] [b]ecause the focus of the wire fraud
statute is misuse of U.S. wires to further a fraudulent scheme.").
That the fraud is ultimately conducted through foreign wires does
not mitigate this finding; the jury was required to find that
McLellan's use of domestic wires was in furtherance of the fraud
against the foreign victim. See Pasquantino, 544 U.S. at 371
Bascuñán, 927 F.3d at 122 (establishing two part framework that
finds "wire fraud involves sufficient domestic conduct when (1)
the defendant used domestic mail or wires in furtherance of a
scheme to defraud, and (2) the use of mail or wires was a core
component of the scheme to defraud"); see also United States v.
Elbaz, 332 F. Supp. 3d 960, 974 (D. Md. 2018) (noting difference
in a "scenario in which a fraud scheme [is] perpetrated by
foreigners against other foreigners, with no U.S. nexus other than
the incidental use of U.S. wires, is nevertheless charged as a
domestic offense"). This, however, is not the case presented to
us today.
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(finding domestic application where domestic wires were used to
organize a scheme to defraud a foreign sovereign in that foreign
sovereign's territory). It is McLellan's domestic conduct through
domestic wires that spurred his prosecution. See id.
Not only was the instruction in effect tailored to
require a domestic application, the evidence was more than
sufficient to find a domestic application. On the large scale,
the jury heard substantial evidence that McLellan directed the
scheme from the United States, dictated the commissions to be
applied to U.S.-based trades through email and phone calls, and
used email and phone calls to shape the response to Royal Mail's
discovery of the scheme. On the smaller scale, the April 5th email
was an approval of a scheme to increase, without NTMA's consent,
commissions applied on security trades in the United States. The
June 22nd email was sent by McLellan to direct the coverup of the
scheme. As the given instructions required the jury to find all
the elements for a domestic application and the evidence was
sufficient to support that conclusion, we find that the district
court did not err in declining to provide McLellan's proposed
instruction.
V. Mutual Legal Assistance Treaties
Finally, McLellan asserts that the Due Process Clause of
the Fifth Amendment and the Compulsory Process Clause of the Sixth
Amendment demand that courts have the authority to order the
-56-
government to exercise its MLAT powers to request evidence from
foreign countries. He therefore argues that the district court
erred by declining to compel the government to pursue the evidence
and testimony he sought through the MLAT process when its letters
rogatory proved ineffectual. Because the district court does not
possess the power to order the government to lodge requests under
MLATs, we disagree and find no reversible error.8
We review the district court's determination that it
lacked the power to order the government to make an MLAT request
de novo because it "turn[s] on an interpretation of law." Obiora,
910 F.3d at 560. The district court determined that it lacked the
authority "to compel the government to exercise its rights under
any of the relevant MLATs on behalf of, or for the benefit of, a
private person." First, to support its ruling, it quoted our
decision in United States v. McIntyre (In re Price), 685 F.3d 1,
11 (1st Cir. 2012) (internal quotation marks omitted) (hereinafter
"Price I") for the proposition that "treaties do not generally
8 Alternatively, McLellan argues that the district court erred in
not excluding the government's evidence obtained from foreign
clients. As his claim is reviewed for an abuse of discretion,
United States v. Obiora, 910 F.3d 555, 560 (1st Cir. 2018), and
the evidence the government sought to introduce was probative and
equally available to McLellan, we see no grounds to find that the
district court abused its discretion in not excluding this
evidence. See United States v. Sensi, 879 F.2d 888, 899 (D.C.
Cir. 1989) ("[A] defendant's inability to subpoena foreign
witnesses is not a bar to criminal prosecution.").
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create rights that are privately enforceable in the federal
courts." Second, it referenced United States v. Rosen, 240 F.R.D.
204, 214-15 (E.D. Va. 2007), which "not[ed] that no court has held
that a defendant's compulsory process rights are violated when the
executive branch declines to exercise a treaty power to compel
testimony of a non-American in another country." McLellan
challenges both rationales.
Our opinion in Price I is the lodestar for the MLAT
origin story and the appropriate law to apply when private
individuals seek MLAT relief. As the district court noted,
"treaties do not generally create rights that are privately
enforceable in the federal courts." United States v. Li, 206 F.3d
56, 60 (1st Cir. 2000) (en banc).9 The U.S.-U.K. MLAT is no
exception because it "expressly disclaims the existence of any
private rights." Price I, 685 F.3d at 13. Article 1, paragraph
3 of the U.S.-U.K. MLAT provides the textual hook for this
conclusion. Id. at 12-13. It states, in full: "This treaty is
intended solely for mutual legal assistance between the Parties.
The provisions of this Treaty shall not give rise to a right on
9 This comports with the "background presumption" that
"[i]nternational agreements, even those directly benefitting
private persons, generally do not create private rights or provide
for a private cause of action in domestic courts." Medellín v.
Texas, 552 U.S. 491, 506 n.3 (2008) (alteration in original)
(quoting Restatement (Third) of Foreign Relations Law of the United
States § 907 cmt. a, at 395 (1986)).
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the part of any private person to obtain, suppress, or exclude any
evidence, or to impede the execution of a request." U.S.-U.K.
MLAT, art. 1, ¶ 3. In relevant part, the U.S.-Ireland MLAT is a
carbon copy. See U.S.-Ireland MLAT, art. 1, ¶ 4.
However, we recognize that McLellan seeks relief under
the Constitution and only indirectly invokes the MLATs. By asking
the district court for an order to compel the government to
exercise its treaty powers to request potentially favorable
evidence to his case from foreign countries, McLellan seeks to
protect his due process rights rather than "to vindicate a private
treaty right."10 It is well-settled law that "no agreement with a
foreign nation can confer power on the Congress, or on any other
branch of Government, which is free from the restraints of the
Constitution." Boos v. Barry, 485 U.S. 312, 324 (1988) (quoting
Reid v. Covert, 354 U.S. 1, 16 (1957) (plurality opinion)). As
the Ninth Circuit has noted, those restraints certainly include
"the separation of powers and the guarantee of due process." In
re Premises Located at 840 140th Ave. NE, Bellevue, Wash., 634
F.3d 557, 571-72 (9th Cir. 2011) (citing Am. Ins. Ass'n v.
Garamendi, 539 U.S. 396, 416 n.9 (2003) (holding that treaties are
10 Along those lines, McLellan contends that even if the MLATs
preclude private rights of action, "they do not preclude the
ability of courts to order the government to seek evidence in the
interests of ensuring defendants a fair trial." By his reading,
the language of the MLATs is "broad enough to encompass requests
made by the government on behalf of criminal defendants."
-59-
"[s]ubject . . . to the Constitution's guarantees of individual
rights")). McLellan submits that because MLATs create an
"evidence-gathering imbalance" in criminal cases where the charges
include conduct occurring abroad, the related guarantees of the
Due Process Clause of the Fifth Amendment and the Compulsory
Process Clause of the Sixth Amendment empower the courts to
safeguard these rights to restore the evidentiary balance,
notwithstanding the absence of private rights of action in the
MLATs.
As McLellan notes, we have held that district courts
possess the authority to quash a subpoena issued by the government
pursuant to a U.S.-U.K. MLAT request. United States v. Trs. of
Bos. Coll. (In re Price), 718 F.3d 13, 23 (1st Cir. 2013)
(hereinafter "Price II"). Our reasoning was based on the
observation that "[n]othing in the text of the U.S.-U.K. MLAT, or
its legislative history . . . lead[s] us to conclude that the
courts of the United States have been divested of an inherent
judicial role that is basic to our function as judges." Id.11
Relying on Price II, McLellan contends that if separation of powers
11 Additionally, he cites to the Ninth Circuit case quoted in
Price II rejecting the government's assertion of sole discretion
in MLAT affairs because it "suggests that by ratifying an MLAT,
the legislative branch could compel the judicial branch to reach
a particular result . . . in particular cases, notwithstanding any
concerns, such as violations of individual rights, that a federal
court may have." In re 840 140th Ave. NE, 634 F.3d at 572.
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justifies a trial court's retention of power to quash MLAT
subpoenas issued by the U.S. government that potentially infringe
on First Amendment protections, then it must also dictate that
courts have the power to "ensure the defendant's right to a
fundamentally fair trial" by "ordering the government to exercise
its undoubted right to obtain the evidence." For the following
reasons, we disagree.
First, our line of cases involving MLAT subpoenas is
readily distinguishable from the predicament that McLellan faces.
In Price I and Price II, the Executive Branch exercised its
diplomatic discretion to comply with the United Kingdom's MLAT
request for information related to an ongoing investigation into
a casualty from the conflict in Northern Ireland. See Price II,
718 F.3d at 16-17. Accordingly, the U.S. government issued two
subpoenas through an appointed commissioner, see 18 U.S.C. § 3512,
to compel Boston College ("BC") to produce interviews from formerly
active participants in the conflict that were compiled by one of
BC's research projects. Price II, 718 F.3d at 16. The central
holding of Price II was that the district court had abused its
discretion by compelling BC to produce interviews that exceeded
the scope of the original subpoena, thus implicating First
Amendment concerns. Id. at 17. In Price I, we determined that
the treaties precluded private rights of action, and we therefore
denied foreign citizens' motions to intervene in BC's motion to
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quash. 685 F.3d at 3, 13. Additionally, we held that § 701(a)(1)
of the Administrative Procedure Act ("APA") barred jurisdiction
over the prospective plaintiff's APA claim because the U.S.-U.K.
MLAT "by its express language precludes judicial review." Id. at
13. These cases constitute the inverse of McLellan's situation.
Since the U.S. government has not exercised its
discretion to pursue evidence through the relevant MLATs, McLellan
effectively urges the Court to find that the MLATs have expanded
the role of the judiciary to include the ability to compel the
government to seek the type of evidence he requests. Separation
of powers surely cannot be stretched so far in this direction as
to provide an avenue for a district court to compel a co-equal
branch to take certain action on behalf of a private individual
without textual or statutory direction.12 Quite the opposite of
Price II, here, it would offend separation of powers principles to
permit the Judiciary to "impair" the Executive "in the performance
12 This is consistent with the view taken by the Department of
Justice at a hearing before the Senate Foreign Relations Committee:
"While a U.S. court would be able to ask the prosecution to make
a request under the treaty (i.e., to adopt a request as its own),
the court would lack the power or authority to compel the
Government to make a request for the benefit of the defense over
the objection of the prosecution." Consular Conventions,
Extradition Treaties, and Treaties Relating to Mutual Legal
Assistance in Criminal Matters (MLATs): Hearing Before the S. Comm.
on Foreign Relations, 102d Cong. 40 (1992) (statement of Robert
Mueller III, Assistant Att'y Gen., Criminal Div., Dep't of
Justice).
-62-
of its constitutional duties." Price II, 718 F.3d at 22 (quoting
Clinton v. Jones, 520 U.S. 681, 701 (1997)). The Constitution may
protect individuals in the United States from subpoenas to comply
with foreign MLAT requests, but it generally does not vest criminal
defendants with the power to compel the government to lodge
diplomatic requests on their behalf. See United States v.
Sedaghaty, 728 F.3d 885, 917 (9th Cir. 2013) ("[T]he district court
had no authority to order the Executive Branch to invoke the treaty
process to obtain evidence abroad for a private citizen.").13
A contrary finding could potentially open U.S. foreign affairs to
the far-flung theories of criminal defendants and risk delay of
13 Despite our search, we could find no decision contrary to this
proposition. United States v. Schneider, No. 17-935, 2019 WL
4242637, at *17 (E.D. Pa. Sept. 6, 2019) (rejecting the defendant's
argument that the government's use of an MLAT with Russia deprived
him of his "rights to a fair trial, due process and compulsory
process"); Escalante v. Lizarraga, No. ED CV 17-850-R (SHK), 2018
WL 2938520, at *7-9 (C.D. Cal. Apr. 16, 2018) ("[A] criminal
defendant has no rights under the [MLAT between the U.S. and
Mexico] to obtain evidence."); United States v. León, No. 09 CR
383-16, 2018 WL 1832878, at *4 (N.D. Ill. Apr. 16, 2018) ("[T]his
Court has 'no authority to order the Executive Branch to invoke
the treaty process to obtain evidence abroad for a private
citizen.'" (quoting Sedaghaty, 728 F.3d at 911-917)); United
States v. Márquez, No. 10CR3044 WQH, 2012 WL 349580, at *4 (S.D.
Cal. Feb. 2, 2012) ("[T]he Sixth Amendment right to compulsory
process . . . does not require an order compelling the Government
to use the MLAT to obtain evidence on behalf of the Defendant.");
United States v. Jefferson, 594 F. Supp. 2d 655, 674-75 (E.D. Va.
2009) ("It is . . . 'quite clear that the right to compulsory
process extends only to forms of process a court can issue of its
own power, not to forms of process that require the cooperation of
the Executive Branch or foreign courts.'" (quoting Rosen, 240
F.R.D. at 214)).
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trial as other countries respond to those requests. Id. (noting
distinctions between immunity context and international
treaties).14
Second, despite McLellan's protestations, our holding in
United States v. Theresius Filippi, 918 F.2d 244 (1st Cir. 1990),
does not dictate otherwise. The Sixth Amendment encompasses a
criminal defendant's right "to have compulsory process for
obtaining witnesses in his favor." U.S. Const. amend. VI. This
includes "[t]he right to offer the testimony of witnesses, and to
compel their attendance, if necessary." United States v.
Acevedo-Hernández, 898 F.3d 150, 169 (1st Cir. 2018) (quoting
Washington v. Texas, 388 U.S. 14, 18-19 (1967)). This right,
however, is not absolute. See United States v. Resurrección, 978
F.2d 759, 762 (1st Cir. 1992) ("The Constitution does not
automatically entitle a criminal defendant to unobtainable
testimony."). "There can be no violation of the defense's right
to present evidence . . . unless some contested act or
omission (1) can be attributed to the sovereign and (2) causes the
loss or erosion of testimony which is both (3) material to the
14 This is certainly not a case where there was a "stacked deck"
against McLellan. See Sedaghaty, 728 F.3d at 916. McLellan
concedes that he was able to receive some measure of documents
from the relevant clients. This is, therefore, not a case where
the government possesses evidence, or has easy access to evidence,
that a criminal defendant lacks. Instead, "both sides faced
obstacles in obtaining evidence from abroad." See id.
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case and (4) favorable to the accused." United States v. Hoffman,
832 F.2d 1299, 1303 (1st Cir. 1987); see also Theresius Filippi,
918 F.2d at 247.
Theresius Filippi featured a criminal defendant facing
drug trafficking charges who was unable to secure the presence of
a key corroborating witness located in Ecuador due to government
inaction. 918 F.2d at 245-46. Since the district court judge
determined that the witness was material and that his testimony
would have been favorable to the defense, our analysis concerned
the attributability and causation prongs of the Hoffman test. Id.
at 247. We recognized that "the right of compulsory process does
not ordinarily extend beyond the boundaries of the United States."
Id. However, we determined that the government's subpoena power
abroad was not at issue because the witness was willing -- and
indeed intended -- to testify at trial but for his inability to
"overcome the immigration hurdles blocking his entry into the
United States." Id. In our view, the "onus" was therefore on the
government "merely to make it possible" for the witness to attend
trial "by requesting a Special Interest Parole from the
[Immigration and Naturalization Service]." Id. Although we
ultimately affirmed the conviction because the defendant waived
his compulsory process rights by "proceed[ing] at trial without
his witness," id. at 246, we also found that the U.S. Attorney's
"deliberate omission to act, where action was required" directly
-65-
caused the defense to lose its only material witness, which rose
to the level of impermissible interference with his Fifth and Sixth
Amendment rights. Id. at 247.
McLellan's case is readily distinguishable on the
causation and favorability prongs of the Hoffman test. First,
McLellan has not established that the U.S. government actually or
proximately caused the absence of the evidence he seeks. The
omission in this case is the government's discretionary decision
not to initiate MLAT requests for evidence on McLellan's behalf
when the letters rogatory failed to achieve the desired result.
However, while the government may request evidence through the
MLAT process, it cannot guarantee compliance. See United States
v. Mejía, 448 F.3d 436, 444 (D.C. Cir. 2006) ("Having the authority
'to seek' tapes or transcripts through a treaty is not the same
thing as having 'the power to secure' them."); United Kingdom v.
United States, 238 F.3d 1312, 1317 n.5 (11th Cir. 2001)
("[C]ompliance with an MLAT request is not mandatory with respect
to records held by governmental agencies."). The Judicial
Authority of Ireland's reply to the district court's letters
rogatory statement that it understands the U.S.-Ireland MLAT to be
the appropriate avenue for requesting evidence refers to a
protocol, but it does not promise results.
McLellan's claim also stumbles on the favorability
element. Although the district court acknowledged that the
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evidence McLellan sought was material to his case (specifically to
the materiality component of securities fraud), McLellan failed to
provide a plausible showing that the evidence would be favorable
to his defense. See Hoffman, 832 F.2d at 1303 ("There must be a
plausible showing that the testimony was both material and
favorable to the defense."). McLellan sought information from
Ireland-based Eircom and NTMA pertaining to (1) internal
communications related to the firms understanding of the offer
from State Street, (2) communications regarding the fees,
(3) competing bids, and (4) communications related to overcharges.
While McLellan argues strenuously that the evidence was necessary
to cross-examine witnesses on the securities fraud counts, he
presented no plausible basis for the district court to determine
that the evidence in the possession of those firms contained
information that could have led to an acquittal, and he concedes
that he does not know the contents of the documents that he seeks.
See id.15 His arguments only demonstrate that the evidence was
15 In an analogous case, the Supreme Court held that the government
was not required to halt a deportation of a potentially material
and possibly favorable witness, where the criminal defendant made
no showing that the testimony the witness would have given would
have been favorable. United States v. Valenzuela-Bernal, 458 U.S.
858, 870-71 (1982). While the Court recognized that it would be
difficult for an accused defendant to determine if testimony from
the witness would be material and favorable at trial, and relaxing
the requirements might be justified in those instances, it
determined that such difficulty does not "afford[] the basis for
wholly dispensing with such a showing." Id. at 870.
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material, but he has not demonstrated that the evidence would have
been favorable. A showing of materiality, alone, is insufficient
to show favorability. Id.; see also United States v. Combs, 555
F.3d 60, 63-64 (1st Cir. 2009) (rejecting criminal defendant's
claim that "it [was] impossible to know how [the witness] might
have testified absent [the government's] conduct" as insufficient
to establish favorability).
We conclude, therefore, that the district court does not
have the authority to compel the government to issue MLAT requests.
Nor is the "onus" on the government in this case to "make it
possible" for the defendant to obtain, via an MLAT request,
evidence that he cannot establish is favorable to his case.
Theresius Filippi, 918 F.2d at 247. Thus, we find no reversible
error. However, we believe it important to note that we do not
disagree that the text of the MLATs at issue do not explicitly
preclude the government from using its discretion to lodge requests
on behalf of criminal defendants. Prosecutors have a duty to "act
in accordance with the obligations imposed on [them] as
. . . agent[s] of justice," id. at 246, and where practicable,
deploying the government's MLAT capabilities in such a manner would
be a just way of fulfilling those obligations.16 However, where,
16 In the rare event that a court does make a request for
information under an MLAT, the Department of Justice takes the
position that "[a] decision would be made on a case-by-case basis,"
and even if "the prosecutor is not persuaded that evidence abroad
-68-
as here, a criminal defendant makes no plausible showing that the
government could have secured evidence that is both material and
favorable to his defense, we have little difficulty concluding
that the prosecutors did not violate this duty.
VI. Conclusion
Accordingly, we affirm McLellan's convictions on all
counts.
Affirmed.
really exists or is needed, he or she may well ask the Department
to make the request anyway, in order to alleviate any questions or
concern the court may have on the matter." 102d Cong. 41 (1992).
-69-
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Opinion filed April 26, 2012
In The
Eleventh Court of Appeals
__________
No. 11-12-00093-CV
__________
IN RE CAMILLE WOODSIDE
Original Mandamus Proceeding
MEMORANDUM OPINION
Relator, Camille Woodside, has filed an original mandamus proceeding regarding an
order entered on March 7, 2012, by the 318th District Court of Midland County in Cause
No. FM-35,058 that required relator to appear for deposition prior to April 15, 2012, and to
produce various requested documents by March 30, 2012. Pursuant to TEX. R. APP. P. 52.10(b),
we granted relator’s motion for temporary stay in a written order entered on March 28, 2012.
Under the terms of the March 28 order, we ordered that all actions and proceedings relating to
the March 7 order be temporarily stayed pending further order of this court or final disposition of
this mandamus proceeding. We additionally requested a response in the March 28 order.
Upon reviewing the petition for writ of mandamus and response thereto, we have
determined that relator is not entitled to the relief sought. Pursuant to TEX. R. APP. P. 52.8(a), the
petition for writ of mandamus is denied. The temporary stay we entered on March 28, 2012, is
hereby dissolved.
April 26, 2012 PER CURIAM
Panel consists of: Wright, C.J.,
McCall, J., and Kalenak, J.
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391 S.E.2d 79 (1990)
Reznick CURRIE, a/k/a Reginald Curtis
v.
COMMONWEALTH of Virginia.
Record No. 1121-88-4.
Court of Appeals of Virginia.
April 17, 1990.
*80 Randal M. Reves, for appellant.
Leah A. Darron, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.
Present: BENTON, KEENAN and WILLIS, JJ.
BENTON, Judge.
Reznick Currie contends that his rape conviction should be reversed because (1) the trial judge erred in prohibiting defense counsel from discussing in closing argument to the jury the victim's post-incident sexual conduct, and (2) the Commonwealth failed to provide the defense with exculpatory information pursuant to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Finding no error, we affirm the conviction.
The evidence establishes that two weeks after the victim's boyfriend was killed in a construction accident, she invited Currie to become her roommate in order to help defray expenses. Currie moved into her apartment on December 2. The victim testified that on the evening of December 4, Currie forced her to engage in acts of sexual intercourse and oral sodomy.
On cross-examination, without objection from the Commonwealth, the victim responded affirmatively to defense counsel's question, "Did you sleep with anyone within a week [after] this rape?" Later, after the Commonwealth's redirect examination and a brief recess, the Commonwealth argued outside the presence of the jury that under Virginia's Rape Shield statute this evidence was irrelevant to the issue of consent and should not have been admitted.[1]*81 The trial judge refused to instruct the jury to disregard the evidence already admitted but ruled, over Currie's objection, that defense counsel was precluded from mentioning in closing argument the post-incident sexual conduct. Currie argues that evidence of the victim's post-incident sexual conduct with another individual was relevant to his claim of consent and that the defense should have been permitted to discuss such evidence in closing argument, especially in view of the Commonwealth's failure to make a timely objection to its introduction.
We conclude that the trial judge did not err in refusing to allow defense counsel to argue the post-incident sexual conduct evidence to the jury. The admissibility of evidence of the post-incident sexual conduct is governed by Code § 18.2-67.7, and is the very kind of evidence the statute renders inadmissible. Code § 18.2-67.7 prohibits the use of "general reputation or opinion evidence of the complaining witness's unchaste character or prior sexual conduct." The statute permits evidence of specific instances of prior sexual conduct in limited circumstances not applicable here. Prior sexual conduct is defined in Code § 18.2-67.10(5) as "any sexual conduct on the part of the complaining witness which took place before the conclusion of the trial, excluding the conduct involved in the offense alleged under this article."
Before the adoption of Code § 18.2-67.7, Virginia law prohibited the introduction of evidence of specific instances of the victim's sexual conduct with persons other than the accused when such evidence was offered solely to establish the probability of the victim's consent to sexual relations with the accused. Wynne v. Commonwealth, 216 Va. 355, 218 S.E.2d 445 (1975). The reason for the prohibition was that such evidence "injects collateral issues into the case which would divert the jury's attention from the real issue, the guilt or innocence of the accused." Id. at 356-57, 218 S.E.2d at 446. The enactment of Code § 18.2-67.7 codified this result. See Winfield v. Commonwealth, 225 Va. 211, 220-21, 301 S.E.2d 15, 21 (1983). Where, as here, the only purpose offered for introducing evidence of the victim's prior sexual conduct is to establish her propensity to engage in consensual sexual acts or to impeach her general credibility, such evidence is rendered inadmissible under the statute. Kneedler, Sexual Assault Law Reform in VirginiaA Legislative History, 68 Va.L. Rev. 459, 496 (1982). Currie's contention that the Commonwealth somehow put the victim's post-incident sexual conduct in issue by eliciting from her the fact of her boyfriend's death two weeks prior to the incident is without merit.
Although the Commonwealth failed to object in a timely manner and consequently allowed to be admitted evidence that the victim had slept with someone a week after the rape, the trial judge was not required to compound the error by allowing Currie to argue the inadmissible evidence to the jury. Furthermore, we find that Currie suffered no appreciable prejudice as a result of that ruling. Although Currie was precluded from raising the issue in closing argument, he had been allowed to impeach the victim's credibility with otherwise inadmissible evidence.
Currie next argues that the Commonwealth was required to provide the defense *82 with copies of the victim's statements. At a post-trial hearing, the evidence established that a report was written by the investigating officer who interviewed the victim at the hospital shortly after the assault. The officer's report appeared in the presentence report as part of the official version of the offense. Although the statements in the report mirrored the victim's trial testimony in most details, they varied as to their description of the precise sequence of events, the number of sexual acts which occurred, and the intensity of the physical assaults. Currie contends that these were inconsistent statements which could have been used to impeach the credibility of the victim's trial testimony and which should have been disclosed pursuant to his Brady motion. We conclude that the trial judge did not err in denying Currie a new trial.
As a general rule the accused is not entitled to obtain statements made by prospective Commonwealth witnesses to police officers in connection with the investigation or prosecution of a criminal case. Rule 3A:11(b)(2); Taitano v. Commonwealth, 4 Va.App. 342, 349, 358 S.E.2d 590, 593 (1987). In Brady v. Maryland, however, the Supreme Court held that "suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment." 373 U.S. at 87, 83 S.Ct. at 1196-1197; see also Stover v. Commonwealth, 211 Va. 789, 795, 180 S.E.2d 504, 509 (1971), cert. denied, 412 U.S. 953, 93 S.Ct. 3002, 37 L.Ed.2d 1006 (1973). Under Brady, the Commonwealth is required to deliver that evidence which is favorable to the accused and which, if suppressed, would deprive the accused of a fair trial. United States v. Bagley, 473 U.S. 667, 675, 105 S.Ct. 3375, 3379, 87 L.Ed.2d 481 (1985). The nondisclosed evidence is considered "material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different." Id. at 682, 105 S.Ct. at 3383. The Court is required to assess the reasonable probability of a different result in light of the totality of circumstances. Taitano, 4 Va.App. at 349, 358 S.E.2d at 594.
The investigating officer in this case testified at the post-trial hearing that when he interviewed the victim at 5:35 A.M. in the hospital, she "was very distraught and near hysterical." The officer further testified that, although his report reflected the events as the victim had relayed them he "had a great deal of difficulty understanding her" and he did not intend that his report would reflect her statements to him word for word. See Bellfield v. Commonwealth, 215 Va. 303, 307, 208 S.E.2d 771, 774 (1974), cert. denied, 420 U.S. 965, 95 S.Ct. 1359, 43 L.Ed.2d 444 (1975) (defense not permitted to impeach victim with police notes not shown to be accurate verbatim transcripts).
A comparison of the victim's statements compiled in the officer's report with the victim's trial testimony reveals that the victim's initial account to the officer is "consistent in every significant particular" with her trial testimony regarding Currie's conduct. Payne v. Commonwealth, 220 Va. 601, 607, 260 S.E.2d 247, 251 (1979). Both accounts were highly inculpatory and both unequivocally stated that Currie, whom she knew as Reginald Curtis, forced her to engage in repeated acts of sexual intercourse and oral sodomy, threatening to kill her if she did not comply. See Taitano, 4 Va.App. at 350, 358 S.E.2d at 594. Both accounts further recite a similar sequence of events, varying only in the level of detail of what is described. Although the victim's trial testimony omitted the description, present in the officer's report, that Currie "assaulted her, knocking her to the floor ... land[ing] on her stomach with a knee.... [and] hit[ting] her several times in the head with his fist" when she attempted to escape, the victim did testify that Currie "pushed [her] back away from the door. [She] fell down. Then Currie told [her] not to try it again or [she] was going to die." Moreover, any discrepancy between the number of sexual acts related in the officer's report and the victim's testimony at trial was rendered inconsequential by Currie's own pretrial statement corroborating the victim's trial *83 account that repeated acts of forced intercourse and oral sodomy occurred. See Payne, 220 Va. at 607, 260 S.E.2d at 251. Whatever minor discrepancies existed between the victim's trial testimony and the statements in the investigating officer's report, they had little impeachment value on the question of consent, which was the central issue in the case, and could not have affected the outcome of the trial.
For the foregoing reasons, the judgment of conviction is affirmed.
Affirmed.
NOTES
[1] Code § 18.2-67.7 provides:
A. In prosecutions under this article, general reputation or opinion evidence of the complaining witness's unchaste character or prior sexual conduct shall not be admitted. Unless the complaining witness voluntarily agrees otherwise, evidence of specific instances of his or her prior sexual conduct shall be admitted only if it is relevant and is:
1. Evidence offered to provide an alternative explanation for physical evidence of the offense charged which is introduced by the prosecution, limited to evidence designed to explain the presence of semen, pregnancy, disease, or physical injury to the complaining witness's intimate parts; or
2. Evidence of sexual conduct between the complaining witness and the accused offered to support a contention that the alleged offense was not accomplished by force, threat or intimidation or through the use of the complaining witness's mental incapacity or physical helplessness, provided that the sexual conduct occurred within a period of time reasonably proximate to the offense charged under the circumstances of this case; or
3. Evidence offered to rebut evidence of the complaining witness's prior sexual conduct introduced by the prosecution.
B. Nothing contained in this section shall prohibit the accused from presenting evidence relevant to show that the complaining witness had a motive to fabricate the charge against the accused. If such evidence relates to the past sexual conduct of the complaining witness with a person other than the accused, it shall not be admitted and may not be referred to at any preliminary hearing or trial unless the party offering same files a written notice generally describing the evidence prior to the introduction of any evidence, or the opening statement of either counsel, whichever first occurs, at the preliminary hearing or trial at which the admission of the evidence may be sought.
C. Evidence described in subsections A and B of this section shall not be admitted and may not be referred to at any preliminary hearing or trial until the court first determines the admissibility of that evidence at an evidentiary hearing to be held before the evidence is introduced at such preliminary hearing or trial. The court shall exclude from the evidentiary hearing all persons except the accused, the complaining witness, other necessary witnesses, and required court personnel. If the court determines that the evidence meets the requirements of subsections A and B of this section, it shall be admissible before the judge or jury trying the case in the ordinary course of the preliminary hearing or trial. If the court initially determines that the evidence is inadmissible, but new information is discovered during the course of the preliminary hearing or trial which may make such evidence admissible, the court shall determine in an evidentiary hearing whether such evidence is admissible.
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/10/2018 01:08 AM CDT
- 670 -
Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
Fredericks Peebles & Morgan LLP, appellee,
v. Fred Assam, appellant.
___ N.W.2d ___
Filed August 3, 2018. No. S-16-855.
1. Declaratory Judgments. An action for declaratory judgment is sui
generis; whether such action is to be treated as one at law or one in
equity is to be determined by the nature of the dispute.
2. Partnerships: Accounting: Appeal and Error. An action for a partner-
ship dissolution and accounting between partners is one in equity and is
reviewed de novo on the record.
3. Declaratory Judgments: Equity: Appeal and Error. In reviewing
an equity action for a declaratory judgment, an appellate court tries
factual issues de novo on the record and reaches a conclusion inde-
pendent of the findings of the trial court, subject to the rule that where
credible evidence is in conflict on material issues of fact, the review-
ing court may consider and give weight to the fact that the trial court
observed the witnesses and accepted one version of the facts over
another.
4. Partnerships. The interpretation of a partnership agreement presents a
question of law.
5. Appeal and Error. An appellate court independently reviews a lower
court’s rulings on questions of law.
6. Courts: Jurisdiction: States. In answering any choice-of-law question,
a court first asks whether there is any real conflict between the laws of
the states.
7. Jurisdiction: States. An actual conflict exists when a legal issue is
resolved differently under the law of two states.
8. Contracts. A contract written in clear and unambiguous language is not
subject to interpretation or construction and must be enforced according
to its terms.
9. Actions: Appeal and Error. An appellate court determines the nature of
an action from the relief sought.
- 671 -
Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
10. Breach of Contract: Damages. A suit for damages arising from breach
of a contract presents an action at law.
11. Trial: Expert Witnesses. The trier of fact is not bound to accept expert
opinion testimony.
12. Trial: Evidence. Evidence not directly contradicted is not necessarily
binding on the triers of fact, and may be given no weight where it is
inherently improbable, unreasonable, self-contradictory, or inconsistent
with facts or circumstances in evidence.
13. Witnesses: Testimony. The credibility of a witness is a question for the
trier of fact, and it is within its province to credit the whole of the wit-
ness’ testimony, or any part of it, which seemed to it to be convincing,
and reject so much of it as in its judgment is not entitled to credit.
14. Options to Buy or Sell: Valuation: Words and Phrases. “Fair market
value” is the price that a willing buyer would pay a willing seller, both
persons having reasonable knowledge of all relevant facts and neither
person being under compulsion to buy or to sell.
15. Options to Buy or Sell: Presumptions. The willing buyer-willing seller
rule presumes that a potential transaction is to be analyzed from the
viewpoint of a hypothetical buyer whose only goal is to maximize his or
her advantage.
16. Options to Buy or Sell. The willing buyer-willing seller rule is applied
using the viewpoint of an objective hypothetical buyer, rather than a
subjective buyer.
Appeal from the District Court for Douglas County: Shelly
R. Stratman, Judge. Affirmed.
David A. Domina, of Domina Law Group, P.C., L.L.O., for
appellant.
Daniel P. Chesire, Brian J. Brislen, and Cathy S. Trent-
Vilim, of Lamson, Dugan & Murray, L.L.P., and James J.
Banks, of Banks & Watson, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
Funke, JJ.
Funke, J.
This appeal concerns a determination of Fred Assam’s
ownership interest in the law firm of Fredericks Peebles &
Morgan LLP (FPM). After Assam voluntarily withdrew from
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
the firm, FPM filed suit seeking a declaration of the rights of
FPM and Assam under the governing partnership agreement
(Partnership Agreement). Following a bench trial, the district
court for Douglas County declared the fair market value of
Assam’s interest in FPM to be $590,000. For the reasons
stated herein, we affirm.
I. BACKGROUND
1. Partnership
FPM is a limited liability partnership composed of legal pro-
fessionals. FPM has a nationwide practice which specializes in
handling legal issues impacting Native American tribes, includ-
ing, but not limited to, facilitating interrelationships between
Native American tribes and the federal government, state gov-
ernments, and other tribes, as well as foreign governments and
foreign companies. FPM represents Native American tribes,
entities, and individuals, as well as banks and financial institu-
tions which deal with Native American tribes.
FPM was organized under the laws of the District of
Columbia, and its principal place of business is located in
Omaha, Nebraska. At the relevant time, FPM had dozens
of attorneys throughout offices in Sacramento, California;
Louisville, Colorado; Sioux Falls, South Dakota; Omaha,
Nebraska; Winnebago, Nebraska; Peshawbestown, Michigan;
and Washington, D.C.
As of October 1, 2014, FPM had five equity partners:
Thomas W. Fredericks, John M. Peebles, Lance G. Morgan,
Conly J. Schulte, and Assam. Fredericks, Peebles, Schulte, and
Assam each held a 23.25 percent interest in FPM, and Morgan
held the remaining 7 percent. FPM traditionally implemented
a team approach in servicing its clients’ accounts, but nearly
90 percent of FPM’s clients were brought in by Fredericks,
Peebles, Morgan, and Schulte. Assam, a financial attorney,
worked on accounts brought in by the other equity partners.
Only three clients followed Assam when he left FPM, two of
which maintained a relationship with FPM.
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Nebraska Supreme Court A dvance Sheets
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FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
In early 2014, FPM undertook a thorough financial review
in order to implement long-term planning. The partners
began to discuss changes to their compensation structure in
order to reward younger partners for bringing in new cli-
ents. Fredericks proposed that compensation should be based
on client generation, while others proposed that compensa-
tion should be based upon equity ownership. The partners
exchanged and refined proposals over a period of months,
and FPM ultimately arrived at a hybrid of the two compensa-
tion structures.
According to the testimony of Peebles, Assam had not kept
up to date on the various proposals and voiced concern about
only Fredericks’ initial proposal, which Assam felt negatively
impacted his compensation. As a result of his concerns, Assam
hired the accounting firm Eide Bailly LLP to perform a valua-
tion of his equity interest in FPM.
On the evening of October 2, 2014, Assam sent an email to
his partners in which he voluntarily resigned from FPM. In the
email, Assam advised, “As you are all aware, over the course
of the last few months, I have been under a personal attack
by . . . Fredericks.” Assam stated the compensation structure
Fredericks had proposed would “transfer complete control of
[FPM] over to [Fredericks]. This means the life of my family
and me will [sic] in complete control of a man who does not
care for me and, in fact, will apparently act with intent to only
to [sic] harm me.”
The following morning, Assam, whose office is located
in Sioux Falls, flew to Denver, Colorado, to attend a partner
meeting at the Louisville office, which had been scheduled
prior to Assam’s resignation email. During his flight, Assam
reviewed some of the more recent compensation structure
proposals and realized the documents he had relied on when
deciding to resign had significantly changed. At the meeting,
Assam told the partners he had made a mistake and wanted to
rescind his resignation and rejoin FPM. The partners declined
and formally voted to accept Assam’s resignation.
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Nebraska Supreme Court A dvance Sheets
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FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
The FPM partners then continued their meeting and, as part
of their ongoing financial review, addressed the agenda item
of how to treat approximately $10 million in old accounts
receivable. Many of FPM’s clients are sovereign under fed-
eral law and therefore may not be sued to collect on past-due
billing absent a waiver of sovereign immunity. FPM has a
practice of not requesting such a waiver from its clients so as
to not jeopardize client relationships. As a result, according to
the testimony of Morgan, FPM has a lower-than-average col-
lection rate.
FPM carried a significant amount of outstanding accounts
receivable for an extended period of time. At the partnership
meeting, FPM decided to write off as uncollectable approxi-
mately $10 million in old accounts receivable.
After Assam’s resignation, the partners made him an offer
of payment intended to represent the fair market value of
his equity interest as set out in the Partnership Agreement.
However, the two sides could not agree as to the value of
Assam’s interest.
In late 2014, FPM filed a declaratory judgment action
to determine the value of Assam’s interest. Assam filed an
answer and counterclaim for an accounting and fair valuation
of his interest in FPM, based on the Partnership Agreement.
Assam sought a money judgment and attorney fees. FPM filed
an amended complaint which asserted claims for breach of
contract, breach of fiduciary duty, fraud, constructive fraud,
rescission, disgorgement, and an accounting. Assam filed
an answer which denied such claims and stated affirma-
tive defenses.
At trial, FPM moved without objection to conform its plead-
ings to the adduced evidence in order to clarify that its sole
claim was for declaratory judgment as to the amount it owed
Assam for the fair market value of his ownership interest, as
provided under the Partnership Agreement. Assam clarified
that he maintained his counterclaim for an accounting, fair
valuation, and a money judgment, plus attorney fees.
- 675 -
Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
The Partnership Agreement is dated May 1, 2007, and was
signed by Fredericks, Peebles, Morgan, Schulte, and Assam
on August 9, 2008. The parties agree that the provision which
governs the determination of Assam’s equitable interest in
FPM is:
In the event any Equity Partner gives a notice of voluntary
withdrawal more than sixty months of July 1, 2003, such
withdrawing Equity Partner will receive an amount equal
to 100% of the fair market value of the Equity Partner’s
interest in the Partnership as of the date of such notice of
voluntary withdrawal, which amount will be paid out in
six equal monthly installments without interest.
2. Expert Testimony
The court heard valuation testimony from several expert
witnesses. FPM called William Brennan, a management con-
sultant for the legal profession. Assam called Chad Flanagan
and Jay Fullerton, of Eide Bailly. In addition, Assam called
Matthew Stadler as an expert witness. Assam himself also
opined as to valuation.
(a) Brennan
Brennan has worked for over a decade as a principal with
a law firm management consulting group. He testified that
in the past 25 years, he has consulted with over 500 firms of
all types and sizes. Prior to becoming a management consult
ant, Brennan worked as an accountant and auditor. Brennan’s
work experience includes serving as chief financial officer
and executive director for two law firms, one of which had
250 attorneys.
As a consultant, Brennan developed a specialty in law
firm mergers and acquisitions, which included performing firm
valuations. Over his career, he had performed about 25 firm
valuations. He previously testified in court seven times as an
expert in law firm valuation. He is published in the area of
valuation and is a frequent speaker on the issue of law firm
financial management.
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
Brennan spent over 100 hours on his valuation of FPM
and drafted a 48-page report. Brennan’s report demonstrated
several different business valuation approaches for compari-
son. Brennan testified that although market-based, asset-based,
and income-based approaches are each generally accepted, the
income approach is best for valuing law firms. Brennan stated
the market-based approach is not useful for valuing law firms,
because such businesses are privately owned and therefore a
firm’s private transaction data is not publicly available to be
used to compare value with other businesses in the market. As
for an asset-based approach, Brennan testified firm assets must
be adjusted down to their cash value in order to determine the
asset’s “net realizable value.” Without this adjustment, assets
such as encumbered assets and uncollectible accounts receiv-
able would be overvalued.
Brennan testified that the income approach has several
subsets, including the discounted cashflow approach and the
“capitalization of economic income” approach. Brennan’s
methodology focused on future cashflows and relied on 5
years of historical income statements which were adjusted
to normalize the income stream by removing nonrecurring
expenses and adding liabilities not present on income tax
forms. Brennan’s analysis considered economic environment
risks, government regulation risks, and risks specific to FPM
such as sustainability, infrastructure, and technological and
data security risks. Brennan employed the “Ibbotson Build-Up
Method” to determine an appropriate discount rate which
considered a risk-free rate, an equity premium, systemic
environmental risk unique to the legal industry, and spe-
cific risks unique to FPM such as aging partners generating
the majority of the client revenue and lower-than-average
collection rates, coupled with an inability to pursue legal
action against nonpaying clients. Brennan also emphasized
that certain factors limit the control and marketability of a
law firm, including that only attorneys can own law firms,
that lawyers cannot ethically restrict their ability to serve
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Nebraska Supreme Court A dvance Sheets
300 Nebraska R eports
FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
clients through the use of noncompete agreements, and that
most firms have partnership agreements which control com-
pensation and/or admission into the firm. In considering all
of these factors, Brennan applied a 60-percent discount to
Assam’s partnership interest. Brennan’s ultimate opinion was
a valuation of $590,000.
(b) Eide Bailly
Flanagan, the director of Eide Bailly’s business valuation
department, and Fullerton, a senior official in Eide Bailly’s
business valuation department, coauthored two reports regard-
ing the value of Assam’s interest. Their reports complied with
industry standards outlined by the “Statements on Standards
for Valuation Services” and the National Association of
Certified Valuation and Analysts. The first report was a calcu-
lation engagement in 2014, and the second report was a more
detailed valuation engagement in 2016. Between Flanagan and
Fullerton, approximately 50 hours were spent compiling the
second report.
Flanagan is a certified public accountant who is a member
of the American Institute of Certified Public Accountants.
Flanagan also holds the designation of being accredited in
business valuation. Fullerton holds a juris doctorate degree, a
master’s degree in business administration, and a bachelor of
science degree in economics with a minor in accounting.
In his practice, Flanagan performs between 150 and 200
business valuations per year. Fullerton testified he had per-
formed 300 business valuations in his career. Flanagan and
Fullerton performed business valuations for various indus-
tries including wholesale, retail, manufacturing, insurance,
real estate holding companies, restaurants, dental practices,
construction, and farming operations. Flanagan had performed
one law firm valuation, and Fullerton had not performed a law
firm valuation prior to this case. Neither had ever performed
financial consulting services for a law firm or had published
any scholarly articles in the area of law firm valuation.
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FREDERICKS PEEBLES v. ASSAM
Cite as 300 Neb. 670
Eide Bailly’s opinion also employed a buildup rate which
included industry risk and firm risk to reach a discount rate
of 4 percent. The opinion also incorporated a 10-percent
discount for lack of control as to nonoperating assets and
a 5-percent discount for lack of marketability, because the
Partnership Agreement provides a market for the sale of
those shares.
Flanagan admitted his valuation assumed that in a fair mar-
ket value analysis, FPM should be understood as the specific
hypothetical buyer of Assam’s interest. Fullerton admitted
this assumption was part of Eide Bailly’s scope of engage-
ment. In addition, Fullerton testified that Assam suggested
to Eide Bailly that the reference to fair market value in the
Partnership Agreement should equate to fair value. Fullerton
further testified that fair value is essentially the same thing as
fair market value without any discounts for lack of control or
lack of marketability.
Prior to commencing the valuation engagement, Assam’s
counsel sent a letter to Eide Bailly, dated April 28, 2016, which
indicated:
The District of Columbia statutes permit a partnership
agreement or a limited partnership agreement to spec-
ify buy-out terms. The [Partnership] Agreement in this
case uses the phrase “fair market value”. However, the
[Partnership] Agreement provides for a market within
[FPM] and its Equity Partners. This means the transaction
occurs at a fair price and on fair terms, not as if the sale
were to a stranger. The internal market assures retention
of client relationships, partnership identity, business con-
tinuity, and avoidance of startup costs and cash flow limi-
tations. It is . . . Assam’s view that these circumstances
require that “fair market value” be understood as the fair
value of the partner interest in the context of the market
created by the [Partnership] Agreement itself. This is, we
think, the same as “fair value” in model corporate and
business entity statutes.
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In their reports, Flanagan and Fullerton used an income
approach which utilized FPM’s average normalized annual
pretax revenue over a 4-year period. Eide Bailly also upwardly
adjusted the value of the partnership due to its having a
passthrough entity tax status. Flanagan testified that passthrough
tax status is, in effect, a capitalization of taxes saved because
FPM, as a limited liability partnership, is not subject to corpo-
rate taxation.
According to Flanagan’s testimony, Eide Bailly’s calcula-
tion engagement in 2014 concluded the value of Assam’s
interest in FPM to be $3,420,000. Eide Bailly’s valuation
engagement in 2016, using more recent revenue streams,
concluded the value of Assam’s interest to be $3,120,000.
Eide Bailly’s valuation accounted for FPM’s nonoperating
assets, such as an interest in real estate and dormant accounts
receivable.
(c) Stadler
Stadler was engaged by Assam to review and compare the
fair market value opinions of Brennan, Eide Bailly, and Assam.
Stadler is a certified public accountant who holds a juris
doctorate and a master’s degree in professional accountancy.
Stadler also has an accreditation in business valuation. Stadler
has never worked in a law firm and has valued only one other
law firm.
At Assam’s request, Stadler examined only Brennan’s valu-
ation report, Eide Bailly’s calculation report, and Assam’s
calculation report, and no other evidence. In doing so, Stadler
did not develop an opinion as to value. Stadler identified defi-
ciencies in each of the reports he reviewed. In the Eide Bailly
report, Stadler opined that the failure to include 2010 data
was a concern, that long-term growth rate was too high, and
that the capitalization rate was too low. In regard to Brennan’s
report, Stadler found fault in the capitalization rate as being
too high and the discount for lack of control and lack of mar-
ketability as being too high. Ultimately, Stadler concluded
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that Brennan’s opinion was understated by $1,235,000 and
that Eide Bailly’s opinion was overstated by $1,275,000.
Stadler fundamentally disagreed with Assam’s approach and
described Assam’s valuation as not being credible “in any
respect” and “ridiculous.”
(d) Assam
Assam is a financial attorney whose practice includes busi-
ness valuation matters. Assam valued his interest in FPM
at $4,877,850. Assam testified his valuation included his
23.25-percent share of the $10 million in written-off accounts
receivable. Assam encouraged the court to reject his experts’
valuations and adopt his own.
3. Trial Court Judgment
In its written order, the court found the proper remedy was
declaratory judgment; it dismissed Assam’s counterclaim and
declined to award attorney fees. In doing so, the court found
FPM’s decision to write off approximately $10 million in old
accounts receivable was not done in bad faith or with an intent
to harm Assam, because the writeoff equally affected all equity
partners and was set on the agenda for the partners’ meeting
prior to Assam’s notice of resignation.
The court also determined, based on the language of the
Partnership Agreement, that Assam’s interest was the fair mar-
ket value of his equity partnership interest in FPM as of the
date of his notice of voluntary withdrawal, October 2, 2014.
The court further found Assam’s valuation opinion was
“unreliable and not credible.” The court accepted Assam’s
testimony that the court should not adopt the opinions offered
by Eide Bailly or Stadler and found that Assam attempted to
“influence in an upward manner” Eide Bailly’s conclusion as to
the fair market value of Assam’s interest. The court concluded
that the April 28, 2016, letter from Assam’s counsel to Eide
Bailly showed that Eide Bailly’s “calculation engagement”
report included an incorrect assumption that FPM must be
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the hypothetical buyer of Assam’s interest under a fair market
value analysis.
The court declined to adopt Eide Bailly’s opinion, because
Flanagan and Fullerton collectively had valued a law firm on
only one other occasion; neither had ever worked at a law firm,
been a chief financial officer for a law firm, or provided finan-
cial consulting services to a law firm; and neither had pub-
lished any scholarly articles in the area of law firm valuation.
The court noted that Stadler also lacked comparable expertise
in law firm valuation for these same reasons.
The court found that the testimony of Brennan was cred-
ible; Brennan’s 60-percent lack-of-control and marketability
discount was credible; Brennan’s discounts were appropriate
as part of a “fair market value” analysis, because they helped
replicate a public marketplace for a private entity; Brennan’s
discount analysis was consistent with the fair market value
standard of a hypothetical buyer’s ability to convert the owner-
ship interest to cash and control the investment; and Brennan
was the only expert to weigh risk factors which were credible
and relevant to determining the fair market value test of a fully
informed hypothetical willing buyer’s desire to maximize his
economic interest.
The court found that the Partnership Agreement was not
ambiguous; the Partnership Agreement did not contain a
choice-of-law provision; there was no conflict with Nebraska
law and District of Columbia law with regard to interpreta-
tion of a contract; if there were a conflict, Nebraska law
would control due to Nebraska’s interest in and contacts with
the dispute; and neither party had breached the Partnership
Agreement.
The court found and declared that the fair market value of
Assam’s equity partner interest in FPM is $590,000; pursu-
ant to the Partnership Agreement, FPM may pay Assam this
amount; and Assam was not entitled to a money judgment or
attorney fees.
Assam appealed, and we moved the case to our docket.
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II. ASSIGNMENTS OF ERROR
Assam assigns, restated, that the district court erred by (1)
failing to apply District of Columbia law; (2) finding FPM
did not breach the Partnership Agreement; (3) adopting the
opinion of FPM’s expert, Brennan, whose valuation opinion
excluded approximately $10 million in old accounts receiv-
able, as well as the value of real estate, automobiles, tenant
improvements, and equipment; and (4) failing to award Assam
a money judgment and attorney fees.
III. STANDARD OF REVIEW
[1-3] An action for declaratory judgment is sui generis;
whether such action is to be treated as one at law or one in
equity is to be determined by the nature of the dispute.1 An
action for a partnership dissolution and accounting between
partners is one in equity and is reviewed de novo on the
record.2 In reviewing an equity action for a declaratory judg-
ment, an appellate court tries factual issues de novo on the
record and reaches a conclusion independent of the findings of
the trial court, subject to the rule that where credible evidence
is in conflict on material issues of fact, the reviewing court
may consider and give weight to the fact that the trial court
observed the witnesses and accepted one version of the facts
over another.3
1
Christiansen v. County of Douglas, 288 Neb. 564, 849 N.W.2d 493
(2014); Vlach v. Vlach, 286 Neb. 141, 835 N.W.2d 72 (2013); Lone Cedar
Ranches v. Jandebeur, 246 Neb. 769, 523 N.W.2d 364 (1994).
2
Robertson v. Jacobs Cattle Co., 288 Neb. 846, 852 N.W.2d 325 (2014); In
re Dissolution & Winding Up of KeyTronics, 274 Neb. 936, 744 N.W.2d
425 (2008); Bass v. Dalton, 213 Neb. 360, 329 N.W.2d 115 (1983). See
Darr v. D.R.S. Investments, 232 Neb. 507, 441 N.W.2d 197 (1989).
3
Gast v. Peters, 267 Neb. 18, 671 N.W.2d 758 (2003); Lake Arrowhead v.
Jolliffe, 263 Neb. 354, 639 N.W.2d 905 (2002). See Badran v. Bertrand,
214 Neb. 413, 334 N.W.2d 184 (1983).
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[4,5] The interpretation of a partnership agreement presents
a question of law.4 An appellate court independently reviews a
lower court’s rulings on questions of law.5
IV. ANALYSIS
1. No Conflict of Laws
In Assam’s first assignment of error, he claims that the dis-
trict court erred by determining that no conflict in substantive
law existed between District of Columbia law and Nebraska
law, as pertaining to the governing effect of the Partnership
Agreement. Assam argues the district court erred when it
concluded that if there were a conflict of laws, Nebraska
law would control over District of Columbia law, because of
Nebraska’s pertinent interest in the subject matter. Assam fur-
ther argues that the choice of law impacts three legal issues,
including what constitutes a breach of duty by FPM to Assam,
what is “fair market value,” and attorney fees.
As we will discuss in more detail later, Assam did not
properly raise a claim for breach of contract; as a result, any
claim that the laws of the District of Columbia differ from
the laws of the State of Nebraska on breach of contract is
without merit. In addition, since we find that Assam was not
entitled to attorney fees, any difference of law on that issue
is irrelevant.
The only remaining issue is the determination of fair mar-
ket value of Assam’s partnership interest. The record indicates
that FPM was organized as a Washington, D.C., limited liabil-
ity partnership. In addition, the Partnership Agreement does
not contain a specific choice-of-law provision, and District of
Columbia law does not allow for such a provision.6
4
Robertson, supra note 2; Shoemaker v. Shoemaker, 275 Neb. 112, 745
N.W.2d 299 (2008).
5
Id.
6
D.C. Code Ann. § 29-701.07(b)(2) (West, Westlaw through 2013
legislation).
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As our analysis will show, the determination of fair market
value is controlled by the Partnership Agreement and no real
conflict exists between the laws of the District of Columbia
and the laws of the State of Nebraska with respect to the con-
trolling effect of partnership agreements.
[6,7] In answering any choice-of-law question, a court first
asks whether there is any real conflict between the laws of the
states.7 An actual conflict exists when a legal issue is resolved
differently under the law of two states.8 We agree with the
district court when it found there was no conflict between
District of Columbia and Nebraska substantive law governing
the determination of Assam’s equity interest.
Under Nebraska’s Uniform Partnership Act of 1998,9 FPM
is a “foreign limited liability partnership,” because FPM was
formed under the laws of the District of Columbia.10 Section
67-457 provides that the law under which a foreign limited
liability partnership is formed governs relations among the
partners and between the partners and the partnership.
Under the laws of the District of Columbia, relations among
the partners and between the partners and the partnership are
governed under the controlling partnership agreement.11 In
addition, under Nebraska law, relations among the partners
and between the partners and the partnership are also governed
by the partnership agreement.12 Thus, whether the laws of the
District of Columbia or the laws of the State of Nebraska are
applied, the terms of the partnership agreement are controlling.
As a result, no actual conflict of laws exists.
7
O’Brien v. Cessna Aircraft Co., 298 Neb. 109, 903 N.W.2d 432 (2017).
8
Id.
9
Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2009 & Cum. Supp. 2014).
10
See, § 67-402(4); D.C. Code Ann. § 29-701.06 (West, Westlaw through
2013 legislation).
11
D.C. Code Ann. § 29-701.07(a).
12
§ 67-404.
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Assuming without deciding that the district court erred
when it determined that if there were a difference in the
law of the State of Nebraska and the law of the District of
Columbia, Nebraska law would apply exclusively, any such
error was harmless.
[8] The Partnership Agreement is clear and unambigu-
ous. A contract written in clear and unambiguous language
is not subject to interpretation or construction and must be
enforced according to its terms.13 Therefore, the terms of the
Partnership Agreement provide the legal framework for our
analysis.
2. No Breach of Contract
In Assam’s second assignment of error, he claims that
the district court erred by failing to find FPM breached the
Partnership Agreement. We find no merit to this assignment
of error.
[9,10] Assam did not assert an independent claim for breach
of contract, but merely asserted a breach of contract claim as
an affirmative defense to FPM’s amended complaint. At the
commencement of trial, Assam clarified that he was seeking
only an accounting and a fair valuation of his interest in FPM.
We determine the nature of an action from the relief sought.14
Even though Assam’s first two assignments of error advance
breach of contract arguments, at oral argument, Assam empha-
sized to this court that this is a proceeding in equity. A suit for
damages arising from breach of a contract presents an action
at law.15
We agree with the district court that this is a declaration of
rights proceeding. The Partnership Agreement does not specify
a particular amount due to Assam or a time period for payment.
13
Frohberg Elec. Co. v. Grossenburg Implement, 297 Neb. 356, 900 N.W.2d
32 (2017).
14
See Elting v. Elting, 288 Neb. 404, 849 N.W.2d 444 (2014).
15
Id.
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Instead, the Partnership Agreement requires that FPM pay
Assam “an amount equal to 100% of the fair market value” of
his 23.25-percent interest. The relief sought by both parties is
the determination of the “fair market value” of Assam’s inter-
est. Consistent with Assam’s view, we find the nature of the
dispute to be one in equity, and as a result, this assignment of
error is without merit.
3. District Court Did Not Err
In Determining Assam’s
Equity Interest
In Assam’s third assignment of error, he claims the district
court erred when it adopted the opinion of Brennan, because
Brennan’s opinion did not account for FPM’s nonoperating
assets. Assam claims the court erred by assigning no value to
approximately $10 million in uncollectable accounts receivable
and FPM’s real estate investments. We find no merit to this
assignment of error.
(a) Conclusions of Law
[11,12] The trier of fact is not bound to accept expert
opinion testimony.16 The determination of the weight that
should be given expert testimony is uniquely the province
of the fact finder.17 Evidence not directly contradicted is not
necessarily binding on the triers of fact, and may be given
no weight where it is inherently improbable, unreasonable,
self-contradictory, or inconsistent with facts or circumstances
in evidence.18
[13] The credibility of a witness is a question for the trier
of fact, and it is within its province to credit the whole of the
16
Green v. Box Butte General Hosp., 284 Neb. 243, 818 N.W.2d 589 (2012).
See Lewison v. Renner, 298 Neb. 654, 905 N.W.2d 540 (2018).
17
Pohlmann v. Pohlmann, 20 Neb. App. 290, 824 N.W.2d 63 (2012).
18
Marston v. Drobny, 166 Neb. 747, 90 N.W.2d 408 (1958). See Maloney v.
Kaminski, 220 Neb. 55, 368 N.W.2d 447 (1985).
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witness’ testimony, or any part of it, which seemed to it to be
convincing, and reject so much of it as in its judgment is not
entitled to credit.19
[14-16] Under the laws of the District of Columbia, “fair
market value” is the price that a willing buyer would pay a
willing seller, both persons having reasonable knowledge of
all relevant facts and neither person being under compulsion to
buy or to sell.20 The willing buyer-willing seller rule presumes
that a potential transaction is to be analyzed from the view-
point of a hypothetical buyer whose only goal is to maximize
his or her advantage.21 The willing buyer-willing seller rule is
applied using the viewpoint of an objective hypothetical buyer,
rather than a subjective buyer.22
(b) Analysis
The evidence of fair market value included the opinions of
Brennan, Assam, Flanagan, Fullerton, and Stadler. Each expert
posited a different fair market value, and each based his opin-
ion on different factors. Just as the trial court did, we too find
that there is evidence in conflict on material issues of fact con-
cerning the appropriate considerations in valuing Assam’s fair
market value interest. As a result, under our de novo review,
we consider and give weight to the fact that the trial court
observed the witnesses and accepted one version of the facts
over another.23
In reaching his opinion that the fair market value of his own-
ership interest was $4,877,850, Assam used the asset approach,
the income approach, and the market approach. Assam testified
19
General Fiberglass Supply v. Roemer, 256 Neb. 810, 594 N.W.2d 283
(1999); In re Estate of Ross, 19 Neb. App. 355, 810 N.W.2d 435 (2011).
20
Adkins Ltd. Ptp. v. O Street Management, 56 A.3d 1159 (D.C. 2012).
21
Eisenberg v. C.I.R., 155 F.3d 50 (2d Cir. 1998); Estate of Curry v. United
States, 706 F.2d 1424 (7th Cir. 1983).
22
See Estate of Bright v. United States, 658 F.2d 999 (5th Cir. 1981).
23
See cases cited supra note 3.
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that in his practice, he routinely used business valuations to
assist his clients in obtaining financing and would retain indi-
viduals to perform the business valuations. In determining how
to prepare his valuation, Assam testified that he relied upon
“some articles” that he read, including one by the American
Bar Association and one from “Inc. Magazine.”
In preparing his valuation, Assam included in the asset
approach real estate, automobiles, tenant improvements, equip-
ment, and $10 million of old accounts receivable. For the
income approach, he simply added 2013 income figures together
with estimated 2014 income figures and divided the sum by
two. For the market approach, he determined an average annual
gross revenue (the amount determined in the income approach)
and multiplied it by two. Ultimately, he determined amounts
for each valuation method, added the values together, divided
the total by three, and multiplied the amount by his partnership
interest. Nothing in the record supports the valuation process
used by Assam. In fact, Assam’s own expert, Stadler, testified
that Assam’s valuation was “ridiculous.”
In regard to Eide Bailly’s opinion as to fair market value,
both Flanagan and Fullerton testified that it was premised
upon FPM’s being the hypothetical buyer. However, as men-
tioned above, fair market value is the price that a willing buyer
would pay a willing seller. A willing buyer is presumed to be a
hypothetical buyer whose only goal is to maximize his or her
advantage. The willing buyer is considered from the viewpoint
of an objective hypothetical buyer, rather than a subjective
buyer. In using FPM as the willing buyer, Eide Bailly’s opinion
failed to fully consider discounts for lack of control and lack
of marketability.
In addition, Eide Bailly employed 4 years of income instead
of 5 years of income. In doing so, Eide Bailly disregarded
2010 income based on the determination that 2010 income
was lower than the other years and was nonrepresentative of
FPM’s regular annual income. However, both Brennan and
Stadler testified that using the income figures over a 5-year
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period was preferred over using income figures over a 4-year
period. Even Flanagan testified that, typically, they use a sam-
ple of 5 years of income. Additionally, Eide Bailly annualized
2014 income, because they did not have final figures for that
year when preparing the report in May 2016. However, the
record indicates that the 2014 income figures were finalized
in March 2015.
Eide Bailly also adjusted the value of FPM due to having a
“pass-through entity tax status.” However, Flanagan testified
that this passthrough status had not been accepted by the U.S.
Tax Court.
Further, though Flanagan and Fullerton are in the profession
of preparing business valuation, neither had significant experi-
ence in valuating law firms. Prior to their engagement with
Assam, Flanagan had performed only one law firm valuation
and Fullerton had performed no law firm valuations.
Each of these decisions by Eide Bailly upwardly impacted
its valuation. As a result, we agree with the district court that
the valuation determined by Eide Bailly of $3,120,000 does
not accurately reflect the value of FPM as of October 2, 2014.
Albeit for different reasons, Assam also testified that Eide
Bailly’s opinion should not be followed by the court.
In regard to Stadler’s testimony that Brennan’s opinion
was understated by $1,235,000 and that Eide Bailly’s opinion
was overstated by $1,275,000, Assam testified that the court
should not adopt Stadler’s analysis. In addition, the record
indicates that Stadler has limited experience in valuating law
firms, Stadler testified that Brennan was more experienced in
that particular field, and Stadler examined only the reports of
the other experts and no other evidence. Further, Stadler used
an industry risk premium for companies having much larger
revenues than FPM; he used a lower specific company risk
premium without reviewing the Partnership Agreement or any
financial documents of FPM; and he used the passthrough
entity tax status, which has not been widely adopted by the
U.S. Tax Court. All of these decisions increased his “opinion”
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of FPM’s fair market value. Lastly, Stadler included approxi-
mately $2.5 million of goodwill, which from the evidence is
attributable to personal goodwill of the remaining partners as
opposed to goodwill of FPM, resulting in an overstating of
the fair market value by $573,000. As a result, we agree that
Stadler’s determination of value was not accurate.
In regard to Brennan’s opinion, the trial court noted his
vast experience in valuating law firms, including working
for a law firm management consulting group dealing with
over 500 law firms, working as an accountant and auditor,
and serving as chief financial officer and executive direc-
tor for two law firms. At the time of trial, Brennan had also
performed approximately 25 law firm valuations and had
testified in court seven times as an expert in law firm valu-
ation. Ultimately, the trial court expressly based its findings
on a credibility determination which accepted Brennan’s ver-
sion of the facts over Assam’s and Eide Bailly’s. The court
found Brennan’s testimony credible and controlling, because
he implemented an approach which valued Assam’s inter-
est in the context of a market. The court therefore found the
60-percent discount for lack of control and marketability
assigned by Brennan to be credible, because of the limitations
presented by Assam’s minority interest in a law firm with
a specialized practice area and equity partnership makeup
such as FPM. The court found that Assam and Eide Bailly
sought to remove the need for a market from the fair market
value analysis dictated by the Partnership Agreement and that,
therefore, their small discounts for lack of control and market-
ability were not credible.
The record indicates that Brennan considered several dif-
ferent business valuation approaches for comparison, includ-
ing market-based, asset-based, and income-based approaches.
Brennan was able to articulate why the income approach was
the most suitable valuation method. Brennan used income fig-
ures for 5 years as opposed to 4 years, and he did not apply the
passthrough entity tax status calculation. Brennan employed
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the “Ibbotson Build-Up Method” to determine an appropriate
discount rate, and his analysis considered economic environ-
ment risks, government regulation risks, and risks specific to
FPM such as sustainability, infrastructure, and technological
and data security risks. Though Brennan’s capitalization and
discount rates were significantly higher than those propounded
by the other experts, Brennan was able to articulate why law
firms should be valued differently from other professional
services industries. We therefore agree with the district court
that Brennan’s opinion of value as to FPM is the most appro-
priate value.
In regard to FPM’s decision to write off approximately
$10 million in old accounts receivable, the trial court found
that it was not done in bad faith or with an intent to harm
Assam. Specifically, the court noted that the writeoff equally
affected all equity partners.
At trial, Peebles testified that the accounts receivable were
“years old” and that the decision to write off the receivables
was not made suddenly but was part of an ongoing analysis
of compensation, partner continuity, personnel, and finances.
He further testified that each of the partners was charged with
the responsibility to review the accounts he was associated
with and to make a determination as to collectability. Morgan
testified that FPM’s collection rate was close to 70 percent.
Assam testified that the aggregate of the accounts receivable
was in excess of $15 million, of which $10.8 million was over
120 days old.
Assam also testified that he was not part of any decision
to write off the accounts receivable. Brennan testified that the
longer a receivable ages, the less likely it will be collected
in full, and that as they continue to age, especially beyond a
year, it is unlikely that a firm would collect any such receiv-
able. Brennan also testified that the partners made a specific
determination for each of the receivables to be written off,
that some of the accounts were 4 to 5 years old, and that
the partners determined that nothing more could be done to
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collect the accounts. As a result, Brennan opined that the
uncollectable accounts receivable were appropriately written
off, because that was a correct reflection of the “net realiz-
able value” of the assets. Even Eide Bailly’s valuation report
indicated that nearly $9 million in accounts receivable was
likely uncollectable.
Despite Assam’s testimony that the writing off of accounts
receivable was not discussed in 2014, he also testified that
the subject of the writeoff was on the agenda for the partners’
meeting prior to the night he sent his notice of withdrawal. In
addition, the majority of FPM’s clients were Native American
tribes and therefore entitled to sovereign immunity, prevent-
ing FPM from bringing suit to collect on unpaid legal fees. As
a result, we agree with the district court that the writeoff of
accounts receivable was not improper.
Finally, Assam contends that the trial court failed to apply
any value for the assets of FPM, including the building and
the vehicles. However, all of the experts, with the exception
of Assam, testified that the asset approach was not the best
method to value FPM, due to the absence of significant capital.
The income approach adopted by the trial court took into con-
sideration FPM’s past and present revenue stream and deter-
mined an appropriate fair market value for it.
We agree with the trial court that Brennan’s testimony is
persuasive and controlling. Based upon our de novo review, we
find no merit to this assignment of error.
4. Failure
Award Money Judgment
to
Attorney Fees
and
Because we find no error in the district court’s ruling that
FPM did not breach the Partnership Agreement, Assam is not
entitled to a money judgment. Though a court may grant a
money judgment as consequential relief in a declaratory judg-
ment action,24 FPM was the entity seeking the declaratory
24
See Hoiengs v. County of Adams, 245 Neb. 877, 516 N.W.2d 223 (1994).
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relief. In its pleadings, FPM did not seek a money judgment.
Only Assam sought a money judgment, which was part of his
claim for breach of contract. Having failed to prove the ele-
ments of a breach of contract, Assam is not entitled to a money
judgment. Consequently, the district court did not err in declin-
ing to award him a money judgment.
In regard to Assam’s request for attorney fees, the Partnership
Agreement allows for attorney fees for any prevailing party
who was required to institute an action or proceeding to
enforce any term or provision of the Partnership Agreement.
However, because we find no merit to Assam’s claim that FPM
breached the Partnership Agreement or that the district court
erred by adopting the valuation opinion of Brennan, Assam
was not a prevailing party. The district court did not err in
refusing to award Assam attorney fees.
V. CONCLUSION
For the foregoing reasons, we affirm the order of the
district court which declared Assam’s interest in FPM to be
$590,000, and that FPM should pay Assam such sum accord-
ing to the terms of the Partnership Agreement.
A ffirmed.
K elch, J., not participating in the decision.
Wright, J., not participating.
| {
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697 F.2d 297
Speightv.Harris
79-2194
UNITED STATES COURT OF APPEALS Second Circuit
9/7/82
1
E.D.N.Y.
AFFIRMED
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} |
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 06-14496 MAY 14, 2007
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 05-60329-CR-JIC
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
CATHLEEN PATTERSON,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(May 14, 2007)
Before MARCUS, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
Cathleen Patterson appeals her convictions, imposed after a jury verdict, and
151-month sentence for conspiracy to possess with the intent to distribute one
kilogram or more of heroin, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A), and
attempt to possess with intent to distribute one kilogram or more of heroin, in
violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A), and 846. On appeal, Patterson
raises three claims. First, she argues that the evidence did not support the district
court’s “deliberate avoidance” jury instruction. Second, she asserts the district
court violated her Sixth Amendment rights during jury deliberations by improperly
responding to the jury’s question concerning the amount of heroin involved in the
underlying offenses. Finally, Patterson challenges the district court’s denial of a
minor-role reduction at sentencing. After thorough review of the record and
careful consideration of the parties’ briefs, we affirm.
I.
We review jury instructions de novo to determine whether they misstate the
law or mislead the jury to the prejudice of the objecting party. United States v.
Chandler, 996 F.2d 1073, 1085 (11th Cir. 1993). “We will not reverse a
conviction unless we find that issues of law were presented inaccurately or the
charge improperly guided the jury in such a substantial way as to violate due
process.” United States v. Perez-Tosta, 36 F.3d 1552, 1564 (11th Cir. 1994).
Ordinarily we review a court’s response to a jury question for an abuse of
discretion. United States v. Wright, 392 F.3d 1269, 1279 (11th Cir. 2004).
However, where, as here, an appellant presents different arguments on appeal
2
regarding why the district court’s action was improper, our review is for plain
error. Id. “To demonstrate plain error, [Patterson] must show: (1) an error; (2) that
is plain; (3) that affects the defendant’s substantial rights. If the defendant satisfies
those three prongs, we may then employ our discretion to note that error only if it
seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” Id. at 1279-80 (internal citation and quotation marks omitted).
We review a district court’s factual determination regarding whether a
defendant is eligible for a reduction for role in the offense for clear error. United
States v. De Varon, 175 F.3d 930, 934 (11th Cir. 1999) (en banc).
II.
The relevant facts are these. On December 22, 2005, Patterson and
codefendants Lizza Cepeda, Maritza Rivera, and Rubby Rios, were charged in a
multi-count indictment arising out of their involvement in smuggling heroin, while
traveling on cruise ships, from Aruba to Port Everglades in Fort Lauderdale,
Florida. Patterson was charged with the following crimes: (1) conspiring to
possess with the intent to distribute one kilogram or more of heroin, in violation of
21 U.S.C. §§ 841(a)(1), (b)(1)(A), and 846 (Count 1); and (2) attempting to
possess with the intent to distribute one kilogram or more of heroin, in violation of
21 U.S.C. §§ 841(a)(1), (b)(1)(A), and 846 (Count 5). After initially pleading
3
guilty, pursuant to a plea agreement, Patterson withdrew her plea and the case
proceeded to a jury trial.
Prior to trial, the government submitted a motion and supporting
memorandum of law requesting that the district court give a jury instruction on
“deliberate ignorance” or “conscious avoidance.” The government argued that
because there was evidence of both actual knowledge and deliberate ignorance, it
should be allowed to pursue both theories. The government also filed a Rule
404(b) Notice of Intent to offer extrinsic-act evidence.
During the trial, Special Agent Selwyn Smith, of the Immigration and
Customs Enforcement (“ICE”), testified that in December 2005, he and other law
enforcement agents boarded a cruise ship that had just arrived at Port Everglades
after having traveled to Aruba. Their purpose was to perform random customs
searches for illegal narcotics. During their search of the room occupied by
Patterson’s codefendants, Maritza Rivera and Lizza Cepeda, the agents discovered
heroin hidden within various personal items, including perfume bottles, sandals,
pants, and a CD case. Subsequent laboratory analysis revealed that the net weight
of the heroin totaled 3.1 kilograms.
After Rivera and Cepeda were read their Miranda rights, they told the agents
that a man named “Carlos,” who lived in Colombia, had paid for their cruise to
4
Aruba where they obtained heroin from a man named “Mauricio.” They had been
promised $10,000 each for transporting the heroin into the United States. They
both agreed to cooperate with law enforcement and to conduct a controlled
delivery of the heroin in the South Florida area. Rivera subsequently placed calls
to Carlos and Mauricio, indicating that she and Cepeda were fighting, and that they
needed someone to pick up the drugs soon. Carlos told Rivera to call “La Mona,”
who later was identified as co-defendant Rios, to arrange for a pick-up.
Thereafter, an undercover agent, acting as Cepeda, called Rios, who said she
would come to a Miami hotel and transport Cepeda and the drugs to the New
York/New Jersey area, where Cepeda could secure her $10,000 payment for the
smuggling job. Defendant Patterson drove Rios to the Miami hotel where the
undercover agent had checked into a room. Patterson waited in her car in the
parking lot while Rios met with the undercover agent in the hotel room. After
entering the room, Rios inspected the contents of a bag the undercover officer gave
to her. As part of the controlled buy, law enforcement had filled the bag with items
containing fake heroin. As Rios pulled the items out of the bag, law enforcement
entered the room and arrested her.
Patterson, who was still waiting in her car in the parking lot, also was
arrested. In Patterson’s car, the arresting officers discovered car rental documents,
5
suitcases with clothes, and a heat sealing machine. The rental documents indicated
that Patterson had rented the car at Miami International Airport on the same day
that the meeting at the hotel had been arranged. The agents also discovered a
Western Union money transfer, in the amount of $920, payable to Patterson, and
another, in the amount of $900, payable to Rios.
When she was arrested, Rios agreed to cooperate with law enforcement and
admitted that she had taken three cruises, two of which entailed smuggling drugs
into the United States. Agents learned from cruise-line records that Patterson had
purchased the tickets for Rios’s second cruise, and, immediately after the cruise,
Patterson had rented a car for 10 days and drove it over 3,000 miles. Patterson also
had purchased a hotel room in New Jersey three days after she rented the car, and
15 phone calls were made to “Consuelo’s” phone number from the hotel room.
The cruise-line records also indicated that in September 2005, Rios and Patterson
went on another cruise to Aruba.
Special Agent Loni Forgash, the undercover ICE agent who posed as Cepeda
during the investigation, testified that when she met with Rios in the hotel room
prior to Rios’s arrest, Rios told her not to be nervous because the most difficult
part of the drug smuggling scheme -- getting through the Port -- was over. Rios
also said that she and “this other lady [who] always traveled together have done
6
this in the past and . . . that on this trip they were actually going to get the money --
that we were going to get the money as soon as we arrived in New York.”
The government also presented the testimony of codefendants Cepeda and
Rio. Cepeda testified that during the December 2005 cruise, she and Rivera had
attended a meeting with Mauricio at a McDonald’s in Aruba, at which time he gave
them bags containing the heroin. They were told that they would receive
instructions from Carlos once the cruise was over, and that they were going to be
paid between $8,000 and $10,000 for the trip.
Rios testified that she had known Patterson for almost three years, during
which they had taken cruises in September 2004, April 2005, and September 2005.
When Rios met Patterson, “Carlos” had asked her (Rios) to recruit other people to
participate in the drug smuggling conspiracy. Patterson was an appealing recruit
because of her looks and the fact that she was American and used a wheelchair,
thus allowing her to enter the country without being searched. Rios characterized
Patterson’s wheelchair-bound status as a “big plus.” Rios approached Patterson
and asked her to come to Aruba to meet Mauricio. Patterson purchased the tickets
for the September 2004 cruise with her credit card, and “Carlos” reimbursed her.
When the two women arrived in Aruba, they met Mauricio at a McDonald’s, and
he took them to his apartment where he told them that on future trips, they would
7
receive several items from him, including perfumes, shoes, and cameras. Rios
remembered Patterson asked Mauricio whether he would pay for lawyers if there
was a problem.
After the initial meeting with Mauricio, Patterson agreed to the plan and told
Rios that she was comfortable going on the April 2005 cruise because she was sick
(and in a wheelchair), and, therefore, they would “always go first.” Patterson made
the travel arrangements, and, once in Aruba, they again met Mauricio at the
McDonald’s and went to his apartment where he gave them shoes, a purse, and
perfumes, all of which contained drugs. Rios and Patterson put the items in bags
and hung them from Patterson’s wheelchair. When they went through customs at
Port Everglades, they went to a special elevator and were not searched because
Patterson was in a wheelchair. They then traveled to New Jersey where Rios
delivered the drugs. The next day, “Consuelo” met Rios in the hotel lobby and
paid her $20,000 to be split between herself and Patterson.
Rios described the third cruise that she and Patterson took in September
2005. Again, Patterson made the reservations for the trip and purchased the tickets
through her travel agency. At another meeting at the McDonald’s in Aruba,
Mauricio gave them items, including perfumes and a CD player, that contained
8
drugs. During the ship’s stop in Puerto Rico, Rios delivered the drugs to a man at
a shopping center. They were each paid $13,000 for their smuggling services.
As for Rios’s and Patterson’s involvement in the December 2005 cruise
taken by Cepeda and Rivera, Rios testified that in the afternoon of December 12,
2005, she was contacted from Colombia by “Carlos” who told her that she needed
to rent a car and pick up Cepeda at a hotel in Miami and take her and some drugs to
New York. Rios told Carlos that she did not have a credit card, and, therefore, she
would need to speak to “Cathy,” whom she trusted and with whom she previously
had “done business.” After the phone call, Rios contacted Patterson, who agreed to
accompany Rios to pick up a woman and some drugs at a Miami hotel and
transport them to “Consuelo” in New York. Rios told Patterson that Carlos would
pay each of them $1500, plus $1000 for travel expenses, and that some of the
money had been wired in advance from New York. While Rios was at Patterson’s
house, “Carlos” called again and told Rios to make sure there were five packages.
Rios then spoke to either Cepeda or Maritza, and arranged to meet them at the
Miami hotel the next morning.
Rios received another call from “Carlos” the next morning. He explained
that Rios and Patterson would be transporting seven, as opposed to five, packages
of heroin. When Patterson picked Rios up that morning, Rios informed Patterson
9
about the changed amount, and Patterson asked whether Carlos would pay them for
the extra two packages. Rios assured Patterson that Carlos would pay them extra.
Rios also testified that during a conversation with Patterson, after they were
arrested at the Miami hotel, they had agreed to “stick together” and never talk
about their previous trips.
Officer Tracy Land, of the Broward County Sheriff’s Office, testified that he
interviewed Patterson at the Miami hotel after her arrest, and, once the interview
was over, he gave Patterson an opportunity to make changes to his written notes.
According to her statement, which Officer Land read into the record, Patterson
was driving Rios to New York because Rios did not have a credit card. Patterson
admitted that she had a “general idea” that Rios was transporting drugs, and that
Rios “possibly” had drugs in a pair of shoes she had bought in Aruba. Patterson
also said that during one of their prior cruises, Rios had met with a man in Aruba.
Patterson said that she thought the meeting “might be about a drug deal.”
Patterson also described a second cruise in which she believed that there “possibly
w[ere] drugs” in a large bronze cologne bottle.
After the government rested, Patterson testified in her own defense. She
claimed that at no point after she met Rios sometime in mid-2004 did Rios ever
discuss the drug business. When Rios invited Patterson to accompany her on a
10
cruise shortly after they met, Patterson thought she had been invited only because
Rios had no one else to go with her, and when Rios asked Patterson to make the
arrangements and pay for the cruise because she did not have a credit card,
Patterson agreed based on her understanding that Rios would reimburse her.
Patterson also claimed that during her various cruises to Aruba, she had never met
with anyone concerning drugs. Patterson said that she never agreed to help Rios
smuggle drugs into the U.S. or to transport them from Florida to New York, and
that Rios never paid her any money, except to reimburse her for travel expenses.
Patterson also gave her version of the events leading up to her arrest in
December 2005. She had planned to take a food sealer to her sister in Gainesville
when Rios asked her to go to New York. Rios told Patterson that they were going
to take someone with them who did not have proper identification to buy a plane
ticket, but Rios did not tell her that the person would be carrying drugs. Patterson
rented the car later that night, and, after she picked Rios up the next morning, they
drove to a hotel in Miami to pick up the other passenger. When they got to the
hotel, Rios went inside while Patterson waited in the car.
Patterson testified that once she had been arrested and removed from her car,
she began to feel extremely dizzy due to her diabetes and the fact that she had not
eaten. She claimed she informed agents of this fact, but they took her to a hotel
11
room and began screaming at her about her involvement with the drugs. She could
not remember what she said during her interview, and testified that she had been
unable to read her statement because she did not have her glasses. She told the
agents that she had been on previous trips with Rios, but she did not admit to
having knowledge of any drugs. She also testified that she did not say anything to
Rios in prison about trying to conceal information from the government.
During the government’s rebuttal, Special Agent David Mitchell, of the
Drug Enforcement Administration, testified that he was present when Patterson
was arrested at the Miami hotel. After her arrest, the arresting officers allowed
Patterson to sit in a chair and use the bathroom before taking her upstairs to a hotel
room. Special Agent Mitchell did not witness anyone abusing Patterson, and he
never heard her complain of pain or discomfort. Another special agent’s testimony
was consistent with Special Agent Mitchell’s version of events.
After the close of evidence, Patterson objected to the proposed jury
instruction on deliberate ignorance. The court overruled the objection without
explanation. During closing arguments, Patterson urged that she should not be
punished for being gullible and naive.
The district court’s charge to the jury included the following jury
instruction:
12
[W]ith respect to the issue of [Patterson’s] knowledge in this case, if
you find from all the evidence beyond a reasonable doubt that
[Patterson] believed that she was at the hotel to pick up and transport
a controlled substance for delivery to a location outside south Florida,
and deliberately and consciously trying to avoid learning the specifics
pertaining to the controlled substance, in order to be able to say if
apprehended that she did not know what she would be transporting,
you may treat such deliberate avoidance of positive knowledge as the
equivalent of knowledge.
In other words, you may find that a defendant acted knowingly if you
find beyond a reasonable doubt either, one, that the defendant actually
knew that she was to transport and deliver controlled substances, or
that she deliberately closed her eyes to what she had every reason to
believe was the fact.
The jury verdict form provided a place for the jury to indicate whether it found
Patterson guilty of Count One. If the jury found Patterson guilty of Count One,
then a second section provided a place for the jury to mark whether it found her
guilty of conspiring to possess with intent to distribute: (1) 1 kilogram or more of
heroin; or (2) 100 grams or more of heroin. Similarly, if the jury found Patterson
guilty of Count Five, then the jury had to indicate whether the offense involved: (1)
1 kilogram or more of heroin; or (2) 100 grams or more of heroin.
During deliberations, the jury submitted the following two questions to the
court:
Why do we have a choice of the amount of the controlled substance
on the verdict form? What do the 100 grams or more have to do with
the case if the amount seized was 3 kilograms?
13
The district court informed the parties it would respond with the following answer:
Three (3) kilograms is equal to 3000 grams.
If you should find beyond reasonable doubt that the Defendant is
guilty of either Count 1 or Count 5, or both, then you must also find
the amount –
that is:
more than 1 kilogram
more than 100 grams
3 kilograms is obviously more than either 1 kilogram or 100 grams.
Patterson requested that the court also instruct the jury that it needed to rely on the
instructions already given, and she argued that by telling the jury that three
kilograms equaled 3,000 grams, the court was bringing in extraneous information.
The court responded that the proper answer to the jury’s question was that the
amounts were listed only because the jury’s finding on drug amount was relevant
for sentencing, but indicated it would not so inform the jury as to the use of drug
amount at sentencing because that information was not relevant to the jury’s
factfinding. The district court overruled Patterson’s objection and provided the
above-quoted response to the jury.
The jury found Patterson guilty on both counts. On the verdict form, the
jury indicated that it found the offenses involved “one kilogram or more,” as
14
opposed to “100 grams or more,” of heroin. Patterson then proceeded to
sentencing.
The Presentence Investigation Report (“PSI”) recommended a base offense
level of 34, pursuant to U.S.S.G. § 2D1.1(a)(3), because the offense involved 3.1
kilograms of heroin. The PSI recommended no adjustments to the base offense
level. With a total offense level of 34, and a criminal history of I, Patterson faced a
Guidelines range of 151 to 188 months’ imprisonment.
In response to Patterson’s objection to the PSI’s failure to recommend a
mitigating-role adjustment, pursuant to § 3B1.2(a), the probation officer noted that
each of the co-defendants was equally culpable because they were all couriers in
the conspiracy. According to the PSI, co-defendants Rivera and Cepeda pled
guilty to Counts 1 and 4 of the indictment and Rios pled guilty to Counts 1 and 5.
All three of Paterson’s co-defendants received 48-month terms of imprisonment.
At the sentencing hearing, Patterson argued she was entitled to a minor-role
adjustment because she was called at the last minute to help Rios drive, and she
and Rios were going to receive only $1,500, while Rivera and Cepeda were
supposed to split $10,000. The district court found that Patterson had failed to
prove by a preponderance of the evidence that she was entitled to a mitigating-role
reduction because all of the participants were equally culpable.
15
After the court said it had considered the parties’ arguments, the PSI, and the
statutory factors under 18 U.S.C. § 3553(a), it found that a sentence at the low end
of the Guidelines range was sufficiently punitive and would deter Patterson and
others from committing similar crimes. The court sentenced Patterson to two
concurrent 151-month terms of imprisonment. This appeal followed.
III.
First, Patterson argues that the district court reversibly erred by including in
its charge to the jury an instruction on deliberate indifference. We have held that
“[a] deliberate ignorance instruction is appropriate when the facts support the
inference that the defendant was aware of a high probability of the existence of the
fact in question and purposely contrived to avoid learning all of the facts in order
to have a defense in the event of a subsequent prosecution.” United States v.
Perez-Tosta, 36 F.3d 1552, 1564 (11th Cir. 1994) (internal quotations and citation
omitted). Such an inference can be supported by either direct or circumstantial
evidence. United States v. Arias, 984 F.2d 1139, 1143 (11th Cir. 1993). Although
the instruction is not appropriate when the “relevant evidence points only to actual
knowledge, rather than deliberate avoidance,” see Perez-Tosta, 36 F.3d at 1564-65
(quotation omitted), the instruction is properly given if the evidence supports both
actual knowledge and deliberate ignorance. Arias, 984 F.2d at 1143.
16
Here, we readily conclude the district court did not err by giving the
deliberate avoidance instruction because the evidence squarely pointed towards
both actual knowledge and deliberate avoidance. Patterson’s primary theory of
defense was that she was ignorant of the purpose not only of the road-trip to New
York in December 2005, but also of the multiple cruises she took with Rios as well
as the first road-trip to New York, in April 2005. However, the government
presented extensive evidence to the contrary, most notably during Rios’s testimony
about Patterson’s direct knowledge of the drug-smuggling purpose of their cruises
and road-trips. Even if the jury discounted Rios’s testimony, it surely could have
found Patterson was aware of a high probability that the purpose of the trip was to
deliver drugs, and she purposely contrived to avoid learning about the trip’s details
in order to have a defense to criminal prosecution. Cf. Perez-Tosta, 36 F.3d at
1564. Even by Patterson’s own account, she was asked to rent a car and drive
codefendant Rios and a stranger hundreds of miles to New York with little more
than a day’s notice. As for her other trips with Rios, Patterson testified that she
was never present when drugs were discussed or exchanged. Indeed, she testified
that Rios never mentioned drug smuggling to her. On this record, the jury could
have found that Paterson had attempted to avoid learning the details of the scheme,
17
particularly in light of her own testimony that she was never present when drugs
were discussed or transferred.1
IV.
Patterson also challenges the district court’s answer to the jury’s questions
concerning whether it had a choice as to “the amount of the controlled substance
on the verdict form” and whether the 100 grams was relevant to the case if the
amount seized was 3 kilograms. Again, the district court’s response was this:
Three (3) kilograms is equal to 3000 grams.
If you should find beyond reasonable doubt that the Defendant is
guilty of either Count 1 or Count 5, or both, then you must also find
the amount –
that is:
more than 1 kilogram
more than 100 grams
3 kilograms is obviously more than either 1 kilogram or 100 grams.
On appeal, Patterson argues that because the jury was still deliberating
over the weight of the drugs when it submitted the questions, and it had not
indicated that it was considering holding Patterson accountable for 3 kilograms
1
Moreover, even if the district court erred by instructing the jury on deliberate avoidance,
the error was harmless beyond a reasonable doubt because Rios’s testimony provided strong
evidence that Patterson had actual knowledge that the purpose of the trip was to transport heroin.
United States v. Schlei, 122 F.3d 944, 973 (11th Cir. 1997) (holding that if a district court gives an
erroneous instruction on deliberate ignorance, but there is also strong evidence of actual knowledge
of the crime being committed, any error will be deemed harmless).
18
of heroin, the district court’s answer to the question constituted reversible error
because it assumed the jury had found Patterson guilty. We disagree. Simply
put, the district court’s response did not assume that the jury was going to find
Patterson guilty, and it did not improperly suggest a finding regarding the
amount of drugs because: (1) it is undisputable that 3 kilograms is more than 1
kilogram or 100 grams; and (2) the jury’s question stated that the crime
involved the seizure of 3 kilograms of heroin. Moreover, even if the district
court did err in its response, it did not commit plain error because the only
genuine issue in dispute was Patterson’s knowledge. At no point did Patterson
assert a defense based on, or otherwise challenge, the amount of heroin
involved in the offense. On this record, she cannot establish error, let alone
plain error, based on the district court’s answer to the jury.
V.
Finally, Patterson argues that she was entitled to a minor-role reduction,
pursuant to U.S.S.G. § 3B1.1, because: (1) she only participated in the
conspiracy to transport the drugs for a brief period; (2) she was the least
culpable of the individuals involved; and (3) she did not have any
understanding or knowledge of the criminal enterprise. Again, we review a
district court’s factual determination regarding whether a defendant is eligible
19
for a reduction for role in the offense for clear error. United States v. De Varon,
175 F.3d 930, 934 (11th Cir. 1999) (en banc). We have noted that “a trial
court’s choice between ‘two permissible views of the evidence’ is the very
essence of the clear error standard of review.” Id. at 939. We will not find clear
error unless we are “left with a definite and firm conviction that a mistake has
been committed.” United States v. Crawford, 407 F.3d 1174, 1177 (11th Cir.
2005) (quotation marks and citation omitted).
In determining a defendant’s role in an offense, a district court (1) must
consider the defendant’s role in the relevant conduct for which he has been held
accountable at sentencing, and (2) may also consider his role as compared to
that of other participants in his relevant conduct. De Varon, 175 F.3d at 940,
944. The proponent of a role adjustment bears the burden of establishing his
role in the offense by a preponderance of the evidence. Id. at 934.
Here, Patterson was held accountable for only 3.1 kilograms of heroin,
which was the amount that she and her codefendants were attempting to
transport when they were arrested at the Miami hotel in December 2005.
Patterson’s role in the transportation of those drugs from Florida to New York
was integral to the criminal enterprise because Rios did not have a credit card or
any other means to pay for the transportation, and, according to Rios’s
20
testimony, she would not have been able to transport the drugs to New York if
Patterson had not agreed to rent the car and drive. Although Patterson contends
that she was less culpable than the other codefendants, the record does not
compel this conclusion, especially considering that there would have been no
transportation for the drugs from Miami to New York without her
participation.2 Accordingly, the district court did not clearly err by denying her
request for a minor-role reduction.
AFFIRMED.
2
We are unpersuaded by Patterson’s challenge to the reasonableness of her sentence. She
suggests that her sentence of 151 months was unreasonably longer than her co-defendants’ 48-month
sentences. “After the district court has accurately calculated the Guideline range,” we review the
final sentence for reasonableness. United States v. Winingear, 422 F.3d 1241, 1244 (11th Cir.
2005). The factors that act as a guide in determining whether a sentence was reasonable are found
in 18 U.S.C. § 3553(a). Id. at 1246. One of these factors is “the need to avoid unwarranted sentence
disparities among defendants with similar records who have been found guilty of similar conduct.”
18 U.S.C. § 3553(a)(6). We have held that the “[d]isparity between the sentences imposed on
codefendants is generally not an appropriate basis for relief on appeal.” United States v. Regueiro,
240 F.3d 1321, 1325-26 (11th Cir. 2001). Also, “when the district court considers the factors of
§ 3553(a), it need not discuss each of them . . . an acknowledgment by the district court that it has
considered the defendant’s argument and the factors in § 3553(a) is sufficient.” United States v.
Talley, 431 F.3d 784, 786 (11th Cir. 2005).
Here, the disparity between Patterson’s sentence and that of her three codefendants’ is easily
explained because her codefendants cooperated with agents during the investigation and accepted
responsibility for their actions, while Patterson took no responsibility for her actions, and maintained
that she was innocent throughout a jury trial. Moreover, the district court stated that it had
considered the parties’ arguments and the 18 U.S.C. § 3553(a) factors. On this record, Patterson’s
sentence, which was at the low end of the advisory Guideline range, was reasonable.
21
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-01-00074-CV
Henrietta Flores, Appellant
v.
Employees Retirement System of Texas, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NO. GN001862, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING
Appellant Henrietta Flores appeals the district court's order affirming a final order
by the Board of Trustees for the Employees Retirement System of Texas (the Board) denying her
application for occupational disability benefits. (1) She raises two issues in her appeal, alleging (1) that
the Board's action was arbitrary and capricious or that it abused its discretion because the Board
applied a new policy in the course of Ms. Flores's contested case without giving her notice of its
intent to do so; and (2) that the Board's interpretation of the statutory definition of occupational
disability is inconsistent with the plain language of the statute. As we sustain both of Ms. Flores's
issues, we will reverse the judgment of the trial court and the order of the Board.
FACTUAL BACKGROUND
Ms. Flores worked for almost fifteen years as an aide to social workers, first at the
county level and later for the Texas Department of Protective and Regulatory Services (the
Department). As an aide, her primary job function was to transport the children who had been
removed from their homes by the Department to court hearings, doctors' appointments, and to their
homes for visits. She provided transportation mostly in the Austin and central Texas area, but
occasionally drove as far as Dallas and Houston. Ms. Flores drove roughly seventy-five percent of
the day and spent between seven to twelve hours each day in the car.
While driving two small children from their home to the Department, she was
severely injured in a car accident. A mattress suddenly fell off a truck in front of her, causing her
to swerve and brake; unfortunately she could not avoid the mattress, which lodged under her car.
Ms. Flores believed her knee hit the steering wheel upon impact, and within a few hours she
experienced extreme pain in her back that radiated down her leg. Several days later she also began
to suffer pain in her knee. After a few days, Ms. Flores returned to work but experienced increasing
pain. Although she underwent two surgical operations and physical therapy, she could not resume
her duties at the Department. Doctor Albert Molnar specifically evaluated her disability in the
context of her job as a social services aide and found that she could no longer drive as before, lift
pediatric clients, or move quickly enough to restrain the children. The Board concedes that Ms.
Flores is permanently disabled. Ms. Flores, who had consistently received excellent evaluations by
her supervisors at the Department and had had no difficulty in the performance of her job duties
before the accident, was dismissed.
After her dismissal, Ms. Flores applied for occupational disability retirement benefits
from the Employees Retirement System (ERS), (2) which was created by the legislature for the purpose
of providing a retirement system for aged and incapacitated state employees. See Act of May 27,
1947, 50th Leg., R.S., ch. 352, 1947 Gen. Laws 697, 697 (statement of purpose). (3) Ms. Flores's claim
was denied on the ground that her disability did not meet the statutory definition of an occupational
disability.
Ms. Flores's application for retirement benefits is governed by section 811.001(12)
of the Government Code, which defines occupational disability to mean a disability "from an injury
or disease that directly results from a specific act or occurrence determinable by a definite time and
place, and directly results from a risk or a hazard peculiar to and inherent in a duty that arises from
and in the course of state employment." Tex. Gov't Code Ann. § 811.001(12) (West Supp. 2002). (4)
ERS denied Ms. Flores's claim, finding that her disability failed to satisfy either statutory prong. She
appealed, and after an administrative hearing, the administrative law judge (ALJ) found that Ms.
Flores's application satisfied both requirements and recommended that occupational disability
benefits be awarded. The Board reversed the ALJ's findings of fact and conclusions of law (5) as to
both statutory prongs and denied benefits. This appeal hinges on our review of the Board's
interpretation of section 811.001(12). (6) Ms. Flores, however, has also challenged the manner in
which the Board decided her appeal: Ms. Flores contends that the manner in which the Board
decided her case is "an affront to the decision-making process prescribed by [the Administrative
Procedure Act (APA)]." We turn first to Ms. Flores's argument that the Board acted arbitrarily and
capriciously in denying her appeal.
ARBITRARY & CAPRICIOUS
In her first issue, Ms. Flores argues that the Board's action was arbitrary and
capricious or constituted an abuse of discretion under section 2001.174(2)(F) of the APA. See Tex.
Gov't Code Ann. § 2001.174(2)(F) (West 2000). (7) Ms. Flores argues that in denying her claim, the
Board ignored its own precedent holding that a preexisting condition that is caused solely by the
natural aging process and is asymptomatic until aggravated by a traumatic incident does not prevent
one from receiving occupational disability benefits. She also contends that the Board applied a new
policy in the course of her contested case hearing without providing her notice, before the hearing,
of its intent to do so. See Texas State Bd. of Pharmacy v. Seely, 764 S.W.2d 806, 815 (Tex.
App.--Austin 1988, writ denied). Madden v. Texas Bd. of Chiropractic Exam'rs, 663 S.W.2d 622,
625-27 (Tex. App.--Austin 1983, writ ref'd n.r.e.). The Board disagrees, asserting that the previous
decisions on which Ms. Flores relies do not constitute binding precedent.
The issues raised by Ms. Flores implicate a broader question as to the manner in
which the Board decided her appeal. After hearing all of the evidence at the contested-case hearing,
the ALJ decided in Ms. Flores's favor. The minutes of the Board's meeting, of which we take
judicial notice, reflect that immediately after hearing from both sides and without any deliberation,
the Board declined to adopt the ALJ's recommendation and unanimously voted to deny Ms. Flores's
appeal. After announcing its decision, the Board also ordered its general counsel to make new
findings of fact and conclusions of law. The general counsel's findings of fact and conclusions of
law, which made systematic and widespread changes and additions to the ALJ's findings of fact and
conclusions of law, were later adopted by the Board. The Board's changes to particular facts suggest
that the Board was acting as its own fact-finder despite having delegated that duty to the ALJ. See
Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 564 (Tex. 2000) ("having chosen to delegate
the fact-finding role to the hearing examiner, a board cannot then ignore those findings with which
it disagrees and substitute its own additional findings."). In addition, the Board failed to comply
with its statutory authorization and administrative rules, which enable the Board to make changes
but also place limits on its ability to do so. See Tex. Gov't Code Ann. § 815.511(a) (West Supp.
2002); 34 Tex. Admin. Code § 67.91(b) (2001) ("Rule 67.91(b)").
These aspects of the Board's manner of deciding Ms. Flores's appeal raise serious
due process concerns. We recognize that an agency does not operate under the same rules as a court
of law, nor is it subject to the same restrictions. An agency must, however, respect the due-process
rights of applicants who appear before it in contested cases. See Seely, 764 S.W.2d at 815 (holding
that an agency denied a party a meaningful hearing required by due process); Madden, 663 S.W.2d
at 625-27 (holding that an agency violated procedural due-process rights of a party by failing to give
him notice of new statutory interpretation that agency applied for first time in the course of
claimant's hearing). Because of the seriousness of the issues raised by the Board's treatment of Ms.
Flores's appeal, we will address each issue separately.
Board as Fact-Finder
Procedural due process does not apply to every action the government or an
administrative agency takes, but it does apply when "government deprives an individual of 'life,
liberty, or property' based on resolution of contested factual issues concerning that individual." 2
Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise § 9.2 at 3 (3d ed. 1994).
When the agency's decision has such an individualized effect, the agency is obligated to provide
some type of adjudicative hearing. Professor Davis has explained that such a hearing requires the
resolution of two different types of facts: adjudicative and legislative:
Adjudicative facts usually answer the questions of who did what, where, when, how,
why, with what motive or intent; adjudicative facts are roughly the kind of facts that
go to a jury in a jury case. Legislative facts do not usually concern the immediate
parties but are the general facts that help the tribunal decide questions of law and
policy and discretion.
Id. § 9.5 at 55.
The litigants may offer conflicting evidence as to adjudicative facts, which the
decision-maker resolves by determining how much weight to give each side's evidence. See F. Scott
McCown, When Can an Agency Change the Findings or Conclusions of an Administrative Law
Judge? 50 Baylor L. Rev. 65, 74 (1998). The resolution of adjudicative facts often requires making
credibility determinations. Id. at 76. The hearing examiner is better suited to make such
determinations than is an agency head or board reviewing the hearing examiner's proposed decision
because the hearing examiner has heard the evidence and has observed the demeanor of the
witnesses. Id. In addition, a hearing examiner who is an ALJ with the State Office of
Administrative Hearings (SOAH) and not employed by the agency is a "disinterested hearings
officer." Id.
Given that the resolution of disputed adjudicative facts requires weighing the
evidence and making credibility determinations, a neutral decision-maker is crucial to a fair
adjudicatory hearing. See 2 Davis & Pierce, Jr., supra, § 9.8 at 67. Indeed, SOAH was created in
response to fairness concerns raised by the fact that hearing examiners employed by the interested
agency were directly accountable to it and, thus, did not have the appearance of disinterested
hearings officers. See McCown, supra, at 67-68. The legislature also recognized, however, that in
addition to providing a fair decision-maker at the hearing, there also needed to be restrictions on an
agency head's ability to change the hearing examiner's decision. Agency heads once enjoyed total
discretion to change findings of fact and conclusions of law contained in a hearing examiner's
proposal for decision. The APA has curtailed this discretion by circumscribing the purposes for
which changes can be made and by requiring a reasoned explanation for each change. See id. at 66-67, 77-78. (8) The supreme court has recently addressed the importance of these limitations to the
administrative system:
If a board could find additional facts, resolving conflicts in the evidence and
credibility disputes, it would then be serving as its own factfinder despite delegating
the factfinding role to a hearing examiner, and the process of using an independent
factfinder would be meaningless. An independent factfinder is integral to the
structure of the hearing-examiner process; permitting a school board to select an
independent factfinder avoids having the board, a party to the dispute, act as its own
factfinder when reviewing the employment decision of its own administration. The
Legislature has further protected the independent nature of the hearing-examiner
process by requiring the board to state in writing the reason, including the legal basis,
for any change or rejection it makes under section 21.259. TEX. EDUC. CODE
§ 21.259(d).
Davis, 34 S.W.3d at 564.
Contrary to these principles, in this case the Board reweighed the evidence relating
to Ms. Flores's disability. We turn first to the evidence regarding the injury to Ms. Flores's back and
then to the evidence of her knee injury.
The Back Injury
When Ms. Flores sought treatment for her injuries, she was diagnosed with two main
injuries to her back. Her treating physician, Dr. Laura Flawn, diagnosed Ms. Flores with "a
herniated disc on the left at L5/S1 [vertebrae]" and "arthrosis at the L4/5 [vertebrae] and a
degenerative bulge at L4/5 vertebrae." The herniated disc at L5/S1 was caused by the traumatic
incident; the arthritic and degenerative conditions at L4/5 were caused by the natural aging process
and not by any prior injury or abnormality. ERS's Medical Board and Ms. Flores's treating
physician agreed that Ms. Flores's degenerative spinal condition contributed to her total incapacity
following the accident. Dr. Flawn, however, specifically distinguished the separate location of the
degenerative condition and the herniated disc caused by the traumatic incident. Similarly, the ALJ's
findings of fact and conclusions of law in support of her decision reflected this distinction. In
contrast, the Board's revised findings of fact ignore this detail. The Board also deleted the finding
reflecting Dr. Flawn's statement that the preexisting degeneration at L4-5 resulted from the natural
aging process and was common for people of Ms. Flores's age (she turned fifty-three shortly after
the car accident) and the finding that Ms. Flores had never experienced any back pain before the car
accident. These deleted factors were all relevant to the ALJ's decision that Ms. Flores's disability
qualified as an occupational disability. The Board's reweighing of the evidence was clearly designed
to change the effect of Ms. Flores's preexisting condition on her disability.
The Knee Injury
The medical evidence adduced at the hearing also established that Ms. Flores had
suffered an injury to her knee caused solely by the accident and that the knee injury contributed to
her permanent incapacity. The Board, however, added a finding that "the ERS Medical Board found
that the Appellant's knee injury, in and of itself, would not likely have rendered the Appellant
permanently incapacitated for the further performance of duty." The Board did not refer to any
evidence presented at the hearing to support this finding, nor have we been able to locate any such
evidence in the record. Indeed, the Board's finding appears to contradict other evidence in the
record, specifically the ERS Medical Board's own statement that it "cannot separate disability due
to back and or knee. Both play a part in her disability." (Emphasis added.) The Board abused its
discretion by making a finding that is not supported by any evidence. See Starr County v. Starr
Indus. Servs., Inc., 584 S.W.2d 352, 355-56 (Tex. Civ. App.--Austin 1979, writ ref'd n.r.e.) (for
agency to avoid a finding that it acted arbitrarily and capriciously, reviewing court must find a
rational connection between facts and decision of agency); see also Flores v. Texas Dep't of Health,
835 S.W.2d 807, 812 (Tex. App.--Austin 1992, writ denied) (although Department is given broad
discretion in arriving at its findings of fact the findings must still be based on evidence in the record).
Board's Failure to Comply with Rule 67.91
Under its statutory authority, the Board must provide a written explanation for any
change it makes to an ALJ's findings of fact or conclusions of law. See Tex. Gov't Code Ann.
§ 815.511(a) (West Supp. 2002). (9) In addition to enhancing the fairness of the adjudicative process
for a party appearing before an agency, this requirement ensures that a reviewing court can judge
whether the agency has followed the procedures set out in the APA and in the agency's own statute
and rules. See McCown, supra, at 89 (explaining that the requirement of a written explanation
provides a basis on which the reviewing court can gauge compliance with the statutes governing the
agency's authority to change the findings). The Board has adopted Rule 67.91(b), which limits the
Board's ability to make changes to the ALJ's decision by providing that it may change a finding,
conclusion, or a proposal for decision (PFD) only if it is:
(1) clearly erroneous or illogical;
(2) is against the weight of the evidence;
(3) is based on misapplication of the rules of evidence or insufficient review of the
evidence;
(4) is inconsistent with the terms or intent, as determined by the board, of benefit
plan or insurance policy provisions; or
(5) is not sufficient to protect the public interest, the interests of the plans and
programs for which the board is trustee, or the interests, as a group, of the
participants covered by such plans and programs. The order shall contain a
written statement of the reason and legal basis for each change made based on
the foregoing policy reasons.
34 Tex. Admin. Code § 67.91(b) (2001). We will look first at the reasons given by the Board for
its changes to the ALJ's findings of fact, and then at its explanation for its changes to the conclusions
of law.
Findings of Fact
The Board's stated explanations for many of the changes made to the ALJ's findings
are not consistent with the listed reasons in Rule 67.91. It changed several fact findings on the
ground that the findings were not relevant. It deleted portions of other findings without providing
any reason and others on the ground that the facts were not relevant because they were not in dispute.
The Board also added new findings of facts for "clarification." An agency is bound to follow its
rules and procedures. Southern Clay Prods., Inc. v. Bullock, 753 S.W.2d 781, 783 (Tex.
App.--Austin 1988, no writ) (citing Gulf Land Co. v. Atlantic Ref. Co., 131 S.W.2d 73, 79 (Tex.
1939)). The Board failed to follow Rule 67.91 by giving stated reasons that are not authorized by
the rule for some of its changes, and by failing to provide explanations for others entirely.
Moreover, the Board's changes indicate that its decision was arbitrary and capricious.
Our conclusion is buttressed by the Board's explanation for its deletion of a finding: "[The finding]
is deleted because it is a finding in support of an erroneous conclusion . . . ." This explanation gives
the appearance of the Board's arriving at a predetermined result, irrespective of the facts as
determined by the ALJ, and then shaping new findings of fact to support its decision. This approach
is at odds with the nature of the administrative process. "A basic purpose of requiring findings of
fact is to ensure that an agency's decision comes after, not before, a careful consideration of the
evidence. Agency conclusions should follow from its serious appraisal of the facts." Gulf States
Utils. Co. v. Coalition of Cities for Affordable Util. Rates, 883 S.W.2d 739, 750 (Tex. App.--Austin
1994), rev'd on other grounds, 947 S.W.2d 887, 891-92 (Tex. 1997); (10) see also Davis, 34 S.W.3d
at 564.
Conclusions of Law
The Board deleted the ALJ's conclusion of law that Ms. Flores's disability "directly
resulted from a specific act or occurrence determinable by a definite time and place." The Board's
reasons for the deletion were that the conclusion of law was "inconsistent with the weight of the
evidence" and "based on a misapplication of the provisions of the benefit plan, the policy of the
Board, and of the law as interpreted by the Board." The Board's explanation quoted verbatim from
a resolution it adopted after Ms. Flores's hearing and stated in part:
The Board finds and concludes that the Legislature intended that an occupational
disability, as defined in TEX GOV'T CODE ANN. § 811.001(12), must be the result
of an occupational trauma (i.e., injury or disease) that is the direct cause of the
member's disability. To this end, a member has been required to present credible
medical evidence that a specific occupational trauma is the direct cause of the
member's disability without regard to a preexisting mental or physical condition. A
disability that arises primarily as the result of degeneration that occurs over time,
including, but not limited to natural age-related degeneration, cannot be described
as a disability that arises as the direct result of a specific act or occurrence
determinable by a definite time and place.
(Emphasis added.) This conclusion of law seemingly identifies the relevant causal test used by the
Board to decide occupational disability appeals: a disability fails to directly result from a specific act
or occurrence determinable at a definite place and time if it arises primarily from a preexisting
condition, whether or not it is age-related.
The Board, however, did not include any findings that would support its own
application of this causal test to Ms. Flores's appeal. See Starr Indus. Servs., 584 S.W.2d at 356 (a
rational connection between the facts and the decision of the agency must be apparent). More
problematically, though, the Board could not have made any findings in support of this formulation
because none of the medical evidence presented at the hearing weighed in favor of a conclusion that
Ms. Flores's disability arose primarily from degeneration. Indeed, all of the evidence suggested that
Ms. Flores had no difficulty performing her job before the traumatic incident but was permanently
incapacitated from her duties after the accident. (11) The Board's failure to provide any support for its
conclusion that Ms. Flores's disability arose primarily from her preexisting condition was arbitrary
and capricious.
We have previously addressed ERS's compliance with the requirement that it provide
a reasoned explanation for changes it makes to an ALJ's findings of fact and conclusions of law.
See Employees Ret. Sys. v. McKillip, 956 S.W.2d 795, 801-02 (Tex. App.--Austin 1997, no pet.),
disapproved on other grounds by, Texas Natural Resources Conservation Comm'n v. Sierra Club,
45 Tex. Sup. Ct. J. 394, 397, 2002 Tex. LEXIS 16, at *13 (Feb. 21, 2002). We found that the
agency's failure to comply with the APA's requirement for making changes to findings of fact or
conclusions of law violated Ms. McKillip's substantial rights under the APA. Id. at 802. Moreover,
we required ERS to provide "a rational connection" between the policy it relied on and the changes
it made. Id. at 801-02. Although we decided McKillip under the general provision of the APA and
Ms. Flores's appeal is governed by the specific provisions in ERS Rule 67.91, the Board's manner
of handling Ms. Flores's appeal ignores our directive in McKillip.
Board's Failure to Explain Departure from Precedent
At the hearing, ERS staff contended that because Ms. Flores had a preexisting
condition that contributed to her incapacity, she was not eligible for disability retirement benefits.
Ms. Flores responded that the Board had held in two prior appeals, Dean (12) and Link, (13) that where a
claimant's preexisting condition is merely the result of the natural aging process and is asymptomatic
prior to injury, the disability qualifies as an occupational disability that "directly results from a
specific act or occurrence." ERS staff attempted to distinguish Dean by arguing that rather than
recognize a global exception for aging-related degeneration, it recognized an exception for such
degeneration only where the claimant was also "elderly." (14) Ms. Flores responded that the Board's
action five years later in Link, involving a 46-year-old claimant and decided on the basis of Dean,
belied the staff's attempt to characterize Dean as an exception only for older claimants nearing
retirement age. The ALJ agreed with Ms. Flores that in light of the facts of this case and the Board's
prior decisions in Dean and Link, Ms. Flores's asymptomatic arthritic back degeneration did not
disqualify her claim that her disability directly resulted from a specific act or occurrence
determinable by a definite time and place.
The Board rejected the ALJ's decision and denied the claim, relying on a policy it
adopted in a resolution several months after Ms. Flores's hearing and only one day before the ALJ
issued her proposed decision. In its revised conclusions of law, the Board explained that the ALJ's
decision "erroneously expands the definition of occupational disability to include a disability that
is primarily caused by degeneration that is the result of the natural-aging process. By the Board's
decision in this appeal, the Board reiterates that it expressly rejects such an expansive interpretation
of the meaning of the term 'occupational disability.'" The Board failed to provide any support for
its conclusion that an exception for age-related preexisting conditions, which it had expressly
recognized in Dean and Link, would have the effect of expanding the statutory definition of
occupational disability beyond the legislature's intent. The Board responds that it has no obligation
to follow its own prior decisions and that Ms. Flores's case is factually distinguishable from Dean.
An agency is not bound to follow its decisions in contested cases in the same way that
a court is bound by precedent. See Miner v. Federal Communications Comm'n , 663 F.2d 152, 157
(D.C. Cir. 1980). (15) Courts, however, frequently require that an agency explain its reasoning when
it "appears to the reviewing court that an agency has departed from its earlier administrative policy
or there exists an apparent inconsistency in agency determinations." City of El Paso v. El Paso Elec.
Co., 851 S.W.2d 896, 900 (Tex. App.--Austin 1993, writ denied). The federal courts have similarly
required reasoned explanation for an agency's departure from precedent. See, e.g., Citizens
Awareness Network, Inc. v. United States Nuclear Regulatory Comm'n, 59 F.3d 284, 291 (1st Cir.
1995) ("[A]ny . . . alteration or reversal [of agency's prior interpretation] must be accompanied by
some reasoning-some indication that the shift is rational, and therefore not arbitrary and
capricious."); Miner, 663 F.2d at157 (quoting Food Marketing Inst. v. Interstate Commerce
Comm'n, 587 F.2d 1285, 1290 (D.C. Cir. 1978)) ("[W]hile agencies may not be bound under the
doctrine of stare decisis to the same degree as courts, . . . it is at least incumbent upon the agency
carefully to spell out the bases of its decisions when departing from prior norms."); National
Conservative Political Action Comm. v. Federal Election Comm'n, 626 F.2d 953, 959 (D.C. Cir.
1980) ("Agencies are under an obligation to follow their own regulations, procedures, and
precedents, or provide a rational explanation for their departures.").
Furthermore, we have held that when an agency adopts new policy in the course of
a contested-case hearing without giving the parties pre-hearing notice, the parties may be deprived
of procedural due process. See Seely, 764 S.W.2d at 815; Madden, 663 S.W.2d at 625-27. For a
hearing to be meaningful, the parties must be able to present evidence on the issues to be decided.
Had Ms. Flores known that the Board no longer intended to apply the Dean exception for preexisting
conditions caused solely by aging, she might have presented her case differently. The Board's post-hearing action prevented her from doing so; the Board's rejection of the Dean and Link precedent
months after her hearing was thus arbitrary and capricious. See Starr Indus. Servs., 584 S.W.2d at
356 ( "the major factor that runs throughout arbitrary-capricious review cases is that the parties must
be able to know what is expected of them in the administrative process.").
There are serious flaws with the Board's manner of deciding Ms. Flores's appeal.
We hold that the Board acted arbitrarily and capriciously by: deciding this appeal before it arrived
at its findings of fact and conclusions of law, reweighing adjudicative facts, changing findings of fact
and conclusions of law for unauthorized and unexplained reasons, making findings of fact and
conclusions of law without adequate support in the record, and failing to give notice before the
hearing of its intention not to follow previous decisions and failing to adequately explain the
reasoning for its change in position. We therefore sustain Ms. Flores's first issue.
STATUTORY INTERPRETATION
Ms. Flores next challenges the Board's interpretation of the two-pronged statutory
definition of occupational disability.
Standard of Review
An administrative agency's construction or interpretation of a statute, which the
agency is charged with enforcing, is entitled to serious consideration by reviewing courts, so long
as that construction is reasonable and does not contradict the plain language of the statute.
Employees Ret. Sys. v. Jones, 58 S.W.3d 148, 151 (Tex. App.--Austin 2001, no pet.) (citing Steering
Comms. for the Cities Served by TXU Elec. & Cent. Power & Light Co. v. Pub. Util. Comm'n, 42
S.W.3d 296, 300 (Tex. App.--Austin 2001, no pet.). However, when the interpretation does not
involve technical or regulatory matters within the agency's expertise but requires the discernment
of legislative intent, we give much less deference to the agency's reading of a statute. "Courts do
not defer to administrative interpretation in regard to questions which do not lie within
administrative expertise, or deal with a nontechnical question of law." 2B Norman J. Singer,
Statutes & Statutory Construction § 49:04, at 23-24 (6th ed. 2000). The Board rejected the ALJ's
conclusions of law that Ms. Flores's disability directly resulted from a specific act or occurrence and
that it directly resulted from a risk or hazard peculiar to her duties of state employment, explaining
that these conclusions impermissibly "expand[] the definition of occupational disability" in
derogation of legislative intent as expressed in section 811.001(12).
In determining whether the ALJ impermissibly expanded this definition by awarding
benefits to Ms. Flores, our objective is to determine and give effect to the legislature's intent.
National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000); Jones, 58 S.W.3d at 151.
Thus, the task of statutory construction here does not involve a matter lying within the Board's
expertise, but involves a question of law: What did the legislature intend when it used the phrases
"directly results from a specific act or occurrence" and "directly results from a risk or hazard
peculiar" to a duty arising from state employment? We look at the phrases in context, based on the
ordinary meaning of the words. Rylander v. Fisher Controls Int'l. Inc., 45 S.W.3d 291, 302 (Tex.
App.--Austin 2001, no pet.). As we stated in Fisher Controls, courts are as competent as the Board
in assessing legislative intent and this reduces considerably the degree of judicial deference owed
the Board's interpretation of section 811.001(12). Id.
We will first address the Board's interpretation of the causal relationship intended
between an employee's at-work injury and her disability.
"Directly Results from a Specific Act or Occurrence"
The Board rejected the ALJ's conclusion of law that Ms. Flores's injury directly
resulted from a specific act or occurrence determinable by a definite time and place. The parties
dispute the level of causation required by this prong of the definition of occupational disability.
While it is clear that there must be a causal nexus between the on-the-job injury and the claimant's
permanent incapacity, the statute does not define the standard in recognizable terms such as "sole
cause," "proximate cause," or "producing cause." Moreover, "directly results" is the only reference
to causation for occupational disability in the statute. Adding to the uncertainty regarding the precise
standard of causation the statute requires is the Board's inconsistent interpretation of "directly
results."
The Board's current position is that if the injury aggravates a preexisting condition
that contributes to her disability, the claimant is disqualified from receiving disability retirement
benefits. Before this case the Board had held that some preexisting conditions, namely those caused
by the natural aging process, do not disqualify claimants from receiving benefits. In Ms. Flores's
appeal, the Board changed this policy and announced without explanation that applying its previous
exception for age-related preexisting conditions "erroneously expands the definition of occupational
disability." This requires us to determine what the second prong of the statute encompasses by the
phrase "directly results from a specific act or occurrence determinable by a definite time and place."
To interpret this definition, we must determine the causal nexus that the legislature
intended between the specific traumatic incident and the resulting disability. We have never
considered the issue of causation for occupational disability in the context of the Employees
Retirement Systems Act. The courts have considered the issue of causation in the context of
disability insurance in the private sector. The words "directly" and "result" appear together
frequently in private accidental-disability insurance policies. See, e.g., American Home Assurance
Co. v. Harbison, 576 S.W.2d 485, 486 (Tex. Civ. App.--Houston [14th Dist.] 1979, writ dism'd);
Bohon v. Travelers Ins. Co., 509 S.W.2d 905, 906 (Tex. Civ. App.--Tyler 1974, no writ); American
Exch. Life Ins. Co. v. Willis, 433 S.W.2d 945, 946-47 (Tex. Civ. App.--Tyler 1968, no writ). The
phrase "resulting directly" is found routinely in disability insurance, but is always modified by
language not found in section 811.001(12): "resulting directly and independently of all other
causes." See Harbison, 576 S.W.2d at 486; Bohon, 509 S.W.2d at 906; Willis, 433 S.W.2d at 946-47
(emphasis added). This phrase has been interpreted to create a sole-cause standard:
The evidentiary burden incumbent upon one who claims under an accident insurance
policy of the type here involved is now settled. The phrase " . . . directly and
independently of all other causes . . . " is construed in law to mean the "sole" or
"only" cause. Thus, under such a clause, it is the claimant's burden to prove that the
insured's peril was the sole cause of disability, i.e., that it did not concur to any
degree with other nonaccidental causes, and mere proof that the insured's peril is "a"
cause or even a "but for" cause, within the concept of "proximate cause," is not
sufficient.
Bohon, 509 S.W.2d at 907 (citing Mutual Benefit Health & Accident Ass'n v. Hudman, 398 S.W.2d
110, 112-13 (Tex. 1965)).
The additional language "and independently of all other causes" plainly limits
compensable injuries to those that solely cause the disability. This limiting language is not found
in section 811.001(12). The legislature could have easily used this or similar language in the
definition of occupational disability retirement benefits and we assume that it would have done so
had it intended to impose a sole-cause standard in the disability retirement context. See Texas Dep't
of Human Servs. v. Hinds, 904 S.W.2d 629, 634 (Tex. 1995) (presuming that legislature would have
specified a sole-cause standard in the whistleblower statute and that the causal language "because"
indicated a lesser standard). The lack of any such language modifying "directly results" is some
evidence that the legislature did not intend to impose a sole-cause standard. See id. We assume that
the omission of such limiting language was a deliberate choice by the legislature, and thus we
conclude that the language of section 811.001(12) does not require an employee to prove that her
injury is the sole cause of her disability.
The Board urges that any disability caused both by a traumatic incident and a
preexisting condition cannot logically directly result from a specific act or occurrence determinable
by a definite time and place. "Directly" is not synonymous with "solely," (16) and nothing in the plain
meaning of the statute mandates disqualifying every claimant who has a preexisting condition that
is aggravated by the injury. Had the legislature intended a sole cause standard, it could have given
some indication, for example, by using "solely results" or "directly results independently of all other
causes." It did not do so. Furthermore, the position adopted by the Board in Ms. Flores's appeal
is inconsistent with its prior interpretation of the statute in Dean (1994), an interpretation re-affirmed
in Link (1999). See J.M. Falkner v. Southwestern Sav. & Loan Ass'n., 320 S.W.2d 164, 171 (Tex.
Civ. App.--Austin 1958) (op. on reh'g), aff'd in part, rev'd in part on other grounds, 331 S.W.2d
917, 923 (Tex. 1960) ( courts should give weight to a construction that is long-continued and
uniform). Here the Board's conclusion regarding the effect of age-related preexisting conditions is
not sanctioned by long acquiescence and this diminishes the consideration this Court affords its
construction of the statute. See Fisher Controls, 45 S.W.3d at 302. Moreover, the statutory
definition at issue involves the assessment of legislative intent, a matter this court is equally
competent to discern. See id. After considering the plain meaning of the words used in section
811.001(12), we reject the Board's reading that the legislature intended to qualify only those
occupational disabilities caused solely by a specific act or occurrence independent of any preexisting
condition. We must still determine, however, what causal standard the legislature did intend.
There has been considerable discussion of causation under the Workers'
Compensation Act which, like the ERS statute, provides benefits for employees who suffer an
occupational injury or disease. We recognize the different purposes furthered by that Act. One of
the primary goals of the Workers' Compensation Act is to protect employees against risks or hazards
taken or imposed on them in order to perform the employer's work or business. Texas Employers
Ins. Ass'n v. Grammar, 157 S.W.2d 701, 704 (Tex. Civ. App.--Dallas 1941, writ ref'd w.o.m.).
That is, workers' compensation is intended to transfer from the worker to the industry the economic
loss due to industrial accidents and injuries. Employers Mut. Liab. Ins. Co. v. Konvicka, 197 F.2d
691, 693 (5th Cir. 1952). Workers' compensation benefits are designed to compensate an injured
employee for loss of earnings as well as earning capacity. See Texas Employers' Ins. Ass'n v.
Davidson, 295 S.W.2d 482, 486 (Tex. Civ. App.--Fort Worth 1956, writ ref'd n.r.e.). On the other
hand, occupational disability retirement benefits are not designed to replace wages but rather to allow
an incapacitated state employee to begin drawing pension payments when she is unable to work until
normal retirement age.
Another distinction is that the Workers' Compensation Act has, from its inception,
been liberally construed in favor of injured workers. See Waldrep v. Texas Employers Ins. Ass'n,
21 S.W.3d 692, 698 n.10 (Tex. App.--Austin 2000, pet. denied ); Texas Employers' Ins. Ass'n v.
Moore, 284 S.W.2d 175, 176 (Tex. Civ. App.--Amarillo 1955, writ ref'd n.r.e.). Under that act,
workers' compensation benefits are an injured employee's exclusive remedy, see Tex. Lab. Code
Ann.§ 408.001(a) (West 1996); thus, an employee forfeits the right to maintain a common-law cause
of action against her employer for negligence. A liberal construction of the act in favor of an
employee's recovery has been seen as necessary in light of the employee's abrogation of common
law remedies. See Hargrove v. Trinity Universal Ins. Co., 256 S.W.2d 73, 75 (Tex. 1953) ("Since
the workman coming under the terms of the Act is denied his common law rights it is held that the
Act should be liberally construed in his favor."). By contrast, the statute governing occupational
disability retirement benefits does not require a claimant to waive any rights that she has under the
common law.
Nonetheless, the Workers' Compensation Act is similar in that it provides
compensation for like types of injuries-occupational injuries and diseases that result in death or
disability. (17) And, to receive statutory workers' compensation benefits, claimants must provide
evidence of a sufficient causal nexus between the workplace accident and the claimant's disability.
Under the current workers' compensation scheme, a compensable injury is "damage or harm to the
physical structure of the body and a disease or infection naturally resulting from the damage or harm.
The term includes an occupational disease." Tex. Lab. Code Ann. § 401.011(26) (West Supp. 2002).
The courts have interpreted "naturally resulting" to encompass a "producing-cause" standard, which
is similar to proximate cause although without the requirement of foreseeability. See Texas Indem.
Ins. Co. v. Staggs, 134 S.W.2d 1026, 1028-29 (Tex. 1940); National Farmers Union Prop. & Cas.
Co. v. Degollado, 844 S.W.2d 892, 897 (Tex. App.--Austin 1992, writ denied).
The focus of proximate cause is to determine whether there is an "unbroken causal
connection between the injury and the disability or death." Staggs, 134 S.W.2d at 1030. A cause
is a proximate cause if, in a natural and continuous sequence it produces the harm, and if without it
the harm would not have occurred. See Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.
1991). As the term "proximate cause" is used in negligence law, the cause must also be a substantial
factor in bringing about the harm. Id. at 471-72(quoting Restatement (Second) of Torts § 431, cmt.
a (1965)). Because of the liberal interpretation of the Workers' Compensation Act, however, a
workplace injury or disease is considered to be a producing cause even if it is not a substantial factor
in bringing about the disability. That is, the workplace injury need not be the primary cause of the
employee's disability; rather, as long as the occupational injury is a producing cause of the disability,
there is a sufficient causal link under the workers' compensation scheme. See INA of Tex. v. Howeth,
755 S.W.2d 534, 536-37 (Tex. App.--Houston [1st Dist.] 1988, no writ); Texas Employers' Ins.
Ass'n v. Charles, 381 S.W.2d 664, 668 (Tex. Civ. App.--Texarkana 1964, writ ref'd n.r.e.). An
unrelated condition or injury may be the primary factor in causing the employee's disability, but
unless the carrier can prove that such unrelated factor was the sole cause of the employee's
incapacity, an employee remains eligible for workers' compensation benefits. See Degollado, 844
S.W.2d at 896-97.
This framework is appropriate in cases brought under the Workers' Compensation
Act, in which the courts have deemed that a liberal construction of the statute in favor of injured
workers is necessary given the abrogation of workers' common-law rights. We believe there are
compelling reasons why this same framework should not be adopted to govern occupational
disability retirement cases under the ERS statute. There is no indication of an intent for an employee
to recover disability retirement benefits without showing that the occupational injury is the primary
cause of her disability.
Although there may be several producing causes of a disability, there can be only one
primary cause. Under this standard, an employee seeking occupational disability retirement benefits
must establish that a specific act or occurrence determinable by a definite time and place is the cause-in-fact of her disability, namely, that the injury in a natural and continuous sequence produced the
disability, and that without it, the disability would not have occurred. See Lear Siegler, Inc., 819
S.W.2d at 471. Moreover, the employee must prove that the at-work injury is the primary cause of
the disability. A preexisting condition that becomes symptomatic only at the time of trauma or that
does not primarily cause the disability does not break the causal chain between the at-work injury
and the disability. This is true even if a preexisting condition makes the injury more difficult to treat
or more disabling. A preexisting condition that substantially contributes to a disability, however,
such that the preexisting condition is the primary cause of the disability, will defeat a claim for
occupational disability retirement.
The Board then correctly expressed in its conclusion of law that a disability that arises
primarily from a preexisting condition is not a disability that directly results from a workplace
incident. We disapprove the Board's additional statement that an employee must establish that an
"occupational trauma is the direct cause of the [employee's] disability without regard to a
preexisting mental or physical condition" because this infers that an employee with a preexisting
condition that is aggravated by an occupational trauma may be disqualified even if the specific act
or occurrence is the primary cause of her disability. (Emphasis added.)
The primary-cause standard, by requiring a claimant to provide evidence of a
substantial link between her incapacity and a work-related accident, ensures that the scope of
disability retirement benefits is not expanded to encompass disabilities that bear only remotely on
an injury sustained as a result of a claimant's state employment. The standard also addresses the
reality that a traumatic injury often interacts with other factors to produce a disability. It thus
alleviates the harsh consequences that flow from the "without-regard to preexisting conditions" rule
that would disqualify all claimants who have any dormant preexisting conditions, even age-related
back degeneration. The ALJ's findings reflect that Ms. Flores suffered from a dormant preexisting
condition, which did not significantly affect her ability to work but which became symptomatic as
a result of the trauma. Where the preexisting condition is caused solely by a natural aging process
and not by an abnormal disease, there is a more compelling reason not to disqualify the claim. Even
courts applying a sole-cause standard of causation for occupational disability have drawn this
distinction:
A distinction, then, is to be drawn between a morbid or abnormal condition of such
quality or degree that in its natural and probable development it may be expected to
be a source of mischief, in which event it may fairly be described as a disease or an
infirmity, and a condition abnormal or unsound when tested by a standard of
perfection, yet so remote in its potential mischief that common speech would call it
not disease or infirmity, but at most a predisposing tendency.
Willis, 433 S.W.2d at 949; see also Harbison, 576 S.W.2d at 487 ("while 'independent cause' means
'sole cause,' '[r]ecovery is not defeated when a preexisting condition or disorder is so remote in the
scale of causation, so dormant and insubstantial, or so temporary and transient that it does not
materially contribute to the death or injury'"); Fidelity & Cas. Co. v. Manley, 132 F.2d 127, 128 (5th
Cir. 1942) ("it is of no legal significance that the injuries sustained did not alone produce the
condition complained of, since they acted as a catalytic agent upon otherwise dormant physical
symptoms").
By using "directly results from a specific act or occurrence" as part of the
qualification for disability retirement benefits, the legislature did not mandate that the injured
employee be free from all preexisting conditions. Degenerative conditions like Ms. Flores's
osteoarthritis typically begin during one's twenties and thirties and almost everyone has degenerative
changes by age forty, although relatively few people have symptoms. Merck Manual online,
"Osteoarthritis," <http://www.merck.com/pubs/mmanual/section5/chapter52/52a.htm>. The
legislature cannot have intended to disqualify the vast majority of state employees from eligibility
for disability retirement benefits; such a result is not mandated by the statutory scheme.
Interpretations that would produce absurd results are to be avoided. Jones, 58 S.W.3d at 153. We
accept the Board's conclusion of law that a disability directly results from an on-the-job injury if the
injury is the primary cause of the employee's disability. However, we reject its additional holding
that this primary causal connection must be determined without regard to preexisting mental or
physical conditions.
We affirm the Board's conclusion that where the claimant's preexisting condition is
the primary cause of disability, the disability does not directly result from the injury. But there is no
evidence in this record to support a finding that Ms. Flores's degenerative back was the primary
cause of her disability. Therefore, the Board erred in rejecting the ALJ's conclusion of law that Ms.
Flores's injury directly resulted from a specific act or occurrence determinable by a definite time and
place. We again emphasize that where the hearing officer has weighed the credibility of the evidence
in making a finding about the causal effect of the preexisting condition, it is not the Board's function
to reweigh the evidence and change the adjudicative facts, unless they are clearly erroneous or suffer
from another legal infirmity encompassed by Rule 67.91(b).
We will next address the Board's interpretation of when a risk or hazard is peculiar
to a duty that arises from and in the course of state employment. In reviewing the Board's
interpretation of this second prong of the definition, we are particularly mindful that the Board
specifically relies on a previous pronouncement by this court rather than a legislative pronouncement
of intent.
"Risk or Hazard Peculiar to a Duty"
We have previously addressed the second prong of section 811.001(12) in Bond v.
Employees Retirement System, 825 S.W. 2d 804 (Tex. App.--Austin 1992, writ denied). (18) Relying
specifically on our Bond decision, the Board determined that an aide's risk or hazard of being
involved in a car accident while driving her young clients within the scope of her employment does
not meet the statutory definition of "peculiar": "[Ms.] Flores did not prove that by virtue of her duty
to transport children she was exposed to a risk different from that experienced by every other person
who was on the highway that day." (Emphasis added.) Allegedly relying on our interpretation of
"peculiar," the Board reversed the ALJ's conclusion of law that Ms. Flores's injury was caused by
a risk or hazard peculiar to her duties. The Board has misread our holding in Bond.
In Bond, we surveyed some of the dictionary definitions of peculiar: "tending to be
characteristic of one only," "distinctive," "different from the usual or normal," "singular, " "special,"
and "particular." Id. at 806 (citing G. &C. Merriam Co., Webster's Third New International
Dictionary 1163 (1969)). But we did not hold that to be peculiar, a risk experienced by a state
employee performing a duty arising from state employment must somehow be different from the risk
experienced by every other person engaged in the same activity. We will revisit the facts presented
in Bond to clarify our holding in that opinion.
Doris Bond was employed as a nurse with the Department of Corrections and was
asked to come in for a staff meeting on her day off. Id. at 805. She arrived at the parking lot and
a strong gust of wind slammed the truck door against her leg as she was getting out of the vehicle,
seriously injuring her knee. Id. We upheld the Board's determination that her injury did not directly
result from a risk or hazard peculiar to her state duties: "This was not a case in which Bond was
injured while working with patients as a nurse. Rather, Bond's injury resulted from a risk to which
all persons in the vicinity of the storm were exposed." Id. at 806 (citations omitted). Ms. Bond was
employed by the state as a nurse and, as we observed, she was not engaged in nursing duties when
she was injured. The nature of Ms. Bond's state employment as a nurse did not routinely subject her
to the risk of injury by gusts of wind. Therefore, we concluded that the risk of getting out of her car
in the wind was a risk common to storms, not a risk peculiar to duties assumed by nurses. We did
not mean that a risk or hazard arising from and in the course of Ms. Bond's nursing duties would be
peculiar only if it were somehow different from the risk assumed by other persons engaged in nursing
activities. To the contrary, a risk or hazard is peculiar to a duty if that duty imposes a risk or hazard
different from the usual or normal risks encountered by a person not engaged in that duty. We find
no basis in the statute, in our Bond opinion, or in the plain meaning of the word "peculiar" for the
Board's overly restrictive definition of that word in this statute.
Unlike Ms. Bond, Ms. Flores was injured while performing her duties of transporting
children who were in the care of the Department, where she was employed. Ms. Flores's job was
defined by one primary task: driving children entrusted to the Department. The Department's
performance/development plan and evaluation for Ms. Flores lists transporting clients as her
foremost duty; Ms. Flores spent between seven and twelve hours each day, or seventy-five percent
of her working hours, in a car. Thus, she faced a much higher risk of being injured in a car accident
than incidental drivers. The increased risk of an accident faced by Ms. Flores, not the general risk
shared by the driving public, was an inherent risk that was particular to her duties as an aide. We
hold that there is abundant evidence in the record that the risk of being injured in a car accident was
peculiar to Ms. Flores's duties within the scope of her state employment. The ALJ so found in her
findings of fact and in her conclusions of law.
The Board defends its definition of "peculiar" by insisting that the legislature intended
to narrowly limit the scope of occupational disabilities and that we recognized this narrow scope in
Bond. We disagree. In Bond, we affirmed the denial of a claim because Ms. Bond was not injured
while performing her peculiar duties of employment as a nurse. Our language regarding the narrow
scope of an occupational disability must be read in that context only. Neither the Bond decision nor
the statute defines occupational disability to exclude an injury arising from a risk or hazard that is
peculiar to the specific duties of state employment, such as we have here.
We hold that the Board erred in rejecting the ALJ's conclusion of law that Ms.
Flores's injury directly resulted from a risk or hazard peculiar to and inherent in a duty arising from
her state employment.
We sustain the second issue on appeal and hold that the Board has erroneously
interpreted both prongs of the statute defining an occupational disability.
CONCLUSION
We hold that the Board disregarded Ms. Flores's substantial rights by deciding this
appeal before it arrived at its findings of fact and conclusions of law, reweighing adjudicative facts,
changing findings and conclusions for unauthorized and unexplained reasons, making findings of
fact and conclusions of law without adequate support in the record, and failing to give notice before
the hearing of its intention not to follow previous decisions and failing to adequately explain the
reasoning for its change in position. We therefore hold that the Board acted arbitrarily and
capriciously and abused its discretion.
We further hold that in reversing the ALJ on both prongs of the definition of
occupational disability the Board applied an erroneous interpretation of section 811.001(12). As to
the first prong, we reject the Board's interpretation that a claimant must prove that a traumatic act
or occurrence caused her disability without regard to any preexisting mental or physical condition.
Based on the plain meaning of "directly results from a specific act or occurrence determinable by a
definite time and place," we hold that the legislature intended a primary-cause relationship between
an employee's traumatic injury and her disability. A claimant need not prove that her disability was
caused by the traumatic incident alone without regard to a preexisting mental or physical condition.
The claimant must, however, prove that her disability was primarily caused by the injury. As to the
second prong, we reiterate that a risk or hazard is "peculiar to . . . a duty . . . that arises from and in
the course of state employment" if that duty imposes a risk or hazard different from the usual or
normal risks encountered by a person not engaged in that duty.
Therefore, we reverse the judgment of the trial court and the Board's order and
remand this cause to the Board for further proceedings consistent with this opinion.
Bea Ann Smith, Justice
Before Justices Kidd, B. A. Smith and Patterson: Opinion by Justice B. A. Smith;
Dissenting Opinion by Justice Patterson
Reversed and Remanded
Filed: April 18, 2002
Publish
1. We will refer to several entities throughout this appeal. The "Board" refers to the agency's
board of trustees, which hears appeals of contested cases. See Tex. Gov't Code Ann. § 815.511
(West Supp. 2002). The "Medical Board" refers to the agency's medical board, which certifies
occupational disability retirement claimants as disabled. See id. § 814.203 (West 1994) (providing
that the medical board shall issue a certification of disability if it "finds that the member is mentally
or physically incapacitated for the further performance of duty, that the incapacity is likely to be
permanent, and that the member should be retired"). We will refer to "ERS staff" to mean the
agency's representatives at the administrative hearing before the State Office of Administrative
Hearings.
2. The Employees Retirement System's (ERS's) governing statute, which is subtitled
"Employees Retirement System of Texas" is found at sections 811.001-815.512 of the Government
Code. See Tex. Gov't Code Ann. §§ 811.001-815.512 (West 1994 & Supp. 2002).
3. ERS provides four types of benefits for eligible state employees: service retirement,
occupational disability retirement, nonoccupational disability retirement, and death benefits. See
Tex. Gov't Code Ann. § 814.001 (West 1994).
4. Ms. Flores's appeal was pending before September 1, 2001 and is governed by the law in
effect at that time. An amendment to Section 811.001(12) became effective on September 1, 2001.
See Act of May 23, 2001, 77th Leg., R.S., ch. 1231, § 1, 2001 Tex. Gen. Laws 2827, 2827. It is
presumed that statutes operate prospectively unless expressly made retrospective. Tex. Gov't Code
Ann. § 311.022 (West 1998). As the amendment that became effective September 1, 2001 has no
substantive effect on the definition, however, the current code is cited for the sake of convenience.
5. See Tex. Gov't Code Ann. § 815.511(a) (West Supp. 2002) (authorizing the Board to change
or delete findings of fact and conclusions of law contained in a proposal for decision submitted by
an administrative law judge or other hearing examiner and to make alternative findings of fact and
conclusions of law, and requiring Board to state in writing its specific reasons for the changes); 34
Tex. Admin. Code § 67.91(b) (2001) (Employees Ret. Sys., Hearings on Disputed Claims) (requiring
written explanation for any change and providing criteria for authorized changes).
6. See Tex. Gov't Code Ann. § 2001.174(2)(A), (D) (West 2000) (providing that a reviewing
court shall reverse or remand the case "if substantial rights of the appellant have been prejudiced
because the administrative findings, inferences, conclusions, or decisions" violate a statutory
provision or are affected by other error of law).
7. The section mandates that a reviewing court reverse or remand a case "if substantial rights of
the appellant have been prejudiced because the administrative findings, inferences, conclusions, or
decisions are . . . arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion." Tex. Gov't Code Ann. § 2001.174(2)(F) (West 2000).
8. The APA provision limiting an agency's ability to change an ALJ's findings of fact and
conclusions of law is found in section 2001.058 of the Government Code. See Tex. Gov't Code
Ann. § 2001.058 (West 2000).
9. The APA contains the minimum standards for administrative agencies. See Tex. Gov't
Code Ann. § 2001.001(1) (West 2000). The Board stated that it was substituting its findings of fact
and conclusions of law for the ALJ's pursuant to the authority of its own statute and rules,
specifically, section 815.511(a) of the Government Code and Rule 67.91 in the Administrative Code.
See Tex. Gov't Code § 815.511(a) (West Supp. 2002); 34 Tex. Admin. Code § 67.91 (2001). We
will therefore specifically analyze the Board's compliance under section 815.511(a) and Rule 67.91.
10. We emphasize that the supreme court's opinion did not reach the issue regarding the
appropriate manner of agency decision-making.
11. The Board also added the following findings: "Appellant's preexisting condition . . .
increased the Appellant's vulnerability to serious back injury;" "her permanent disability would not
have resulted from the June 1996 accident but for the preexisting conditions;" "Appellant's injuries
from the automobile accident of June 1996 would not, in and of themselves, have rendered the
Appellant permanently incapacitated, in the absence of the preexisting condition." None of these
findings, however, is the equivalent of a finding that Ms. Flores's disability resulted primarily from
her degeneration; nor is such a finding warranted in light of the fact that Ms. Flores suffered a
herniated disc at L5/S1 from the accident but her preexisting arthrosis was at L4/L5, and that she was
also found to have an incapacitating knee injury, which was caused solely by the accident.
12. Employees Ret. Sys. of Tex., Appeal of Mary L. Dean, (Mar. 16, 1994) (final order of Board
granting application for benefits). The findings of fact accompanying the decision state that
degenerative changes caused solely by the aging process are not considered preexisting conditions
for purposes of occupational disability retirement benefits.
13. Id., Appeal of Francisca G. Link, Docket No. XXX-XX-XXXX (Aug. 18, 1999) (final order of
Board granting application for benefits). The Board adopted the ALJ's proposal for decision which
relied on Dean to grant the employee's application where the employee suffered from an age-related
preexisting condition. Both the Link and Dean decisions are included in our record.
14. Apparently, Ms. Dean was in her 60s at the time of her appeal.
15. We have been unable to find a Texas case squarely addressing this issue. In a previous
decision by this court, we refused to find that one prior decision that was distinguishable on its facts
established binding precedent. See Retama Dev. Corp. v. Texas Workforce Comm'n, 971 S.W.2d
136, 139-40 (Tex. App.--Austin 1998, no pet.).
16. Compare some of the definitions of "sole": "being the only one or ones, only"; "being the
only one of the kind," "belonging or pertaining to one individual or group to the exclusion of all
others," with some of the definitions of "direct": "proceeding in a straight line or by the shortest
course," "personal or immediate," "straightforward, frank," "inevitable, consequential." Jess Stein,
Ed., Random House College Dictionary, (revised ed. 1984).
17. Compare language of Tex. Gov't Code Ann. § 811.001(12) (West Supp. 2002) ("injury or
disease that directly results from a specific act or occurrence determinable by a definite time and
place, and directly results from a risk or a hazard peculiar to and inherent in a duty that arises from
and in the course of state employment"), with language describing compensable injury under
workers' compensation statute, Employers Mut. Liab. Ins. Co. v. Konvicka, 197 F.2d 691, 693-94
(5th Cir. 1952) ("[a]n injury has to do with, and arises out of, the work or business of the employer,
when it results from a risk or hazard which is necessarily or ordinarily or reasonably inherent in or
incident to the conduct of such work or business").
18. Appellant challenges as an initial matter the Board's statutory interpretation that the
inherent risk or hazard must also be peculiar to a duty arising from state employment. Our previous
decision in Bond has foreclosed appellant's argument. See Bond v. Employees Ret. Sys., 825 S.W.2d
804, 806 (Tex. App.--Austin 1992, writ denied). Therefore, we address only Ms. Flores's challenge
to the Board's interpretation of the word "peculiar."
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455 P.2d 172 (1969)
Jerry ROGERS and Karla Rogers, individually and on behalf of their deceased minor daughter, Jaylene Rogers; Edward Knowles; and Connie C. Knowles, Appellants,
v.
STATE of Nevada, Respondent.
No. 5722.
Supreme Court of Nevada.
June 6, 1969.
Rehearing Denied July 8, 1969.
Echeverria & Osborne, Reno, for appellants.
Harvey Dickerson, Atty. Gen., Fred R. Rodgers, Deputy Atty. Gen., Carson City, for respondent.
OPINION
THOMPSON, Justice.
The district court granted a motion to dismiss this case against the state for failure of the plaintiffs to timely file claims with the ex offico clerk of the State Board of Examiners. Statute requires the presentation of claims to such clerk within six months from the time the cause of action *173 accrues.[1] Here, the claims were presented to a member of the board of examiners rather than to the ex officio clerk. Presentation to such member was on the same day of the month six months after accrual of the causes of action. The main appellate issues concern the computation of time and the effectiveness of presenting claims to a member of the board rather than to its clerk. We rule that the claims were timely filed and in substantial compliance with statutory requirements.
A single car accident occurred on U.S. Highway 40 in which Jerry and Karla Rogers, Edward and Connie Knowles were injured, and Jaylene Rogers, the minor daughter of Jerry and Karla, was killed. The claimants charge the State of Nevada with negligence in the maintenance of that highway. The accident happened on September 8, 1967. Claims were presented to the Secretary of State on March 8, 1968, who in turn transmitted them to the ex officio clerk of the board of examiners on March 12, 1968. That board is composed of the Governor, the Secretary of State, and the Attorney General.
This action was commenced May 16, 1968. Since the board had not acted upon the claims, the complaint did not allege compliance with the claim statute. On June 4, 1968 the board reviewed and denied the claims. On August 2, 1968 an amended complaint was filed alleging the presentation and denial of the claims.
1. Substantial compliance with statutory requirements is sufficient. Hansen-Neiderhauser v. Nevada State Tax Commission, 81 Nev. 307, 311, 402 P.2d 480 (1965); City of Reno v. Fields, 69 Nev. 300, 250 P.2d 140 (1952). Presentation of the claims to a member of the board of examiners is substantial compliance. Indeed, only the board can approve or deny the claims. The ex officio clerk is not involved in that decision. (See, e.g., Rice v. Clark County, 79 Nev. 253, 382 P.2d 605 (1963), where failure to serve one of two named recipients was held inconsequential, where one not served had no decisional authority.) To hold that such claims must be presented to the clerk, and that presentation to a member of the board is ineffective, would exalt form over substance. This, we decline to do, and rule that the claims were presented on March 8, 1968 when served upon the Secretary of State.
2. The state insists that the phrase "within 6 months" used in NRS 41.036(2) should be construed to require filing before the expiration of the day preceding the same date, six months removed. Such a construction would require the instant claims to have been filed on or before March 7, 1968, and the filing with the Secretary of State on March 8 would be one day late. The claimants argue that the computation of any time period within which an act is to be done excludes the first day of the period and includes the last.
The proper method of computing time is as the claimants suggest and has been the rule of Nevada for many years. NCL 9029, since replaced by NRCP 6(a); McCulloch v. Bianchini, 53 Nev. 101, 292 P. 617, 297 P. 503 (1930); Watson v. Koontz, 74 Nev. 254, 328 P.2d 173 (1958).
NRCP 6(a) controls this case. It provides: "In computing any period of time prescribed or allowed by these rules, by the local rules of any district court, by order of court, or by any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included * * *."
NRS 41.036 is, one, a statute and, two, applicable since it directs the filing of a claim with the state. It does not, however, specify how time shall be computed. NRCP 6(a) does so specify.
*174 The state suggests that Kirk v. Parsons, 76 Nev. 442, 357 P.2d 120 (1960), supports its position. There, the court held that Rule 6(a) had no application to election contests, reasoning that a special law governed. We think that Kirk v. Parsons was incorrectly decided since the special law to which the court made reference did not specify how time was to be computed. Accordingly, we now expressly overrule that holding.
The filing of the claims in the case at hand was, therefore, within six months from the time the causes of action accrued.
3. Two subordinate matters must be considered. Edward and Connie Knowles did not themselves present claims. Jerry Rogers did so on their behalf. NRS 41.031 waives state immunity "provided the claimant complies" with the statutes governing suits against the state. The state urges that the filing of claims by Jerry Rogers on behalf of the Knowleses was not "claimant compliance." Apparently Rogers was authorized to act for the Knowleses. There is nothing to suggest otherwise and we reject the technical contention of the state.
This action was prematurely filed since the board of examiners had not acted upon the claims presented to it, nor had 90 days elapsed from the receipt thereof. NRS 41.036(2). After the board did act the plaintiffs amended their complaint to so reflect. That new matter should have been introduced by a supplemental pleading since it did not exist when suit was started. NRCP 15(d); Las Vegas Network v. B. Shawcross and Associates, 80 Nev. 405, 395 P.2d 520 (1964). But since the statute of limitations is about to run, we shall treat the amended complaint as a supplemental complaint in this case.
Other claimed errors are without merit.
Reversed and remanded for further proceedings.
COLLINS, C.J., and ZENOFF, BATJER and MOWBRAY, JJ., concur.
NOTES
[1] NRS 41.036(2) reads: "Every other claim against the state or any of its agencies shall be presented to the ex officio clerk of the state board of examiners within 6 months from the time the cause of action accrues."
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ACCEPTED
03-16-00196-CR
12583961
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/8/2016 10:11:37 AM
JEFFREY D. KYLE
CLERK
NO. 03-16-00196-CR
JEFF ELLIS NANNY IN THE FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS
V. THIRD COURT9/8/2016
OF APPEALS
10:11:37 AM
JEFFREY D. KYLE
THE STATE OF TEXAS AUSTIN, TEXAS Clerk
STATE'S MOTION FOR EXTENSION OF TIME TO FILE BRIEF
TO THE HONORABLE THIRD COURT OF APPEALS:
NOW COMES the State of Texas, Appellee in the above entitled and
numbered cause and files this Motion for Extension of Time to File State’s
Brief, and in support thereof would show the Court the following:
I.
Appellant was found guilty by the Court of possession of a controlled
substance, a state jail felony, and the Judge assessed punishment at 600 days
confinement in the State Jail Division of the Texas Department of Criminal
Justice on March 17, 2016. Appellant filed Notice of Appeal on March 23,
2016. Appellant's brief was filed on August 10, 2016. The State's brief is
currently due on September 9, 2016.
II.
The State has not requested an extension in this case prior to this
request.
III.
The State requests this extension of time due to the following: Counsel
for the State has been involved in prosecution of cases including contested
hearings, pretrial hearings, grand jury presentation, negotiations with opposing
counsel, guilty pleas and other hearings in numerous additional pending felony
cases.
WHEREFORE, The Attorney for the State requests an extension of time
to October 11, 2016, in which to file State's Brief.
Respectfully submitted,
_______________________
Jason Ferguson
Assistant District Attorney
119th Judicial District
124 W. Beauregard, Suite B
San Angelo, TX 76903
(325) 659-6583
State Bar No. 24072092
SWORN TO AND SUBSCRIBED before me by the said Meagan White,
this 8th day of September, A. D. 2016.
_______________________
Notary Public
State of Texas
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Motion for
Extension of Time to File Appellee's Brief was this 8th day of September, 2016,
delivered to Tom Watson, Attorney for Appellant, through e-file.txcourts.gov.
_______________________
Jason Ferguson
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132 S.W.3d 533 (2004)
Harold Earl WILSON, Appellant,
v.
Veronica WILSON, Appellee.
No. 01-02-00736-CV.
Court of Appeals of Texas, Houston (1st Dist.).
February 26, 2004.
*534 Raymond M. Hill, Raymond M. Hill & Associates, Houston, TX, for Appellant.
Frederick K. Wilson, Houston, TX, for Appellee.
Panel consists of Justices TAFT, KEYES, and BLAND.
OPINION
JANE BLAND, Justice.
Appellant Harold Wilson submits a restricted appeal from a default divorce judgment rendered in favor of appellee Veronica Wilson. We conclude that the evidence is factually insufficient to support the trial court's "just and right" division of the community estate and therefore reverse and remand for a new trial.
Facts
Veronica Wilson petitioned for a divorce from Harold Wilson. The clerk issued citation and an officer personally served Harold Wilson with suit papers. Harold Wilson never filed an answer. On New Year's Eve of 2001, the trial court held a default judgment hearing, at which Veronica Wilson testified as the sole witness. The trial court admitted no exhibits.
*535 With respect to the division of the marital estate, Veronica Wilson initially testified:
Q. You're also asking the Court to award you the division of the property as shown in the decree that's in front of the Court and a copy of which I am handing you; is that correct?
A. That's correct.
Q. And in that decree his estate is about $1.2 million; is that correct?
A. Yes.
Q. And you're asking for approximately half of the estate?
A. Yes.
(Emphasis added). The questions continue in the same vein: "You're asking that [personal property, clothing, jewelry, bank accounts, vehicles] be awarded to you," each to which Veronica Wilson responds, "Yes." Counsel adds: "And you're asking for a judgment against him of $275,000?" Veronica Wilson again responds affirmatively. Finally, Veronica Wilson acknowledges that "the rest of the property" is to be awarded to her husband.
After prompting from the trial court, counsel expanded on this testimony with the following:
Q. You have approximately what you aggregate a total of about $1.2 million in assets? [sic]
A. Yes.
Q. Of that roughly $300,000 was the house?
A. Yes.
Q. The rest is all notes, land and CDs; is that correct?
A. Yes.
Q. You're asking for the bank account that's in your name?
A. Yes.
Q. That's about $100,000?
A. Yes.
Q. And then you're asking for about two point$275,000 dollar judgment against him for the other half of the reasonable value of the estate to be awarded to you; is that correct?
A. Yes.
(Emphasis added).
After this colloquy, the trial court asked: "Sir, what authority do I have as the Court to grant a judgment instead of simply awarding assets to her in the amount sufficient for that?" Counsel responded: "A cash award to make an equal division of the estate basedalso we have testified as to cruelty an [sic] unequal division but to make a division of the estate awarding her a judgment." The court then stated, "And you've obviously written this decree and you believe that the language contained in the decree is sufficient for the relief you're requesting?" to which counsel represented "I do."
Several days later, the trial court signed a final divorce decree, containing a "Division of the Marital Estate" subsection. In it, the trial court awarded Veronica Wilson a specifically identified piece of real property, household furnishings and fixtures, any pension benefits relating to her past or future employment, "any and all sums of cash in the possession of or subject to the sole control of Petitioner," securities in her name, two vehicles, and "$275,000 payable by Harold Earl Wilson to Veronica Wilson on the day of divorce, by cash, cashier's check, or money order for which this Court grants a judgment against Harold Wilson in the amount of $275,000, and for which let execution issue." The decree awards Harold Wilson furniture and fixtures in his sole possession or control, his pension benefits, securities in his name, a vehicle, and real property described as *536 land in Waller County, a condominium unit in Jefferson County, and "land and improvement" on Exchange Street in Harris County. The decree also awards a "Promissory Note and Deed of Trust from Word of Love Church in the original amount of $254,000 dated 9-17-98."
Harold Wilson does not dispute that he was served with process and failed to appear. He alleges, however, that he did not receive notice of the final default hearing date, nor of entry of the final judgment. Having failed to file a motion for new trial, he appeals by restricted appeal, contending that (1) his failure to receive notice of the default judgment hearing warrants reversal, and (2) the record is factually insufficient to support the division of assets in the final decree of divorce.
Restricted Appeal
A direct attack on a judgment by restricted appeal must (1) be brought within six months after the trial court signs the judgment, (2) by a party to the suit, (3) who did not participate in the actual trial, and (4) the error complained of must be apparent on the face of the record. Tex.R.App. P. 30; Norman Communications v. Texas Eastman Co., 955 S.W.2d 269, 270 (Tex.1997). The "face of the record" consists of all the papers on file in the appeal, including the statement of facts. Id. In addition to citation and service issues, a restricted appeal confers jurisdiction upon the appellate court to review whether the evidence is legally and factually sufficient to support the judgment. Id.
Notice
A defendant who makes an appearance following service of process is entitled to notice of the trial setting as a matter of constitutional due process. Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86, 108 S.Ct. 896, 899-900, 99 L.Ed.2d 75, (1988); LBL Oil Co. v. Int'l Power Serv., Inc., 777 S.W.2d 390, 390-91 (Tex.1989). The same is not true if the defendant fails to answer or otherwise appear. The law imposes no duty on the plaintiff to notify a defendant before taking a default judgment when he has been served properly with the citation and petition, and nonetheless has failed to answer or otherwise appear. See Brooks v. Assoc. Fin. Servs. Corp., 892 S.W.2d 91, 94 (Tex.App.-Houston [14th Dist.] 1994, no writ). It is undisputed that Harold Wilson received service of process and did not appear. He does not contest the propriety of the citation or the method of service. He thus has failed to show error on the face of the record regarding his claim that he had no notice of the trial setting.
Having concluded that Harold Wilson has not shown error on the face of the record regarding notice, we turn to his complaint that the record is factually insufficient to support the division of property in the final decree of divorce. See Norman Communications, 955 S.W.2d at 270.
Division of Marital Property
The standard of review for property division issues in family law cases is abuse of discretion. See Schlueter v. Schlueter, 975 S.W.2d 584, 589 (Tex.1998). A trial court has broad discretion in dividing the "estate of the parties," but must confine itself to community property. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 139 (Tex.1977). If a court of appeals finds reversible error that materially affects the trial court's "just and right" division of property, then it must remand the entire community estate for a new division of the property. Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex.1985) (remanding to trial court for new division of community estate when court of appeals found portion of division lacked evidentiary support). In *537 reviewing the factual sufficiency of Veronica Wilson's affirmative claims, for which she has the burden of proof, we examine all the evidence in the record, including any evidence contrary to the judgment, to determine if the challenged finding is so weak as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986).[1] If the division of marital property lacks sufficient evidence in the record to support it, then the trial court's division is an abuse of discretion. See Sandone v. Miller-Sandone, 116 S.W.3d 204, 208 (Tex.App.-El Paso 2003, no pet.) (holding that trial court abused its discretion in dividing property because there was no evidence of community estate's value); see also Mai v. Mai, 853 S.W.2d 615, 618 (Tex.App.-Houston [1st Dist.] 1993, no writ) (legal and factual sufficiency are relevant factors in assessing whether trial court abused its discretion).
Harold Wilson first contends that neither he nor his wife works and that the bulkif not allof the estate stems from a personal injury settlement he received after sustaining serious personal injuries, including an amputated leg. A spouse's recovery for personal injuries during marriage is generally that spouse's separate property. Tex. Fam.Code Ann. § 3.001(3) (Vernon 1998). Portions of a personal injury award may, however, belong to the community estate, including damages for lost wages, medical expenses, and other expenses associated with the injury to the community estate. Id.; Osborn v. Osborn, 961 S.W.2d 408, 414 (Tex.App.-Houston [1st Dist.] 1997, pet. denied). In this case, the facts surrounding the accident and personal injury lawsuit are largely absent from the trial court record. Veronica Wilson testified at a hearing regarding temporary orders that Harold Wilson received "a fair amount of money when he had a leg crushed." Veronica Wilson moreover acknowledges the settlement in her brief, but contends that her husband co-mingled the separate property. To speculate as to the settlement and what happened to its proceeds necessarily would require us to look for error outside the face of the record. Rule 30 and the cases interpreting it stringently require that a direct attack by restricted appeal may not rely on such extra-record speculation. See Tex.R.App. P. 30; Norman Communications, 955 S.W.2d at 270. Thus, we decline to address Harold Wilson's arguments about the amount of his personal injury settlement and its purported characterization as separate property.[2]
The evidence that is apparent on the face of the record, however, is sparse and inconsistent. In her testimony, Veronica Wilson fails to identify the amount of the community estate. Initially, she testifies that the value of "his" estate "in the decree" is $1.2 million. Later, she agrees *538 that "you have approximately what you aggregate [sic] total $1.2 million." She fails to identify a referent to the pronoun "you." She never defines the assets of the community estate, nor describes them with any particularity, other than a home worth $300,000, two vehicles, and a $100,000 bank account. She fails to identify at all what "the rest of the property" is that she seeks to have awarded to her husband. Finally, she testifies that she is entitled to a money judgment against her husband for her share of "the rest" of these unidentified and unvalued assets. Her testimony regarding the rough $1.2 million figure is subject to conflicting inferences"his," or "yours," or perhaps even "theirs." Given the dearth of evidence identifying, describing, and valuing the community estate, we hold that there is insufficient evidence to support the division of assets. See O'Neal v. O'Neal, 69 S.W.3d 347, 350 (Tex.App.-Eastland 2002, no pet.) (reversing default judgment in restricted appeal because record contained no evidence as to value of any property divided by trial court, no evidence of any improvements to land, and no evidence as to whether land was separate or community property).
The final decree of divorce illustrates this lack of affirmative prooffor it does not match up with Veronica Wilson's testimony. The decree refers to specific pieces of land, a promissory note, and other assets never described or valued for division during Veronica Wilson's testimony. More importantly, it assesses a $275,000 personal money judgment against the defaulting defendant without any testimony upon which to base such an award. A just and right division of assets generally does not include an additional money judgment, absent evidence that a spouse secreted specific assets that properly belonged to the community estate. See Schlueter, 975 S.W.2d at 588. The evidence presented at the default judgment hearing fits none of the criteria for such an award. See O'Neal, 69 S.W.3d at 350 (noting that legal description contained in decree is not itself evidence and that conclusory testimony that decree was fair and equitable was not sufficient to support judgment).[3] Moreover, the allegations in a petition for divorce are not admitted by a defaulting defendantunlike other civil cases in which a defaulting defendant is presumed to admit the petition's allegations regarding liability and liquidated damages. Tex. Fam.Code Ann. § 6.701 (Vernon 1998); see Sandone, 116 S.W.3d at 207 (petition for divorce may not be taken as confessed if respondent does not file answer). Without sufficient evidence, we cannot sustain the division of assets in the final divorce decree.
Child Support
The final decree of divorce awards $2,000 per month in child support to Veronica *539 Wilson. Harold Wilson contends that insufficient evidence supports the child support award. Given our holding that insufficient evidence supports the division of the community estate, we remand the child support determination to the trial court, as such a claim may be "materially influenced" by the property division, and we should not substitute our discretion for that of the trial court. See Jacobs, 687 S.W.2d at 732; see also O'Neal, 69 S.W.3d at 350 (reversing default judgment in restricted appeal and remanding both the child support and division of the estate to the trial court).
Conclusion
A default judgment stands against defenses that could have been raised and were not, but one granting affirmative relief will not stand without affirmative proof to support it. Here, the evidence is insufficient to support the division of assets in the final decree of divorce. We therefore reverse the trial court's decree of divorce with respect to the division of the community estate of the parties and the child support award and remand the case to the trial court for a new trial on these issues. We affirm the decree of the trial court in all other respects. We deny Harold Wilson's motion to supplement the record.
NOTES
[1] Harold Wilson's initial brief complained about a lack of evidence to support the default judgment, though he did not use legal or factual sufficiency as specific terms in his "issues presented." In his reply brief, he clarified the "central issue" to be "want of evidence sufficient to enable the court to exercise discretion in division of the marital estate."
[2] In his brief, Harold Wilson complains of "extrinsic fraud" and provides a set of "supplemental" materials that are not part of the trial court record. Extrinsic fraud necessarily requires evidence not found in the record. See Montgomery v. Kennedy, 669 S.W.2d 309, 312 (Tex.1984). Any collateral attack on the judgment requiring evidence outside the record must be brought by a bill of review in the trial court and not by restricted appeal. Id. Moreover, it is well-settled that an appellate court reviewing a restricted appeal may not consider supplemental materials not found in the trial court record. See Tex.R.App. P. 30; Norman Communications, 955 S.W.2d at 270. We therefore deny Harold Wilson's motion to supplement the record.
[3] On appeal, Veronica Wilson relies upon evidence presented at a temporary injunction hearing to support the division of assets contained in the final decree of divorce. Her testimony from the earlier temporary injunction hearing, however, was never offered at the default judgment hearing. The reporter's record reveals that two different associate judges heard these matters. Testimony from earlier ancillary proceedings in the case must be offered at the trial to be considered as evidence in support of final affirmative relief. See May v. May, 829 S.W.2d 373, 376 (Tex.App.-Corpus Christi 1992, writ denied) (holding that trial court may not judicially notice testimony taken at prior hearing in same case with respect to temporary orders); Ex parte Turner, 478 S.W.2d 256, 258 (Tex.Civ.App.-Houston [1st Dist.] 1972, no writ) (holding that trial court cannot judicially notice previous testimony). Moreover, we have reviewed the testimony from the temporary injunction hearing and conclude that it provides no sufficient evidentiary basis for the division of community assets in the final decree of divorceparticularly, the $275,000 personal money judgment.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-1483
SHEKHEM BEY, a/k/a Shekhem Daawuud El Amen Bey,
Plaintiff – Appellant,
v.
ZURICH NORTH AMERICA INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Robert J. Conrad,
Jr., Chief District Judge. (3:09-cv-00459-RJC-DCK)
Submitted: January 25, 2012 Decided: February 8, 2012
Before SHEDD, DAVIS, and DIAZ, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Shekhem Bey, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Shekhem Bey seeks to appeal the district court’s order
dismissing this action for failure to comply with a court order.
We dismiss the appeal for lack of jurisdiction because the
notice of appeal was not timely filed.
Parties are accorded thirty days after the entry of
the district court’s final judgment or order to note an appeal,
Fed. R. App. P. 4(a)(1)(A), unless the district court extends
the appeal period under Fed. R. App. P. 4(a)(5), or reopens the
appeal period under Fed. R. App. P. 4(a)(6). “[T]he timely
filing of a notice of appeal in a civil case is a jurisdictional
requirement.” Bowles v. Russell, 551 U.S. 205, 214 (2007).
The district court’s order was entered on the docket
on January 28, 2010. The notice of appeal was filed on March 9,
2011. Because Bey failed to file a timely notice of appeal or
to obtain an extension or reopening of the appeal period, we
deny leave to proceed in forma pauperis and dismiss the appeal.
We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
DISMISSED
2
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265 U.S. 70 (1924)
NORFOLK & WESTERN RAILWAY COMPANY
v.
PUBLIC SERVICE COMMISSION OF WEST VIRGINIA ET AL.
No. 187.
Supreme Court of United States.
Argued January 22, 1924.
Decided May 5, 1924.
ERROR TO THE SUPREME COURT OF APPEALS OF THE STATE OF WEST VIRGINIA.
*71 Mr. John H. Holt, with whom Mr. Lucian H. Cocke, Jr., Mr. Lucian H. Cocke and Mr. Theodore W. Reath were on the briefs, for plaintiff in error.
Mr. Randolph Bias, for Followay, defendant in error. Mr. Lafe Chafin was also on the brief.
MR. JUSTICE BUTLER delivered the opinion of the Court.
John Followay, one of the defendants in error, a merchant at a village called Blackberry City in Mingo County, West Virginia, filed complaint with the Public Service Commission of that State, praying that the Norfolk & Western Railway Company, plaintiff in error, be required to furnish a suitable crossing and to provide reasonable facilities for the use of shippers at that place. After a hearing, at which much evidence was introduced, the commission made an order which directed the railway company to construct and maintain a roadway for vehicles across its tracks at McCarr Siding. It limited the use of the crossing to the transportation of freight consigned to the complainant and other shippers, and required that the entrance to the crossing at the north side of the track be closed by a gate to be furnished by complainant and to be by him kept locked, except when the crossing was being so used; and directed that, while the crossing was being used by complainant for the transportation of goods across the tracks in vehicles, he should provide a watchman to give notice of approaching trains.
The company instituted proceedings in the Supreme Court of Appeals to suspend and set aside the order, and *72 there contended that it was repugnant to the due process and equal protection clauses of the Fourteenth Amendment. The contention was overruled, and the order was affirmed. Norfolk & Western Ry. Co. v. Public Service Commission, 91 W. Va. 414. Plaintiff in error seeks to have the judgment reversed on the ground of such repugnancy.
It is provided by statute that every railroad company may be required by the commission to establish and maintain such suitable public facilities and conveniences as may be reasonable and just. § 4, c. 15-0, Barnes' Code, 1918; Norfolk & Western Ry. Co. v. Public Service Commission, supra, 419.
The facts may be briefly stated. At McCarr Siding, there are four parallel tracks, an eastbound main line, a westbound main line, a track between these, and a branch line extending across the Tug River. There is also a spur track extending southeasterly from the main line tracks to the tipple of the Allburn Coal Corporation and intersecting the approach to the proposed crossing about 200 feet therefrom.
The railroad tracks are on the north bank of the Tug River which at this place is the boundary between West Virginia and Kentucky. The village adjoins the company's right of way on the north and is located on a bluff considerably higher than the railroad tracks. Its population is about 100. Complainant's store is on a hillside a short distance north of the tracks. The Allburn Coal Corporation owns a doubledecked bridge across the river almost directly opposite the store. The upper level of the bridge is used for transportation of coal, and the lower level is used for pedestrian and vehicular travel. Though privately owned, it has been used by the public for a number of years as a part of the traveled way between the village and the territory south of the river. By reason of a sharp curve in the tracks and a deep cut, the *73 view of the crossing is obstructed, so that enginemen on approaching trains can see it for only a short distance.
McCarr Siding was established for the accommodation of the Allburn Coal Company about 10 or 12 years prior to the filing of the complaint. The tariffs of the railway company and its shipping instructions state that the siding is a carload billing point. It is also a prepay station to which freight in carload and less than carload lots may be shipped, to be delivered at the risk of consignees. The coal company and complainant receive by far the larger part of the freight. The amount received by others is small. When the mines of the Allburn Coal Corporation are fully operated, eight or ten carloads of coal are loaded daily. Other outgoing shipments, consisting principally of boxes, containers and household goods, are also made. The siding is a flag station for three passenger trains, two eastbound and one westbound daily. For that purpose it serves about 1000 people living in the vicinity, including many on the Kentucky side of the river. From 10 to 30 people get on and off trains at McCarr daily. Mail for the village is carried by railroad and delivered at the siding.
Complainant has been engaged in business in the village for many years. He handles merchandise in substantial volume. His freight bill amounts to about $300 a month. The goods come in less than carload and in carload lots and are delivered by the company at the siding. Most of them are brought from the west. Less than carload lots are deposited by the company on the ground on the south side of the tracks opposite his place of business, and carloads are delivered at approximately the same place. It is necessary for him to move his freight across the four intervening tracks. No station facilities have ever been furnished at the siding, and the commission found that the company's failure to afford reasonable facilities for the removal of complainant's freight *74 from its premises causes him damage, delay and inconvenience.
Because of the danger attending the use of the crossing, the railway company, shortly before the commencement of these proceedings, planted posts about five feet apart for a distance of about 50 feet along the right of way on the north side of its tracks to obstruct the crossing and prevent its use for vehicular traffic. This compelled complainant to carry the freight consigned to him by hand across the tracks at a cost greatly in excess of the expense of hauling it in vehicles.
The State, in the exercise of its police power, directly or through an authorized commission, may require railroad carriers to provide reasonably adequate and suitable facilities for the convenience of the communities served by them. But its power to regulate is not unlimited. It may not unnecessarily or arbitrarily trammel or interfere with the operation and conduct of railroad properties and business. Mississippi Railroad Commission v. Mobile & Ohio R.R. Co., 244 U.S. 388, 390, 391. The validity of regulatory measures may be challenged on the ground that they transgress the Constitution; and thereupon it becomes the duty of the court, in the light of the facts in the case, to determine whether the regulation is reasonable and valid or essentially unreasonable, arbitrary and void. Wisconsin, Minnesota & Pacific R.R. v. Jacobson, 179 U.S. 287, 297, 301; Burns Baking Co. v. Bryan, 264 U.S. 504. Railroad carriers may be compelled by state legislation to establish stations at proper places for the convenience of their patrons. Minneapolis & St. Louis R.R. Co. v. Minnesota, 193 U.S. 53, 63. Any measure promulgated by the State to require a railroad company to provide suitable facilities reasonably necessary for the removal from its premises of freight carried by it for its customers does not create a new duty or impose any unnecessary burden.
*75 The facts in this case clearly show the need of some facilities at McCarr Siding for the use of the patrons of the railroad. The order directing the company to construct and maintain a crossing for the use of vehicles to haul the freight across the tracks is a light burden upon the carrier and cannot be said to be unreasonable and arbitrary. It need not be considered whether the company, in the interest of the safety of those using the crossing, lawfully might have been required to furnish the gate and provide the watchman.
To support its contention that the order is unconstitutional, the company asserts that the order takes from it and gives to complainant the control of the crossing; that it prevents the use of the crossing without the consent and participation of complainant, and compels the company to enter into an arrangement or agreement with complainant making him its agent to control the use of the crossing and to guard it while being used. These contentions are without merit. The order does not impair or interfere with the company's right to permit the crossing to be used for purposes other than those specified in the order or prevent the company from guarding the crossing by watchmen or otherwise as it sees fit. Manifestly the limitation upon the use of the crossing and the imposition of duties on the complainant in respect of the gate and the guarding of the crossing were for the benefit of the company. The effect of these provisions was to relieve the carrier of a part of the burden and expense of providing facilities deemed reasonable and necessary for the removal of freight consigned to complainant and others at the siding. We find nothing in the order that deprives the company of its property without due process of law or denies to it the equal protection of the laws.
Judgment affirmed.
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Case: 09-70019 Document: 00511145170 Page: 1 Date Filed: 06/17/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 17, 2010
No. 09-70019 Lyle W. Cayce
Clerk
QUINTIN PHILLIPPE JONES,
Petitioner - Appellant
v.
RICK THALER, DIRECTOR, TEXAS DEPARTMENT OF CRIMINAL
JUSTICE, CORRECTIONAL INSTITUTIONS DIVISION,
Respondent - Appellee
Appeal from the United States District Court
for the Northern District of Texas
No. 4:05-CV-638
Before HIGGINBOTHAM, DENNIS, and ELROD, Circuit Judges.
PER CURIAM:*
This appeal concerns the application of equitable tolling under the
Antiterrorism and Effective Death Penalty Act.1 Jones contends that his failure
to timely file a federal habeas petition should be excused as his attorney’s
conduct was so deficient as to amount to an extraordinary circumstance
*
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.
1
See 28 U.S.C. § 2244(d)(1)(A).
Case: 09-70019 Document: 00511145170 Page: 2 Date Filed: 06/17/2010
No. 09-70019
warranting tolling. The district court dismissed his petition, finding that under
this court’s jurisprudence, Jones was not entitled to tolling and that therefore
his petition was time-barred. The Supreme Court recently spoke to the issues
raised in this case in its opinion in Holland v. Florida.2 In order to permit the
district court first consideration of Jones’s petition in light of the Court’s holding
in Holland, we VACATE and REMAND.
2
Holland v. Florida, No. 09-5326 (U.S., June 14, 2010).
2
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161 N.W.2d 324 (1968)
In re ESTATE of Jacob JEURISSEN, aka J. J. Jeurissen and Jacob J. Jeurissen.
Hildegard JEURISSEN, surviving spouse of decedent, Appellant,
v.
Mary Ann OHNSORG, et al., children of decedent, Respondents.
No. 41004.
Supreme Court of Minnesota.
August 23, 1968.
Lindmeyer & Lindmeyer, Shakopee, for appellant.
Odell & Smith, Chaska, for respondents.
Heard before KNUTSON, C. J., and NELSON, SHERAN, PETERSON, and FRANK T. GALLAGHER, JJ.
OPINION
SHERAN, Justice.
Appeal from an order of the district court denying a new trial.
Issue
The question for decision is whether the trial court was justified in upholding the validity of an antenuptial agreement executed by Hildegard Fitz and Jacob Jeurissen on January 11, 1961, in anticipation of their marriage.
Facts
Before the marriage, Hildegard Fitz, 62 years of age, was employed as a "floor lady" at the Masonic Home at Bloomington, Minnesota, where she earned approximately $135 per month. She lived in a house in Shakopee, Minnesota, worth approximately $11,000, renting out the upstairs which had been converted into a rental unit. Her first husband, Peter Fitz, died on February *325 5, 1960; there were two living children by that marriage. Jacob Jeurissen, 67, was a widower married twice previously, with five adult daughters.
Their courtship began in September 1960. On December 19, a meeting was held between Mrs. Fitz and Mr. Jeurissen which was attended by his five children. They discussed the rights of each in the property of the other upon death. Apparently this meeting was arranged by the daughters of Mr. Jeurissen and they carried the initiative in the discussion. It became so disconcerting to Mrs. Fitz that she left the gathering and went home.
Approximately a week prior to January 11, 1961, Mr. Jeurissen consulted with Attorney Eugene Wann of New Prague, Minnesota, relative to an antenuptial agreement, explaining to Mr. Wann in a general way what he wanted. On January 11 both parties appeared at the office of Mr. Wann where they discussed the property held by each, the nature of the rights of each in the property of the other in the event of marriage, and the terms of a proposed antenuptial agreement. Both parties professed not to be interested in the exact details of the other's financial affairs.
At the conclusion of the conference, the antenuptial agreement was prepared and executed by the parties. It provides that each waives rights in the property of the other in the event of their marriage and the subsequent death of one of them. A duplicate original of the agreement was provided to each of the parties and each preserved it.
At the time of his death Mr. Jeurissen's assets approximated $46,000, including the homestead valued at $14,000. Appellant's assets consisted of her home, valued at approximately $12,000, producing an income ranging from $30 to $50 per month. Later she became entitled to social security benefits approximating $75 per month.
The antenuptial agreement gave Mrs. Jeurissen, should she be the survivor, the home at 214 W. Fourth Street, Shakopee, Minnesota, so long as she remains unmarried and resides in the dwelling, and a 1961 2-door Dodge automobile.
Following the wedding, Jacob Jeurissen and Hildegard Jeurissen lived together as husband and wife in his house at Shakopee until his death on July 12, 1965. At her husband's request, Hildegard Jeurissen discontinued her work at the Masonic Home at Bloomington, and their relationship during the 4½ years of the marriage was apparently congenial.
If the antenuptial agreement had not been signed, the widow would have been entitled to receive:
(1) Support and maintenance during the probate of the estate for a period not to exceed 18 months (Minn.St. 525.15 [4]).
(2) Furniture and household goods not to exceed $2,000 in value; and personal property worth up to $1,000 (Minn.St. 525.15 [1]).
(3) A life estate in the homestead (Minn.St. 525.145 [1] [b]).
(4) One-third of all other property, real or personal (Minn.St. 525.16 [1, 2]).
Decision
The evidence disclosed by the record is adequate to sustain the determination made by the trial court.
The applicable rules of law were set out most recently in Gartner v. Gartner, 246 Minn. 319, 323, 74 N.W.2d 809, 812, where this court said:
"* * * Antenuptial contracts in anticipation of marriage, fixing the rights which the survivor shall have in the property of the other after his or her death, are not against public policy but are regarded with favor as conducive to the welfare of the parties making them, and these contracts will be sustained whenever equitably and fairly made."
*326 There was evidence introduced in behalf of appellant which would tend to support a finding that she did not fully understand the relationship between (a) her position under the terms of the antenuptial agreement, and (b) her position as it would have been had the agreement of January 11, 1961, not been signed. The attorney who prepared the antenuptial agreement had no personal knowledge of the financial background of the parties to it. It is probable that his explanation of the rights of each in the property of the other under the antenuptial agreement and their rights without it was in general terms. It is possible that Mrs. Jeurissen had difficulty in applying an explanation in general terms to the specifics of her situation. There is evidence indicating that during the years which intervened between the marriage and the death of her husband she did not fully understand the limitations upon her rights which result if the agreement is a binding one.
But, in our judgment, this evidence, though persuasive, is not sufficiently strong to justify rejection of the findings and conclusions made by the trial judge who had the opportunity of evaluating the evidence as it developed in the courtroom. The agreement is not inherently inequitable as a matter of law. At the time it was executed, Mrs. Hildegard Fitz was, it appears, a reasonably intelligent and experienced person even though her formal education was not extensive. She had some limited income of her own and a house which, by the terms of the agreement, was freed from such interest as Jacob Jeurissen would have in it had she died before he did. And although Mrs. Jeurissen may have resented the actions in support of a property arrangement taken by some of the adult children of the widower she married, she probably recognized and respected a disposition on the part of her husband, 67 at the time of the marriage, to preserve the bulk of his estate for their benefit. It seems that at the time of the meeting in the office of the attorney who prepared the antenuptial agreement, both of the parties who executed it were less interested in acquiring the property owned by the other than they were in preserving for their respective children the property they owned themselves.
Because we do not feel that as a matter of law the record justifies a reversal of the determination made by the trial court, we affirm.
Affirmed.
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Mejia v West 27th St. Rental, LLC (2015 NY Slip Op 04590)
Mejia v West 27th St. Rental, LLC
2015 NY Slip Op 04590
Decided on June 2, 2015
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on June 2, 2015
Friedman, J.P., Saxe, Manzanet-Daniels, Feinman, Gische, JJ.
15283 115609/10
[*1] Rafael Mejia, Plaintiff,
vWest 27th Street Rental, LLC, et al., Defendants, 537 West 27th Street Owners, LLC, et al., Defendants-Appellants.
537 West 27th Street Owners, LLC, et al., Third-Party Plaintiffs-Appellants,
J & R Glassworks, Inc., et al., Third-Party Defendants-Respondents.
Cascone & Kluepfel, LLP, Garden City (Howard B. Altman of counsel), for appellants.
Mauro Lilling Naparty LLP, Woodbury (Seth M. Weinberg of counsel), for J & R Glassworks, Inc., respondent.
Gambeski & Frum, Elmsford (Karen A. Jockimo of counsel), for Walsh Glass & Metal, Inc., respondent.
Appeal from order, Supreme Court, New York County (Joan M. Kenney, J.), entered September 30, 2014, which denied defendants/third-party plaintiffs' motion to stay the trial, accept as timely their motion for summary judgment on their claim against third-party defendants for contractual indemnification or grant leave to move for summary judgment based on good cause for the delay, grant them summary judgment, and, to the extent the court previously ruled on issues raised in their prior motion to vacate the note of issue, accept the motion as one for reargument, unanimously dismissed, without costs.
In a prior order, the motion court denied in its entirety defendants/third-party plaintiffs' motion, inter alia, to extend the time for moving for summary judgment. To the extent defendants/third-party plaintiffs subsequently seek leave to file a late motion for summary [*2]judgment, their motion is one for reargument, the denial of which is not appealable (see Belok v New York City Dept. of Hous. Preserv. & Dev., 89 AD3d 579 [1st Dept 2011]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: JUNE 2, 2015
CLERK
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204 B.R. 838 (1997)
In re Murray S. MARSHALL, Debtor.
Murray S. MARSHALL, Movant,
v.
SUNTRUST BANK, SAVANNAH N.A. f/k/a Trust Company of Georgia Bank of Savannah, N.A., Respondent.
Bankruptcy No. 95-42828.
United States Bankruptcy Court, S.D. Georgia, Savannah Division.
February 6, 1997.
*839 Jessee C. Stone, Merrill, Stone & Parks, Swainsboro, GA, for Movant.
Michael J. Thomerson, Savannah, GA, for Respondent.
ORDER
JOHN S. DALIS, Chief Judge.
Murray S. Marshall ("Debtor") filed this motion to avoid the judgment lien of Suntrust Bank, Savannah, N.A. f/k/a Trust Company of Georgia Bank of Savannah, N.A. ("Suntrust") pursuant to 11 U.S.C. § 522(f)[1], a core matter within the Court's jurisdiction under 28 U.S.C. § 157(b)(1) & (2)(A)(K) & (O) and 28 U.S.C. § 1334.
Suntrust holds a pre-bankruptcy filing judgment lien against the Debtor's property. The Debtor moved to avoid Suntrust's lien against his current property as well as any property he may acquire post-petition. The parties have stipulated that Suntrust's lien against the Debtor's assets as of his filing this case under Chapter 7 is avoided pursuant to § 522(f). However, Suntrust contends that § 522(f) does not affect its lien which will attach to any property the Debtor acquires after his bankruptcy filing. Suntrust argues that the Debtor's discharge affects only the Debtor's personal liability, and that after the discharge is granted and the § 362(a) stay lifted, Suntrust may collect its claim via in rem actions against the Debtor's post bankruptcy filing acquired property. Although the provisions of § 522(f) do not include post bankruptcy filing acquired property, the prefiling judicial lien does not survive a debtor's bankruptcy filing and discharge pursuant to 11 U.S.C. § 506(d) and the discharge injunction of § 524.
In support of its argument, Suntrust cites 11 U.S.C. § 524 contending that the effect of the Debtor's discharge relieves his personal liability without affecting Suntrust's lien rights in his after-acquired property.[2] A discharge relieves a debtor of all debts (with certain exceptions not applicable to this case) that arose prior to the bankruptcy filing, without affecting a creditor's lien rights against the debtor's property. 11 U.S.C. § 727(b)[3]; Johnson v. Home State Bank, 501 U.S. 78, 84, 111 S.Ct. 2150, 2154, *840 115 L.Ed.2d 66 (1991) (A discharge eliminates a debtor's personal liability on a mortgage but does not eliminate the secured creditor's lien rights against the underlying real estate.) However, Johnson dealt with a pre-bankruptcy lien, a mortgage, that had affixed to the prebankruptcy property of the debtor. As of the filing of the instant Chapter 7 case and the approval of the § 522(f) motion to avoid the lien as to the prefiling assets, the lien no longer affixed to any property.
The affixing of a creditor's lien against a debtor's property is based upon the existence of a debt as the personal liability of the debtor. In order for Suntrust to enforce its lien after the discharge, the Debtor must first acquire property and Suntrust must then seek to enforce its unsatisfied debt against that property which is "an act to collect . . . such [discharged] debt as a personal liability of the debtor . . ." prohibited by the discharge injunction of § 524. In re Paeplow, 972 F.2d 730, 735 (7th Cir.1992) (Although a discharge will generally not affect a pre-petition lien, creditors may not create post-petition liens based upon discharged debts nor may they institute post-discharge in rem collection actions against after-acquired property if they hold no surviving lien after the discharge). The discharge issued pursuant to § 524 extinguishes that personal liability. Therefore, the lien, as it pertains to any after acquired property of the Debtor, does not survive the discharge, does not affix and cannot affect the after acquired property. Id.
Additionally, upon the filing of the Debtor's bankruptcy petition under Chapter 7 and the granting of the motion to avoid Suntrust's judicial lien as it pertains to the prefiling assets of the Debtor, Suntrust no longer has an allowed secured claim in this case and its lien is therefore void pursuant to 11 U.S.C. § 506(d).[4] "[T]he words `allowed secured' claim in § 506(d) need not be read as an indivisible term of art defined by reference to § 506(a), which by its terms is not a definitional provision. Rather, the words should be read term by term to refer to any claim that is, first, allowed, and, second, secured." Dewsnup v. Timm, 502 U.S. 410, 415, 112 S.Ct. 773, 777 116 L.Ed.2d 903 (1992). In Dewsnup, the Supreme Court found that a prepetition consensual lien securing a debt evidenced by an allowed claim passed through the debtor's bankruptcy unaffected and remained with the real property to which it had affixed prepetition. The Supreme Court reasoned that "[t]he voidness language [of § 506(d)] sensibly applies only to the security aspect of the lien and then only to the real deficiency in the security." Dewsnup, 502 U.S. at 417, 112 S.Ct. at 778. In this case, Suntrust has an allowed claim. However, by virtue of the Debtor's motion to avoid Suntrust's lien under § 522(f), there remains no prebankruptcy property to which the lien attaches, and the claim is therefore unsecured. As the allowed claim of Suntrust is not a secured claim, the lien is void, the real deficiency in the security being the full amount of the debt.
This result is consistent with Congressional intent to cleanse a debtor's property of certain pre-petition liens in an effort to promote the debtor's fresh start. In legislating the formula by which the court should determine whether a lien is avoided as impairing a debtor's exemptions, Congress clarified its intent to protect the debtor's interest in the future appreciation of property which was subject to pre-petition liens exceeding the property's value on the petition date. 140 Cong.Rec H10, 764 (daily ed. October 4, 1994); H.R.Rep. No. 103-835, 35-37 (1994); U.S.Code Cong. & Admin.News 1994, p. 3340; 11 U.S.C. § 522(f)(2). Under § 522(f), a debtor may not only avoid a creditor's lien impairing the debtor's present equity in the *841 property, but he may also extinguish the lien to prevent it from attaching to future equity the debtor may accumulate. In re Thomsen, 181 B.R. 1013 (Bankr.M.D.Ga.1995). Similarly, preventing the affixing of a prebankruptcy judgment lien to after acquired property pursuant to § 506(d) and prohibiting the collection of the discharged debt upon which the prefiling lien is based against the post bankruptcy acquired property pursuant to § 524 fosters the purpose of the Chapter 7 filing and discharge, affording the debtor a fresh start free from the burden of prefiling debt. The results of the lien voiding provision of § 506(d) and of the injunction under § 524 are a matter of law requiring no further action by a debtor.
It is therefore ORDERED that the Debtor's motion to avoid the prepetition judicial lien of Suntrust is granted finding that the lien impairs the exemptions to which the debtor is entitled pursuant to applicable State law rendering the allowed claim of Suntrust as general unsecured. By operation of law the lien is void and unenforceable.
NOTES
[1] 11 U.S.C. § 522(f) provides in pertinent part:
(f)(1) Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is
(A) a judicial lien, other than a judicial lien that secures a debt
(i) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement; and
. . . . .
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of
(i) the lien,
(ii) all other liens on the property; and
(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;
exceeds the value that the debtor's interest in the property would have in the absence of any liens.
(B) In the case of a property subject to more than 1 [one] lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
. . . . .
[2] 11 U.S.C. § 524 provides in part:
(a) A discharge in a case under this title
(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and . . . (emphasis added).
[3] 11 U.S.C. § 727 provides in part:
. . . . .
(b) Except as provided in section 523 of this title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined under section 502 of this title as if such claim had arisen before the commencement of the case, whether or not a proof of claim based on any such debt or liability is filed under section 501 of this title, and whether or not a claim based on any such debt or liability is allowed under section 502 of this title.
. . . . .
[4] 11 U.S.C. § 506(d) provides:
To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void unless
(1) such claim was disallowed only under section 502(b)(5) or 502(e) of this title; or (2) such claim is not an allowed secured claim due only to the failure of any entity to file a proof of such claim under section 501 of this title.
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466 F.Supp.2d 1255 (2006)
Roger PIPKINS, Plaintiff,
v.
TA OPERATING CORPORATION and Travel Centers of America, Inc. jointly, d/b/a TA Travel Centers of America, Defendants.
No. CV 05-1200 WPL/RLP.
United States District Court, D. New Mexico.
December 19, 2006.
*1256 Albert N. Thiel, Jr., Will Ferguson & Associates, Albuquerque, NM, for Plaintiff.
Teresa L. Hock, Douglas G. Schneebeck, Modrall Sperling Roehl Harris & Sisk PA, Albuquerque, NM, for Defendants.
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION TO EXCLUDE EVIDENCE AND RECOVERY OF MEDICAL EXPENSES WRITTEN OFF BY HEALTH CARE PROVIDER
LYNCH, United States Magistrate Judge.
Defendants bring this Motion in Limine to exclude evidence of and recovery of *1257 medical expenses which were written off by Plaintiffs health care provider. Defendants contend that "Plaintiffs bills for past medical expenses reveals [sic] that much of his claimed past medical damages were written off by various health care providers pursuant to, their agreement with the federal government under Medicare." (Doc. 62 at 2.) Specifically, Defendants point out that of the $23,812.10 of past medical expenses Plaintiff seeks to recover, "at least $15,533.76 were written off or adjusted by Medicare." (Doc. 62 at 2.) Defendants argue that while"the collateral source rule "does not operate to reduce damages recoverable from a wrongdoer ... medical expenses which are written off or adjusted by healthcare providers pursuant to their agreements under Medicare do not fall within this rule." (Doc. 62 at 3.) Defendants contend that because the collateral source rule is inapplicable to Medicare write offs, the Plaintiff should not recover, or be allowed to introduce into evidence, the amount of medical expenses written off or adjusted by his health care provider. Plaintiff, in contrast, argues that the collateral source rule, as New Mexico courts have applied that rule, applies where a health care `provider's medical bills were written off pursuant to a contract with Medicare:[1] (Doc. 68 at 3.)
DISCUSSION
Defendants' Motion poses the question of whether the collateral source rule applies to medical expenses written off or adjusted by a health care provider pursuant to an agreement with the federal government under Medicare. Although New Mexico recognizes the collateral source rule, New Mexico courts have not addressed the precise question raised in this Motion.[2] For the reasons discussed below, I conclude that the collateral source rule's development in New Mexico case law reflects New Mexico courts' commitment to the rule's policy and legal underpinnings and strongly suggests' that New Mexico courts would apply the collateral source rule to medical expenses written off or adjusted by a health care provider pursuant to an agreement with the federal government under Medicare.
The Collateral Source Rule
The collateral source rule applies to prevent "compensation or indemnity received *1258 by an injured party from a collateral source, wholly independent from the wrongdoer" from diminishing "the damages otherwise recoverable from the wrongdoer." Berg v. United States, 806 E.2d 978, 984 (10th Cir.1986) (quoting Kistler v. Halsey, 173 Colo. 540, 481 P.2d 722, 724 (1971)). Under New Mexico law, "[c]ompensation received from a collateral source does not operate to reduce damages recoverable from a wrongdoer." Trujillo v. Chavez, 76 N.M. 703, 417 P.2d 893, 897 (1966). In recognizing the policy rationale underlying the collateral source rule, the New Mexico Supreme Court has observed that "[i]n general the law seeks to award compensation, and no more, for personal injuries negligently inflicted. Yet an injured person may usually recover in full from a wrongdoer regardless of anything he may get from a `collateral source' unconnected with the wrongdoer." McConal Aviation, Inc. v. Commercial Aviation Ins. Co., 110 N.M. 697, 799 P.2d 133, 136 (1990) (quoting Rose v. Hakim, 335 F.Supp. 1221 (D.D.C.1971)). Under the collateral source rule, a plaintiff may recover "his full losses from the responsible defendant, even though he may have recovered part of his losses from a collateral source." Id.
The collateral source rule "is most often applied in cases where an injured party recovers from a tortfeasor amounts for which plaintiff has already been compensated by his insurer." Lopez v. Safeway Stores, Inc., 212 Ariz. 198, 129 P.3d 487, 492 (2006) (quoting Taylor v. S. Pac. Transp. Co., 130 Ariz. 516, 637 P.2d 726, 729 (1981)); see Trujillo, 417 P.2d at 897 (applying the collateral source rule to a plaintiffs receipt of sick leave from an employer); Bailey v. Jeffries-Eaves, Inc., 76 N.M. 278, 414 P.2d 503, 511 (1966) (holding that a "plaintiff may recover medical expenses and lost wages incurred by a defendant's negligence, even though plaintiff may have had such items paid for by insurance or otherwise"); Selgado v. Commercial Warehouse Co., 86 N.M. 633, 526 P.2d 430, 434 (1974) (holding that plaintiff could "recover medical expenses incurred by defendants' negligence even though these items were paid for by insurance"). Similarly, the collateral source rule applies where, "due to a healthcare provider's gratuitous treatment, a plaintiff neither incurs nor is responsible for payment of the reasonable value of medical services, but nonetheless cab claim and recover compensation for that value from the tortfeasor." Lopez, 129 P.3d at 492.
These examples, insurance proceeds and gratuitous medical treatment, provide two uncomplicated applications of the collateral source rule. Complexity arises, however, when courts apply the rule to expenses that a hospital incurs and bills, but that are ultimately "written off' pursuant to an agreement with the plaintiffs insurance company or with the federal government under Medicare or Medicaid. Contractual agreements often govern the relationship between hospitals and health care insurers (including Medicare and Medicaid). Summer H. Stevens, Collateral Source Benefits or Windfall for Plaintiffs? FOR THE DEFENSE, Nov. 2006, at 53. Under these contractual agreements, the insurer pays a reduced amount that the medical services provider accepts as the full payment for the medical services. Id. The medical service provider then writes off the difference between the contractual amount and the billed amount. Id.
The Collateral Source Rule Applied to Contractual Write Offs
Despite the absence of direct authority, New Mexico case law, combined with authority from foreign jurisdictions, strongly suggests that New Mexico courts would apply the collateral source rule where a *1259 health care provider's medical bills were written off pursuant to a contract with Medicare. Determining whether New Mexico courts would apply the collateral source rule to contractual write offs under a medicare policy involves a two-part analysis. First, I must determine whether New Mexico courts would characterize the amount written off as a benefit or contribution received by the plaintiff from a source collateral to the tortfeasor. Second, if this amount is characterized as a collateral contribution, I must determine whether New Mexico case law evinces policy considerations that militate against the collateral source rule's application to such collateral contributions.
New Mexico Courts Would Treat Contractual Write Offs as a Collateral Contribution
The collateral source rule "provides that benefits or payments received on behalf of a plaintiff, from an independent source, will not diminish recovery from the wrongdoer." Bynum v. Magno, 106 Hawai`i 81, 101 P.3d 1149, 1154 (2004). "Under the collateral source rule, a tortfeasor is not entitled to have its liability reduced by benefits received by the plaintiff from a source wholly independent of and collateral to the tortfeasor." Id. (quoting Sam Teague, Ltd. v. Hawai`i Civil Rights Comm'n, 89 Hawai`i 269, 971 P.2d 1104, 1116 (1999)). To trigger the collateral source rule, therefore, a plaintiff must receive a benefit or contribution from a source collateral to the tortfeasor.
Many courts characterize contractual write offs as a benefit or contribution received by the plaintiff from a collateral source and hold that the collateral source rule applies to such write offs. See Lopez, 129 P.3d at 495 ("A majority of courts have concluded ... that plaintiffs are entitled to claim and recover the full amount of reasonable medical expenses charged, based on the reasonable value of medical services rendered, including amounts written off from the bills pursuant to contractual rate reductions."); Robinson v. Bates, 160 Ohio App.3d 668, 828 N.E.2d 657, 673 (2005) ("We agree with those jurisdictions a large majority that have held that a plaintiffs recovery of the reasonable value of her medical treatment is not limited to the amount paid by her insurance."). In Lopez, for example, the Arizona Court of Appeals, in applying the collateral source rule to expenses written off pursuant to an insurance agreement, observed that "no rational distinction exists between payments made by an insurance carrier on behalf of an injured plaintiff ...; a healthcare provider's acceptance of reduced payments from health maintenance organizations (HMOs) and government payors ...; or a provider's write off of portions of billed charges to patients pursuant to contractual relationships with HMOs or government payors." 129 P.3d at 495. For courts following this approach, the amount written off pursuant to an agreement with an insurance carrier (including Medicare or Medicaid) constitutes a benefit or contribution received by the plaintiff from a source collateral to the tortfeasor. See Acuar v. Letourneau, 260 Va. 180, 531 S.E.2d 316, 322 (2000) (recognizing that the proper focus of the collateral source rule is "whether a tort victim has received benefits from a collateral source that cannot be used to reduce the amount of damages owed by a tortfeasor").
Other courts, in contrast, characterize contractual write offs as illusory and therefore inapplicable to the collateral source rule. See Moorhead v. Crozer Chester Med. Ctr., 564 Pa. 156, 765 A.2d 786 (2001); Wildermuth v. Staton, No: 01-2418-CM, 2002 WL 922137, *5, 2002 U.S. Dist. LEXIS 8034, at *15 (D. Kan. April 29, 2002). Courts following this approach *1260 observe that the amount written off is never actually paid, and thus cannot constitute payment from a collateral source nor a benefit or contribution received by the plaintiff from a collateral source. In Wildermuth, for example, the court recognized that "the collateral source rule, by its express terms, simply does not apply to write-offs of expenses that are never paid." Id.; see also Moorhead, 765 A.2d at 791 ("The collateral source rule does not apply to the illusory `charge' of [the write off amount] since that amount was not paid by any collateral source."). The Wildermuth court observed that "[b]ecause a write-off is never paid, it cannot possibly constitute payment of any benefit from a collateral source." 2002 WL 922137, *5, 2002 U.S. Dist. LEXIS 8034, at *15 (citing Moorhead, 765 A.2d at 791). As Wildermuth demonstrates, courts following this approach focus on whether the plaintiff has incurred medical expenses as a result of the medical treatment and whether a collateral source has made a payment on behalf of a plaintiff to satisfy the plaintiffs financial liability for the medical treatment. Id.; see also Moorhead, 765 A.2d at 788-91 (concluding that the plaintiff was only entitled to the amount actually paid, and could not, therefore, collect the amount of the Medicare write off).
Defendants' Motion urges adoption of the rule articulated in Wildermuth and argues that "because a write off or adjustment is never paid by any source, collateral or otherwise, the amount of money representing a write off or adjustment is not `compensation received,' and thus, is not subject to the collateral source rule." (Doc. 62 at 4.) Contrary to the approach adopted by courts in cases such as Wildermuth and Moorhead and urged by Defendants, however, the write off amount is not "illusory." This approach fails to recognize that "the focal point of the collateral source rule is not whether an injured party has `incurred' certain medical expenses." Acuar, 531 S.E.2d at 322. Nor is the focal point of the collateral source rule whether an amount of money has been "paid" by a collateral source. Instead, the_ proper-focus of the collateral source rule is on "whether a tort victim has received benefits from a collateral source that cannot be used to reduce the amount of damages owed by a tortfeasor." Id.
A medical provider's gratuitous provision of medical services illustrates the principle that the collateral source rule's proper focus is on whether the "tort victim has received benefits from a collateral source that cannot be used to reduce the amount of damages owed by a tortfeasor." Id.; see Bynum, 101 P.3d at 1155 (observing that because a plaintiff "is not required to pay the difference between the standard rate and the Medicare/Medicaid payment, that part of such medical services attributable to such difference could be viewed conceptually as gratuitous service to the plaintiff, so as to come within the collateral source rule"). Where a health care provider gratuitously waives an injured party's financial obligation, the collateral source rule enables the plaintiff to recover the full amount of medical expenses from the tortfeasor. See Lopez, 129 P.3d at 492; RESTATEMENT (SECOND) OF TORTS § 920A cmt. c(3) ("[T]he fact that the doctor did not charge for his services or the plaintiff was treated in a veterans hospital does not prevent his recovery for the reasonable value of the services."). In the case of gratuitous medical services, the plaintiff incurs no financial liability. Yet, regardless of the plaintiffs lack of financial liability, the collateral source rule applies because the plaintiff has received a benefit from a source collateral to the defendant. Gratuitous treatment, therefore, constitutes a collateral contribution and triggers application of the collateral source rule.
*1261 Contractual write offs reflect a situation analogous to a health care provider's gratuitous provision of medical services and thus yield a similar result under the collateral source rule. See Bynum, 101 P.3d at 1156 ("[B]ecause a plaintiff would be able to recover the `reasonable value' of medical services if such services were rendered gratuitously, it would appear to follow that a plaintiff should be allowed to recover the `reasonable value' of such services, even if Medicare/Medicaid had already paid a part, or a discounted amount, of the `reasonable value' of such services."). In the case of gratuitous medical service, the health care provider, out of goodwill, waives the plaintiffs financial liability that arises out of the provision of medical services. Similarly, in the case of contractual write offs, the medical care provider waives the write off amount as required by the contractual agreement between the provider and the plaintiffs insurance carrier. These two situations differ only in the source of the benefit in one instance, the benefit springs from the hospital's goodwill; in the other, the benefit arises out of a contractual agreement between the hospital and a third party. In both situations, the plaintiff receives a benefit from, a source collateral to the tortfeasor. In neither situation does a collateral source make a payment on behalf of the plaintiff. But see Moorhead, 765 A.2d at 791 ("The collateral source rule does not apply to the illusory [write off amount] since that amount was not paid by any collateral source."). In this light, a contractual write off is properly characterized as a contribution from a source collateral to the' tortfeasor.
New Mexico's recognition of the collateral source rule and development of that rule suggests that New Mexico courts would characterize the write off amount as a benefit or contribution received by the plaintiff from a source collateral to the tortfeasor. Although New Mexico courts have not addressed the collateral source rule's application to the gratuitous provision of medical services, the legal and policy underpinnings of New Mexico courts' approach to the collateral source rule strongly suggest that New Mexico would apply the collateral source rule to the gratuitous provision of medical services. In Mobley v. Garcia, 54 N.M. 175, 217 P.2d 256, 257 (1950), the New Mexico Supreme Court stated: "The right of redress for wrong is fundamental. Charity cannot be made a substitute for such right, nor can benevolence be made a set-off against the acts of a tortfeasor." See Martinez v. Knowlton, 88 N.M. 42, 536 P.2d 1098, 1099 (1975) ("To Mobley we add that a tortfeasor should not get the benefit of the contract between the employee and the employer."). Similarly, in McConal, the New Mexico Supreme Court observed that "`[u]sually the collateral contribution necessarily benefits either the injured person or the wrongdoer. Whether it is a gift or the product of a contract of employment or of insurance, the purposes of the parties to it are obviously better served and the interests of society are likely to be better served if the injured person is benefitted than if the wrongdoer is benefitted.'" 799 P.2d at 136 (quoting. Rose, 335 F.Supp. at 1236). These decisions indicate that New Mexico courts would apply the collateral source rule to the gratuitous provision of medical services. It follows, therefore, that under New Mexico law, the amount of a contractual write off similarly constitutes a benefit received from a source collateral to the tortfeasor.
New Mexico Courts Would Apply the Collateral Source Rule to Contributions that Take the Form of Contractual Write Offs
My decision that the amount of a contractual write off constitutes a collateral *1262 contribution under New Mexico law does not end my inquiry into the collateral source rule's application to Medicare write offs. Rather, I must determine whether New Mexico's approach to the collateral source rule evinces legal or policy considerations that militate against the collateral source rule's application to collateral contributions that take the form of Medicare write offs.
Courts that have declined the opportunity to apply the collateral source rule to contractual write offs have often done so to prevent a plaintiff from receiving a windfall. As the court in Wildermuth noted, the collateral source rule is "intended to prevent a defendant tortfeasor from escaping from full liability for the consequences of his or her wrongdoing and to prevent a windfall to the tortfeasor, who would otherwise profit from the benefits provided by a third party to the injured party. It is not intended to provide a windfall to plaintiffs ... the basic principle of damages is to make a party whole by putting it back in the same position, not to grant a windfall.'" 2002 WL 922137, *5, 2002 U.S. Dist. LEXIS 8034, *15-16 (quoting State ex rel. Stephan v. Wolfenbarger & McCulley, P.A., 236 Kan. 183, 690 P.2d 380 (1984)). Defendants' Motion echoes this approach and argues that Plaintiff should not be able to recover more than his actual losses.
The consequence of the approach urged by Defendants, however, is to allow the tortfeasor to receive a windfall in the amount of the benefit conferred to the plaintiff from a source collateral to the tortfeasor. Such a result would thwart the policy rationale underlying New Mexico courts' adoption of the collateral source rule. The New Mexico Supreme Court's decision in McConal affirmed the plaintiff-oriented approach underlying the collateral source rule and indicated that under New Mexico law, any windfall arising from the collateral source rule should benefit the plaintiff, and not the tortfeasor. 799 P.2d at 136 (recognizing that "if a collateral resource is to benefit a party, it should better benefit the injured party than the wrongdoer"); see also Lopez, 129 P.3d at 492 ("In many respects, the rule `is punitive' because it `allows a plaintiff to fully recover from a defendant for an injury even when the plaintiff has recovered from a source other than the defendant for the same injury.'" (quoting Norwest Bank (Minnesota), N.A. v. Symington, 197 Ariz. 181, 3 P.3d 1101, 1109 (2000))). Moreover, New Mexico case law, along with the policy rationale underlying New Mexico's adoption of the collateral source rule, indicates that Medicare write offs would be treated the same as any other benefit a plaintiff may receive from a collateral source. Merely because a Medicare write off arises from a program of the federal government does not militate against the policy rationale in New Mexico law favoring a plaintiffs, rather than a tortfeasor's, receipt of any windfall. Accordingly, New Mexico law does not prevent Plaintiff from. introducing into evidence, or from recovering, medical expenses written off by a health care provider.
CONCLUSION
For the reasons set forth above, Defendants' Motion in Limine to Exclude Evidence and Recovery of Medical Expenses Written Off By Health Care Provider (Doc. 62) is DENIED.
IT IS SO ORDERED.
NOTES
[1] Plaintiff also argues that Defendants "are estopped from disputing the value of the medical services by their Supplemental Answers to Plaintiffs Requests for Admission." (Doc. 68 at 9.) Because I conclude that the collateral source rule applies to the Medicare write offs at issue here, I need not address this additional argument raised in Plaintiff's Response.
[2] New Mexico law appears to govern the resolution of Defendants' Motion, even in light of the Tenth Circuit's recent decision in Sims v. Great American Life Insurance Co., 469 F.3d 870 (10th Cir.2006). In Sims, the Tenth Circuit held that the Erie Doctrine does not govern the Federal Rules of Evidence. The Tenth Circuit recognized, however, that with the Federal Rules of Evidence, "Congress did not give federal courts unbridled discretion to preempt state substantive law on all arguably procedural matters." Id. at 880. As Sims observed, "Most pertinent to this case, Rule 401 protects against incursion into state substantive law as part of its admissibility assessment. Rule 401 defines relevant evidence as 'evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.'" Id. at 881 (internal punctuation omitted). A determination of whether the amount of Medicare write offs are admissible necessarily involves an evaluation of whether New Mexico law allows the recovery of such write offs under the collateral source rule. New Mexico law must be addressed for evidentiary purposes because, under Rule 401, only New Mexico law, can resolve whether such write offs are "of consequence to the determination of the action." FED.R.EVID. 401.
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101 F.3d 716
42 U.S.P.Q.2d 1154
NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.WARMINSTER FIBERGLASS COMPANY, INC., Plaintiff-Appellant,v.DELTA FIBERGLASS STRUCTURES, INC., aka, Delta ReinforcedPlastic Structures, Inc., Defendant/Cross-Appellant.
Nos. 96-1113, 96-1110.
United States Court of Appeals, Federal Circuit.
Nov. 14, 1996.
Before ARCHER, Chief Judge, PLAGER, and SCHALL, Circuit Judges.
DECISION
SCHALL, Circuit Judge.
1
Warminster Fiberglass Company, Inc. ("Warminster") appeals from the judgment of the United States District Court for the District of Utah following a bench trial in Warminster's suit against Delta Fiberglass Structures, Inc. ("Delta") for patent infringement. Warminster Fiberglass Co. v. Delta Fiberglass Structures, Inc., No. 89-C-723J (Nov. 7, 1995). We affirm.
DISCUSSION
I.
2
Warminister sued Delta for infringement of claims 1, 2, 4, 6, and 11 of United States Patent No. 4,391,704 ("the '704 patent"). The '704 patent is assigned to Warminster; the patent is directed to an odor control system adapted to capture and treat noxious gases generated by waste water or sewage treatment plants. Claim 1 is the only independent claim in the patent; claims 2, 4, 6 and 11 depend from it. The only dispute before us involves the meaning and scope of Claim 1. The claim reads in full as follows:
3
1. In combination with a settling tank for a wastewater treatment, said tank including an inlet line for feeding wastewater therein, means to remove sludge from the tank and an outlet zone defined by an effluent trough, at least one side of which has a weir to permit clarified water to spill into the trough; and an outlet to remove clarified water from said trough; an arrangement for preventing noxious gases generated in the wastewater from being discharged into and fouling the atmosphere, said arrangement comprising:
4
A. a hood which is supported over the trough to define a confined region to capture said gases, said hood having a side wall which protrudes into the water in said settling tank at a position spaced from the weir side of the trough, said side wall protruding into the water to a depth below the upper edge of the weir to form a scum baffle integral with the hood; and
5
B. means to treat the captured gases to render them inactive, and to prevent the discharge of said noxious gases into the atmosphere.
6
This case was originally tried in the district court in June, 1991. The court held that the '704 patent was not in valid, and found that Delta's odor control system did not infringe the asserted claims of the patent, either literally or under the doctrine of equivalents.
7
The court noted that the accused system, unlike the patented system, contained an air gap between the scum baffle and hood. The court held that the air gap prevented the hood from defining a "confined region" and that it prevented the hood from being "integral with" the baffle.
8
The case was appealed to this court.
9
In our March 17, 1994 decision, we vacated the trial court's finding of noninfringement under the doctrine of equivalents and its finding that the patent was not proven invalid.1 We rejected the district court's restrictive interpretation of the terms "confined region" and "integral" in Claim 1, holding that the court unduly limited the term "confined region" to regions that are "completely sealed" and the term "integral" to "one-piece" constructions.
10
We held that the district court did not clearly err in its finding of no literal infringement, but we remanded for a determination of whether, under our claim interpretation, there was infringement under the doctrine of equivalents.
11
On remand, the district court found that Delta's odor control system did not infringe under the doctrine of equivalents.
12
The court also found no contributory infringement, noting that the Delta device was capable of substantial noninfringing use.
13
At the same time, the court concluded that Delta's good-faith belief that its design did not infringe the '704 patent precluded a finding that Delta knowingly induced infringement. Lastly, the court held that the '704 patent was not in valid.
14
Warminster urges us to reverse the district court's doctrine of equivalents determination, arguing that the court misapplied our earlier interpretation of the terms "integral" and "confined region." Warminster also challenges the district court's findings of no contributory infringement and no inducement of infringement. For its part, Delta cross-appeals on the validity issue.
II.
15
We review the district court's claim construction de novo, see Markman v. Westview Instr., Inc., 52 F.3d 967, 979 (Fed.Cir.1995), aff'd, 116 S.Ct. 1384 (1996), and its findings relating to alleged infringement under the doctrine of equivalents for clear error, see Hilton Davis Chem. Co. v. Warner-Jenkinson Co., 62 F.3d 1512, 1521 (Fed.Cir.1995), cert. granted, 116 S.Ct. 1014 (1996). After careful consideration, we hold that the district court's claim construction is in accord with our earlier decision. We further find that the district court's finding of no infringement under the doctrine of equivalents is not clearly erroneous. Because we affirm the district court's finding of no infringement, we need not address the issues of inducement of infringement or contributory infringement.
16
First, we disagree with Warminster's interpretation of the term "integral." Warminster would like us to interpret the term "integral" as meaning functionally as opposed to physically integral. Such a reading would be directly contrary to our earlier interpretation of the term "integral" as defining a "structural relationship."
17
Second, we turn to the issue of infringement under the doctrine of equivalents. Although it is legal error not to apply the doctrine of equivalents to the invention as a whole, each limitation or its equivalent must be found in the accused device. "It is ... well settled that each element of a claim is material and essential, and that in order for a court to find infringement, the plaintiff must show the presence of every element or its substantial equivalent in the accused device." Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1533 (Fed.Cir.1987) (quoting Lemelson v. United States, 752 F.2d 1538, 1551 (Fed.Cir.1985)). As noted in Athletic Alternatives, Inc. v. Prince Manufacturing, Inc., 73 F.3d 1573 (Fed.Cir.1996), "the doctrine of equivalents is not a license to ignore or 'erase ... structural and functional limitations of the claim,' limitations 'on which the public is entitled to rely in avoiding infringement.' " Id. at 1582 (quoting Perkin-Elmer, 822 F.2d at 1532).
18
In this case, the inventors specifically claimed a scum baffle that was integral with the hood. Because we interpret the term integral to mean "structurally related," we cannot consider the accused device, in which the scum baffle and hood are physically separated, to be the equivalent of the claimed invention without reading out the term "integral." Therefore, because we believe that the district court's doctrine of equivalents determination is the only proper conclusion, we cannot find it clearly erroneous.
19
Agreeing that the alleged infringing device does not infringe the claimed invention, we need not reach the issues of contributory infringement or inducement of infringement. See Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 687 (Fed.Cir.1986) ("Absent direct infringement of the patent claims, there can be neither contributory infringement ... nor inducement of infringement ...." (citations omitted)).
20
Finally, we have carefully considered Delta's cross-appeal on the validity issue. Having done so, we conclude that all of Delta's contentions are unpersuasive. Accordingly, we will not disturb the ruling of the district court on this issue.
21
Each party shall bear its own costs.
1
Our vacatur of the validity judgment was premised solely on the trial court's omission of findings of fact and conclusions of law
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
AMERICAN FEDERATION OF )
GOVERNMENT EMPLOYEES, AFL- )
CIO, )
)
Plaintiff, )
)
v. ) No. 1:18-cv-1261 (KBJ)
)
DONALD J. TRUMP, et al., )
)
Defendants. )
) MEMORANDUM OPINION
)
NATIONAL FEDERATION OF )
FEDERAL EMPLOYEES, FD-1, )
IAMAW, AFL-CIO, et al., )
)
Plaintiffs, )
)
v. )
)
DONALD J. TRUMP, et al., )
)
Defendants. )
)
)
AMERICAN FEDERATION OF )
STATE, COUNTY AND MUNICIPAL )
EMPLOYEES, AFL-CIO, et al., )
)
Plaintiffs, )
)
v. )
)
DONALD J. TRUMP, et al., )
)
Defendants. )
)
)
NATIONAL TREASURY EMPLOYEES )
UNION, )
)
Plaintiff, )
)
v. )
)
DONALD J. TRUMP, et al., )
)
Defendants. )
)
TABLE OF CONTENTS
I. INTRODUCTION ................................................................................................. 1
II. BACKGROUND ................................................................................................... 7
A. An Historical Overview Of The Management Of Federal Public Employees ....... 7
The Statutory Provisions That Are Relevant To The Instant Dispute ................. 10
1. The Purpose, Structure, And Provisions Of The FSLRMS ........................... 11
2. The Federal Labor Relations Authority ....................................................... 14
3. Relevant Miscellaneous Provisions Of The United States Code ................... 16
The Challenged Executive Orders .................................................................... 17
1. Executive Order 13,836 (“The Collective Bargaining Procedures Order”) ... 17
2. Executive Order 13,837 (“The Official Time Order”) .................................. 19
3. Executive Order 13,839 (“The Removal Procedures Order”) ....................... 23
Procedural History ........................................................................................... 25
III. APPLICABLE LEGAL STANDARDS ................................................................. 27
IV. ANALYSIS ......................................................................................................... 31
This Court Has Subject-Matter Jurisdiction Because Congress Did Not
Intend For This Matter To Be Resolved Through The FSLMRS Or CSRA
Administrative Review Schemes ...................................................................... 33
1. Both The FSLMRS And The CSRA Evince A Fairly Discernable
Congressional Intent To Channel Certain Claims To The FLRA
And The MSPB .......................................................................................... 35
2. The Unions’ Claims Are Not Of The Type That Congress Intended To
Funnel Through The FLRA or CSRA Statutory Review Schemes ................ 37
a. Meaningful Judicial Review Of The Unions’ Claims Would Be
Foreclosed If The District Courts Could Not Hear These Claims ..... 37
b. The Unions’ Claims Are Wholly Collateral To The FSLMRS
And The CSRA Administrative-Judicial Review Schemes ............... 48
ii
c. Although Potentially Helpful, The Agencies’ Expertise Is Not
Essential To Resolving The Instant Claims ..................................... 56
The Unions’ Claims Are Fit For Judicial Resolution......................................... 59
The President Has The Statutory And Constitutional Authority To Issue
Executive Orders That Pertain To Federal Labor-Management Relations,
So Long As His Orders Do Not Conflict With The Will Of Congress ................ 66
Before The Enactment Of The FSLMRS And CSRA, Presidents Had
The Authority To Issue Executive Orders Regulating Federal Labor-
Management Relations ................................................................................ 66
2. The FSLMRS And CSRA Did Not Divest The President Of Any
Authority In This Field ............................................................................... 71
3. The President’s Executive Orders Concerning This Area Must Be
Consistent With Congress’s Pronouncements .............................................. 75
Many Of The Order Provisions The Unions Have Challenged In This Case
Impermissibly Infringe Upon The Statutory Right To Bargain Collectively ...... 76
1. Section 7103(a) And D.C. Circuit Caselaw Define The Contours Of
The Statutory Right To Bargain Collectively ............................................... 78
a. The Duty To Bargain ..................................................................... 80
b. The Duty To Act In Good Faith ..................................................... 82
c. Takeaways Regarding Agency Conduct With Respect
To Federal Labor Negotiations ..................................................... 83
2. Certain Provisions Of The Challenged Executive Orders Dramatically
Curtail The Scope Of Bargaining Because Agencies And Unions Will
No Longer Negotiate Over A Host Of Significant Issues ............................. 88
a. The Orders Remove These Matters From The Scope Of The
Right To Bargain Despite The Fact That Congress Has Made
Them Negotiable ........................................................................... 88
b. The Removed Topics Are Important To The Functioning
Of Labor Organizations And The Fairness Of Collective
Bargaining Negotiations ................................................................ 92
3. Certain Provisions Of The Executive Orders Impede The Prospect
Of Good Faith Negotiations ...................................................................... 100
4. Defendants’ Best ‘No-Conflict’ Counterarguments Are Meritless .............. 105
a. The Specious Section 7117 Suggestion ........................................ 105
b. The Mistaken ‘Mere Guidance’ Characterization .......................... 111
The Remaining Challenged Provisions Of These Executive Orders Are
Legitimate Exercises Of The President’s Authority ........................................ 113
V. CONCLUSION ................................................................................................. 118
iii
MEMORANDUM OPINION
I. INTRODUCTION
The Constitution of the United States divides the powers of the Federal
government into three spheres: “[t]o the legislative department has been committed the
duty of making laws, to the executive the duty of executing them, and to the ju diciary
the duty of interpreting and applying them in cases properly brought before the courts.”
Massachusetts v. Mellon, 262 U.S. 447, 488 (1923). Because “the accumulation of all
powers, legislative, executive, and judiciary, in the same hands . . . po se[s] an inherent
threat to liberty[,]” each branch of government must stay within its proper domain.
Patchak v. Zinke, 138 S. Ct. 897, 905 (2018) (plurality opinion) (internal quotation
marks and citations omitted). When one of the three branches exceeds the scope of
either its statutory or constitutional authority, it falls to the federal courts to reestablish
the proper division of Federal power. See, e.g., Plaut v. Spendthrift Farm, Inc., 514
U.S. 211, 218 (1995) (rebuking Congress’s intrusion into t he judicial sphere); Lujan v.
Defs. of Wildlife, 504 U.S. 555, 577 (1992) (preventing the Judiciary from intruding
into the executive sphere); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 655
(1952) (halting the President’s encroachment upon the le gislative sphere). The instant
case implicates these fundamental principles, for it relates to the power of the Judiciary
to hear cases and controversies that pertain to federal labor -management relations; the
power of the President to issue executive orders that regulate the conduct of federal
employees in regard to collective bargaining; and the extent to which Congress has
made policy choices about federal collective bargaining rights that supersed e any
presidential pronouncements or priorities.
On May 25, 2018, President Donald J. Trump issued three executive orders
relating to the administration of the federal civil service and the rights of federal
employees to engage in collective bargaining. See Exec. Order No. 13,836, 83 Fed.
Reg. 25329 (May 25, 2018); Exec. Order No. 13,837, 83 Fed. Reg. 25335 (May 25,
2018); Exec. Order No. 13,839, 83 Fed. Reg. 25343 (May 25, 2018) (collectively, “ the
Orders”). Among other things, these Orders seek to regulate both the collective
bargaining negotiations that federal agencies enter into with public-sector unions and
the matters that these parties negotiate. The Orders place limits on the activities that
federal employees may engage in when acting as labor representatives; guide agencies
toward particular negotiating positions during the collective bargaining process; and
address the approaches agencies shall follow when disciplining or evaluating employees
working within the civil service.
Between May 30, 2018 and June 18, 2018, numerous federal employee unions
(“the Unions” or “Plaintiffs”) filed the instant consolidated cases against President
Trump, the U.S. Office of Personnel Management (“OPM”), and the Director of OPM
(collectively, “Defendants”), challenging the validity of the President’s executive
orders in various respects. 1 The Unions contend that the Orders conflict with the
1
The lead plaintiff unions are: the American Federation of Gover nment Employees, AFL-CIO
(“AFGE”); the National Treasury Employees Union (“NTEU”); the National Federation of Federal
Employees, FD1, IAMAW, AFL-CIO (“NFFE”); and the American Federation of State, County and
Municipal Employees, AFL-CIO (“AFSCME”). Joining those Plaintiffs are the International
Association of Machinists and Aerospace Workers, AFL -CIO; the Seafarers International Union of
North America, AFL-CIO; the National Association of Government Employees, Inc., the International
Brotherhood of Teamsters, the Federal Education Association, Inc. ; the Metal Trades Department, AFL-
CIO; the International Federation of Professional and Technical Engineers, AFL -CIO & CLC; the
National Weather Service Employees Organization; the Patent Office Professional Association; the
National Labor Relations Board Union; the National Labor Relations Board Professional Association ;
the Marine Engineers’ Beneficial Association, District No. 1 PCD, AFL -CIO; and the American
Federation of Teachers, AFL-CIO.
2
Federal Service Labor-Management Relations Act (“the FSLMRS”), 5 U.S.C. §§ 7101 –
7135—and therefore constitute ultra vires and unconstitutional actions on the part of
the President—and also that the Orders impinge upon the constitutional rights of federal
employees. Several union plaintiffs initially insisted that the Orders amounted to such
an egregious violation of presidential power, and worked such an immediate harm to the
collective bargaining rights of federal employees, that a preliminary injunction was
warranted. (See, e.g., Pl. AFGE’s Mot. for a Prelim. Injunction, ECF No. 10.)
However, the parties subsequently agreed to proceed straight to the merits of the
Unions’ challenges by having this Court resolve the instant dispute on cross -motions for
summary judgment handled in an expedited fashion. (See Scheduling Order, ECF No.
16, at 1.) 2
Before this Court at present are Plaintiffs’ and Defendants’ ripe cross -motions
for summary judgment. 3 The Court held a lengthy hearing on these motions on July 25,
2018, and since then, it has worked diligently to sort out, and resolve, the myriad
complicated and contentious issues that the parties’ arguments raise. For example, each
of the four motions for summary judgment that the Unions have filed assails various
2
Page-number citations to the documents that the parties have filed refer to the page numbers that the
Court’s electronic filing system automatically assigns.
3
See Pls.’ Mem. in Supp. of Their Mot. for Summ. J. (“NFFE’s Mem.”), ECF No. 26; Pls. AFSCME’s
& AFT’s Stmt. in Supp. of Mot. for Summ. J. & Joinder in Mots. Filed by Pls . AFGE, NTEU and
NFFE, et al. (“AFSCME’s Mem.”), ECF No. 27 -1; Mem. Supporting Pl. NTEU’s Mot. for Summ. J.
(“NTEU’s Mem.”), ECF No. 29-2; Mem. in Supp. of Pl. AFGE’s Mot. for Summ. J. (“AFGE’s Mem. ”),
ECF No. 30-1; Defs.’ Opp’n to Pls.’ Mots. For Summ. J. & Defs.’ Cross -Mot. for Summ. J. (“Defs.’
Mot.”), ECF 40; Pls.’ Opp’n to Defs.’ Cross Mot. for Summ. J. & Reply to Defs.’ Opp’n to Pls.’ Mot.
for Summ J. (“NFFE’s Reply”), ECF No. 45; Pl. NTEU’s Consol. Opp’n to Defs.’ Cross-Mot. for
Summ. J. & Reply in Supp. of its Mot. for Summ J. (“NTEU’s Reply”), ECF No. 48; Pls. AFSCME &
AFT’s Opp’n to Defs.’ Cross-Mot. for Summ. J., Reply in Supp. of Pls.’ Mot. for Summ. J., & Joinder
in Opp’n to Defs.’ Mot. for Summ. J. (“AFSCME’s Reply”), ECF No. 49; Pl. AFGE’s Opp’n to Defs.’
Cross Mot. for Summ. J. & Reply to Defs.’ Opp’n to AFGE’s Mo t. for Summ. J. (“AFGE’s Reply”),
ECF No. 50; Defs.’ Reply in Supp. of Defs.’ Cross -Mot. for Summ. J. (“Defs.’ Reply”), ECF No. 51.
3
provisions in the Orders (a total of twenty provisions are targeted), and each motion
makes different claims regarding the validity of the challenged provisions. By and
large, this Court has treated the Unions’ four motions as one. Generally speaking, the
Unions collectively contend that (1) the President has no statutory or constitutional
authority to issue executive orders pertaining to the field of federal labor relations; (2)
the challenged provisions conflict with particular sections of the FSLMRS in a manner
that abrogates the Unions’ statutory right to bargain collectively; and (3) certain
provisions of the Orders transgress Article II’s Take Care Clause , and also, in one
instance, the First Amendment’s right to freedom of association.
For its part, the summary judgment motion that has been filed on behalf of
Defendants raises two threshold issues: that this Court lacks subject-matter jurisdiction
over the instant dispute due to the channeling effect of the FSLMRS’s administrative
review scheme, and that some of the Unions’ claims are insufficiently concrete to be
prudentially ripe for judicial decision. On the merits, Defendants’ summary judgment
motion maintains that the President has ample statutory and constitutional authority to
issue executive orders in the field of federal labor relations, and that the Orders do not,
in fact, conflict with the FSLMRS’s complicated statutory regime, either because the
challenged provisions only constitute “guidance” to federal agencies or because a
section of the FSLMRS specifically authorizes the President to reduce the scope of
collective bargaining through the issuance of “government-wide rules or regulations.”
Defendants further assert that the Take Care Clause claim is nonjusticiable, and that the
First Amendment freedom-of-association claim is baseless.
For the reasons explained at length below, this Court has decided that the Unions
4
have the better of this argument. With respect to Defendants’ threshold concerns, the
Court concludes that it has subject-matter jurisdiction over the instant claims because,
even though most disputes concerning federal labor-management relations must be
channeled through the administrative review scheme that Congress has prescribed, this
matter is different in kind than the disputes that Congress intended the FSLMRS’s
channeling provisions to cover. The Court further finds that the Unions’ legal claims
are generally fit for judicial resolution, and therefore, the prudential ripeness doctrine
poses no bar to this Court’s consideration of these challenges now.
As to the merits of the Unions’ contentions, while past precedents and pertinent
statutory language indicate that the President has the authority to issue executive orders
that carry the force of law with respect to federal labor relations, it is undisputed that
no such orders can operate to eviscerate the right to bargain collectively as envisioned
in the FSLMRS. In this Court’s view, the challenged provisions of the executive orders
at issue have that cumulative effect. Stated succinctly, by enacting the FSLMRS,
Congress undertook to guarantee federal employees the statutory right to engage in
good-faith collective bargaining with agencies and executive branch officials, and the
pronouncements that the FSLMRS makes are clearly based upon Congress’s stated
opinion that “the right of employees” to “bargain collectively . . . safeguards the public
interest, contributes to the effective conduct of public business, and facilitates and
encourages the amicable settlements of disputes” in regard to the “conditions of
[federal] employment.” 5 U.S.C. § 7101(a)(1). Viewed collectively, the challenged
executive orders reflect a decidedly different policy choice; namely, the President’s
stated view that federal employees’ right to engage in collective bargaining over the
5
conditions of their employment is not apropos of an “effective and efficient
Government[,]” Exec. Order No. 13,836 § 1(b), and should be rendered subordinate to
the agencies’ interest “in developing efficient, effective, and cost-reducing collective
bargaining agreements[,]” id. (preamble); see also Exec. Order No. 13,837 (preamble);
Exec. Order No. 13,839 (preamble).
Certain provisions of the Orders plainly further the President’s intention to
restrict the scope and effectiveness of federal employees’ right to collective bargaining
vis-à-vis the agencies (e.g., those directives that stunt negotiations by narrowing the
terms that the agency can entertain related to significant matters, such as access to
government office space for union business and the amount of official time that can be
allotted to negotiations and counseling), see Exec. Order No. 13,836 § 5(e), 6; Exec.
Order No. 13,837 §§ 4(a), 4(b); Exec. Order No. 13,839 §§ 4(a), 4(c), or clearly
constrain agency negotiators’ ability to conduct collective bargaining negotiations in
good faith (e.g., those mandates that direct agency representatives to pursue specific
positions “whenever possible,” such as limiting the annual aggregate official time
awarded amount to one hour per employed union member per year), see Exec. Order
No. 13,836 §§ 5(a), 5(e); Exec. Order No. 13,837 §§ 3(a); Exec. Order No. 13,839 §§ 3.
Therefore, this Court finds that these provisions conflict with congressional intent in a
manner that cannot be sustained. (See Part IV.D, infra.) What remains of the Orders
are those provisions that the Unions have not opted to challenge, and the few
challenged provisions described in Part IV.E. See Exec. Order No. 13,836 § 5(c); Exec.
Order No. 13,837 §§ 2(j), 4(c); Exec. Order No. 13, 839 §§ 2(b), 2(c), 4(b)(iii), 7.
This all means that, ultimately, both sides’ motions for summary judgment must
6
be GRANTED IN PART AND DENIED IN PART, and this Court will enjoin the
President’s subordinates within the Executive Branch to disregard: sections 5(a), 5(e),
and 6 of Executive Order 13,836; sections 3(a), 4(a), and 4(b) of Executive Order
13,837; and sections 3, 4(a), and 4(c) of Executive Order 13,839. In this Court’s view,
these directives undermine federal employees’ right to bargain collectively as protected
by the FSLMRS, and as a result, the President must be deemed to have exceeded his
authority in issuing them. A separate order accompanies this Memorandum Opinion.
II. BACKGROUND
A. An Historical Overview Of The Management Of Federal Public
Employees
The history of federal public employment in the United States evidences two
competing visions of the proper relationship between the President and the individuals
who are employed to work for the federal government within the Executive Branch.
See The Civil Service and the Statutory Law of Public Employment , 97 Harv. L. Rev.
1619, 1619 (1984). The first of these visions emphasizes “broad deference to the
executive in matters of public employment[,]” and is based on the belief that such
deference “is essential both to efficient public administration and [to] the realization of
the popular will.” Id. According to this view, the President must have free reign to
discharge federal employees, and to regulate labor relations between the government
and its employees, because such authority is necessary to run a capable a nd efficient
Federal Government. See id. at 1620. This belief also maintains that such power is
necessary to ensure that the President can promote the will of the people by installing
federal bureaucrats who actually seek to achieve the political platform that undergird
the President’s election. See id.
7
The second vision of public employment worries that unfettered “executive
discretion” to hire and fire civil servants can damage “the integrity of public
administration in general,” especially if an unchecked administration arbitrarily
discharges career employees who hold contrary political views or who seek to blow the
whistle on abusive employment practices within the Executive Branch. Id. This second
vision of public employment also often asserts that a public employee has acquired a
“property interest of sorts in his office[,]” id., and expresses concerns not only about
the impact that an abrupt dismissal might have on the administration of the federal
government as a whole, but also on that employee’s future employment prospects, see
id. at 1621. Based on such concerns, the second vision of the civil service system
“fosters the view that the public executive ought to be extensively constrained in
employment decisions” regarding apolitical civil service employees. Id. at 1619; see
also, e.g., Harrison v. Bowen, 815 F.2d 1505, 1518 (D.C. Cir. 1987) (discussing how
certain statutes constrain executive discretion to remove employees).
As relevant here, these two different visions of the role of the President in
managing the civil service have proven ascendant at different moments in American
history, including during periods that precede the statute at issue in this case. Indeed ,
because “[i]nitially, presidents had broad powers to fill the civil service with their
[own] appointees[,]” Jacob Marisam, The President’s Agency Selection Powers, 65
Admin. L. Rev. 821, 863 (2013), throughout the nineteenth century, newly inaugurated
presidents would regularly purge the ranks of the civil service, see id.; see also U.S.
Civil Serv. Comm’r v. Nat’l Ass’n of Letter Carriers, 413 U.S. 548, 557–58 (1973)
(describing these practices). The exercise of presidential power to manage the federal
8
workforce in this way waned significantly in the mid-twentieth century, as both
President John F. Kennedy and President Richard M. Nixon expressly curtailed the
purging practice by issuing executive orders that afforded significant procedural
protections to civil servants. See, e.g., Exec. Order No. 11,491, 34 Fed. Reg. 17605
(October 29, 1969); Exec. Order No. 10,988, 27 Fed. Reg. 551 (Janu ary 17, 1962). The
Kennedy and Nixon orders also authorized the creation of labor unions representing
federal government employees, and expressly granted federal employees “limited
collective bargaining rights[,]” thus “provid[ing] the initial authorization for federal
experimentation with unionization.” See Scott L. Novak, Collective Bargaining, 63
Geo. Wash. L. Rev. 693, 695–96 (1995); see also Bureau of Alcohol, Tobacco &
Firearms v. Fed. Labor Relations Auth., 464 U.S. 89, 91–92 (1983) (“BATF”).
With the 1970s, the view that slothful federal employees enjoyed too much
protection against discharge became increasingly popular, amidst mounting concern
over government integrity in the wake of the Watergate scandal . It was against this
backdrop that Congress enacted the Civil Service Reform Act of 1978 (“the CSRA”),
Pub L. No. 95-454, 92 Stat. 1111 (1978), which was codified (as amended) in scattered
sections of Title 5 of the United States Code. This legislation was expressly billed as
an effort to codify the previous assortment of executive orders and rules that regulated
the relationships between the federal government and its civil service employees. See
The Civil Service and the Statutory Law of Public Employment , 97 Harv. L. Rev. at
1631–33. And the CSRA “comprehensively overhauled the civil service system,”
Lindahl v. Office of Pers. Mgmt., 470 U.S. 768, 773 (1985), by replacing the “outdated
patchwork of statutes and rules built up” during the previous hundred years through
9
executive orders and federal statutes, United States v. Fausto, 484 U.S. 439, 444 (1988)
(quoting S. Rep. No. 95-969, p.3 (1978)), with “an elaborate new framework for
evaluating adverse personnel actions against federal employees[,] ” id. at 443 (internal
quotation marks, citation, and alternation omitted).
Significantly for present purposes, Congress crafted the CSRA with the express
goal of “balanc[ing] the legitimate interests of the various categories of federal
employees with the needs of sound and efficient administration. ” Id. at 445. To that
end, “[t]he CSRA protects covered federal employees against a broad range of
personnel practices, and it supplies a variety of causes of action and remedies to
employees when their rights under the statute are violated.” Grosdidier v. Chairman,
Broad. Bd. of Governors, 560 F.3d 495, 497 (D.C. Cir. 2009). At the same time, the
CSRA also streamlined the lengthy and laborious appeals processes that pre -dated the
CSRA, which made it easier for employers to take successful disciplinary or
performance-based actions against federal employees. See Fausto, 484 U.S. at 445.
The aforementioned FSLMRS, which addresses collective bargaining and labor
unions exclusively, is Title VII of the CSRA, and is “the first statutory scheme
governing labor relations between federal agencies and their employees.” BATF, 464
U.S. at 91.
The Statutory Provisions That Are Relevant To The Instant Dispute
The arguments presented in the parties’ cross-motions for summary judgment in
this case chiefly revolve around several provisions of the FSLMRS—5 U.S.C. §§ 7101–
06, 7111–23, 7131–35—as well as a few miscellaneous provisions that appear either in
the CSRA or elsewhere in the United States Code, see, e.g., id. §§ 4302, 7301.
10
The Purpose, Structure, And Provisions Of The FSLRMS
The very first section of the FSLMRS lays out the purposes of the statute and the
legislative findings that underlie it. Congress makes crystal clear that, in its considered
judgment, labor unions and collective bargaining “safeguard[] the public interest”;
“contribute[] to the effective conduct of public business”; and “facilitate and encourage
the amicable settlement[] of disputes between employees and their employers involving
conditions of employment[.]” 5 U.S.C. § 7101(a)(1). This statutory text also
emphasizes the importance of adhering to “the highest standards of employee
performance and the continued development and implementation of modern and
progressive work practices to facilitate and improve employee performance and the
efficient accomplishment of the operations of the Government.” Id. § 7101(a)(2).
Broadly speaking, the FSLMRS sets out to accomplish these goals by, among other
things: affirming the rights of federal employees to unionize and to engage in collective
bargaining, see id. §§ 7102, 7103(a)(12); determining what matters must, can, or cannot
be bargained over, see id. §§ 7102, 7106, 7117, 7121, 7131; and developing a dispute-
resolution mechanism for the various foreseeable issues that might arise during the
collective bargaining process or as part of a final collective bargaining agreement, see
id. §§ 7104–05, 7116, 7118–19, 7121–22, 7132.
First and foremost, the FSLMRS firmly establishes the rights of federal
employees to join labor unions for the purpose of petitioning government officials about
labor matters, see id. §§ 7102, 7102(1), and describes labor unions as entities that
represent federal employees by “engag[ing] in collective bargaining with respect to
conditions of employment through representatives chosen by employees under this
chapter[,]” id. § 7102(2). The terms “collective bargaining” and “conditions of
11
employment” are terms of art within the FSLMRS, which means they have particular
meanings that bear on this case. “Collective bargaining” is defin ed as “the performance
of the mutual obligation of . . . an agency and the [union] . . . to meet at reasonable
times and to consult and bargain in a good-faith effort to reach agreement with respect
to the conditions of employment affecting such employees.” Id. § 7103(a)(12). The
“conditions of employment” that are subject to negotiation under the statute include
“personnel policies, practices, and matters, whether established by rule, regulation, or
otherwise, affecting working conditions[.]” Id. § 7103(a)(14). Furthermore, when
bargaining over such matters, both agencies and union representatives must abide by
their obligation to “meet and negotiate in good faith[,]” id. § 7114(a)(4), and this means
that the parties to the negotiation must generally “e nter into discussions with an open
mind and a sincere intention to reach an agreement[,]” United Steelworkers of Am.,
AFL-CIO-CLC, Local Union 14534 v. Nat’l Labor Relations Bd., 983 F.2d 240, 245
(D.C. Cir. 1993) (quoting Sign and Pictorial Union Local 1175 v. Nat’l Labor Relations
Bd., 419 F.2d 726, 731 (D.C. Cir. 1969)).
After establishing that the right to good-faith collective bargaining exists, the
statute lays out what matters are subject to negotiation and the extent to which those
matters must be discussed. In this regard, the FSLMRS establishes a three-tier system
based upon the negotiability of matters in collective bargaining discussions. First, the
FSLMRS establishes a default presumption that it is “mandatory” for agencies and
unions to bargain over the “condition[s] of employment” in the workplace. U.S. Dep’t
of the Navy, Naval Aviation Depot, Cherry Point, N.C. v. Fed. Labor Relations Auth. ,
952 F.2d 1434, 1439 (D.C. Cir. 1992); accord 5 U.S.C. §§ 7102(2), 7103(a)(12), (14).
12
Moreover, while the phrase “conditions of employment” is broad, the FSLMRS further
explicitly emphasizes at least two mandatory bargaining matters: the scope of grievance
procedures for disputes between employees and management, see 5 U.S.C. § 7121(a),
and the availability of “official time[,]” id. § 7131(d)—i.e., the availability of paid time
to union members to work on union-related matters, see BATF, 464 U.S. at 91. Second,
the FSLMRS explicitly designates a narrow category of matters (section 7106(b)(1)) as
‘permissive’ matters for bargaining, in the sense that the parties may bargain over the
matters contained within this section “at the election of the agency[. ]” 5 U.S.C.
§ 7106(b)(1); see id. (allowing, “at the election of the agency,” negotiation as to the
“numbers, types, and grades of employees or positions assigned to” any project, or “the
technology, methods, and means or performing work”); see also Nat’l Treasury Emps.
Union v. Fed. Labor Relations Auth., 414 F.3d 50, 53 (D.C. Cir. 2005) (acknowledging
that these matters constitute “permissive” subjects of bargaining).
Third and finally, the FSLMRS prohibits negotiation over matters relating to
management rights or those matters subject to Government -wide rules or regulations.
Accordingly, none of the bargaining rights the FSLMRS confers may interfere with the
rights of federal agencies “to determine the mission, budget, organization, number of
employees, and internal security practices of the agency” or “to hire, assign, direct,
layoff, and retain employees . . . or to suspend, remove, reduce in grade or pay, or take
other disciplinary action against such employees” as allowed by law. 5 U.S.C.
§ 7106(a). The statute also frees federal agencies of any obligation to negotiate over
those “matters which are the subject of any . . . Government-wide rule or regulation[.]”
Id. § 7117(a)(1). This means that the right to collective bargaining does not extend to
13
rules or regulations that are “generally applicable throughout the Federal
Government[,]” even if the rule does not “apply[] to . . . a fixed minimum percentage of
the federal civilian workforce.” Overseas Educ. Ass’n, Inc. v. Fed. Labor Relations
Auth., 827 F.2d 814, 816–17 (D.C Cir. 1987) (internal quotation marks and citation
omitted); see also Am. Fed’n of Gov’t Emps., Local 2782 v. Fed. Labor Relations Auth. ,
803 F.2d 737, 741 (D.C. Cir. 1986).
As mentioned, the FSLMRS also recognizes that a number of disputes may arise
in the context of collective bargaining negotiations or during the execution of a
collective bargaining agreement. Thus, the statute prohibits labor unions or federal
agencies from engaging in “unfair labor practices[,]” such as interfering with the ability
of employees or agencies to pursue their rights under the FSLMRS , or refusing to
negotiate in good faith. 5 U.S.C. § 7116(a)(1), (a)(5), 7116(b)(1), (b)(5). It also
provides mechanisms for agencies and labor unions to resolve any impasse during
negotiations, id. § 7119, and to determine whether a union’s proposal is actually
negotiable under the FSLMRS, id. § 7117(c).
The Federal Labor Relations Authority
The various relevant provisions of the FSLMRS discussed above cover a lot of
substantive ground regarding the scope of federal labor-management relations. But
there’s more: to ensure that these statutory prescriptions are administered effectively,
Congress also created a permanent agency that it named the Federal Labor Relations
Authority (“FLRA”). See id. § 7104(a). The FLRA has three members who are
appointed by the President with the advice and consent of the Senate. See id. § 7104(a),
(b). No more than two of its three members may come from the same political party,
see id. § 7104(a), and the members may “be removed by the President only upon notice
14
and hearing and only for” cause, id. § 7104(b). Thus, the FLRA is a bipartisan,
independent agency. See Secs. Exch. Comm’n v. Fed. Labor Relations Auth., 568 F.3d
990, 997 (D.C. Cir. 2009) (Kavanaugh, J., concurring).
Per the FSLMRS, the FLRA must “provide leadership in est ablishing policies
and guidance relating to matters under” the statute, 5 U.S.C. § 7105(a)(1), and the
agency is specifically tasked with promulgating regulations pertaining to the FSLMRS,
see id. § 7134. The FLRA must also carry out a number of other prescribed duties, such
as “resolv[ing] issues relating to the duty to bargain in good faith under section
7117(c)[,]” id. § 7105(2)(E); “conduct[ing] hearings and resolv[ing] complaints of
unfair labor practices[,]” id. § 7105(a)(2)(G); and providing, by and large, the final
word relating to employee grievances under any grievance procedures established by a
collective bargaining agreement, see id. § 7122.
When the FLRA is called upon to hear a dispute, it may hold hearings and take
testimony, require an agency or labor union “to cease and desist from violations” of the
FSLMRS, or otherwise “take any remedial action it considers appropriate to carry out
the policies of this chapter.” Id. § 7105(g). However, the FLRA is not the final word
on such matters; under the statute, “[a]ny person aggrieved by any final order of the
[FLRA]” may, with two minor exceptions, “institute an action for judicial review of the
Authority’s order in” the federal court of appeals where that person resides, or in the
D.C. Circuit. Id. § 7123(a). The statute further provides that when such an appeal is
filed, the court of appeals “shall have jurisdiction of the proceeding and of the question
determined therein[,]” and may affirm, modify, or set aside the FLRA’s order. Id.
§ 7123(c). Given the FLRA’s expertise and the extensive role that Congress envisioned
15
for this agency in administering the FSLMRS, the agency is entitled to Chevron
deference when interpreting the ambiguous provisions within the FLRA. See Fort
Stewart Schs. v. Fed. Labor Relations Auth., 495 U.S. 641, 645 (1990).
Relevant Miscellaneous Provisions Of The United States Code
Other statutory provisions that are either contained within the CSRA (but outside
of the FSLMRS), or appear elsewhere in the United States Code, are relevant to this
case. For example, in the CSRA, Congress created an agency known as the Merit
Systems Protection Board (“MSPB”) that adjudicates employee objections to certain
adverse personnel actions. See 5 U.S.C. § 7701; 5 C.F.R. § 1201.3 (listing the various
types of actions that the MSPB may hear). Among other things, the MSPB is
specifically empowered to hear cases regarding the removal or reduction in grade of an
employee “for unacceptable performance[,]” 5 U.S.C. § 4303, and cases involving an
“adverse action taken against employees . . . based on misconduct[,]” Fausto, 484 U.S.
at 446; see also 5 U.S.C. § 7513. The MSPB’s decisions are typically reviewable in the
Federal Circuit. 5 U.S.C. § 7703.
In the category of other sections of the United States Code that specifically
address the President’s ability to regulate the civil service, section 3301 of Title 5
authorizes the President to “prescribe such regulations for the admission of individuals
into the civil service in the [E]xecutive [B]ranch as will best promote the efficiency of
that service[,]” id. § 3301(1), and the President is also expressly authorized to
“ascertain the fitness of applicants as to age, health, character, knowledge, and ability
for the employment sought[,]” id. § 3301(2). Similarly, section 7301 of Title 5 states
that “[t]he President may prescribe regulations for the conduct of employees in the
[E]xecutive [B]ranch.” Id. The public law that enacted the CSRA also expressly states:
16
“no provision of [the CSRA] shall be construed to limit, curtail, abolish or terminate
any function of, or authority available to, the President which the President had
immediately before the effective date of this Act.” Civil Service Reform Act of 1978,
Pub. L. 95-454, § 904(1), 92 Stat. 1111, 1224 (internal quotation marks omitted).
The Challenged Executive Orders
President Donald J. Trump issued the Orders at issue in this case on May 25,
2018, as part of a coordinated effort to overhaul labor-management relations within the
federal government. 4 The Orders—dubbed “the Collective Bargaining Procedures
Order”; “the Official Time Order”; and “the Removal Procedures Order,”
respectively—cover a variety of issues, as described below.
Executive Order 13,836 (“The Collective Bargaining Procedures
Order”)
Executive Order 13,836, which is officially entitled “Developing Efficient,
Effective, and Cost-Reducing Approaches to Federal Sector Collective Bargaining,”
aims to instruct federal agencies on the procedures ( e.g., the methods and timing) that
the President would like to see instituted with respect to collective bargaining
negotiations, as well as some of the subjects of negotiation that the President would like
to see eliminated from the collective bargaining process. This executive order sets the
tone at the outset, by admonishing federal agencies for “fall[ing] short” of
implementing the prescriptions of the FSLMRS, which in the President’s view, is
“consistent with” that statute’s pronouncement that the FSLMRS should be interpr eted
to promote an “effective and efficient Government.” Id. § 1(a). The Order further
4
Defendants acknowledge that these three orders were issued simultaneously, as a package deal. ( See
Defs.’ Mem. at 17 (“[T]he President issued three Executive Orders designed to promote more efficient
and effective approaches to federal-sector collective bargaining and labor-management relations.”).)
17
provides specific examples of such alleged failures: the President laments the fact that
“CBAs, and other agency agreements with collective bargaining representatives, often
make it harder for agencies to reward high performers, hold low performers
accountable, or flexibly respond to operational needs[,]” id., and notes that this
suboptimal result is often reached after years of taxpayer funded CBA renegotiations,
see id., under circumstances in which “[a]gencies must also engage in prolonged
negotiations before making even minor operational changes, like relocating office
space[,]” id.
As relevant to this litigation, Executive Order 13,836 purports to fix the se
problems, primarily by changing the collective bargaining procedures that federal
agencies follow. See id. §§ 5(a), (c), (e), (6). First, section 5(a) states that “[t]o
achieve the purposes of this order, agencies shall begin collective bargaining
negotiations by making their best effort to negotiate ground rules that minimize delay”
and “set reasonable time limits for good-faith negotiations[.]” Id. § 5(a). In this regard,
the Order also maintains that “a negotiating period of 6 weeks or less to achieve ground
rules, and a negotiating period of between 4 and 6 months for a term CBA under those
ground rules, should ordinarily be considered reasonable.” Id. Section 5(c),
meanwhile, explains that when collective bargaining is delayed or impeded due to a
union representative’s “failure to comply with the duty to negotiate in good faith,” the
agency shall “consider” filing an unfair labor practice complaint with the FLRA or
“propose a new contract, memorandum, or other change in agency policy and
implement that proposal if the collective bargaining representative does not offer
counter-proposals in a timely manner.” Id. § 5(c).
18
In a similar vein, section 5(e) purports to impact collective bargaining
procedures by announcing that, when “developing proposed ground rules, and during
any negotiations, agency negotiators shall request the exchange of written proposals, so
as to facilitate resolution of negotiability issues and assess the likely effect of specific
proposals on agency operations and management rights.” Id. § 5(e). Moreover, “[t]o
the extent that an agency’s CBAs, ground rules, or other agreements contain
requirements for a bargaining approach other than the exchange of written proposals
addressing specific issues,” agencies are required, “at the soonest opportunity, [to] take
steps to eliminate them.” Id. Finally, section 6 homes in on the substance of the
negotiations: it provides that “[t]he heads of agencies . . . may not negotiate over the
substance of the subjects set forth in [section 7106(b)(1) of Title 5 of the United States
Code] and shall instruct subordinate officials that they may not negotiate over those
same subjects.” Id. § 6.
The net effect of these challenged provisions is to set a presumptive timeframe
for the completion of collective bargaining negotiations (roughly five to seven months),
see id. § 5(a); to remove certain matters from the bargaining table completely, see id.
§ 6; to require agencies to seek an exchange of written proposals about specific issues
during rounds of collective bargaining, and to call for the elimination of other
approaches, see id. § 5(e); and to ask agencies to consider taking certain steps ( e.g., the
potential implementation of the agency’s own unilateral agreement) if union
representatives delay or impede the negotiations in bad faith, see id. § 5(c).
Executive Order 13,837 (“The Official Time Order”)
Executive Order 13,837 is entitled “Ensuring Transparency, Accountability, and
Efficiency in Taxpayer-Funded Union Time Use[.]” Exec. Order No. 13,837. In this
19
Order, as with all the Orders, there is no mention of Congress’s statutory statement that
“labor organizations and collective bargaining in the civil service are in the public
interest.” 5 U.S.C. § 7101(a). Rather, the Order suggests that the work of the agency
itself is the only relevant interest that the public has as far as federal employees are
concerned, and to make this crystal clear, the Order announces that “[t]o advance this
policy, executive branch employees should spend their duty hours p erforming the work
of the Federal Government and serving the public.” Exec. Order No. 13,837 § 1
(emphasis added). As justification for this policy statement, t he Order points to
Congress’s direction that the FSLMRS should be interpreted “in a manner consistent
with the requirements of an effective and efficient government [,]” and asserts that “[a]n
effective and efficient government keeps careful track of how it spends taxpayer’s
money and eliminates unnecessary, inefficient, or unreasonable expenditures[.]” Id. In
so doing, the Order implies that the official duty time that some federal employees
(representatives of federal labor unions) spend working on union business or
representing federal employees in collective bargaining (which federal law allows ) is an
inefficient and ineffective taxpayer expense. See id.
To this end, Executive Order 13,837 specifically redefines —and limits—the
extent to which federal employees may engage in union business during working hours
(a practice that the FSLMRS calls “official time” and that the Order dubs “taxpayer-
funded union time”), and the Order also prohibits federal employees from using certain
federal resources when working on non-agency business. The “[p]urpose” preamble
announces four animating principles: (1) that “agencies should ensure that taxpayer-
funded union time is used efficiently and authorized in amounts that are reasonable,
20
necessary, and in the public interest”; (2) that “[f]ederal employees should spend the
clear majority of their duty hours working for the public”; (3) that “[n]o agency should
pay for Federal labor organizations’ expenses, except where required by law”; and (4)
that agencies should “eliminate unrestricted grants of taxpayer -funded union time” by
“requir[ing] employees to obtain specific authorization[,]” should “monitor [the] use of
taxpayer-funded union time[,]” and should make that information available to the
public, to “ensure [such time] is used only for authorized purposes[.]” Id.
The Order then promotes these principles by laying out specific standards that
pertain to how much official time an agency can authorize through a collective
bargaining agreement. In this regard, the Order mandates that “[n]o agency shall agree
to authorize” official time under section 7131(d) of Title 5 of the United States Code
“unless such time is reasonable, necessary, and in the public interest.” Id. § 3(a).
Moreover, the Order states that, ordinarily, no federal union should, in one calendar
year, receive more authorized official time under section 7131(d) than one hour per
every federal employee within that union. See id. (asserting specifically that, while
attempting to “fulfill their obligation to bargain in good faith[,]” “[a]gencies shall
commit the time and resources necessary to strive for a negotiated union time rate of 1
hour or less”). Furthermore, if agency negotiators wish to present or accept a collective
bargaining proposal that would result in official time in excess of the rate prescribed
above, those negotiators must inform the agency head of that proposal 5 days in
advance of the date they intend to offer up or accept that proposal, see id. § 3(b)(ii), and
if the agency proceeds to authorize an amount of official time in excess of this standard,
the head of that agency has 15 days to report the relevant agreement or proposal to the
21
head of OPM, who will subsequently report that proposal and agreement to the
President of the United States, see id. § 3(b)(i).
The Executive Order also places limits on the activities that a federal employee
may participate in while on duty; it also regulates how much official time any employee
is entitled to, and what resources the government must make available to employees
during activities for which official time is allotted. To be specific, “[e]mployees may
not engage in lobbying activities during” their on-duty hours, “except in their official
capacities as an employee.” Id. § 4(a)(i). Nor may federal employees use official time
“to prepare or pursue grievances . . . brought against an agency[,]” unless that employee
is working on his own pending grievance, is serving as a witness in a grievance
proceeding, or is challenging an adverse personnel action as retaliation for
whistleblowing activity. Id. § 4(a)(v). In addition, those employees cannot spend more
than one quarter of total working hours engaged in union-related activities, see id.
§ 4(a)(ii)(1), and, if they do so, that time will count against their total permissible
official time for the next calendar year, see id. § 4(a)(ii)(3). The Order notes that this
does not apply to official time in excess of one quarter of a union employee’s total
working hours if that time is used for the purposes laid out in section 7131(a) and (c) of
Title 5 of the United States Code. See id. § 4(a)(ii)(2). But the use of any official time
will require “advance written authorization from [the employee’s] agency, except where
obtaining prior approval is deemed impractical” according to regulation. Id. § 4(b).
Finally, section 4(a)(iii) prohibits federal employees from receiving the “free or
discounted use of government property or any other agency resources if such free or
discounted use is not generally available for non-agency business by employees when
22
acting on behalf of non-federal organizations[,]” id. § 4(a)(iii), and section 4(a)(iv)
disallows reimbursement of employees for expenses incurred for performing non-
agency business, unless required by law or regulation, see id. § 4(a)(iv). The Order also
obligates both OPM and agency heads to take steps to ensure that all applicable
regulations and newly-negotiated collective bargaining agreements are brought into
conformance with those stated rules. See id. § 4(c).
In sum, the challenged portions of this Order not only seek to limit the amount of
taxpayer-funded union time (“official time”) that can be designated to a labor
organization and/or an individual union employee, see id. §§ 3(a), 4(a)(ii), 4(b), but
also prohibit union employees from using that time in relation to certain activitie s (i.e.,
lobbying and some grievance-related proceedings), see id. §§ 4(a)(i), 4(a)(v). In
addition, the Order disallows union members from using government property for union
business conducted during official time, and refuses to reimburse employees for any
costs incurred during official time. See id. §§ 4(a)(iii), 4(a)(iv).
Executive Order 13,839 (“The Removal Procedures Order”)
The third, and final, executive order at issue in this lawsuit is entitled
“Promoting Accountability and Streamlining Removal Procedures Consistent With
Merit System Principles[.]” Exec. Order No. 13,839. Because federal agencies’
purported “[f]ailure to address unacceptable performance and misconduct undermines
morale, burdens good performers with subpar colleagues, and inh ibits the ability of
executive agencies . . . to accomplish their missions,” this Order expressly seeks to
“advance the ability of supervisors in agencies to promote civil servant accountability
consistent with merit system principles while simultaneously recognizing employees’
procedural rights and protections[.]” Id. § 1. It mainly aims to achieve these goals by
23
encouraging the “[r]emov[al] [of] unacceptable performers” using “a straightforward
process that minimizes the burden on supervisors.” Id. § 2(a).
The relevant challenged provisions start by rejecting the idea that federal
supervisors and deciding officials should be “required to use progressive discipline”
when dealing with underperforming subordinates. Id. § 2(b). Instead, the Order makes
clear that “[a]gencies should limit opportunity periods to demonstrate acceptable
performance” once the agency deems an employee to be performing inadequately , and
provides instead that “[t]he penalty for an instance of misconduct should be tailored to
the facts and circumstances.” Id. § 2(a), (b). For example, depending on the specific
factual circumstances, a federal employee might be removed for a f irst infraction—no
warnings, temporary suspensions, or second chances. See id. § 2(d) (“Suspension
should not be a substitute for removal in circumstances in which removal would be
appropriate.”). Of course, the Order notes that every employee’s disciplinary history
and work performance is unique, and thus theorizes that “[c]onduct that justifies
discipline of one employee at one time does not necessarily justify similar discipline of
a different employee at a different time.” Id. § 2(c). But it states in no uncertain terms
that progressive discipline should not be required, id. § 2(b), and to effectuate that
policy, it further provides that no agency is permitted to make “any agreement,
including a collective bargaining agreement that limits the agency’s discretion to
remove an employee from Federal service without first engaging in progressive
discipline.” Id. § 4(b)(iii). Along these same lines, the Order states that agencies shall
“generally [not] afford [an underperforming] employee more than a 30-day period” to
improve his unacceptable performance, unless the agency determines in its “sole
24
discretion” that a longer period is necessary. Id. § 4(c).
In an effort to further streamline the removal process, the Order takes certain
other matters off the collective bargaining table. For example, the Order mandates that,
“[w]henever reasonable[,]” agency heads shall attempt to negotiate collective
bargaining agreements that “exclude from the application of any grievance procedures”
those disputes “concerning decisions to remove any employee from Federal service for
misconduct or unacceptable performance.” Id. § 3. Agencies are also prohibited from
subjecting “the assignments of ratings of record” or “the award of any form of incentive
pay” (such as “cash awards[,] quality step increases[,] or recruitment, retention, or
relocation payments”) to any “grievance procedures or binding arbitration.” Id. § 4(a).
Boiled to bare essence, these provisions make it easier for the government to
dismiss federal employees for bad conduct or unsatisfactory performance at work, and
they remove certain matters relating to the grievance process from the collective
bargaining negotiations process. OPM and the heads of agencies are further directed to
bring any current regulations, disciplinary programs, or collective bargaining
agreements into conformance with these principles as soon as possible. See id. § 7.
Procedural History
Within a month of the President signing the Orders described above, seventeen
federal employee unions filed four separate lawsuits in this Court seeking to challenge
the legality of these orders. See Am. Fed’n of Gov’t Emps., AFL-CIO v. Trump, et al.,
18-cv-1261 (KBJ); Nat’l Treasury Emps. Union v. Trump et al., 18-cv-1348 (KBJ);
Nat’l Fed’n of Fed. Emps., FD1, IAMAW, AFL-CIO, et al. v. Trump, et al., 18-cv-1395
(KBJ); Am. Fed’n of State, Cty. & Mun. Emps, et al. v. Trump, et al., 18-cv-1444 (KBJ).
The contours of the claims that the Unions have brought in the context of those four
25
lawsuits differ slightly, but in toto, the alleged claims can be grouped into four
categories: (1) claims that challenge the President’s authority to issue executive orders
in the field of federal labor-management relations at all (see, e.g., Compl., Nat’l Fed.’n
of Fed. Emps., FD1, IAMAW, AFL-CIO, et al. v. Trump, et al., 18-cv-1395 (D.D.C. June
13, 2018) (“NFFE’s Compl.”), ECF No. 1, ¶¶ 82–95); (2) claims that challenge the
President’s authority to issue executive orders that conflict with individual provisions
of the FSLMRS (see, e.g., id. ¶¶ 96–109); (3) claims that challenge the cumulative
impact of these provisions upon the statutorily-guaranteed right to bargain collectively
(see, e.g., Am. Compl., Nat’l Treasury Emps. Union v. Trump, et al., 18-cv-1348
(D.D.C. June 15, 2018) (“NTEU’s Compl.”), ECF No. 21, ¶¶ 131–134); and (4) claims
that contend that the issuance of the Orders violate either the Constitution’s Take Care
Clause, or, in the case of section 4(a)(v) of the Official Time Order, the First
Amendment right to freedom of association (see, e.g., Compl., Am. Fed’n of State, Cty.
& Mun. Emps., et al. v. Trump, et al., 18-cv-1444 (D.D.C. June 18, 2018) (“AFSCME’s
Compl.”), ECF No. 1, ¶¶ 94–97, 114–18).
Between June 15 and June 19, 2018, this Court consolidated all of these cases
into a single action (see Minute Order of June 15, 2018; Minute Order of June 18, 2018 ;
Minute Order of June 19, 2018), and shortly thereafter, the parties agreed to have these
matters resolved by way of expedited summary judgment proceedings ( see Scheduling
Order at 1). Plaintiffs then filed four separate motions for summary judgment,
reasserting their core claims and insisting that there is no genuine issue of material fact
regarding the impropriety of the President’s actions in issuing the Orders. (See NFFE’s
Mem.; AFSCME’s Mem.; NTEU’s Mem.; AFGE’s Mem.) Defendants filed an omnibus
26
cross-motion for summary judgment (see Defs.’ Mem.), and the parties’ summary
judgment motions have now been briefed in full (see NFFE’s Reply; AFSCME’s Reply;
NTEU’s Reply; AFGE’s Reply; Defs.’ Reply).
Defendants’ motion contends that the Unions’ claims about the lack of
presidential authority are meritless for a variety of reasons. ( See, e.g., Defs.’ Mem. at
18 (“Contrary to Plaintiffs’ insistence that the orders are an unlawful exercise of
Presidential power, they fall well within the President’s author ity.”); id. at 19
(“[S]ection 7117 of the Statute permits the government to pull a subject out of the
bargaining process by issuing a government-wide rule that creates a regime inconsistent
with bargaining.” (internal quotation marks and citation omitted)) .) Defendants also
raise threshold questions about whether this Court has subject-matter jurisdiction to
hear these claims, given that Congress has created a scheme that designates the FLRA
and the MSPB as the first steps for adjudicating federal labor claims (see id. at 17), and
Defendants also question whether the Unions’ claims are prudentially ripe (see id. at
18). This Court held a hearing regarding the parties’ cross -motions on July 25, 2018.
(See Hr’g Tr., ECF No. 56.)
III. APPLICABLE LEGAL STANDARDS
“The President’s authority to act, as with the exercise of any governmental
power, ‘must stem either from an act of Congress or from the Constitution itself[,]’” or
from a combination of the two. Medellin v. Texas, 552 U.S. 491, 523 (2008) (quoting
Youngstown, 343 U.S. at 585). Thus, when assessing whether the President has acted
beyond the bounds of his legal authority, a court may at times have to consider both the
authority that congressional statutes have conferred upon him and the inherent authority
27
that the Constitution assigns to the President. See, e.g., Dames & Moore v. Regan, 453
U.S. 654, 675–82 (1981) (considering both aspects of the President’s power). The
inquiries that are required to determine the extent of the President’s statutory and
constitutional authority differ substantially, but it is worth noting that a court need not
assess the scope of the President’s constitutional authority to take a particular action
unless the President has specifically asserted that authority in the context of the given
dispute. See Am. Fed’n of Labor and Congress of Indus. Orgs. v. Kahn , 618 F.2d 784,
787 (D.C. Cir. 1979) (en banc). Hence, it is possible for a court to conclude that the
President has acted ultra vires without concluding that the President has violated the
constitutional separation of powers. See Dalton v. Specter, 511 U.S. 462, 472 (1994)
(“Our cases do not support the proposition that every action by the President, or by
another executive official, in excess of his statutory authority is ipso facto in violation
of the Constitution. On the contrary, we have often distinguished between claims of
constitutional violations and claims that an official has acted in excess of his statutory
authority.”).
Evaluating whether the President (or one of his subordinates) has acted in excess
of his statutory authority typically presents “a difficult problem of statutory
interpretation.” Kahn, 618 F.2d at 787. To solve such a puzzle, a court must analyze
the organic statute that supposedly confers statutory authority upon the President,
assess the scope of a given executive order, and check for inconsistencies between the
statute and the executive order. See id. at 792–94. It must take these three steps
because there are two independent ways that the President may exceed the scope of his
statutory authority in issuing these orders. On the one hand, it is possible that no
28
statute has ever supplied the President with an explicit or implicit delegation of
statutory authority. See, e.g., Youngstown, 343 U.S. at 585–86. And on the other, even
if the President has the authority to act in a certain field, the President nevertheless acts
in excess of his statutory authority if the orders that he issues conflict with a federal
statute. See Chamber of Commerce of U.S. v. Reich, 74 F.3d 1322, 1332 (D.C. Cir.
1996).
If the President asserts his inherent constitutional authority to take a particular
challenged action, the court’s analysis shifts to the well-known tripartite framework
spelled out in Justice Robert Jackson’s Youngstown concurrence. “When the President
acts pursuant to an express or implied authorization of Congress” in a manner that is
consistent with the will of Congress, “his [overall] authority is at its maximum, for it
includes all that he possesses in his own right plus all that Congress can delegate.”
Youngstown, 343 U.S. at 635 (Jackson, J., concurring). In such a situation, the
President’s action is “supported by the strongest of presumptions and the widest latitude
of judicial interpretation, and the burden of persuasion would rest heavil y upon any who
might attack it.” Id. at 637. And, “[w]hen the President acts in absence of either a
congressional grant or denial of authority, he can only rely upon his own independent
powers, but there is a zone of twilight in which he and Congress may have concurrent
authority, or in which its distribution is uncertain.” Id. In these uncertain waters,
“‘congressional inertia, indifference or quiescence may’ invite the exercise of executive
power.” Zivotofsky ex rel. Zivotofsky v. Kerry, 135 S. Ct. 2076, 2084 (2015) (quoting
Youngstown, 343 U.S. at 637 (Jackson, J., concurring)). Finally, “[w]hen the President
takes measures incompatible with the expressed or implied will of Congress, his power
29
is at its lowest ebb, for then he can rely only upon his own constitutional powers minus
any constitutional powers of Congress over the matter.” Youngstown, 343 U.S. at 637
(Jackson, J., concurring). In the latter circumstance, sustaining such an exercise of
“exclusive Presidential control” essentially requires a court to “disabl[e] the Congress
from acting upon the subject[,]” id. at 637–38, and a court may affirm such a claim to
power only by holding that a given action is “within [the President’s] domain an d
beyond control by Congress[,]” id. at 640.
In short, like an ultra vires claim, a constitutional separation of powers claim
requires the court to analyze what statutory authority, if any, the President possesses in
relation to the challenged action. See, e.g., Medellin, 552 U.S. at 529–30. After
evaluating the scope of the President’s statutory authority, the court must consider the
scope of the President’s inherent authority to act, looking to “the Constitution’s text
and structure, as well as precedent and history bearing on the question[,]” to determine
what acts the President’s inherent authority encompasses. Zivotofsky, 135 S. Ct. at
2084.
One final note, in regard to how these analytic frameworks function at the
motion for summary judgment stage, is useful. The familiar standard for deciding
motions for summary judgment under the Federal Rules of Civil Procedure dictates that
if a “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[,]” then a court must grant summary
judgment in his favor. Fed. R. Civ. P. 56(a). Of course, in the context of ultra vires
and constitutional separation of powers claims, there are no questions of fact, because
whether or not a statute or the Constitution grants the President the power to act in a
30
certain way is a pure question of law. See, e.g., Zivotofsky, 135 S. Ct. at 2083–84
(prescribing de novo review); Chamber of Commerce of U.S., 74 F.3d at 1332–39
(conducting a de novo review). The same can be said of any issues of interpretation
that a federal court may have to answer in parsing out the meaning of any relevant
statutes or the pertinent provisions of a challenged executive order. See Bldg. &
Constr. Trade Dep’t, v. Allbaugh, 295 F.3d 28, 32–36 (D.C. Cir. 2002).
IV. ANALYSIS
The circumstances presented in the instant case—i.e., where the Unions have
challenged the President’s authority to issue certain executive orders regarding federal
labor-management relations on a variety of grounds, and where the President maintains
that he has both the statutory and constitutional authority to direct the manner of
executive agencies’ collective bargaining negotiations and other related matters but
that, in any event, this Court cannot and should not address the Unions’ claims—present
complicated legal questions that require the application of myriad legal precedents and
more than one analytical framework. The lengthy analysis below begins with the
threshold issues concerning this Court’s subject-matter jurisdiction and the ripeness of
the Unions’ claims, and the Court concludes that the claims at issue here are not the
types of claims that Congress intended to be funneled to the FLRA through the
FSLMRS’s administrative review scheme, nor are they unfit for judicial review at this
time. (See Part IV.A. & Part IV.B, infra.)
The Court then proceeds to tackle the merits of the claims presented in the
Unions’ consolidated complaints. It finds that the President has the constitutional and
statutory authority to issue executive orders that carry the force of law regarding federal
31
labor-management relations, including collective bargaining (see Part IV.C, infra), but
that any such orders cannot impermissibly infringe upon the right to collective
bargaining that is enshrined in the FSLMRS (see Part IV.D, infra). And because many
of the executive order provisions that the Unions challenge here have that effect, this
Court concludes that the President has overstepped his bounds. ( See id.)
Specifically, on their face, the Order provisions concerning matters such as the
reduction of the availability of and support for official time activities, see Exec. Order
No. 13,837 § 4, and the specific prohibitions against bargaining over section
7106(b)(1)’s permissive matters, see Exec. Order No. 13,836 § 6, or the unilateral
narrowing of any negotiated grievance procedures, see Exec. Order No. 13,839 § 4(a),
dramatically decrease the scope of the right to bargain collectively, because, in the
FSLMRS, Congress clearly intended for agencies and unions to engage in a broad and
meaningful negotiation over nearly every “condition of employment.” Likewise, the
Orders’ requirements, such as the directive that agencies should “ordinarily” seek to
conclude collective bargaining negotiations within five to seven months, Exec. Order
No. 13,836 § 5(a), or should limit the applicability of grievance procedures “[w]henever
reasonable[,]” Exec. Order No. 13,839 § 3, effectively instruct federal agencies and
executive departments to approach collective bargaining in a manner that clearly runs
counter to the FSLMRS’s expectation of good-faith conduct on the part of negotiating
parties.
In this Court’s considered judgment, the President is without statutory authority
to promulgate directives that reduce the scope of the statutory right to bargain
collectively that Congress enacted in the FSLMRS; and, indeed, there appears to be no
32
dispute that the President does not have the constitutional authority to override
Congress’s policy choice (see Defs.’ Reply at 30–31). Thus, the only challenged
provisions of Executive Orders 13,836, 13,837, or 13,839 that can stand are those that
neither contribute to a reduction in the scope of the collective bargaini ng that Congress
has envisioned nor impede the ability of agencies and executive departments to engage
in the kind of good-faith bargaining over conditions of federal employment that
Congress has required. (See Part IV.E., infra.)
This Court Has Subject-Matter Jurisdiction Because Congress Did Not
Intend For This Matter To Be Resolved Through The FSLMRS Or CSRA
Administrative Review Schemes
“Federal courts are courts of limited jurisdiction[,]” meaning that “[t]hey possess
only that power authorized by [the] Constitution and statute.” Kokkonen v. Guardian
Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). It is well established that, “[w]ithin
constitutional bounds, Congress decides what cases the federal courts have jurisdiction
to consider.” Bowles v. Russell, 551 U.S. 205, 212 (2007); see also U.S. Const. art. III.,
§ 1. Therefore, so long as Congress has provided a federal district court with an
“applicable jurisdictional grant[,]” that court has the authority to hear any case that falls
within that grant of jurisdiction. Jarkesy v. Secs. Exch. Comm’n, 803 F.3d 9, 15 (D.C.
Cir. 2015); see also, e.g., 28 U.S.C. § 1331 (authorizing federal question jurisdiction);
id. § 1332 (authorizing diversity jurisdiction); id. § 1367 (authorizing supplemental
jurisdiction).
Of course, because Congress has the power to control the jurisdiction of federal
district courts, it may also choose to withhold jurisdiction, by “channeling” certain
types of claims through alternative review mechanisms. See Elgin v. Dep’t of the
Treasury, 567 U.S. 1, 9 (2012); accord Thunder Basin Coal Co. v. Reich, 510 U.S. 200,
33
207 (1994). In one such relatively common circumstance, Congress establishes a
“statutory scheme of administrative review followed by judicial review in a federal
appellate court[.]” Elgin, 567 U.S. at 9. It is also clear beyond cavil that when
Congress erects a statutory scheme of this nature, it “implicitly preclude[s] district
court jurisdiction over the claims” to which that statutory scheme applies. Arch Coal,
Inc. v. Acosta, 888 F.3d 493, 496 (D.C. Cir. 2018); see also Jarkesy, 803 F.3d at 15
(explaining that such schemes typically preclude initial judicial review by district
courts because “it is ordinarily supposed that Congress intended that procedure to be
the exclusive means of obtaining judicial review in those cases to which it applies”
(internal quotation marks and citation omitted)).
Defendants here insist that the administrative review schemes that appear in the
FSLMRS and CSRA channel the Unions’ claims to the FLRA or MSPB for resolution,
and thus, this Court has no subject-matter jurisdiction to resolve the instant dispute.
(See Defs.’ Mem. at 32–33.) To analyze whether a statutory scheme of review does, in
fact, implicitly strip away a district court’s power to hear a claim that it woul d
otherwise have the authority to hear, courts apply the two -step inquiry that the Supreme
Court laid out in Thunder Basin Coal Co. v. Reich. See Jarkesy, 803 F.3d at 15.
“Under Thunder Basin’s framework, courts determine that Congress intended that a
litigant proceed exclusively through a statutory scheme of administrative and judicial
review when (i) such intent is ‘fairly discernible in the statutory scheme,’ and (ii) the
litigant’s claims are ‘of the type Congress intended to be reviewed within [the] statutory
structure.’” Id. (quoting Thunder Basin, 510 U.S. at 207, 212); see also Elgin, 567 U.S.
at 10, 15 (applying this framework); Free Enter. Fund v. Pub. Co. Accounting
34
Oversight Bd., 561 U.S. 477, 489 (2010) (same). Both elements must be present to
support the conclusion that Congress has implicitly denied district court jurisdiction;
however, as explained below, only the first of these two prongs is satisfied under the
circumstances presented here.
Both The FSLMRS And The CSRA Evince A Fairly Discernable
Congressional Intent To Channel Certain Claims To The FLRA And
The MSPB
It is well settled that the FSLMRS evinces a congressional intent to channel the
resolution of at least some claims to the administrative agency that Congress created to
address certain federal labor-management issues (the FLRA). See 5 U.S.C. § 7105(a).
The D.C. Circuit has acknowledged that, “[w]ith the FSLMRS, . . . Congress passed an
enormously complicated and subtle scheme to govern employee relations in the federal
sector, including the authorization of collective bargaining[,]” from which it reasoned
that “[i]t follows, then, that [a plaintiff] may not circumvent that structure by seeking
judicial review outside the CSRA’s procedures.” Am. Fed’n of Gov’t Emps. v. Sec’y of
the Air Force, 716 F.3d 633, 636 (D.C. Cir. 2013) (internal quotation marks and
citations omitted). Moreover, the procedures for judicial review that are set forth in the
FSLMRS are detailed and specific, suggesting that Congress intended for those
procedures to be exclusive. See 5 U.S.C. § 7123(a) (providing a right of appeal to
“[a]ny person aggrieved by any final order of the Authority other than an order under”
section 7122 or section 7122 of the FSLMRS); id. § 7123(c) (outlining, e.g., the court
of appeals’ jurisdiction, the relief that may be granted, the standard of review, and
waiver rules); cf. Elgin, 567 U.S. at 11–12 (“Given the painstaking detail with which
the CSRA sets out the method for covered employees to obtain review of adverse
employment actions, it is fairly discernable that Congress intended to deny such
35
employees an additional avenue of review in district court.”).
Thus, it comes as no surprise that the D.C. Circuit has held that “the FSLMRS’s
remedial regime is exclusive[,]” Sec’y of the Air Force, 716 F.3d at 637 (emphasis
added), and that federal “[d]istrict courts do not have concurrent jurisdiction over
matters within the exclusive purview of the FLRA[,]” Am. Fed’n of Gov’t Emps., AFL-
CIO, Local 446 v. Loy, 367 F.3d 932, 935 (D.C. Cir. 2004)—i.e., those matters listed in
section 7105 of Title 5. In short, Congress intended for the “mine -run of cases”
involving the FSLMRS to come before the FLRA—not the federal district courts—
because “Congress create[d] procedures designed to permit agency expertise to be
brought to bear on particular problems[.]” Jarkesy, 803 F.3d at 16 (internal quotation
marks and citation omitted).
Similarly, when it enacted the other provisions of the CSRA, Congress
unquestionably “established a comprehensive system for reviewing personnel action
taken against federal employees.” Fausto, 484 U.S. at 455. Thus, the statute’s scheme
contains its own mechanisms for the resolution of disputes: it provides for
“administrative and judicial review of specified adverse employment actions[,]” Elgin,
567 U.S. at 5, including the removal or reduction in grade of an employee “for
unacceptable job performance” under Chapter 43 of the CSRA, and a system for the
review of “adverse action taken against employees . . . based on misconduct” under
Chapter 75 of the CSRA, Fausto, 484 U.S. at 445–46. “Given the painstaking detail
with which the CSRA sets out the method for covered employees to obtain review of
adverse employment actions, it is fairly discernible that Congr ess intended to deny such
employees an additional avenue of review in district court.” Elgin, 567 U.S. at 11–12.
36
The Unions’ Claims Are Not Of The Type That Congress Intended To
Funnel Through The FLRA or CSRA Statutory Review Schemes
Of course, the administrative and judicial review schemes that Congress adopted
in the FSLMRS and CSRA are the exclusive path only with respect to the disputes to
which these schemes apply. Here, the Unions maintain that their claims are not “of the
type Congress intended to be reviewed within” the pertinent “statutory structure[s]” of
the FLRA or the CSRA. Thunder Basin, 510 U.S. at 212. (See, e.g., AFGE’s Reply at
9.) Fortunately, the D.C. Circuit spoke at great length in Jarkesy about how this type of
analysis should unfold. See 803 F.3d at 17.
But first, it is important to note at the outset that “[t]o unsettle the presumption
of initial administrative review—made apparent by the structure of the organic statute—
requires a strong countervailing rationale.” Id. (internal quotation marks and citation
omitted). According to the D.C. Circuit, such a rationale exists “‘if a finding of
preclusion could foreclose all meaningful judicial review; if the suit is wholly collateral
to a statute’s review provisions; and if the claims are outside the agency’s expertise.’”
Id. (quoting Free Enter., 561 U.S. at 489–90) (internal quotation marks omitted). These
three conditions do not “form three distinct inputs into a strict mathematical formula[,]”
but instead serve as “general guideposts useful for channeling the inquiry” at hand. Id.;
see also Arch Coal, 888 F.3d at 500 (reaffirming this holistic assessment). This Court
concludes that, on balance, these guideposts point toward the conclusion that Congress
did not intend to strip away the jurisdiction of the district courts to hear cases such as
this.
a. Meaningful Judicial Review Of The Unions’ Claims Would Be
Foreclosed If The District Courts Could Not Hear These Claims
The first of these guidepoststhe availability of meaningful judicial
37
reviewrequires a court to assess whether a plaintiff will, “as a practical matter[,] be
able to obtain meaningful judicial review” if he is “not allowed to pursue [his] claims in
the District Court.” Thunder Basin, 510 U.S. at 213 (internal quotation marks and
citation omitted). To answer this question, courts have considered such factors as
whether or not the plaintiff would suffer serious harm by dint of undergoing the
administrative review process, see Free Enter., 561 U.S. at 490; whether the plaintiff
could obtain the evidence it needs through the administrative process, see, e.g., McNary
v. Haitian Refugee Ctr., Inc., 498 U.S. 479, 497 (1991); and whether an Article III court
will eventually have the opportunity to resolve the plaintiff’ s claims at some point
during the administrative review scheme, see, e.g., Elgin, 567 U.S. at 17–18. With
respect to the FSLMRS, this Court finds that the prescribed scheme for judicial review
is such that the Unions will not be able to obtain meaningful judicial review of the
claims that they bring here, because the FLRA cannot hear cases of this nature, and as a
result, no court of appeals will have the opportunity to review the instant claims.
The scope of the FLRA’s authority is laid out in the FSLM RS, and as a general
matter, that agency can address and resolve particular issues of fact that arise under
that statute—such as an agency’s or a union’s alleged violation of the statute’s
prescriptions in the context of a given labor-related dispute. See 5 U.S.C. § 7105.
Congress has specifically conferred upon the FLRA the power to issue orders that
“require an agency or a labor organization to cease and desist from violations of” the
FSLMRS, and the FLRA can also “require [the agency] to take any remed ial action [the
FLRA] considers appropriate to carry out the policies of [the FSLMRS]. ” Id.
§ 7105(g)(3). Congress has also specifically enumerated the FLRA’s “powers and
38
duties[,]” see id. § 7105(a)(1)–(2), and has thus made crystal clear that the FLRA’s
authority extends only to the consideration of certain fact-specific inquiries pertaining
to federal labor-management relations, and not to general questions of law.
For example, the FLRA is authorized to “determine the appropriateness of units
for labor organization representation under [section 7112 of Title 5 of the United States
Code]”; to “supervise or conduct [the] elections” that labor organizations hold under
section 7111; and to “prescribe criteria” regarding such matters as “the granting of
national consultation rights under section 7113” or an alleged “compelling need for
agency rules and regulations under section 7117(b)[.]” See id. §§ 7105(a)(2)(A)–(D).
The agency can also “resolve[] issues relating to the duty to bargain in good faith und er
section 7117(c)[,]” id. § 7105(a)(2)(E), and “conduct hearings and resolve complaints
of unfair labor practices under section 7118[,]” id. § 7105(a)(2)(G). What does not
appear in the statute is any authorization for the FLRA to address and resolve bro ad,
abstract questions of law regarding labor-management relations, such as whether a
systemic agency practice is unconstitutional. See, e.g., U.S. Dep’t of the Treasury, U.S.
Customs Serv. v. Fed. Labor Relations Auth., 43 F.3d 682, 689 n.9 (D.C. Cir. 1994)
(“[A] claim that the arbitration or FLRA procedures were unconstitutional would have
to be brought as a collateral challenge in the district court[.]”). And this omission is
remarkable, because it appears that Congress has authorized similar agencies to address
such abstract questions in other portions of the CSRA. See, e.g., 5 U.S.C. § 1204(f)
(empowering the MSPB to “review” any “rule or regulation” issued by the Office of
Personnel Management); see also Clark v. Office of Pers. Mgmt., 95 F.3d 1139, 1141
(Fed. Cir. 1996) (recognizing that the MSPB has this authority).
39
The FLRA itself has interpreted the FSLMRS to be a limited grant of authority in
this regard; indeed, that agency has consistently maintained that it “lack[s] jurisdiction”
to address claims that assail the general legality of agency conduct. Nat’l Treasury
Emps. Union, 60 F.L.R.A. 782, 783 (2005) (refusing to consider a challenge to the
legality of an OPM regulation); Am. Fed’n of Gov’t Emps., Local 4052, Council of
Prison Locals, 56 F.L.R.A. 414, 416–17 (2000) (same); see also Am. Fed’n of Gov’t
Emps. v. Fed. Labor Relations Auth., 794 F.2d 1013, 1015 (5th Cir. 1986) (“We find no
support in either the statutes or the case law for AFGE’s argument that the FLRA may
rule on the legality or validity of a government-wide OPM regulation.”); cf. City of
Arlington, Tex. v. FCC, 569 U.S. 290, 307 (2013) (requiring courts to accord Chevron
deference to an agency’s interpretation of its jurisdiction). Thus, when parties have
asked the FLRA to rule in the abstract upon the validity of a rule that has some effect
within the realm of federal labor relations, the FLRA has stated that such challenges
should be brought in the “district court.” Am. Fed. Gov’t Emps., Local 4052, Council of
Prison Locals, 56 F.L.R.A. at 416 (citing to Nat’l Treasury Emps. Union v. Devine, 577
F. Supp. 738, 745 (D.D.C. 1983), aff’d, 733 F.2d 114 (D.C. Cir. 1984)).
This all matters because the claims that the Unions have brought in the instant
case are broad, facial attacks on the validity of the Orders and the President’s authority
to issue such directives; there are no fact-specific claims of unfair labor practices,
mishandling of employment-related grievances, or negotiability disputes. (See, e.g.,
NFFE’s Compl. ¶¶ 82–120.) As noted, nothing in the FSLMRS’s detailed statement of
“the powers and duties” of the FLRA even remotely “relates to passing judgment on
rules or regulations enacted by any other federal agency[,]” Am. Fed’n of Gov’t Emps.,
40
794 F.2d at 1015, much less adjudicating the validity of executive orders that the
President of the United States has issued, see, e.g., U.S. Office of Pers. Mgmt., 68
F.L.R.A. 1039, 1041 (2015) (holding that both “executive orders” and “regulations
having the force and effect of law” constitute “applicable law” under section 7106(b) of
the FSLMRS). Thus, to be clear, this Court concludes that Congress has intended to
funnel only certain types of labor-related disputes into the administrative review
scheme that the FSLMRS established—i.e., those arising out of specific negotiations or
unfair labor practices—and that it never intended for the broad ultra vires and
constitutional claims that the Unions have brought in this case to be resolved by the
FLRA. 5
Defendants’ contention that an avenue for meaningful judicial review of the
Unions’ claims nevertheless exists within the prescribed administrative review scheme,
because a court of appeals could still reach and resolve these claims under section 7123
of Title 5 of the United States Code despite the limited jurisdiction of the FLRA, is
clever, but ultimately unpersuasive. Defendants point to the FSLMRS’s statement that
5
A similar analysis would apply to any attempt to bring the claims in this case before the MSPB. It is
well established that “[t]he jurisdiction of the [MSPB] is not plenary[,]” Schmittling v. Dep’t of the
Army, 219 F.3d 1332, 1336 (Fed. Cir. 2000); rather, that agency has the authority to hear appeals only
“from any action which is appealable to the Board under any law, rule, or regulation.” 5 U.S.C.
§ 7701; see also Schmittling, 219 F.3d at 1336. The specific actions that the MSPB has jurisdiction
over are laid out in Part 1201.3 of Title 5 of the Code of Federal Regulations , and, as relevant here, the
MSPB has jurisdiction to hear specific and concrete cases. See id. (explaining how the board of
appeals has the jurisdiction to hear, for example, appeals relating to adverse actions, terminations,
performance-based actions, or a reduction in force that have a negative impact on individual
employees). The CSRA makes MSPB jurisdiction over an appeal “dependent only on the nature of the
employee and the employment action at issue[,]” Elgin, 567 U.S. at 18, which means that the MSPB
cannot have jurisdiction until a specific employee has been the object of some sort of employment
action. Moreover, although the MSPB has some limited authority to invalidate rules issued by OPM,
that authority only extends to those rules that would require employees to take prohibited personnel
actions, as defined in section 2302(b) of Title 5 of the United States Code, see 5 U.S.C. § 1204(f), and
does not expand to invalidating rules or executive orders that carry the force of law as a general matter,
see, e.g., Zirbel, 87 M.S.P.R. 84, 86 (2000).
41
“‘any person aggrieved by any final order of the FLRA’”—including, presumably, an
order dismissing the complaint for lack of jurisdiction—“may seek judicial review of
the order in the Court of Appeals for the D.C. Circuit[.]” (Defs.’ Mem at 34 –35
(alterations omitted) (quoting 5 U.S.C. § 7123(a)).) Defendants further observe that the
federal courts of appeals have “jurisdiction of the proceeding[s] and of the question[s]
determined” by the FLRA. (Defs.’ Reply at 16 (emphasis added) (quoting 5 U.S.C.
§ 7123(c)).) And Defendants read this language to authorize the court of appeals to
address any ultra vires or constitutional challenges that the Unions might bring to assail
the President’s executive orders in the context of an FLRA proceeding. ( See id. at 16.)
Of course, the trouble with this argument lies in the fact that the FSLMRS does not give
the FLRA the power to adjudicate such challenges (i.e., suits filed against the President
claiming that executive orders are invalid) in the first place.
To understand why this is so, it is important to begin by recognizing that the
FSLMRS’s statutory scheme plainly makes the court of appeals’ jurisdiction to review
matters brought before the FLRA entirely derivative of the FLRA’s jurisdiction. By its
terms, the “judicial review” that is provided for at section 7123(a) of Title 5 of the
United States Code extends only to “the proceeding” that took place before the FLRA
“and the question determined therein[,]” 5 U.S.C. § 7123(c)—language that, at the very
least, suggests that Congress intended for the court of appeals to review only those
matters that the FLRA could have considered. Furthermore, section 7123(c) makes
clear that, as a result of its review, the court of appeals may “grant any temporary relief
. . . it considers just and proper,” and its final decree must be crafted relative to the
FLRA’s decision: it can affirm (and enforce), modify (and enforce as so modified), or
42
“set[] aside in whole or in part the order of the [FLRA].” Id. The FSLMRS says
nothing that would authorize the court of appeals to hear matters that are beyond the
scope of the FLRA’s jurisdiction through this administrative review scheme, and lest
there be any doubt that Congress intended for the court of appeals to confine its review
to the FLRA’s own actual (or potential) determinations made in the context of
proceedings that properly pertain to alleged unfair labor practices, employment-related
grievances, negotiability disputes, and the like, section 7123(c) also imposes a series of
procedural restrictions that clearly indicate that the scope of the court of appeals’
review is no more and no less than the facts that the FLRA has already considered,
should have considered, or can be compelled to consider, in order to resolve the
dispute. 6
Thus, the fact that the Unions here have sued the President of the United States
and the Office of Personnel Management to challenge the validity of the President’s
Orders—i.e., a dispute that is manifestly not within the purview of the FLRA—matters,
and, in this Court’s view, this fact ultimately disposes of the question of whether the
court of appeals can address the Unions’ claims under section 7123. To be sure, with
respect to similar channeling statutes, binding precedents indicate that a court of
appeals can reach and resolve a plaintiff’s claims notwithstanding an administrative
agency’s lack of authority to do so, see, e.g., Elgin, 567 U.S. at 18; Thunder Basin, 510
6
See 5 U.S.C. § 7123(c) (“No objection that has not been urged before the [ FLRA], or its designee,
shall be considered by the court, unless the failure or neglect to urge the objection is excused because
of extraordinary circumstances. The findings of the [FLRA] with respect to questions of fact, if
supported by substantial evidence on the record considered as a whole, shall be conclusive. If any
person applies to the court for leave to adduce additional evidence and shows to the satisfaction of the
court that the additional evidence is material and that there were reasonable gro unds for the failure to
adduce the evidence in the hearing before the [FLRA], or its designee, the court may order the
additional evidence to be taken before the [FLRA], or its designee, and to be made a part of the
record.”).
43
U.S. at 215, but in these cases, it was clear that the unadjudicated claims arose in the
context of the kind of proceeding that Congress had expressly funneled into the
administrative review process. In such a circumstance, the plaintiff could be said to
retain the prospect of meaningful judicial review of their claims , because the claim was
part of a proceeding that was otherwise properly before the agency. See Elgin, 567 U.S.
at 18.
In the instant context, however, just as in American Federation of Government
Employees, AFL-CIO, Local 446 v. Nicholson, 475 F.3d 341 (D.C. Cir. 2007), no such
meaningful opportunity exists. Nicholson involved a union’s challenge to the Secretary
of Veterans Affairs’ determination that a particular matter was not su bject to collective
bargaining—a determination that the agency was purportedly authorized to make under
section 7422 of Title 38 of the United States Code. See 475 F.3d at 345. In considering
the scope of the court of appeals’ authority to review that dispute pursuant to section
7123 of Title 5, the D.C. Circuit held that, because “[t]he FLRA lacked authority to
review” this decision of the Department of Veterans Affairs, see id. at 347, the “D.C.
Circuit could not provide [judicial] review” of the FLRA’s dismissal of that matter
under section 7123 of Title 5, id. at 348. In this Court’s view, that analysis not only
firmly establishes the derivative nature of the D.C. Circuit’s judicial review, it also
resolves the judicial review question presented here. The FLRA lacks jurisdiction over
disputes that do not involve an unfair labor practice, grievance, negotiability dispute, or
the like, as explained above, and that necessarily means that the court of a ppeals lacks
the ability under section 7123 to decide any claim that arises out of a challenge that the
FLRA did not have jurisdiction to hear, such as a challenge to the President’s executive
44
orders. See U.S. Dep’t of the Air Force v. Fed. Labor Relations Auth., 952 F.2d 446,
453 (D.C. Cir. 1991) (“Any challenge to the legality of the OPM regulation under
§ 4(b) of the Portal-to-Portal Act must be brought in an appropriate forum.”); Am.
Fed’n of Gov’t Emps., 794 F.2d at 1015 (directing any challenge to a rule or regulation
to proceed through the district courts—not the FLRA).
In this regard, then, Defendants’ reliance on Elgin v. Department of the Treasury
(see Defs.’ Reply at 16–18), is misplaced. The plaintiffs in Elgin were “former federal
competitive service employees who failed” to register for the Selective Service and
were discharged from their jobs with federal agencies as a result. 567 U.S. at 6 –7. One
of the plaintiffs (Elgin) appealed his removal to the MSPB, and claimed that requiring
male citizens between the ages of 18 and 26 to register for the Selective Service was
unconstitutional. See id. at 7. The ALJ who heard Elgin’s claim held that the agency
“lack[ed] authority to determine the constitutionality of a statute[,]” id. (internal
quotation marks and citation omitted), and Elgin then proceeded to file a suit in district
court (instead of appealing the ALJ’s determination to the full MSPB or the Federal
Circuit, which is the court of appeals authorized to hear such appeals), see id. Before
the Supreme Court, Elgin explained that he had filed an action in district court because
the MSPB did not have the authority to decide certain constitutional claims, and that as
a result, the Federal Circuit also could not hear such claims, effectively foreclosing any
prospect of meaningful judicial review. See id. at 16–17. But the Supreme Court
sidestepped the issue of whether the MSPB was actually capable of deciding a
constitutional claim, see id. at 17, and reasoned instead that, even if the MSPB could
not hear Elgin’s claims, the Federal Circuit could do so pursuant to the statutory
45
administrative review scheme, see id. at 18. The Supreme Court emphasized that the
Federal Circuit had only ever “questioned its jurisdiction when an employee appea ls
from a type of adverse action over which the MSPB lacked jurisdiction [,]” and that so
long as the MSPB had jurisdiction “over [the] appeal”—because the case involved the
type of “employee and [] employment action” that the MSPB could handle—it did not
matter that the MSPB may have lacked the authority to rule on a particular claim. Id.
(emphasis added).
Jarkesy and Thunder Basin speak to the same principle. In both cases, federal
agencies had charged, or would soon charge, the plaintiffs with violati ng laws and
regulations that the agencies administered. See Thunder Basin, 510 U.S. at 204 (failure
to post a notice containing information regarding miners’ representatives); Jarkesy, 803
F.3d at 13 (securities law violations). There was also no questio n in Jarkesy or
Thunder Basin that the Securities Exchange Commission or the Federal Mine Safety and
Health Review Commission, respectively, had the power to adjudicate these alleged
violations as a general matter. See Thunder Basin, 510 U.S. at 205; Jarkesy, 803 F.3d
at 19. And both cases involved plaintiffs who challenged the agencies’ ability to rule
upon certain statutory and constitutional claims in the context of cases involving
government action that the agencies could otherwise legitimately consid er. See
Thunder Basin, 510 U.S. at 213–15; Jarkesy 803 F.3d at 18–19. Under those
circumstances, both the Supreme Court and the D.C. Circuit concluded that, even if for
some reason these agencies could not adjudicate the particular claims in the proceedi ng
before them, the courts of appeals were “fully competent” to do so on review of the
agency’s proceedings. Jarkesy, 803 F.3d at 19; see also Thunder Basin, 510 U.S. at 215
46
(“[P]etitioner’s statutory and constitutional claims [] can be meaningfully addre ssed in
the Court of Appeals.”).
These situations differ significantly from the one presented here. To recap, in
Elgin, Jarkesy, and Thunder Basin, the agencies had jurisdiction over the underlying
matters at issue: the MSPB had jurisdiction over cases concerning the removal of
federal employees; the SEC had jurisdiction over cases concerning the violation of
securities laws; and the FMSHRC had jurisdiction over cases concerning matters arising
under the Mine Act. In addition, the challenged conduct was generally of the type that
could be addressed by the relevant agencies; therefore, the courts of appeals had no
reason to “question[]” their own jurisdiction to review the underlying proceedings.
Elgin, 567 U.S. at 18. By contrast, the instant case does not involve such a matter—
there is no alleged unfair labor practice, grievance, or negotiability dispute over which
the FLRA could otherwise exercise jurisdiction. The FLRA has no jurisdiction to hear
any part of this case—and does not just lack the authority to hear the particular claims
that the Unions have raised—so a court of appeals that is limited to reviewing “the
proceeding and the question [the FLRA] determined therein” under section 7123(c) of
Title 5 of the United States Code could not possibly reach the Unions’ challenge to the
President’s Orders through the statutory administrative-judicial review process. 7
7
The same is true of the Federal Circuit’s jurisdiction to review claims that arise in cases brought
before the MSPB. In any case “brought under 5 U.S.C. § 7701, ‘the scope of the subj ect matter
jurisdiction of the Federal Circuit is identical to the scope of the jurisdiction of the Board.’”
Schmittling, 219 F.3d at 1337 (alterations omitted) (quoting Rosano v. Dep’t of the Navy, 699 F.2d
1315, 1318 (Fed. Cir. 1983)). Thus, “[i]f the [MSPB] lacks jurisdiction” over a matter, the Federal
Circuit is “without authority to hear the mer its of the appeal.” Id. Here, the MSPB could not possibly
hear the case that the Unions have advanced —since there is no employment action or employee to
speak of—and as a result, the Federal Circuit could not review any of the claims that the Union s have
brought in this case.
47
The practical effect of this analysis is that all Article III judicial review of the
Unions’ contention that the President lacks the authority to issue the challenged
executive orders would be foreclosed if the doors of the district court are shut , and that
result counsels against concluding that Congress meant to preclude the district court
from exercising subject-matter jurisdiction over the claims that the Unions have brought
in this case. See Free Enter., 561 U.S. at 489 (“[W]e presume that Congress does not
intend to limit jurisdiction if ‘a finding of preclusion could foreclose all meaningful
judicial review[.]’” (citation omitted)); Nicholson, 475 F.3d at 348 (“[B]ecause the D.C.
Circuit could not provide that review on a petition for the review of the FLRA decision
dismissing the [unfair labor practice] complaint, [the case law] does not provide a basis
for the district court dismissing this case for lack of jurisdiction.”); see also Chamber of
Commerce of U.S., 74 F.3d at 1328 (indicating that courts may normally review ultra
vires claims unless Congress has precluded all non-statutory judicial review of the
President’s actions); Ralls Corp. v. Comm. On Foreign Inv. in the U.S., 926 F. Supp. 2d
71, 86 (D.D.C. 2013) (suggesting that congressional preclusion of jurisdiction over
ultra vires claims must be “express”), rev’d on other grounds, 758 F.3d 296 (D.C. Cir.
2014).
b. The Unions’ Claims Are Wholly Collateral To The FSLMRS And
The CSRA Administrative-Judicial Review Schemes
Not only do the FSLMRS and CSRA administrative-judicial review schemes
foreclose meaningful review of the challenge that the Unions seek to make here, it is
also clear that the Unions’ claims themselves are “‘wholly collateral’ to the” statutory -
review scheme at issue. Jarkesy, 803 F.3d at 22.
In determining whether a lawsuit is wholly collateral to a statute’s scheme of
48
review, the Supreme Court and the D.C. Circuit have differentiated between those
claims that “arise ‘outside’ the [agency’s] administrative enforcement scheme” and
those claims that “arise from actions the [administrative agency] took in the course of
that scheme.” Jarkesy, 803 F.3d at 23. Claims that are deemed to have arisen outside
the agency’s administrative enforcement scheme are those that are essentially divorced
from any action that the agency has taken, or any determination that it has made, in the
context of agency proceedings. See, e.g., Free Enter., 561 U.S. at 490 (challenging the
very existence of an administrative agency, not any proceeding before that agency);
Nat’l Mining Ass’n v. Dep’t of the Labor, 292 F.3d 849, 855 (D.C. Cir. 2002) (per
curiam) (challenging a regulation passed through the notice-and-comment rulemaking
process as impermissibly retroactive). By contrast, legal claims that arise from actions
taken by an administrative agency (and are thus not properly considered wholly
collateral) include attacks on the initiation of administrative proceedings involving the
plaintiff, or challenges to specific decisions that the agency made in the course of those
proceedings, or any other attempt to use a federal lawsuit as “the ‘vehicle by which’
[the party] seeks to prevail in his administrative proceeding.” Jarkesy, 803 F.3d at 23
(quoting Elgin, 567 U.S. at 22). In essence, courts seek to determine whether the
claims brought in the lawsuit would impact ongoing administrative proceedings such
that the plaintiff can be said to have made “an end run around” around the applicable
statutory review scheme “by going directly to district court.” Sturm, Ruger & Co. v.
Chao, 300 F.3d 867, 876 (D.C. Cir. 2002).
By these standards, the Unions’ claims are wholly collateral to any
administrative action. Again, the Unions have sued the President and OPM, and the
49
gravamen of their consolidated action is that the three disputed executive orders in this
case are ultra vires and unconstitutional. As explained above, the Unions’ claims do
not relate specifically to any alleged unfair labor practice, negotiability dispute, or
grievance proceeding. (See Part IV.A.2.a., supra.) Consequently, these claims are not
“inextricably intertwined with the conduct of” an enforcement proceeding or appea l that
the FLRA or MSPB may “institute and resolve as an initial matter[.]” Jarkesy, 803
F.3d at 23 (internal quotation marks and citation omitted); see also Free Enter., 561
U.S. at 490 (explaining that a “general challenge” to the existence of an agency “is
‘collateral’ to any [agency] orders or rules from which review might be sought.”); cf.
McNary, 498 U.S. at 491–92 (concluding that a challenge to the agency’s policies and
procedures, rather than claims about any individual adjudication, were wholly c ollateral
to a specific immigration proceeding).
The fact that the D.C. Circuit has previously treated analogous claims as
“collateral”—and has allowed them to be brought in the federal district courts —is
significant. In National Mining Association v. Department of Labor, the plaintiffs
sought to challenge the validity of a Department of Labor regulation that revised the
“rules governing the adjudication of miners’ claims under” the Black Lung Benefits Act
(“BLBA”). 292 F.3d at 854. The BLBA contained a statutory-review scheme that
provided that “a person ‘adversely affected or aggrieved by a final order of the Board
may obtain review of that order in’” the courts of appeals. Id. at 856 (quoting 33
U.S.C. § 921(c)). The D.C. Circuit pointed out that the “rule” that the plaintiffs sought
to challenge could not properly be understood as an “order,” given the distinct meaning
of those terms in the administrative law context. See id.; compare 5 U.S.C. § 551(4)
50
(defining “rule”) with 5 U.S.C. § 551(6) (defining “order”). So, while Congress may
have decided that a plaintiff should obtain judicial review of an “order” through the
statutory-review scheme, it had not specified how a plaintiff ought to challenge a rule
of the agency, and thus, the panel concluded that “persons seeking such review would
be directed by the APA to go to district court.” Nat’l Mining, 292 F.3d at 856; see also
id. (concluding that such a pre-enforcement “broad-scale attack” on an agency rule falls
outside the relevant statutory-review scheme). Furthermore, and notably, the panel
distinguished Thunder Basin, and thereby indicated that even if a pre-enforcement
challenge to an inevitable adjudicatory proceeding is not wholly collateral to the
administrative process, a pre-enforcement challenge to a “rule” can constitute a wholly
collateral claim. See id. at 857; see also Nat’l Treasury Emps. Union v. Devine, 733
F.2d 114, 117 n.8 (D.C. Cir. 1984) (“It is quite different to suggest, as appellant does,
that a detailed scheme of administrative adjudication impliedly precludes
preenforcement judicial review of rules.”). 8
The D.C. Circuit has since affirmed this core holding of National Mining, see,
e.g., Arch Coal, 888 F.3d at 500–01; Sturm, Ruger & Co., 300 F.3d at 875–76, and the
cases that have followed have identified three aspects of that decision that were
especially relevant to the D.C. Circuit’s analysis. First, National Mining involved a
“direct attack on the validity of a ‘formal regulation,’ issued pursuant to ‘notice -and-
comment’ rulemaking” rather than an “attack on an enforcement policy[.]” Sturm,
8
Thunder Basin had suggested that a pre-enforcement challenge in the context of an administrative
adjudication is not wholly collateral, but National Mining emphasized that Thunder Basin “did not
involve a regulation, which is typically treated different[ly] from an adjudication.” 292 F.3d at 857. It
is clear to this Court that the challenge to the President’s Orders that the Unions bring here is more
analogous to the challenge to National Mining’s “rule” than Thunder Basin’s attack on the pre-
enforcement adjudicative policies of an agency.
51
Ruger & Co., 300 F.3d at 875 (quoting Nat’l Mining, 292 F.3d at 858). Second, the
challenge to the regulations at issue in National Mining “require[d] analysis of ‘all of
the regulations together as well as the entire rulemaking process’” and “such an
analysis ‘would not be feasible in individual adjudications dealing with particular
regulatory provisions.’” Id. at 876 (quoting Nat’l Mining, 292 F.3d at 858–59). Last,
“and most important, National Mining Association was not a case in which the ‘plaintiff
sought to short-circuit the administrative process’ through the vehicle of a district court
complaint.” Id.
All three of these circumstances are present. The Unions have brought a
challenge to the “rules” the President has adopted in the Orders, rather than any specific
“order” of the FLRA or the MSPB. Cf. Nat’l Mining, 292 F.3d at 856; see also 5 U.S.C.
§ 7123 (permitting a challenge to an “order” of the FLRA); id. § 7703(a)(1) (permitting
a challenge to an “order or decision” of the MSPB). Moreover, although the Orders are
not regulations authored through notice-and-comment rulemaking, the President’s
directives are similar for all intents and purposes, because they carry t he force of law,
and “alter the rights or interests of parties.” Arch Coal, 888 F.3d at 501. (See Part
IV.C., infra.) And, far from seeking to upend any particular agency determination or
adjudication, the Unions have claimed that the President’s new ru les are ultra vires and
violate federal law or the Constitution across the board. Cf. Nat’l Mining, 292 F.3d at
856. It is also noteworthy that the resolution of several of the Unions’ claims requires
an evaluation of existing laws and regulations in mass, as well as a determination of the
extent to which those statutes and regulations authorize the President’s action in this
case (see Parts III.C & D, infra)—analyses that “would not be feasible in individual
52
adjudications dealing with particular regulatory provisions[,]” Nat’l Mining, 292 F.3d at
858.
Thus, Defendants are mistaken when they righteously maintain that Congress
intended for the Unions to be forced to jam the square peg of these broad ultra vires
and constitutional claims into the round hole of the administrative-judicial review
scheme that was crafted specifically for labor representatives and federal managers to
utilize as they hammer out particular collective bargaining agreements or engage in
other, similar fact-bound negotiations. (See, e.g., Defs.’ Reply at 14–15.) Pointing to
American Federation of Government Employees v. Secretary of the Air Force , 716 F.3d
633 (D.C. Cir. 2013), Defendants insist that the Unions must challenge the President’s
Orders in the context of a “negotiability appeal, arbitration, or an unfair labor practice
charge[,]” rather than launching a direct attack in federal distric t court. (Defs.’ Reply
at 14.) But the Secretary of the Air Force case does not require the Unions to follow
that approach under the circumstances presented here.
Secretary of the Air Force involved a challenge to Air Force regulations that
required certain civilian workers within the Air Force “to wear military uniforms while
performing civilian duties.” 716 F.3d at 635. The plaintiff unions filed a lawsuit
against the Air Force under section 706 of the Administrative Procedure Act, alleging
that the agency had acted arbitrarily and capriciously, contrary to law, and in excess of
its statutory authority, see id., but the D.C. Circuit ruled that those claims improperly
circumvented the FSLMRS and CSRA’s statutory review schemes, primarily because
the plaintiffs had myriad ways of obtaining the relief they sought through the
administrative process: they could attempt to negotiate with the Air Force about its
53
dress code policy; file a grievance claiming that the dr ess code violated the employees’
rights under the relevant statutory scheme; or, if any current collective bargaining
agreement contradicted the policy, file an unfair labor charg e. See id. at 637–38.
Here, by contrast, the Unions have brought ultra vires and constitutional claims
against the President and OPM, and not against any particular agency, so a negotiability
appeal, arbitration, or unfair labor practice charge brought in the context of a
proceeding in the FLRA will not generate the relief the Unions seek. That is, in
contrast to Secretary of the Air Force and that case’s predecessors, there is not a
“close[] connection between the relief sought in th[is] judicial action and that available
in the administrative process.” Fornaro v. James, 416 F.3d 63, 68 (D.C. Cir. 2005).
This distinction is sufficient to place the Unions’ claims outside the boundaries of the
D.C. Circuit’s warning that, where Congress has imposed a chan neling administrative-
judicial review scheme, plaintiffs should not be permitted to “short -circuit the
administrative process through the vehicle of a district court complaint.” Sturm, Ruger
& Co., 300 F.3d at 875 (internal quotation marks and citation om itted); see also Free
Enter., 561 U.S. at 490 (“[P]etitioners object to the Board’s existence, not to any of its
auditing standards.”); McNary, 498 U.S. at 497–98 (acknowledging that while judicial
review of individual determinations may be barred, a broad pattern or practice claim is
not); Nicholson, 475 F.3d at 348 (holding that “because the legality of the disputed
§ 7422 Decision is expressly outside the FLRA’s purview” the district court could hear
that case (emphasis added)).
Undaunted, Defendants suggest that the Unions here must reformulate their
claims to contend that, because of the President’s Orders, a particular agency has
54
violated the FSLMRS; or a particular agency must negotiate on a certain matter with
the union; or a particular agency has committed an unfair labor practice, such that the
FLRA or MSPB can address the Unions’ contentions, or else they simply cannot “‘raise
the[se] claim[s] at all.’” (Defs.’ Reply at 14 (quoting Sec’y of the Air Force, 716 F.3d
at 638).) But Defendants don’t explain why this is so; in the ordinary course, “plaintiffs
are masters of their complaints”—not defendants. Webster v. Reprod. Health Servs.,
492 U.S. 490, 512 (1989); cf. The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25
(1913) (“[T]he party who brings a suit is master to decide what law he will rely
upon[.]”). And the Supreme Court did not mandate any such transmogrification with
respect to similar claims that it deemed to be outside of the prescribed administrative -
judicial review process. See, e.g., Free Enter., 561 U.S. at 490; McNary, 498 U.S. at
497–98.
Indeed, Defendants’ suggestion that such a reformation is the only viable way of
getting the Unions’ claims resolved (Defs.’ Reply at 14 (quoting Sec’y of the Air Force,
716 F.3d at 638)), has no support in the case law. In Secretary of the Air Force, the
D.C. Circuit merely acknowledged that if the CSRA and FSLMRS left certain parties
unable to pursue a claim that the FLRA could otherwise hear, then those parties could
not raise that claim at all. See id. at 638–39. And the panel did not suggest, as
Defendants do here, that an agencies’ inability to hear a claim me ant that such claims
could not be heard by district courts. To the contrary, at least with regard to the
constitutional and ultra vires claims presented in this case, such a conclusion upends
well-settled principles of law. See Webster v. Doe, 486 U.S. 592, 603 (1988) (noting
the serious constitutional issues that would result if no court were available to hear
55
constitutional claims); Chamber of Commerce of U.S., 74 F.3d at 1328 (explaining that
courts may normally review ultra vires claims unless Congress has expressly precluded
all non-statutory judicial review of the President’s actions).
The bottom line is this: there is no hint or suggestion that the Unions in this case
have “sought to short-circuit the administrative process through the vehicle of a district
court complaint[,]” Sturm, Ruger & Co., 300 F.3d at 876 (internal quotation marks and
citation omitted), or that they have otherwise attempted to influence the course of an
existing (or anticipated) agency adjudication, see Thunder Basin, 510 U.S. at 216. To
the contrary, it is clear that these claims against the President are not sim ply “the
vehicle by which” the Unions intend to prevail in any one given administrative
proceeding, Elgin, 567 U.S. at 22, and that the Unions’ allegations cannot be
legitimately reframed and adjudicated piecemeal by each agency t hat must apply the
President’s Orders without altering the fundamental character of the relief that is being
claimed: across-the-board invalidation of those provisions of the Orders that conflict
with the FLRA and CSRA, on the grounds that the President has no statutory or
constitutional authority to issue the challenged directives. (See, e.g., NFFE’s Compl.
¶¶ 82–120; NTEU’s Compl. ¶¶ 100–34.) As such, the Unions’ claims are “wholly
collateral” to the administrative-judicial review processes set forth in the FSLMRS and
CSRA, and that finding clearly supports the conclusion that Congress did not intend to
relegate these types of claims to the FLRA and MSPB in the first instance. See Free
Enter., 561 U.S. at 490.
c. Although Potentially Helpful, The Agencies’ Expertise Is Not
Essential To Resolving The Instant Claims
Finally, this Court must consider whether the Unions’ claims fall “outside the
56
[the relevant agency’s] competence and expertise.” Id. at 491. This inquiry asks not
only whether the administrative agency to which Congress has channeled certain
disputes regularly confronts the claims that a plaintiff has raised, but also whether the
agency’s expertise can be generally “brought to bear on the [] questions presented” in
the administrative proceeding. Thunder Basin, 510 U.S. at 215 (internal quotation
marks and citation omitted).
The statutory and constitutional claims in a given case may well be of a type that
the agency typically encounters in its line of work; if so, such claims do generally fall
within its expertise. See, e.g., Jarkesy, 803 F.3d at 28 (noting the wide array of
constitutional and statutory claims that come before the SEC). Moreover, “the
challenged statute may be one that the [agency] regularly construes,” Elgin, 567 U.S.
22, and, indeed, “there are precious few cases involving interp retation of statutes
authorizing agency action in which [the court’s] review is not aided by the agency’s
statutory construction[,]” Jarkesy, 803 F.3d at 29 (emphasis added) (internal quotation
marks and citation omitted). That said, the Unions’ claims here primarily require an
assessment of questions concerning executive power (including, in particular, whether
or not Congress has conferred upon the President the statutory authority to issue
executive orders in the area of labor-management relations at all), and thus, this Court
concludes that the expertise of the agencies, though potentially helpful, would
ultimately be of limited utility.
This conclusion is based primarily on the fact that, as this Court has already
emphasized, neither the FLRS nor the MSPB regularly opines upon the separation-of-
powers issues that are at the heart of the instant action, nor do they have any specialized
57
experience in determining whether a statute or the Constitution has authorized the
President to act in a particular way. By contrast, these sorts of questions are the
proverbial bread and butter of the Judicial Branch. See Youngstown, 343 U.S. at 597
(Frankfurter, J., concurring) (“The judiciary may . . . have to intervene in determining
where authority lies as between the democratic forces in our scheme of government.”);
Marbury v. Madison, 1 Cranch 137, 177 (1803) (“It is emphatically the province and
duty of the judicial department to say what the law is.”).
Thus, while the FLRA and the MSPB might have helpful background knowledge
about what the FSLMRS and CSRA require or authorize with respect to federal labor
relations, one cannot infer that Congress necessarily intended for these agencies to
always be the bodies that resolve any broader legal questions that might arise in the
context of their consideration of the particular fact issues within their realm of
expertise. Truth be told, this conclusion is even more readily apparent when one
acknowledges the fact that the district courts can rely heavily upon the expertise of the
FLRA and the MSPB, as necessary and appropriate, when interpreting the appropriate
meaning of the FSLMRS and the CSRA. See Fort Stewart Schs., 495 U.S. at 645
(according Chevron deference to the FLRA); Kaplan v. Conyers, 733 F.3d 1148, 1177
(Fed. Cir. 2013) (noting that MSPB’s interpretation of the CSRA would be entitled to
deference were the language ambiguous).
***
“Having canvassed the three considerations the Supreme Court laid out in
Thunder Basin” and its progeny, this Court concludes that Congress did not “implicitly
preclude[] the district court’s jurisdiction over cases of this type.” Jarkesy, 803 F.3d at
58
29. The FLRA and the MSPB do not have any statutory basis for exercising jurisdiction
over the case presented here, which means no meaningful judicial review of the claims
presented here can occur unless the district courts are available to resolve cases of this
nature. (See Part IV.A.2.a, supra.) And the claims that the Unions have brought are
wholly collateral to any administrative action, such that they cannot be reasonably
construed as an effort to “short circuit” the administrative scheme that Congress
enacted. (See Part IV.A.2.b., supra.) Finally, it strains credulity to suggest, as
Defendants do here, that Congress intended for an administrative agency (even one with
particular expertise in federal labor-management relations) to resolve purely legal
claims that implicate the fundamental distribution of power among the different
branches of the federal government, and this is especially so when those claims arise in
the context of a legal challenge that is utterly divorced from any of the matters that
Congress has expressly assigned to an agency for resolution.
Therefore, although Congress clearly intended for certain disputes arising under
the FSLMRS and the CSRA to come before these administrative agencies in the first
instance, this Court confidently concludes that Congress had no such intent with regard
to the claims that the Unions have raised in the instant case. Accordingly, and because
this Court sees no other basis for questioning its own subject -matter jurisdiction, this
Court concludes that the district court is open to address, and resolve, the Unions’
claims.
The Unions’ Claims Are Fit For Judicial Resolution
“[T]he doctrine of prudential ripeness ensures that Article III courts make
decisions only when they have to, and then, only once.” Am. Petroleum Inst. v. Envtl.
Prot. Agency, 683 F.3d 382, 387 (D.C. Cir. 2012). This “threshold inquiry[,]” Ctr. for
59
Biological Diversity v. Envtl. Prot. Agency, 722 F.3d 401, 408 (D.C. Cir. 2013), exists
to ensure that the federal courts do not waste resou rces in “prematurely entangling
[them]selves in abstract disagreements,” Nat’l Treasury Emps. Union v. United States,
101 F.3d 1423, 1431 (D.C. Cir. 1996), and it “protect[s] the other branches from
judicial interference until their decisions are formalized and their ‘effects felt in a
concrete way[,]’” id. (quoting Abbott Labs v. Gardner, 387 U.S. 136, 148–49 (1967)).
Thus, although not jurisdictional, prudential ripeness is an important initial
consideration for the federal courts.
To assess whether a claim is ripe for judicial review, a court must evaluate both
“the fitness of the issues for judicial decision and the ext ent to which withholding a
decision will cause hardship to the parties.” Am. Petroleum Inst., 683 F.3d at 387
(internal quotation marks and citation omitted). Generally, “[t]he fitness of an issue for
judicial [review] depends on whether it is purely legal, whether consideration of the
issue would benefit from a more concrete setting, and whether the [challenged] action is
sufficiently final.” Atl. States Legal Found. v. Envtl. Prot. Agency, 325 F.3d 281, 284
(D.C. Cir. 2003) (internal quotation marks and citation omitted). In most cases, the
determination of whether a matter is fit for judicial review will be the end of the matter;
an unripe claim will usually only be heard if delay threatens “immediate and
significant” hardship to the plaintiff. Devia v. NRC, 492 F.3d 421, 427 (D.C. Cir. 2007)
(internal quotation marks omitted). But, of course, this is not an “exact science; nor is
it a matter of weaving complicated legal distinctions divorced from reality.” State
Farm Mut. Auto. Ins. Co. v. Dole, 802 F.2d 474, 480 (D.C. Cir. 1986) (internal
quotation marks and citation omitted). Therefore, when making this determination,
60
courts must ultimately rely on the exercise of “practical common sense[.]” Continental
Air Lines, Inc. v. Civil Aeronautics Bd., 522 F.2d 107, 128 (D.C. Cir. 1974) (citation
omitted).
At the motion hearing in this case, Defendants acknowledged “the weaknesses of
[their] ripeness claim with respect” to the Unions’ purely legal argument that the
President does not have the statutory or constitutional authority to issue executive
orders that pertain to the field of federal labor relations (Hr’g Tr. at 27:1–5);
furthermore, defense counsel also appeared to concede that the subset of challenged
executive-order provisions that are “fully formed” and leave “no discretion” to federal
agencies are ripe for judicial review (id. at 29:5–12). But counsel held fast to the
assertion that certain claims that the Unions have made should be deemed prudentially
unripe: (1) those claims that challenge the President’s announcement of a new
collective bargaining policy if the executive order provision contains a directive to
OPM to issue regulations about the matter (Defs.’ Mem. at 39–40; Hr’g Tr. at 28:6–
18)—e.g., section 4 of the Official Time Order, which both prohibits the use of official
time for a variety of matters, and requires OPM to identify and change regulations that
are inconsistent with this mandate, see Exec. Order No. 13,837 § 4—and (2) those
claims that challenge provisions within the Orders that purport to set “aspirational
objectives” and thus “leave room for negotiation” (Defs’ Mem. at 41), such as section
5(a) of the Collective Bargaining Procedures Order, which states that “ordinarily” “a
negotiation period of 6 weeks or less to achieve ground rules, and a negotiating period
of between 4 and 6 months for a [collective bargaining agreement]” should suffice,
Exec. Order No. 13,836 § 5(a). Defendants argue that this Court should defer its
61
consideration of Plaintiffs’ challenges to these kinds of provisions in the Orders, either
because further clarification by OPM and other agency heads will permit helpful
administrative determinations regarding “the interplay of the Orders with ‘applicable
law’” (Defs.’ Mem. at 40), or because the Order provisions that merely “set goals for
the outcome of agencies’ negotiations and advise agencies on policy considerations
while bargaining with individual unions” are too fact-bound to be fit for judicial review
(id. at 41). As demonstrated below, Defendants’ ripeness contentions misconstrue
either the nature of the President’s orders, or the claims that the Unions are making
about those orders—or both—and thus are not persuasive.
Take the first category first: with respect to the Unions’ purportedly unripe
challenges to those executive order provisions that authorize further ‘clarification’ by
OPM and the like, see, e.g., Exec. Order No. 13,837 § 4(c) (ordering rulemaking to
“clarify and assist agencies in implementing these rules”), it is clear to this Court that
any future clarification by OPM or other agencies will be of limited scope, because the
anticipated future regulations will necessarily pertain to the clear and concrete policy
change that the President has made regarding how federal agencies or federal
employees must act going forward with respect to collective bargaining negotiations ,
and this Court has no doubt that the President’s orders will be received as such. ( See
AFGE’s Reply at 20–21; NFFE’s Reply at 13; NTEU’s Reply at 16–17.) This means
that, as far as subsequent ‘clarifications’ are concerned, there is really not much left to
be done.
For example, section 4 of Executive Order No. 13,837 announces that
“[e]mployees may not engage in lobbying activities during paid time, except in t heir
62
official capacities as an employee.” Exec. Order No. 13,837 § 4(a)(i). Similarly,
section 4 of Executive Order No. 13,839 states that agencies shall not “subject to
grievance procedures or binding arbitration disputes concerning (i) the assignment o f
ratings of record; or (ii) the award of any form of incentive pay[.]” Exec. Order No.
13,839 § 4(a); see also, e.g., Exec. Order No. 13,837 §§ 4(a)(ii)–(v), 4(b); Exec. Order
No. 13,839 §§ 2(b), 2(c), 4(b)(iii). Agencies are presently interpreting and actively
implementing these challenged prescriptions, and others (see, e.g., Pls.’ Stmt. of
Material Facts as to Which There Is No Genuine Dispute (“NFFE’s Stmt. of Facts”),
ECF No. 26-1, ¶¶ 39, 51, 66, 73–74; Pl. NTEU’s Stmt. of Material Facts Not in Dispute
(“NTEU’s Stmt. of Facts”), ECF No. 29-3, ¶¶ 13–18, 20, 28, 36, 40, 44, 54, 72–74;
Decl. of David I. Cann, Ex. 1 to Pl. AFGE’s Mot. for Summ. J., ECF No. 30-4, ¶¶ 13–
15), presumably without confusion about what the President has ordered them to do .
The fact that OPM might eventually provide additional practical guidance about how
agencies can best implement these unequivocal mandates poses no impediment to this
Court’s consideration of the Unions’ current contention that the President’s new
policies are contrary to the labor rights that the FSLMRS guarantees. See Nat’l Home
Ass’n of Home Builders v. U.S. Army Corp of Eng’rs, 417 F.3d 1272, 1282 (D.C. Cir.
2005) (suggesting that such facial claims are presumptively fit for judicial review); see
also Am. Petroleum Inst. v. U.S. Envt’l Prot. Agency, 906 F.2d 729, 739 (D.C. Cir.
1990) (per curiam) (refusing to defer judicial review when a rulemaking will not
actually alter the status quo); Campaign for Accountability v. U.S. Dep’t of the Justice,
278 F. Supp. 3d 303, 318 (D.D.C. 2017) (explaining that a “true prudential ‘ripeness’
defect has a remarkably different appearance” and “occurs, generally speaking, when
63
the alleged wrong is insufficiently concrete . . . as a factual matter”).
The ripeness contentions that Defendants make with respect to the executive
order provisions that pertain to what agencies should “ordinarily” do in various
collective bargaining circumstances fare no better. Section 5(a) of the Collective
Bargaining Procedures Order, section 3(a) of the Official Time Order, and section 3 of
the Removal Procedures Order prescribe goals that agencies should “ordinarily”
negotiate toward, Exec. Order No. 13,836 § 5(a); Exec. Order No. 13,837 § 3(a), and/or
steps that an agency should take as part of labor negotiations “[w]henever
reasonable[,]” Exec. Order No. 13,839 § 3. Given the literal language of these Order
provisions, there is no question that agencies retain a measure of discretion that will
necessarily result in “a factual outcome” that is “sure to vary by agency and bargaining
unit[.]” (Defs.’ Mem. at 41.) But the question of whether these Order provisions
themselves are ultra vires does not turn on these variable outcomes; rather, the Unions
have suggested, among other things, that the President cannot prescribe these types of
aspirational goals because, in doing so, he has constrained agency officials’ bargaining
discretion in a manner that violates the statute. (See, e.g., NTEU’s Mem. at 24
(“Section 3 does not allow for any real bargaining on amounts of official time[.]”
(emphasis added)); AFSCME’s Reply at 18 (“[T]he clear effect of Section 5(a) is to set
an unreasonable baseline by decree rather than to approach negotiations in good faith
and with an open mind[.]”).
Properly understood, then, the Unions’ “conflict” contentions are not necessarily
about the reasonableness of the particular presumptive period of negotiation that
appears in Executive Order 13,836 (e.g., 4 months, versus 6 months, versus some longer
64
period), or whether allowing only one hour of ‘official time’ per bargaining -unit
member, as Executive Order 13,837 suggests, is in the public interest; with those kinds
of claims, perhaps a wait-and-see approach might be warranted. Instead, a consistent
theme within the Unions’ consolidated complaints is that it transgresses the statutorily-
prescribed duty of good faith in the context of collective bargaining for the President to
prescribe any presumptive timeframes or any procedural steps for the agency to shoot
for as it bargains. (See NTEU’s Compl. ¶ 106 (“Section 3 would cause agencies to seek
to impose a formulaic annual aggregate on official time . . . [and] would preclude the
type of good faith negotiations on official time that Congress’s scheme requires[.]”);
see also AFSCME’s Compl. ¶ 55.) And the issue that such a contention raises—i.e.,
whether and to what extent the FSLMRS requires federal agencies to enter into
collective bargaining negotiations with an open mind about various aspects of
bargaining (including the scope and length of the negotiations) and without pre -
established constraints related to terms that Congress has identified as up for
discussion—is a legal one that needs no further factual development. See Nat’l
Treasury Emps. Union v. Chertoff, 452 F.3d 839, 854 (D.C. Cir. 2006) (characterizing
the union’s claim as a challenge to the perceived “threat to the process of collectively
bargaining[,]” and noting that “whether DHS ever chooses to” take a certain course of
action “is irrelevant to the ripeness inquiry”). In Part IV.D.3, infra, this Court
undertakes to answer that question. 9
9
Even if the Court “ha[d] doubts” about whether the Unions’ challenges to the goal -setting,
aspirational provisions of these the Orders are fit for judicial resolution, the ongoing hardship that the
Unions allege would be sufficient to propel the Court toward commencing judicial review. Nat’l Ass’n
of Home Builders, 417 F.3d at 1283. (See, e.g., NFFE’s Stmt. of Facts ¶¶ 39, 50, 69; NTEU’s Stmt. of
Facts ¶ 40.)
65
The President Has The Statutory And Constitutional Authority To Issue
Executive Orders That Pertain To Federal Labor-Management Relations,
So Long As His Orders Do Not Conflict With The Will Of Congress
With Defendants’ threshold arguments out of the way, the merits of the Unions’
claims take center stage. As has repeatedly been mentioned, the Unions have made a
variety of claims in the four consolidated actions that are now before this Court; for the
purpose of this Memorandum Opinion, the Court first addresses the Unions’ assertion
that the President of the United States cannot issue executive orders that carry the force
of law in the field of federal labor-management relations, because he lacks the statutory
and/or constitutional authority to do so. (See NFFE’s Compl. ¶¶ 82–95; AFSCME’s
Compl. ¶¶ 102–03.) As explained below, this Court finds that binding precedent and
the history of presidential action in this arena compels the conclusion that both section
7301 of Title 5 of the United States Code and the President’s inherent constitutional
power as head of the Executive Branch authorizes him to act in the field of federal
labor-management relations (see Part IV.C.1, infra), and furthermore, the Unions have
largely overstated the extent to which Congress sought to divest the President of any
such authority with its enactment of the FSLMRS/CSRA (see Part IV.C.2, infra). But
there is no serious dispute that any orders a President issues in this area must be
consistent with the will of Congress (see Part IV.C.3, infra), and ultimately, that is the
principle that guides this Court’s conclusions regarding the merits of the Unions’
claims.
Before The Enactment Of The FSLMRS And CSRA, Presidents Had
The Authority To Issue Executive Orders Regulating Federal Labor -
Management Relations
As this Court mentioned at the outset, both President Kennedy and President
Nixon utilized executive orders to regulate federal labor -management relations in a
66
manner that afforded significant protections to federal workers. ( See Part II.A., supra.)
See also Exec. Order No. 11,491; Exec. Order No. 10,988. With their ultra vires
arguments, NFFE and AFSCME have strongly suggested that there has never been
statutory authority for Presidents to issue any such orders with respect to federal labor
relations. (NFFE’s Reply at 21–23; AFSCME’s Compl. ¶¶ 102–03.) For their part,
Defendants maintain that “the Supreme Court has held that the President is authorized
by both Article II of the Constitution and congressional statute to issue executive orders
regulating labor relations in the federal government[.]” (Defs.’ Reply at 29.) This
dispute is material to the Unions’ overall attack on the source of the President’s
authority to act in this arena, and, as defense counsel suggests, this Court does not pen
its analysis on an entirely blank slate.
In Old Dominion Branch No. 496, National Association of Letter Carriers v.
Austin, 418 U.S. 264 (1974), the Supreme Court discussed President Nixon’s Executive
Order 11,491, which was issued in 1969 and operated as the foundation for all
collective bargaining and labor rights within the federal government. In the majority
opinion, the Court observed that this executive order was “plainly a reasonable exercise
of the President’s responsibility for the efficient operation of the Executive Branch”
that is afforded by the Constitution, and the Court also found “express statutory
authorization in 5 U.S.C. § 7301.” 418 U.S. at 273 n.5. That statute provides (then, as
now) that “[t]he President may prescribe regulations for the conduct of employees in
the executive branch[,]” 5 U.S.C. § 7301, and the Supreme Court reasoned that the term
“conduct” included how federal employees interact with management in the workplace,
see Old Dominion, 418 U.S. at 273 n.5. Thus, the Old Dominion Court had “no
67
difficulty” in announcing the validity of an executive order that established an entire
universe of federal labor-management relations, both in light of the statutory authority
that Congress had conferred upon the President in section 7301, and also on the basis of
the inherent constitutional authority that the President enjoys with respect to the
management of the federal administrative workforce. Id.
Old Dominion can only be read to support the conclusion that the President of
the United States possesses the authority to issue executive orders regarding federal
labor-management relationships, at least in the pre-FSLMRS world. Indeed, that
appears to have been the generally accepted view throughout history, because, by
executive order Presidents have dictated an entire scheme of federal labor-management
relations, see Manhattan-Bronx Postal Union v. Gronouski, 350 F.2d 451, 456 (D.C.
Cir. 1965), and they have also routinely determined what rights executive branch
employees would enjoy as part of that scheme, see, e.g., Exec. Order No. 11,491
(modifying the rights conferred by previous presidents in this field); see also Novak,
Collective Bargaining, 63 Geo. Wash. L. Rev. at 695 (explaining how these executive
orders were the ones to extend to federal employees “the right . . . to form, join and
assist any employee or organization” and to engage in “limited collective bargaining”
(internal quotation marks and citation omitted)). Moreover, it appears that the
President’s exercise of authority in this arena has not ceased in modern times. See, e.g.,
Exec. Order No. 13,522, 74 Fed. Reg. 66,203 (Dec. 9, 2009), amended by Exec. Order No.
13,708, 80 Fed. Reg. 60,271 (Sept. 30, 2015), revoked by Exec. Order No. 13,812, 82 Fed.
Reg. 46,367 (Sept. 29, 2017); Exec. Order No. 12,983, 60 Fed. Reg. 66,855 (Dec. 21,
1995), revoked by Exec. Order No. 13,203, 66 Fed. Reg. 11,227 (Feb. 17, 2001); Exec.
Order No. 12,128, 44 Fed. Reg. 20,625 (Apr. 4, 1979); Exec. Order No. 12,107, 44 Fed.
68
Reg. 1,055 (Dec. 28, 1978). If anything, the more recent pronouncements of the
Supreme Court and other authorities strongly suggest in an even clearer fashion that the
President of the United States possesses substantial authority over executive branch
employees and operations. Cf. Free Enter., 561 U.S. at 492 (“[I]f any power
whatsoever is in its nature Executive, it is the power of appointing, overseeing, and
controlling those who execute the laws.”); id. at 496–97 (“Article II makes a single
President responsible for the actions of the Executive Branch.” (internal quotation
marks and citation omitted)); see also 5 C.F.R. 251 (citing 5 U.S.C. § 7301 as the
statutory basis for certain regulations that govern the relationships between agencies
and labor unions). Consequently, NFFE’s insistence that there is no “statutory
foundation” for a President to issue an executive order concerning federal labor -
management relations rings hollow. (NFFE’s Reply at 20.)
The best that NFFE can do to resist the conclusion that some combination of
statutory authority and constitutional authority provides the President with sufficient
power to enter the labor-management arena is to argue that the Supreme Court did not
mean what it said in Old Dominion. (See id. at 22.) In this regard, NFFE highlights the
Supreme Court’s observation in Karahalios v. National Federation of Federal
Employees, Local 1263, 489 U.S. 527 (1989), that the pre-FSLMRS executive orders
“were not legislative[,]” 489 U.S. at 535 n.3, and it also points to a series of comments
in the dicta of circuit court opinions that purport to consider whether the early
executive orders were issued pursuant to any federal statute, see Kuhn v. Nat’l Ass’n of
Letter Carrriers, Branch 5, 570 F.2d 757, 760–61 (8th Cir. 1978); Local 1498, Am.
Fed’n of Gov’t Emps. v. Am. Fed’n of Gov’t Emps., 522 F.2d 486, 491 (3d Cir. 1975).
69
But the question presented in each of these circuit cou rt cases differs from the one at
issue here: these cases address the status of pre-FSLMRS executive orders in the course
of deciding whether or not such orders constituted “laws of the United States” (and thus
can provide either subject-matter jurisdiction to the federal courts under section 1331 of
Title 28, or a cause of action to private persons seeking to sue their unions or federal
employers). See, e.g., Karahalios, 489 U.S. at 534–35; Kuhn, 570 F.2d at 760–61;
Local 1498, Am. Fed’n of Gov’t Emps., 522 F.2d at 490. 10 So while these courts stated
that such orders were not “legislative,” Karahalios, 489 U.S. at 535 n.3, and/or were
not “issued pursuant to a statutory authority providing for presidential implementation”
of a congressional scheme, Local 1498, Am. Fed’n of Gov’t Emps., 522 F.2d at 491,
those statements cannot be read to suggest that the pre -FSLMRS executive orders were
themselves statutorily unauthorized in the manner that NFFE suggests here. 11
NFFE’s argument also withers when viewed in light of the plain language of
section 7301. For example, NFFE emphatically argues that while section 7301 gives
the President express authority to “prescribe regulations for the conduct of employees
in the executive branch[,]” 5 U.S.C. § 7301 (emphasis added), “[u]nion official time is
10
It appears that, for a time, some courts believed that the “law[s] of the United States” could not
encompass presidential orders that resulted from the President’s own power to pursue “federal
government personnel policies,” but instead had to derive from a specific congressional dec ision to
regulate a given industry or activity. Local 1498, AFGE, 522 F.2d at 491; see also Kuhn, 570 F.2d at
760–61 (looking for a “specific statute” to authorize an executive order with “the force and effect of
law” (internal quotation marks and citatio n omitted)); Stevens v. Carey, 483 F.2d 188, 190–91 (7th Cir.
1973) (“The President . . . was under no obligation to issue the Order; and his action in doing so was
simply in furtherance of a personal policy.” (alteration in original) (internal quotation marks and
citation omitted)).
11
These cases actually seem to stand for the mere proposition that, because the executive orders at
issue (and the regulations they contained) were not mandated by any overarching congressional statute
or design, they could not constitute a “law of the United States” for purposes of section 1331 of Title
28. Of course, that contention has no bearing on the question of whether the President has statutory
authority to issue executive orders in the field of federal labor relatio ns.
70
not a conduct issue” (NFFE’s Reply at 21 (emphasis added)). Apparently, the Supreme
Court thinks otherwise. See Old Dominion, 418 U.S. at 273 n.5 (accepting Executive
Order 11,491 as a valid exercise of the President’s stat utory authority under section
7301, including section 20 of the executive order, which plainly dealt with official
time); see also BATF, 464 U.S. at 100–01 (describing the different approaches to
official time in Executive Order 11,491 and Executive Order 10,988). It is also
manifestly logical to consider the express grant of statutory authority to the President to
regulate employee “conduct” under section 7301 to include the power to speak to how
an employee spends her time at work. Cf. Black’s Law Dictionary 358 (10th ed. 2014)
(defining “conduct” as “[p]ersonal behavior,” “the manner in which a person
behaves[,]” or “collectively, a person’s deeds”).
The FSLMRS And CSRA Did Not Divest The President Of Any
Authority In This Field
Several of the union plaintiffs insist, in the alternative, that even if past
Presidents had the statutory and constitutional authority to issue executive orders
regarding the federal labor-management relationship, Congress unquestionably intended
to foreclose any such action in 1978, when it enacted the FSLMRS and CSRA. (See
NFFE’s Mem. at 28 (“Congress wrested the power to regulate federal labor -
management relations away from the Executive Branch with the passage of the
[FSLMRS.]”); NFFE’s Reply at 20 (“[T]he overall purpose of the Statute was to divest
the President of authority to regulate federal sector labor relat ions through executive
orders.” (emphasis in original)).) The first (and, frankly, most imposing) hurdle that
the Unions have to face in sustaining this argument is the language of the FSLMRS
itself. The codified provisions of that statute mention the President expressly in only
71
three respects. First, in section 7103(b) of Title 5 of the United States Code, Congress
provides “[t]he President” with the authority to “issue an order excluding any agency or
subdivision thereof from coverage under [the FSLMRS]” for reasons pertaining to
national security. 5 U.S.C. § 7103(b). Second, the FSLMRS allows “the President” to
appoint the members of the FLRA and its General Counsel, with the advice and consent
of the Senate, see id. § 7104(b), (f)(1), as well as the members of the Federal Services
Impasse Board, the other independent agency that the FSLMRS creates, see id.
§ 7119(c)(2). And, third, the FSLMRS affirms that the “[p]olicies, regulations, and
procedures established under and decisions issued under” prior executive orders “shall
remain in full force and effect until revised or revoked by the President, or unless
superseded by specific provisions of [the FSLMRS] or by regulations or decisions
issued pursuant to [the FSLMRS].” Id. § 7135. The provisions of the FSLMRS do not
mention the President at any other point—and, unfortunately for the Unions, that statute
does not say, as one might rightly expect it to, something to the effect of: the President
is ‘hereby precluded from issuing executive orders in this arena as he has done in the
past.’
This omission is crucial. Congress clearly knew that Presidents had previously
dabbled in regulating federal labor relations by executive order, see, e.g., id.; in fact, it
appears that the Legislature entered this arena precisely because it wanted to codify the
gains that federal workers had made by virtue of certain executive orders. See H.R.
Rep. No. 95-1403 at 12 (1978) (“The committee agrees that the time has come to
establish by statute a labor-management relations system for Federal employees[.]”
(emphasis added)); President Carter’s Statement on Signing the Civil Service Reform
72
Act of 1978, 14 Weekly Comp. of Pres. Doc. 1765 (Oct. 13, 1978) (explaining that Title
VII of the CSRA “move[d] Federal labor relations from Executive order to statute”).
The Unions read this history as firm support for the contention that Congress intended
“to stop regulation of employees by executive order.” (NFFE’s Reply at 22 (emphasis
added).) But the statute does not say that. And given the widely-known sweeping
exercise of presidential prerogative to regulate federal labor-management relations that
preceded the FSLMRS, Congress’ silence on the issue of the President’s authority to
continue to act in this arena speaks volumes about whether it actually intended to oust
the President entirely from this sphere.
What is more, in their briefing and during the motions hearing, Defendants
pointed to language in the original Public Law that appears so definitive that it can only
be understood as closing the case with respect to this investigation into Congress’s
intent. At the tail end of the document that became the CSRA, Congress included the
heading—“POWERS OF PRESIDENT UNAFFECTED EXCEPT BY EXPRESS
PROVISIONS”—and then inserted the following statement:
SEC. 904. Except as otherwise expressly provided in this Act, no
provision of this Act shall be construed to[:] (1) limit, curtail,
abolish, or terminate any function of, or authority available to, the
President which the President had immediately before the effective
date of this Act; or (2) to limit, curtail, or terminate the President’s
authority to delegate, redelegate, or terminate any del egation of
functions.
Civil Service Reform Act of 1978, Pub. L. 95-454, § 904, 92 Stat. 1111, 1224 . If there
exists more explicit language about the extent to which an Act of Congress should be
viewed as leaving the power of the President intact, this Court has not seen it. The
Unions themselves have provided no argument as to why this provision doesn’t settle
73
the issue, and none of the eight separate briefs that they have filed in this matter does
anything to blunt the sheer force of this clear statement of Congress.
This is not to say that the Unions are entirely wrong to observe that Congress
undertook to enact a “specific statute in 1978 comprehensively governing Federal sector
labor relations” (NFFE’s Reply at 23), and to note that the FSLMRS “reached every
aspect” of that relationship (AFGE’s Mem. at 9). See also H.R. Rep. No. 95-1403 at 38
(explaining that the FSLMRS represents “a new framework for the conduct of Federal
labor-management relations”). Where they veer off course is with the suggestion that
Congress’s enactment of the FSLMRS, standing alone, is sufficient to justify the
inference that Congress intended to prevent future Presidents from taking any action in
this area. (See, e.g., NFFE’s Reply at 20.) Courts ordinarily require more to give
subsequent legislation such preclusive effect. Cf. Lorillard Tobacco Co. v. Reilly, 533
U.S. 525, 541–42 (2001) (“[W]e work on the assumption that the historic police powers
of the States are not to be superseded by the Federal Act unless that is the clear and
manifest purpose of Congress.” (internal quotation marks, citation, and alterations
omitted)). And a clear-statement rule (or some other showing of clear congressional
intent) seems all the more important where, as here, Congress’s entry int o a field
implicates the exercise of power by a co-equal branch of the federal government. Cf.
Bond v. United States, 134 S. Ct. 2077, 2089 (2014) (noting that when Congress
changes the balance of the vertical separation of powers, courts look for a clear
statement).
All things considered, then, this Court concludes that the Unions have no
sustainable basis for contending that Congress divested the President of his authority to
74
act in the field of federal labor relations by enacting the FSLMRS and CSRA. That
said, whether the President can proceed to issue labor relations executive orders that
conflict with Congress’s own pronouncements is another issue, as the Court explains
below.
The President’s Executive Orders Concerning This Area Must Be
Consistent With Congress’s Pronouncements
There is no dispute that, even if the President can issue executive orders that
carry the force of law in the field of federal labor-management relations, he does not
have a “blank check . . . to fill in at his will.” Kahn, 618 F.2d at 793. (Compare, e.g.,
NTEU’s Mem. at 20 (stating that an executive order may not contradict a federal statue )
with Defs.’ Reply at 30–31 (acknowledging that an executive order that conflicts with a
federal statute is without statutory authorization).) Thus, the notion that the President
does not have the statutory authority to issue an executive order that conflicts with a
federal statute need not detain the Court for long. Quite simply, this is now clear
beyond cavil, for the D.C. Circuit has held that executive orders that conflict with the
purposes of a federal statute are “ultra vires[.]” See Chamber of Commerce of U.S., 74
F.3d at 1339 (striking down a regulatory executive order under the Procurement Act
because it conflicted with the National Labor Relations Act); see also Marks v. Cent.
Intelligence Agency, 590 F.2d 997, 1003 (D.C. Cir. 1978) (“[A]n executive order cannot
supersede a statute.”).
Of course, the President could always theoretically claim that he possesses the
inherent constitutional authority to take a given action, regardless of any conflict with a
congressional statute and his resulting lack of statutory authority. See, e.g., Zivotofsky,
135 S. Ct. at 2084; Youngstown, 343 U.S. at 585–86. But Defendants have made no
75
such assertion in the instant case; instead, they have “expressly recognized statutory
limitations on the President’s authority to act in this area.” (Defs.’ Reply at 31; see
also id. at 30–31 (“Defendants have not argued that the President can issue exec utive
orders contrary to the specific language of the Statute or that he has the right to revoke
any portion of the Statute through an Executive Order and make the scope of bargaining
a null set.” (internal quotation marks and citations omitted)).)
Therefore, the claims that remain in this case turn solely upon a somewhat
“difficult problem of statutory interpretation[,]” see Kahn, 618 F.2d at 787: whether or
not the provisions of Executive Orders 13,836, 13,837 and 13,839 that the Unions have
challenged do conflict with the will of Congress as set forth in any federal statute. If
such a conflict exists, then this Court must hold that the President lacks the authority to
issue those Order provisions that generate the relevant conflicts. See Chamber of
Commerce of U.S., 74 F.3d at 1339.
Many Of The Order Provisions The Unions Have Challenged In This
Case Impermissibly Infringe Upon The Statutory Right To Bargain
Collectively
The FSLMRS expressly enshrines the right of federal employees to bargain
collectively with respect to their working conditions. See BATF, 464 U.S. at 107. Lest
there be any doubt about the reverence that Congress appears to have had for labor
organizations and collective bargaining at the time the FSLMRS was enacted, the
statute opens with Congress’s unequivocal finding that
(1) experience in both private and public employment indicates
that the statutory protection of the right of employees to organize,
bargain collectively, and participate through labor organizations of
their own choosing in decisions which affect them—
(A) safeguards the public interest,
(B) contributes to the effective conduct of public business,
and
76
(C) facilitates and encourages the amicable settlements of
disputes between employees and their employers
involving conditions of employment[.]
5 U.S.C. § 7101(a)(1). What this means is that existing, binding federal law fully
endorses labor organizations and collective bargaining in the federal civil service; in
fact, even after Congress acknowledges that “the public interest demands the highest
standards of employee performance . . . and the efficient accomplishment of the
operations of Government,” id. § 7101(a)(2), it makes the additional, unqualified
proclamation that “labor organizations and collective bargaining in the civil service are
in the public interest[,]” id. § 7101(a).
The plain text of the FSLMRS also dispels all myths about that statute’s
purposes: “to prescribe certain rights and obligations of the employees of the Federal
Government and to establish procedures which are designed to meet the special
requirements and needs of the Government.” Id. § 7101(b). Thus the statute’s various
provisions delineating “[e]mployees’ rights,” id. § 7102, “[m]anagement rights,” id.
§ 7106, “[n]ational [c]onsultation [r]ights,” id. § 7113, and “[r]epresentation rights and
duties,” id. § 7114, as well as those proscribing “unfair labor practices,” id. § 7116, and
imposing a specific duty to bargain in “good faith,” id. § 7117, clearly provide the
baseline framework for the establishment of the type of “effective” and “efficient”
federal sector labor-management relationship that the FSLMRS envisions. See 5 U.S.C.
§ 7101(b) (“The provisions of this chapter should be interpreted in a manner consistent
with the requirement of an effective and efficient Government.”). 12 In the instant case,
12
See also id. § 7101(a)(1)(B) (finding, in particular, that protecting labor organizations and the right
to collective bargaining “contributes to the effective conduct of public business” (emphasis added)); id.
§ 7101(a)(2) (explaining, without cavea t, that “continued development and implementation of modern
and progressive work practices” facilitates “the efficient accomplishment of the operations of
77
the Unions claim that certain directives in President Trump’s recent Orders so
undermine the core protections for federal laborers that FSLMRS says “safeguard[] the
public interest,” id. § 7101(a)(1), and are so at odds with the requirements that
Congress has specifically prescribed “to facilitate and improve employee performance
and the efficient accomplishment of the operations of Government,” id. § 7101(a)(2),
that the resulting right to collective bargaining has been rendered virtually
unrecognizable. (See, e.g., NTEU’s Mem. at 37; NTEU’s Reply at 37; Hr’g Tr. at
115:14–22.) When the text of the challenged executive order provisions are considered
in light of existing law that delineates the scope of the right to bargain collectively and
the duty of management to bargain in good faith, this Court agrees that many of the
challenged Order provisions impermissibly infringe upon the right to good -faith
bargaining that the FSLMRS establishes.
Section 7103(a) And D.C. Circuit Caselaw Define The Contours Of
The Statutory Right To Bargain Collectively
The FSLMRS not only preserves the statutory right of federal employees to
“collective bargaining,” but also (quite helpfully) expressly defines that term. In
relevant part, the definitions section (5 U.S.C. § 7103) states:
“collective bargaining” means the performance of the mutual
obligation of the representative of an agency and the exclusive
representative of employees in an appropriate unit in the age ncy to
meet at reasonable times and to consult and bargain in a good -faith
effort to reach agreement with respect to the conditions of
employment affecting such employees and to execute, if requested by
either party, a written document incorporating any collective
bargaining agreement reached, but the obligation referred to in this
paragraph does not compel either party to agree to a proposal or to
make a concession[.]
Government” (emphasis supplied)).
78
5 U.S.C. § 7103(a)(12) (emphasis added). Much of the remainder of the statute is
devoted to specifying the circumstances under which the prescribed good-faith
negotiations over “the personnel policies, practices, and matters . . . affecting working
conditions[,]” id. at § 7103(a)(14) (defining “conditions of employment”) must, might,
or won’t occur. See id. §§ 7103(a)(12), 7106, 7117. The FSLMRS also creates an
independent agency to resolve certain foreseeable future disputes regarding particular
negotiations and to develop the specific policies that necessarily will be required to
shore up collective bargaining rights, id. §§ 7104, 7105.
But the primary mandate is clear: in contrast to workplace scenarios in which
rules and requirements can be unilaterally imposed upon workers by the management,
under the FSLMRS, labor representatives and agency managers are obliged “to consult
and bargain” regarding the conditions of employment, and to proceed in “good faith”
during any such collective bargaining negotiations. Id. § 7103(a)(12). In other words,
boiled to bare essence, the right of collective bargaining that the FSLMRS protects is
the right of federal workers to have a say with respect to the terms and conditions under
which they will be working. See Overseas Educ. Ass’n, Inc. v. Fed. Labor Relations
Auth., 876 F.2d 960, 971 (D.C. Cir. 1989) (stating that a “collective bargaining measure
. . . allows [] employees to combine their views and their voices in a concerted
responsive effort”); cf. Nat’l Labor Relations Bd. v. Am. Ins. Co., 343 U.S. 395, 401–02
(1952) (“The National Labor Relations Act is designed to promote industrial peace by
encouraging the making of voluntary agreements governing relations between unions
and employers.”).
Notably, the D.C. Circuit has determined that there are certain “core element[s]”
79
of the protected right to bargain collectively under the FSLMRS—i.e., certain aspects
of that right that are so fundamental to its exercise that efforts to interfere with them
qualify as violations of the FSLMRS. See Chertoff, 452 F.3d at 861. Two of these core
elements are relevant to this Court’s analysis of the Orders the Unions have challenged
in the instant case: (1) the duty to “bargain[,]” and (2) the duty to negotiate “in good
faith[.]” 5 U.S.C. § 7103(a)(12). An understanding of the scope and nature of these
obligations is essential for comprehending this Court’s ultimate conclusions.
a. The Duty To Bargain
The text of the FSLMRS plainly establishes a three-tier approach that delineates
the boundaries of the parties’ statutory duty “to bargain” about working conditions in
the federal civil service. To begin, there is a presumptive requirement that federal
agencies and labor unions must bargain over any “condition of employment[,]” meaning
any “personnel policies, practices, and matters” that affect agency employees. 5 U.S.C.
§ 7103(a)(12), (14); see also Nat’l Treasury Emps. Union, 414 F.3d at 52 (“[T]he
Statute generally obligates an agency to negotiate with its employees’ bargaining
representative over ‘conditions of employment[.]’” (citation omitted)). These are
“mandatory” subjects of negotiation. U.S. Dep’t of the Navy, Naval Aviation Depot,
Cherry Point, N.C., 952 F.2d at 1439.
The FSLMRS also identifies certain other matters that courts have deemed
“permissive”—i.e., matters that an agency may bargain over “at [its] election[.]” 5
U.S.C. § 7106(b)(1); see also Nat’l Treasury Emps. Union v. Fed. Labor Relations
Auth., 453 F.3d 506, 508 (D.C. Cir. 2006). Per the statute, the parties might negotiate
over the “numbers, types, and grades of employees” or the “technology, me thods, and
means of performing work[,]” and if the agency agrees, they can strike a bargain
80
regarding these matters. 5 U.S.C. § 7106(b)(1). Thus, federal agencies and unions are
free to approach each other and discuss the prospect of bargaining over such matters,
and must engage in a good-faith discussion on this front, but “neither party may
lawfully insist upon agreement on such issues as a condition to a labor agreement.”
U.S. Dep’t of the Interior, Bureau of Reclamation v. Fed. Labor Relations Auth. , 23
F.3d 518, 521 (D.C. Cir. 1994).
Third, and finally, the statute specifically “places a number of substantive topics
off limits for bargaining[,]” including the “management rights” contained in section
7106(a) of Title 5 of the United States Code, Chertoff, 452 F.3d at 863; see also 5
U.S.C. § 7106(a), as well as the subject matter of “any Federal law or any Government-
wide rule or regulation[,]” 5 U.S.C. § 7117(a)(1); see also U.S. Dep’t of the Air Force,
952 F.2d at 448 (“[A] federal agency may not negotiate over proposed conditions of
employment that are inconsistent with any Federal law or Government -wide rule or
regulation.” (internal quotation marks and citation omitted)).
What this three-tier structure means is that the scope of collective bargaining
between federal agencies and unions under the FSLMRS encompasses the negotiation of
all mandatory subjects (i.e., all conditions of employment not excluded or excludable
under sections 7106 or 7117), as well as discussions regarding the prospect of
negotiating any of the permissive bargaining matters laid out in section 7106(b)(1) (i.e.,
matters over which the agency can opt to reach an agreement). See U.S. Dep’t of the
Navy, Naval Aviation Depot, Cherry Point, N.C., 952 F.2d at 1439 (“Inherent in both
the NLRA and the FSLMRS is a fundamental rule that the parties to a bargaining
relationship are [] required to negotiate over “mandatory” subjects of bargaining.”);
81
U.S. Dep’t of the Treasury, Internal Revenue Serv., Office of Chief Counsel, Wash. D.C .
v. Fed. Labor Relations Auth., 739 F.3d 13, 19 (D.C. Cir. 2014) (“[S]ection 7106(b)(1)
expressly identifies certain matters that although interfering with section 7106(a)
management rights, may nonetheless be negotiated at the election of the agency[.]”
(internal quotation marks and citation omitted)). With respect to these delineated
matters, Congress has provided no choice: federal workers’ right to collective
bargaining requires agency management to either actually discuss certain topics or be
open to discussing them. But as the D.C. Circuit has recognized, in the overall scheme
of things, the scope of protected bargaining rights that the FSLMRS mandates with
respect to federal labor relations is relatively narrow. See Chertoff, 452 F.3d at 861.
That is, the FSLMRS “excludes from negotiations a host of subjects that employers
would be obliged to bargain about in the private sector.” Id. (internal quotation marks
and citations omitted). As explained above, Congress appears to have done this in
deference to “the special requirements and needs of the government[.]” Id.; see also id.
at 863 (explaining that Congress struck a delicate balance, by creating a collective
bargaining system whose “parameters . . . under the FSLMRS are narrow and flexible”).
b. The Duty To Act In Good Faith
The FSLMRS also expressly requires both labor unions and agencies to negotiate
“in good faith” during collective bargaining negotiations. See, e.g., 5 U.S.C.
§§ 7103(a)(12), 7114(b). The duty to bargain in good faith pla ys a central role in the
FSLMRS’s scheme, because an agency’s “unwillingness to discuss the issues with an
open mind, and to engage in a ‘give and take’ relationship foreclose[s] any possibility
of meaningful collective bargaining.” Fed. Aviation Admin. Nw. Mountain Region
Seattle, WA, 14 F.L.R.A. 644, 672 (1984); see also Archibald Cox, The Duty to Bargain
82
in Good Faith, 71 Harv. L. Rev. 1401, 1412–13 (1958) (“The bargaining status of a
union can be destroyed by going through the motions of negotiating al most as easily as
by bluntly withholding recognition.”).
To satisfy this duty, agencies and unions have a clear statutory obligation: to
“approach [] negotiations with a sincere resolve to reach a collective bargaining
agreement”; to “be represented at the negotiations by duly authorized representatives
prepared to discuss and negotiate on any condition of employment”; and to “meet at
reasonable times and convenient places as frequently as may be necessary, and to avoid
unnecessary delays[.]” 5 U.S.C. § 7114(b)(1)–(2). In addition, the parties must
“participate actively in the deliberations so as to indicate a present intention to find a
basis for agreement”; maintain “an open mind”; and make “a sincere effort . . . to reach
[] common ground.” Amalgamated Transit Union Int’l AFL–CIO v. Donovan, 767 F.2d
939, 949 (D.C. Cir. 1985); Turegon v. Fed. Labor Relations Auth., 677 F.2d 937, 939–
40 (D.C. Cir. 1982) (“[I]t is appropriate . . . to consider precedent developed under the
NLRA in interpreting the [FSLMRS].”). Hence, when appraising whether a union or
agency has acted in bad faith, the FLRA and the courts pay particular attention to
whether there has been an “attempt to evade or frustrate the bargaining
responsibility[.]” Division of Military & Naval Affairs, State of New York, 7 F.L.R.A.
321, 338 (1981).
c. Takeaways Regarding Agency Conduct With Respect To Federal
Labor Negotiations
The FSLMRS’s unequivocal duties to (a) “bargain” and (b) negotiate “in good
faith” compel the conclusion that Congress intended to regulate agency conduct with
respect to federal labor negotiations, and these statutory criteria clearly impact federal
83
agencies in at least two ways. First, in order to preserve federal workers’ statutory
right to “bargain,” an agency must be cautious about taking matters off the negotiating
table in its collective bargaining discussions. See, e.g., U.S. Dep’t of the Navy, Naval
Aviation Depot, Cherry Point, N.C., 952 F.2d at 1439. Second, in order to fulfill the
obligation to bargain “in good faith,” agency representatives must keep an open mind
and exhibit flexibility in the give-and-take process that good-faith negotiation requires.
See Amalgamated Transit Union Int’l AFL–CIO, 767 F.2d at 949. In other words,
because Congress has specifically determined the scope of the right to collective
bargaining in the federal civil service, (i.e., what matters can, must, and need not be
negotiated), as well as the required nature of any such negotiations (i.e., a sincere
attempt to reach agreement), in order to act consistently with that statute, agency
management must not remove covered matters from the bargaining table
indiscriminately, and must proceed to collective bargaining discussions ready to listen
and consider what the workers are proposing, with an open mind and with every
intention of coming to a mutually acceptable result.
In regard to what agencies can and cannot do, National Treasury Employees
Union v. Chertoff, 452 F.3d 839 (D.C. Cir. 2006), is instructive. In that case, OPM and
the Department of Homeland Security (“DHS”) attempted to implement a provision of
the Homeland Security Act that authorized them to create the DHS human resources
system, but the final regulations that DHS issued drastically reduced the matters that
were subject to collective bargaining such that, in essence, only those “that might be
seen as personal employee grievances” remained. Id. at 848. The new policy also
authorized DHS to take additional matters off the bargaining table in the future. Id.
84
Several unions filed a lawsuit, complaining that, among other things, OPM and DHS’s
regulation “impermissibly restricted the scope of bargaining.” Id. at 851. And, the
D.C. Circuit held that, because the agencies had impermissibly diminished the already
narrow “scope of bargaining” under the Homeland Security Act (which mimics the
scope of bargaining under the FSLMRS, see id. at 858, 863), the agencies’ actions had
violated the right to bargain collectively, see id. at 861.
As far as agency management’s obligation to respect employees’ right to bargain
goes, Chertoff provides at least three relevant lessons. First, it establishes that the
linchpin of identifying agency conduct that impermissibly undermines the right to
bargain is whether the agency’s actions strike at the “core elements[s]” of collective
bargaining as defined by statute. (See Part IV.D.1(a), (b), supra.) Chertoff, 452 F.3d at
861. Second, with respect to the scope of bargaining under the FSLMRS, an agency’s
reduction of the matters that would otherwise be subject to negotiation between
agencies and federal employees (i.e., taking matters off the table) can deprive the
employees and their union representatives of the right to bargain collectively, and can
thereby violate the statute. Chertoff, 452 F.3d at 844, 861–62. Even without imposing
limitations that specifically and directly conflict with individual statutory prescriptions,
there can come a point at which an agency (or in this case the President) diminishes the
scope of bargaining such that the only acceptable conclusion is that the agency’s
conduct violates the FSLMRS’s requirement that the parties “bargain in a good-faith
effort to reach agreement with respect to the conditions of employment affecting such
employees[,]” 5 U.S.C. § 7103(a)(12). Third, an attempt to limit the negotiability of
the areas of bargaining that the FSLMRS deems permissive (i.e., those over which the
85
agency has discretion to bargain under section 7106(b)(1)) is not merely an innocuous
exercise of management prerogatives; rather, it eviscerates the statutory right of
employees to have an opportunity to discuss certain matters, and also seemingly sheds
light on the agency’s motivations for slashing otherwise potentially negotiable topics ,
and as such, is cause for great concern. See Chertoff, 452 F.3d at 862 (calling the fact
that the agency had removed the “permissive” areas of bargaining from the scope of
bargaining “critical” with respect to a determination of whether the scope of bargaining
was impermissibly reduced).
Not surprisingly, Defendants read Chertoff differently. They argue, for example,
that the hallmark of an impermissible reduction in the scope of bargaining under
Chertoff is not whether the agency has acted to remove from the collective bargaining
table topics that Congress has specifically identified as negotiable, but whether what is
left on the table is sufficient to constitute collective bargaining within the meaning of
statute. (See, e.g., Defs.’ Mem. at 73 (“[T]he HR system struck down by the D.C.
Circuit in Chertoff bears no resemblance to the collective bargaining regime that
continues to exist under the President’s Executive Orders.”); see also Defs.’ Reply at 24
(quoting Chertoff to suggest that an egregious near-total diminution of bargaining is
necessary, based on the D.C. Circuit’s observation that the challenged act before it had
“reduced the scope of bargaining . . . to ‘virtually nil’” (citation omitted)).) But
Chertoff’s analysis does not demand this result. To be sure, in that case the D.C.
Circuit evaluated what appears to have been a near total abrogation of the collective
bargaining right, but that says nothing about whether a less egregious affront can
suffice to impair the right to bargain in violation of the FSLMRS. With respect to that
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key question, Chertoff established (and this Court concludes) that “the norms of
‘collective bargaining’” matter, 452 F.3d at 861, and that agency efforts to remove from
the bargaining table otherwise negotiable topics of discussion arbitrarily and in a
manner that impacts a unions’ ability to engage in effective collective bargaining
negotiations moving forward impermissibly jeopardizes the right to bargain that the
FSLMRS assiduously protects, id. at 487 (concluding “the scope of bargaining” rights
under federal law “must be guided by the federal labor policy underlying the
permissible scope of bargaining in the federal sector[,]” and that the “general
framework” that Congress has laid out “to ensure collective bargaining” for federal
employees “must be followed”).
One final takeaway bears mentioning: we have learned from the FLRA that an
executive branch official can be found to have “instruct[ed]” agency negotiators in a
manner that “preclude[s] the existence of the prerequisite good faith necessary under
the” FSLMRS. Fed. Aviation Admin. Nw. Mountain Region Seattle, WA, 14 F.L.R.A. at
672. This occurs most obviously when the instruction prevents the negotiator from
“approach[ing] the Union with [an] open mind[.]” Id. In other words, commands that
are likely to cause agency representatives to pursue a certain outcome with such dogged
determination that the agency negotiator effectively “come[s] to the bargaining table
with a closed mind[,]” impinge upon the duty to act in good faith. Sign & Pictorial
Union Local 1175, 419 F.2d at 731; compare Teamsters Local Union No. 515 v. Nat’l
Labor Relations Bd., 906 F.2d 719, 726 (D.C. Cir. 1990) (emphasizing that “rigid
adherence to disadvantageous proposals may provide a basis for inferring bad fa ith”
(internal citation and quotation marks omitted)) with Fed. Aviation Admin. Nw.
87
Mountain Region Seattle, WA, 14 F.L.R.A. at 672 (associating a flexible process of
“give and take” with the obligation to proceed in “good faith”).
Certain Provisions Of The Challenged Executive Orders Dramatically
Curtail The Scope Of Bargaining Because Agencies And Unions Will
No Longer Negotiate Over A Host Of Significant Issues
With the above framework in mind, it is clear to this Court that various aspects
of the Orders that the Unions seek to challenge in this case violate the statutorily
protected duty to bargain. This violation is most easily perceived as an illegitimate
attempt to take four categories of otherwise negotiable matters off the bargaining table:
(1) all of the permissive subjects of bargaining that Congress has listed in section
7106(b)(1) of Title 5 of the United States Code; (2) the ways in which union members
can receive and use official time (which the FSLMRS addresses in section 7131(d)); (3)
the agency’s procedures for handling matters relating to inadequate employee
performance, performance evaluations, and performance-based bonuses (which is
covered in the statute, at sections 7103(a)(12) and 7121); and (4) the methods for
conducting collective bargaining in the first place (which are designated by Congress as
a topic for negotiation under section 7114(a)(4)).
a. The Orders Remove These Matters From The Scope Of The
Right To Bargain Despite The Fact That Congress Has Made
Them Negotiable
To be more specific, with respect to each of these bargaining categories, the
challenged executive orders dictate the following. Section 6 of the Collective
Bargaining Procedures Order states that agencies “may not negotiate over the substance
of the subjects set forth in section 7106(b)(1) of [T]itle 5”— period. Exec. Order No.
13,836 § 6. This means that unions and agencies will no longer engage in negotiations
over such topics as “the numbers, types, and grades of employees or positions assigned
88
to any organizational subdivision, work project, or tour of duty” and “the technology,
methods, and means of performing work”—matters that Congress specifically
designated as subject to negotiation “at the election of the agency” in section
7106(b)(1). 5 U.S.C. § 7106(b)(1).
Even more dramatically, the Official Time Order completely reconceptualizes the
terms and scope of bargaining regarding the right of employees to engage in union
business during their paid working hours—a topic that the FSLMRS specifically covers.
See Exec. Order No. 13,837. Subsections (a) and (c) of section 7131 of the FSLMRS
provide a list of certain activities for which a federal agency must grant “official time”
to labor representatives, 5 U.S.C. § 7131(a) (negotiation of a collective bargain ing
agreement); id. § 7131(c) (participation of proceedings before the FLRA, if that agency
authorizes it), while section 7131(b) provides Congress’s directive that, with respect to
activities “relat[ed] to the internal business of a labor organization[,]” official time
cannot be used, id. § 7131(b). For everything else, section 7131(d) states that federal
employees “shall be granted official time in any amount the agency and the exclusive
representative involved agree to be reasonable, necessary, and in t he public interest.”
Id.; see also BATF, 464 U.S. at 99 (defining “official time” as the right of employees to
receive their “usual pay” during union-related matters). Yet certain challenged
provisions in the Official Time Order expressly limit the negotiations over the matters
for which official time can be utilized: e.g., the Order flatly prohibits the use of official
time to lobby government officials, or to prepare grievances on behalf of the union or
other union members. See Exec. Order No. 13,837 §§ 4(a)(i), 4(a)(v). Similarly, the
Official Time Order instructs agencies that they cannot provide union members with
89
federal resources or support relating to activities performed on official time, see id.
§§ 4(a)(iii)–(iv)—effectively making those matters, too, non-negotiable—and it restricts
bargaining over the conduct of union employees with respect to the use of official time
as well, because whatever collective bargaining negotiators might have been able to
agree to about the amount of official time labor representatives can utilize while
engaged in union business, the order mandates that official time cannot comprise more
than twenty-five percent of a union employee’s working hours, see id. § 4(a)(ii), and
management approval must be obtained before any official time can be used at all, see
id. §§ 4(b).
By restricting negotiation over the procedures that an agency uses to evaluate
employee performance, the Removal Procedures Order takes a similar tack. See Exec.
Order No. 13,839. For example, section 4(a) explicitly prohibits agencies from
subjecting disputes about assignment ratings (i.e., performance evaluations) or
performance-based monetary awards to any “grievance procedures or binding
arbitration[,]” id. § 4(a), no matter what the agency and labor organization might have
been able to agree to with respect to how such disputes should be handled. Compare 5
U.S.C. § 7121(a)(1) and (2) (providing that “any collective bargaining agreement shall
provide procedures for the settlement of grievances[,]” and suggesting that all related
grievance matters are negotiable, because “any collective bargaining agreement may
exclude any matter from the application of the grievance procedures which are provided
for in the agreement”). Section 4(c) of Executive Order 13,839 removes from the
bargaining process and commits to the sole discretion of agency management how long
an employee should have to improve their performance before being terminated once
90
their employer has deemed their performance unacceptable with in the meaning of
section 4302(c)(6) of Title 5 in the United States Code, see Exec. Order No. 13,839
§ 4(c), despite the fact that section 4302(c)(6) and the relevant regulations in this regard
do not set any definite limit on the length that employees have to improve their
performance, see 5 U.S.C. § 4302(c)(6). 13
Courts and the FLRA have decided that each of the matters discussed above falls
within the scope of the right to bargain that Congress sought to protect when it enacted
the FSLMRS. See BATF, 464 U.S. at 107 n.17 (financial support to union members is
negotiable during collective bargaining); Dep’t of the Air Force Eglin Air Force Base,
Fla., 2016 WL 3548040, at *13 (May 31, 2016) (a party is free “to advocate for what it
believes to be the proper amount of official time”); U.S. Dep’t of the Treasury, Internal
Revenue Serv., Wash. D.C., 56 F.L.R.A. 393, 395 (2000) (“[M]atters covered under
section 7106(b)(1) are negotiable only at the election of the agency.”); Am. Fed’n of
Gov’t Emps. Nat’l Council of Field Labor Locals, 39 F.L.R.A. 546, 553 (1991) (how
official time may be used is open to negotiation); Patent Office Prof’l Ass’n, 29
F.L.R.A. 1389, 1403 (1987) (the amount of recovery time to be provided before
performance-based action is negotiable); Vt. Air Nat’l Guard, Burlington, Vt., 9
F.L.R.A. 737, 740–41 (1982) (the scope of grievance procedures is negotiable); see also
5 U.S.C. § 7114(a)(4) (unions and agencies “may determine appropriate techniques,
13
The Unions point to one other purported conflict between a prov ision of the Removal Procedures
Order and the FSLMRS with regard to the scope of bargaining: section 4(b)(iii) of that Order prohibits
an agency from “mak[ing] any agreement, including a collective bargaining agreement . . . that limits
the agency’s discretion to remove an employee from Federal Service without first engaging in
progressive discipline[.]” Exec. Order No. 13839 § 4(b)(iii). As explained in Part IV.E, this directive
does not conflict with the scope of bargaining protected by the FSLMRS, beca use the FLRA has already
determined that such matters are within the sole discretion of agency management under section
7106(a), and the opinion of this expert agency is entitled to Chevron deference.
91
consistent with the provisions of section 7119 of [the FSLRMS], to assist in any
negotiation”). However, as indicated above, the Orders that the Unions challenge here
selectively remove these nine matters from the array of topics that Congress has placed
on the bargaining table in the FSLMRS, ostensibly to promote an expansive conception
of what Congress intended when it recognized the public’s interest in “the effective
functioning of the executive branch.” Exec. Order No. 13,837 (preamble); Exec. Order
No. 13,839 (preamble); see also Exec. Order No. 13,836 (preamble); cf. Chertoff, 452
F.3d at 861–62 (concluding that the removal of just six matters illegally diminished the
scope of bargaining anticipated in the statute). 14 This Court has little doubt that this
shifting of discussion topics from the “must” or “may” negotiate buckets that Congress
created and into the non-negotiable bucket reduces the scope of the protected right to
bargain in an impermissible manner. See Chertoff, 452 F.3d at 861.
b. The Removed Topics Are Important To The Functioning Of
Labor Organizations And The Fairness Of Collective
Bargaining Negotiations
Whether or not the right to bargain has been impermissibly reduced as a result of
14
As an aside, each of these Orders puts way too much stock in the FSLMRS’s statements about an
“effective” and “efficient” government, as a general matter. It is certainly true that that goal certainly
reflects one key aspect of the careful balance that Congress was attempting to strike between
management and labor. See, e.g., 5 U.S.C. § 7101(a)(2) (suggesting that “the public interest demands
the highest standards of employee performance”). But the overall thrust of the FSLMRS is
unquestionably Congress’s stated belief that “labor organizations and colle ctive bargaining in the civil
service are in the public interest[,]” id., rather than any concern that, by accommodating collective
bargaining rights, government agencies were becoming ineffective or inefficient and thus not serving
the public. Moreover, far from being propelled by some abstract conviction that the scope of the right
of collective bargaining needs to be reduced in order to achieve an effective and efficient federal
workforce (as these Orders suggest), in the FSLMRS, Congress stated plainly what the statute means
when it references “the requirement of an effective and efficient Government.” Id. § 7101(b). Section
7101(a)(1)(B) explains that “the statutory protection of the right of employees to organize, bargain
collectively, and participate through labor organizations of their own choosing in decisions which
affect them” itself “contributes to the effective conduct of public business,” and section 7101(a)(2)
indicates that “the continued development and implementation of modern and progress ive work
practices” through collective bargaining “facilitate[s] and improve[s] employee performance and the
efficient accomplishment of the operations of the Government.” Id. § 7101(a)(1)(B), (2) (emphasis
added).
92
the removal of these matters from the realm of negotiation turns on more than just the
number of matters the Orders remove from the ambit of collective bargaining
discussions; it also depends on the relative importance of the subjects that the orders
target in this regard. When viewed from this perspective, this Court’s assessment of
whether or not these provisions of the Orders conflict with the will of Congress
becomes even more grave.
Consider, for example, the ban on agency and union negotiations about the
potential of negotiating the permissive bargaining matters listed in section 7106(b)(1 ).
In Chertoff, the D.C. Circuit expressly disapproved of agency determinations that these
matters are categorically “off limits[,]” and in doing so, the panel strongly suggested
that the “distinction” between a right of bargaining that includes the poten tial to discuss
these matters and a right of bargaining that does not “is critical.” 452 F.3d at 862.
But that is not the only canary in the coal mine. Indeed, one could argue that the
executive order provisions that restrict and limit official time ha ve an even bigger
impact on the scope of bargaining that the FSLMRS protects. By prohibiting union
members from using official time for lobbying efforts or for the pursuit of other
employees’ grievances, the Official Time Order has eliminated what the Unions say are
two indisputably central activities of labor organizations: attempting to preserve and
expand (through lobbying) the statutory protections for workers and the right to
collective bargaining (see, e.g., NFFE’s Stmt. of Facts ¶ 58; Decl. of Kenneth Moffett,
Jr., Ex. 1 to Pl. NTEU’s Mot. for Summ. J., ECF No. 29 -4, ¶ 35), and seeking to enforce
the results of collective bargaining negotiations by working with their members to file
grievances under negotiated grievance procedures about the violation of agreed-to
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conditions (see, e.g., NTEU’s Stmt. of Facts ¶¶ 30, 47; Decl. of Witold Skwierczynski,
Ex. 3 to Pl. AFGE’s Mot. for Summ. J., ECF No. 30 -6, ¶ 27). For a very long time in
this country, unions have played a “major” role “in urging legislation and candidacies”
with the goal of advancing policy agendas that are favorable to workers. Int’l Ass’n of
Machinists v. Street, 367 U.S. 740, 813 (1961) (Frankfurter, J., dissenting); see also
Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 344–47 (2010) (providing
examples). Indeed, for public unions in particular, the right to “communicate with
Congress is essential . . . because so many fundamental working conditions are directly
determined by Congress through legislation.” Gen. Servs. Admin., 9 F.L.R.A. 213, 223
(1982). And it is also clear that gains workers achieve through a union’s agreements
with management would not be worth the paper they are written on if unions and their
members cannot effectively enforce the terms of their agreements through the vigorous
pursuit of any grievance that a member is authorized to file. See Sec’y of the Air Force,
716 F.3d at 636–37. By assisting individual members in the grievance process, unions
have traditionally advanced this effort. See, e.g., Vaca v. Sipes, 386 U.S. 171, 194
(1967). And Congress appears to have endorsed this practice, for it devoted an entire
section of the FSLMRS to negotiated grievance procedures, see 5 U.S.C. § 7121,
explicitly granting federal workers (through their representat ives) an open-ended right
to bargain with management about them.
Thus, it is entirely unsurprising that unions have sought to protect and defend the
right to bargain over the use of official time for lobbying and grievance assistance, both
before and after the enactment of the FSLMRS. See Patent Office Prof’l Ass’n v. Fed.
Labor Relations Auth., 872 F.2d 451, 452–53 (D.C. Cir. 1989) (grievances); Gen. Servs.
94
Admin., 9 F.L.R.A. at 223 (lobbying). Collective bargaining over material support has
also been viewed as a vital term in collective bargaining negotiations for many reasons,
including the fact that the potential of securing support contributes to the parity
between management and labor that the FSLMRS implicitly requires. See Dep’t of the
Navy Naval Constr. Battalion Ctr. Port Hueneme, Cal., 14 F.L.R.A. 360, 372 (1984);
see also BATF, 464 U.S. at 104 (noting that several provisions of the act “aim[] at
equalizing the positions of management and labor”); id. at 101–02 (recognizing that the
justifications for permitting federal workers to do union work during paid time have
historically centered on the need “to maintain a reasonable policy with respect to union
self-support[,]” and on the principle that union members “should be allowed official
time to carry out their statutory representational activities just as management uses
official time to carry out its responsibilities” (internal quotation marks and citations
omitted)). Under these challenged provisions of the Official Time Order, however, the
Unions’ right to bargain for the official time and financial support that contributes to
parity in collective bargaining negotiations is significantly diminished, because union
representatives cannot negotiate for the financial support that management recei ves, nor
can they barter for arrangements that would permit uni on representatives to devote the
necessary time to become specialists in labor-management issues. See Exec. Order No.
13,837 §§ 4(a)(ii)–4(a)(iv). This, in turn, exacerbates management’s advantages over
labor and hampers unions’ ability to engage effectively in future collective bargaining,
contrary to the clearly articulated goals of the FSLMRS. See 5 U.S.C. § 7101(a).
Insofar as the Official Time Order also generally requires agency management to
pre-approve union representatives’ use of official time, see Exec. Order No. 13,837
95
§ 4(b), one could argue that this singular provision is the one that does the most damage
to the statutory right to bargain that the FSLMRS establishes. This is so because
requiring preapproval effectively confers upon management the discretion to dictate
when, if ever, union employees may use paid time to engage in union activities. See id.
§ 5(b) (requiring any authorization procedure to allow management to “asses s whether
it is reasonable and necessary” to grant such official time). (See also NFFE’s Mem. at
41–42.) No; the Order does not give management the power to prevent union members
from engaging in any union activities on their own time. (Defs.’ Mem. at 77; Hr’g Tr.
146:3–11.) Nor does the Order expressly divest labor representatives of their clear
statutory right to use paid time to negotiate collective bargaining agreements under
section 7131(a) of Title 5 of the United States Code, or to participate in authorized
FLRA proceedings, id. § 7131(c). But to the extent that the Order confers upon
management control over when (and if) official time is used to do anything else union -
related, it effectively shifts the determination of what is “reasonable, neces sary, and in
the public interest” away from both parties, where section 7131(d) of Title 5 of the
United States Code places it, and hands that crucial decision over to management alone,
in a manner that might well result in labor representatives being deni ed the use of paid
time in all but the most narrow set of circumstances. 15
15
The parties to collective bargaining negotiations can still conceivably bargain over the circumstances
under which official time might be appropriately granted (except for lobbying and grievances), and can
include such circumstances in their agreements, under the Official Time Order’s prov ision, but, as
noted, the Order directs agencies to secure the power to grant or deny “authorization” for the requested
use of official time for any reason, which will affect how official -time agreements are actually
implemented. Exec. Order No. 13,837 § 4(b). Thus, agencies can turn any bargain regarding the scope
of official time into a meaningless exercise, and according to the D.C. Circuit, that circumstance
conflicts with the will of Congress, because “[n]one of the major statutory frameworks for col lective
bargaining allows a party to unilaterally abrogate a lawfully executed agreement.” Chertoff, 452 F.3d at
860. In other words, by giving management the unilateral power to determine whether or not this
bargained-for term will be actually implemented, the government has effectively conferred upon itself
96
The Removal Procedures Order provisions that (a) pertain to agreements about
the grievability of performance evaluations and incentive awards, and (b) place time
limits on struggling employees’ efforts to improve their performance, have similar
outsized significance. As indicated above, it is well established that grievance
procedures exist to “safeguard the participation rights of individual employees and []
unions[,]” Am. Fed’n of Gov’t Emps., Locals 225, 1504, and 3723 AFL-CIO v. Fed.
Labor Relations Auth., 712 F.2d 640, 641 (D.C. Cir. 1983), and the FSLMRS finds that
such participation is “in the public interest[,]” 5 U.S.C. § 7101(a), so any reduction in
the scope of negotiations regarding such procedures is potentially problematic from the
standpoint of what matters to Congress as reflected in the FSLMRS. Moreover, because
federal employees’ ability to file grievances regarding unsatisfactory performance
evaluations and/or performance awards, in particular, is clearly instrumental in
facilitating the protection of other statutory rights, see, e.g., Lathram v. Snow, 336 F.3d
1085, 1089 (D.C. Cir. 2003) (claiming that a “pay differential was a result of
discrimination”); Smith v. Sec’y of the Navy, 659 F.2d 1113, 1120 (D.C. Cir. 1981)
(acknowledging that “[a]n unfavorable employee assessment . . . could both prejudice
the employee’s superiors and materially diminish his chances for advancement”), the
Order’s elimination of the ability of labor representatives to negotiate over how
grievances will be handled with respect to federal employees who claim they were
improperly evaluated or undercompensated deprives unions of an opportunity to utilize
the collective bargaining process to influence the mechanisms through which accurate
and fair treatment of employees within the federal civil service occurs. Accountability
the power to nullify any bargained -for agreement to the use of official time.
97
of government officials with respect to their treatment of workers also hangs in the
balance—all in clear contrast with Congress’s stated conviction that collective
bargaining has the potential to “safeguard[] the public interest” and to “facilitate . . .
the amicable settlements of disputes[.]” 5 U.S.C. § 7101(a) (emphasis added).
Likewise, and finally, forbidding agencies from bargaining over the length of
time available to an employee to “demonstrate acceptable performance” under section
4302(c)(6) of Title 5 of the United States Code effectively silences workers with
respect to “one of the most important rights” relating to performance-based employment
actions. Sandland, 23 M.S.P.R. 583, 590 (1984). Defendants have yet to explain how
shutting down any such discussions comports with the FSLMRS’s requirement that
federal workers get a ‘say’ with respect to their conditions of employment. See 5
U.S.C. § 7103(a)(14); Dep’t of the Treasury, Office of Chief Counsel v. Fed. Labor
Relations Auth., 873 F.2d 1467, 1468 (D.C. Cir. 1989) (“Perhaps the most important
protections enjoyed by the competitive service are those—set forth in chapters 43 and
75 of the Act—which buffer the prospect of discipline or discharge.”); see also Prof’l
Airways Sys. Specialists, MEBA, AFL-CIO v. Fed. Labor Relations Auth., 809 F.2d 855,
858 (D.C. Cir. 1987) (“Legally mandated collective bargainin g provides an orderly
vehicle for the formal articulation of competing positions so, if successful, a more
universally agreeable course of action may eventuate.”).
This all demonstrates that even though the Orders touch upon only selected
matters among the myriad topics that negotiators purportedly seek to addres s during the
federal collective bargaining process (see Hr’g Tr. at 122:6–13 ( defense counsel
contending that “ I have a long, long list of things that would [still] be negotiable in
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that respect”)), these particular provisions have a substantial impact on the scope of the
right to bargain under the FSLMRS. As the D.C. Circuit recognized, the scope of
bargaining under the FSLMRS is actually quite “narrow” to begin with, when compared
to what labor and management negotiate over in the private sector, Chertoff, 452 F.3d at
860, so it stands to reason that almost any attempt to shrink the otherwise generally
accepted and traditional scope of bargaining rights under the FSLMRS can quickly
render such an effort suspect from the standpoint of the boundaries that Congress has
constructed, id. at 858 (suggesting that the point in which management is “not even
giv[ing] an illusion of collective bargaining” comes fast in the federal bargaining
process). Even with respect to one carveout in the Chertoff case—the permissive
bargaining matters under section 7106(b)(1) of Title 5 of the United States Code—the
Circuit has made no bones about the fact that the scope of the right to bargain can be
“critical[ly]” restricted. See id. at 862; see also, e.g., U.S. Dep’t of the Navy, Naval
Aviation Depot, Cherry Point, N.C., 952 F.2d at 1439 (finding that the removal of
“mandatory subjects of bargaining,” such as matters relating to official time, grievance
procedures, employee performance, and the methods of collective bargaining,
“impermissibly restricts collective bargaining at its core”). The Orders before this
Court require the carveout of the FSLMRS’s permissive bargaining topics, too, and—in
terms of actual practical effect—so much more. 16
16
Because the above analysis invalidates section 4(a)(v) of the Official Time Order, which is the only
Order provision to which the Unions’ First Amendment claim related, it is unnecessary for this Court to
consider the Unions’ claims that section 4(a)(v) of the Official Time Order violates the Unions’ First
Amendment right to freely associate. (See AFGE’s Mem. at 15–19; AFGE’s Reply at 31–34;
AFSCME’s Mem. at 31–36; AFSCME’s Reply at 10–15.)
99
Certain Provisions Of The Executive Orders Impede The Prospect Of
Good Faith Negotiations
Sections 5(a) and (e) of the Collective Bargaining Procedures Order, section 3(a)
of the Official Time Order, and section 3 of the Removal Procedures Order, create a
new series of norms and default bargaining positions, and in this Court’s view, these
standards prevent federal agency representatives from bargaining with labor
organizations “in good faith,” consistent with their duty to d o so under the FSLMRS.
See 5 U.S.C. §§ 7103(a)(12), 7114(b).
First of all, several of these provisions tell the agencies —at the outset—what
should “ordinarily” happen with respect to certain negotiable terms and negotiation
processes during the course of collective bargaining. Section 5(a) of the Collective
Bargaining Procedures Order, for example, provides that “ordinarily” agencies shall
only devote a certain amount of time to negotiating the ground rules for a collective
bargaining process (no more than six weeks) or to hammering out the terms of a final
collective bargaining agreement (between four to six months). Exec. Order No. 13,836
§ 5(a). Section 3(a) of the Official Time Order similarly prescribes that agencies
should “ordinarily” not agree to provide unions with more than one hour of official time
per union member employed with the bargaining agency, in the aggregate. Exec. Order
No. 13,837 § 3(a). And section 3 of the Removal Procedures Order instructs agencies
that they should, “[w]henever reasonable[,]” endeavor to exclude from the negotiated
grievance procedures any issues relating to an employee’s removal for misconduct or
unacceptable performance. Exec. Order No. 13,839 § 3.
Given the rights that the FSLMRS confers, such preconceived notions of the
‘ordinary’ length of negotiations or the standard amount of official time to be
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authorized, are unwarranted, and ultimately unduly restrictive, because there is no such
thing as a typical collective bargaining agreement with respect to each of these terms—
all of these matters concern negotiable conditions of employment or negotiated
procedures for collective bargaining, as the FLRA has recognized. See Dep’t of the Air
Force Base, Fla., 2016 WL 3548040 at *13 (amount of official time); U.S. Dep’t of the
Treasury, Internal Revenue Serv., Wash, D.C., 64 F.L.R.A. 426, 432 (2010) (timelines);
Vt. Air Nat’l Guard, Burlington, Vt., 9 F.L.R.A. at 740–41 (scope of grievance
procedures).
Furthermore, these norm-setting provisions of the executive orders at issue each
contain an implicit enforcement mechanism that effectively transforms the se norms
from fashionable “aspirations,” merely to be tried on and thoughtfully pondered during
the course of negotiations (cf. Defs.’ Mem. at 41), into an impermeable straightjacket.
In this regard, each Order first announces the endpoint that the agency must strive to
achieve in the “ordinar[y]” course of things, or whenever it is “reasonable” for the
agency to do so. Exec. Order No. 13,836 § 5(a); Exec. Order No. 13,837 § 3(a); Exec.
Order No. 13,839 § 3. Then, across the board, these provisions indicate that
“[a]gencies shall commit the time and resources necessary” to achieve these objectives.
Exec. Order No. 13,836 § 5(a); Exec. Order No. 13,837 § 3(a); Exe c. Order No. 13,839
§ 3. And, in the unlikely event that the agency somehow fails to bring all of its
resources to bear upon the assigned task of browbeating the union into accepting the
stated term in the context of any negotiation, it must either bring th e matter to
mediation and then to the Federal Impasse Panel, see Exec. Order No. 13,836 § 5(a)
(regarding ground-rule negotiations), or must explain to the “President [of the United
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States] through the Director of the Office of Personnel Management” why th e agency
relented, and thereby, shamefully, failed to achieve the goal, Exec. Order No. 13,837 §
3(b); Exec Order No. 13,839 § 3.
This Court has no doubt that the net effect of these provisions is to put an entire
hand on the scale with respect to certain negotiable provisions of a collective
bargaining agreement before negotiations even begin (never mind the thumb), and to
require agency negotiators to cut off any digits that union representatives might seek to
extend in the hopes of reaching an agreement on these particular issues. In effect,
agency negotiators are told that they must enter into the negotiating arena wielding
predetermined goals, and must be prepared to fight to the death on these prescribed
issues, in a manner that, in this Court’s view, is not meaningfully susceptible to the
open “give and take” negotiating process that the duty to bargain in good faith
anticipates. Fed. Aviation Admin. Nw. Mountain Region Seattle, WA , 14 F.L.R.A. at
672. Indeed, “[s]ection 7114(b) of the [FSLMRS] obligates” agencies and unions “to
send representatives to the bargaining table who are fully authorized to discuss and
negotiate over any condition of employment.” Am. Fed. of Gov’t Emps., Local 1916, 64
F.L.R.A. 1171, 1172 (2010) (emphasis added). But the norm-setting sections of these
Orders effectively remove full negotiation authority from agency officials in the
covered circumstances, and rather than seeking to promote the “open mind” approach to
collective bargaining negotiations that the FSLMRS unques tionably promotes,
Amalgamated Transit Union Int’l AFL–CIO, 767 F.2d at 949 (internal quotation marks
and citation omitted), these challenged provisions of the Orders require the following of
agency negotiators: to commit to keeping the presumptive positions in the forefront of
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their consciousness; to dedicate all the time and resources necessary to achieving these
positions; and to answer to the Director of OPM and the President of the United States
about their failed negotiating strategy, if, in some unli kely scenario, they cannot secure
the desired result.
Under the FSLMRS, the collective bargaining process is not a c utthroat death
match. Cf. Nat’l Labor Relations Bd. v. Katz, 369 U.S. 736, 747 (1962) (suggesting
that behavior that “in effect . . . reflects a cast of mind against reaching agreement” is
inconsistent with good-faith bargaining (emphasis added)). Quite to the contrary,
Congress explicitly called for open-mindedness, civility, and sincere mutual effort when
it directed agency and labor representatives to bargain “in good faith.”
Section 5(e) of the Collective Bargaining Procedures Order conflicts with the
duty of good faith bargaining for a similar reason. That executive order provision
provides that, with respect to the manner of bargaining, agencies “shall request the
exchange of written proposals” and “should, at the soonest opportunity, take steps” to
remove any other approach to collective bargaining from current collective bargaining
agreements or collective bargaining ground rules. Exec. Order No. 13,836 § 5(e). For
even a “request” to conduct collective bargaining negotiations entirely on paper , and
especially pursuant to changed agency rules requiring this result, risks altering the
fundamental nature of the fair and flexible bargaining process that the FSLMRS
guarantees, for collective bargaining negotiations are supposed to involve flexible
exchanges between knowledgeable institutional actors who meet regularly to try to
come to an agreement. 5 U.S.C. § 7114(a)(4). The requested robotic exchange of
written proposals suggests that the kind of direct and personal contact that has to occur
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when negotiators are seated around a metaphorical table, discussing workplace
conditions, is not welcomed; moreover, it surely discourages the type of “give and take”
among equals that the negotiating process of the FSLMRS demands. See Fed. Aviation
Admin. Nw. Mountain Region Seattle, WA, 14 F.L.R.A. at 672. 17
What is more, a written-proposal request carries with it the implicit assertion that
the requestor (the agency representative) himself does not have “full” authority to
commit or to comment about union proposals, see Am. Fed. of Gov’t Emps., Local 1916,
64 F.L.R.A. at 1172; instead, his task is to compile a record of union suggestions in a
format that other agency officials (folks who are not otherwise engaged in the
negotiations) can review. See, e.g., Exec. Order. 13,836 § 5(e) (stating that this
provision will “facilitate resolution of negotiability issues and assess the likely effect of
specific proposals”). While having a comprehensive listing of all that has ever been
offered might well make the supervision of an individual agency negotiator’s game-time
strategy decisions easier, see, e.g., Exec. Order No. 13,837 § 3(a), it is also
unquestionably constraining (of a piece with the substantive negotiating restrictions
described above) from the standpoint of the government official who is charged with
the responsibility of negotiating in good faith.
Notably, section 5(e) of the Collective Bargaining Procedures Order not only
introduces an element of inflexibility into the process of negotiating that is antithetical
to the good faith negotiations that the FSLMRS guarantees, but it also expressly
prevents negotiation over whether or not proposals must be made in writing—which is
17
With respect to the same matter, “rigidity” and “fluidity” are opposing concepts. See, e.g., Paul J.
Hagerman, Flexibility of RNA, 26 Ann. Rev. of Biophysics and Biomolecular Structur e 139 (1997)
(examining the helix and nonhelix components of RNA).
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an otherwise negotiable term of a collective bargaining agreement. See 5 U.S.C.
§ 7114(a)(4). (See also AFSCME’s Reply at 19.) Consequently, in terms of FSLMRS
transgressions, this provision of the Order comes up snake eyes, as it has the unenviable
distinction of patently conflicting with both the duty to bargain and the duty to bargain
in good faith. (See Part IV.D.2, supra.)
Defendants’ Best ‘No-Conflict’ Counterarguments Are Meritless
In their briefs and during the hearing, Defendants made a host of compelling
counterarguments, but upon reflection, none of them effectively counters this Court’s
conclusion that the challenged provisions of the Orders described above exceed the
President’s statutory authority because they conflict with the letter and the spirit of the
FSLMRS. (See Part IV.D.2 and 3.) Only two of Defendants’ contentions are worth
addressing here. 18
a. The Specious Section 7117 Suggestion
Defendants vigorously maintain that the President has the st atutory authority to
issue the challenged executive order provisions notwithstanding any conflict with the
tenets of FSLMRS—and, in fact, the President has explicit authorization to contradict
Congress—because the Orders qualify as “Government-wide rule[s]” under section
7117(a)(1). To hear Defendants tell it, the following statutory statement provides the
window through which Congress has permitted the President to toss any of the other
labor relations mandates that Congress has made:
[T]he duty to bargain in good faith shall, to the extent not
inconsistent with any Federal law or any Government-wide rule
18
To the extent that Defendants’ briefs make the argument that what the President set out to do with
these Orders was to regulate the conduct of federal employees and agencies (see, e.g., Defs.’ Mem. at
49), the Court notes that Defendants have also maintained that the Orders were “designed to promote
more efficient and effective approaches to federal -sector collective bargaining and labor -management
relations” (id. at 17). In this Court’s view, Defendants cannot have it both ways.
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or regulation, extend to matters which are the subject of any rule
or regulation only if the rule or regulation is not a Government -
wide rule or regulation.
5 U.S.C. § 7117(a)(1). (See Defs.’ Reply at 21 (characterizing Collective Bargaining
Procedures Order section 6, Official Time Order sections 4(a) and (b), and Removal
Procedures Order section 4 as “a lawful exercise of the President’s authority to issue
consistent rules across the federal workforce”).)
The strangeness of Defendants’ contention that, in the context of a statute that
Congress has crafted to protect workers’ rights to good-faith collective bargaining,
Congress intended to confer upon the President the power to issue executive orders that
nullify those protections, cannot be overstated. A plain, compelling, and entirely
reasonable alternative explanation for the statute’s language carving-out “Government-
wide rule[s] or regulations” is that government-wide standards sometimes relate to
various terms and conditions of employment in the civil service. See, e.g., Nat’l Fed’n
of Fed. Emps., Local 2015, 41 F.L.R.A. 1158, 1185–86 (1991) (concerning President
Ronald Reagan’s Drug-Free Workplace Executive Order). And section 7117 merely
clarifies that any such requirement naturally has to be applied to federal workers, so, as
a result, such government-wide rules must be excluded from the scope of collective
bargaining. See 5 U.S.C. § 7117(a)(1). This is the simplest, narrowest, and most
straightforward reading of the plain text of the section 7117(a)(1) exemption from
bargaining. By contrast, Defendants employ an analysis that is akin to verbal jujitsu:
their first move is to contend that the President can certainly issue executive orders that
qualify as “government-wide rules” (Defs.’ Reply at 20–21); then, they confidently
maintain that the President has the authority to opt to make such governm ent-wide rules
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apply to federal-sector labor relations “in a specific way” (id. at 23 (internal quotation
marks, italics, and citation omitted). For the grand finale, they reasons that clearly
Congress must have intended for the President to employ this power to impact federal
sector labor relations by taking select matters off the collective bargaining table
nationwide per the language of section 7117, because that provision plainly states that
“matters which are the subject of any rule of regulation” that qualifies as “a
[g]overnment-wide rule or regulation” (read: any executive order the President wishes
to craft) are necessarily exempted from good-faith bargaining (id. at 20–23).
In so arguing, Defendants have (voila!) made a distracting shiny object out of an
otherwise entirely unremarkable statutory exemption. But this Court has kept its focus
on Congress’s stated “findings and purposes,” which provide clear context for the
statute in which section 7117 is nestled. As has by now been said repeatedly, Congress
enacted the FSLMRS to protect and preserve collective bargaining rights, not to destroy
them. Thus, what Defendants’ section 7117 analysis has not answered—and cannot
answer—is why an exception to collective bargaining principles that allows the
President (or any other agency official, for that matter) to pick off any of the mandatory
or permissive topics of negotiation that Congress took care to delineate in the FSLMRS ,
and put it into the management rights (non-negotiable) bundle, would ever be inserted
in this statute? Defendants attempt to distract from this fundamental unanswered
inquiry by providing a detailed discussion of the reason why the scope of its favored
interpretation is actually less expansive than its implications might suggest. ( See, e.g.,
id. at 22 (emphasizing the “narrowness” of a conclusion that the President is authorized
to “direct the exercise of existing management prerogatives in a specific way, so that
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particular subjects or appropriate arrangements are identified as inappropriate topics of
bargaining” (emphasis in original) (internal citation and quotation marks omitted)).)
But with respect to the actual question at issue, the silence is deafening; there is no
rational explanation for Defendants’ suggestion that Congress would have intended for
the President to have the power to act in this fashion at all in regard to the matters that
the FSLMRS specifically characterizes as negotiable. Quite frankly, it is hard to even
imagine a rational statutory exception that is intentionally designed to swallow the rule.
Not surprisingly, the D.C. Circuit has confirmed that the government officials
are not permitted to issue government-wide regulations “that merely restate[] a
statutorily guaranteed prerogative of management” in order to “render a bargaining
proposal nonnegotiable when the underlying statutory prerogative does not do so[.]”
Office of Pers. Mgmt. v. Fed. Labor Relations Auth., 864 F.2d 165, 166 (D.C. Cir.
1988). Put another way, contrary to Defendants’ assertions, the government cannot use
section 7117(a)(1) to “circumvent” other portions of the FSLMRS. Id. at 168; see also
Equal Emp’t Opportunity Comm’n v. Fed. Labor Relations Auth. , 744 F.2d 842, 853
(D.C. Cir. 1984). Yet, that is precisely what Defendants say Congress has authorized
the President to do, when they press the section 7117 argument here. That is, rather
than asking this Court “to give [the] statute the most harmonious, comprehensive
meaning possible, and not to impute to Congress a purpose to paralyze with one hand
what it sought to promote with the other[,]” Office of Pers. Mgmt., 864 F.2d at 168
(internal quotation marks and citations omitted), Defendants insist that, pursuant to
section 7117, the President has the authority to “lawfully prescribe Government -wide
rules that have the effect of removing subjects from the scope of collective
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bargaining[,] as he has done here” (Defs.’ Reply at 20). But in the words of the D.C.
Circuit, “[i]t strains plausibility to assert . . . that Congress could have made statements
in support of” collective bargaining and the various rights conferred throughout the
FSLMRS “while simultaneously fashioning an omnipotent veto mechanism in the form
of government-wide regulations[.]” Office of Pers. Mgmt., 864 F.2d at 170.
U.S. Department of the Treasury, IRS v. Federal Labor Relations Authority, 996
F.2d 1246 (D.C. Cir. 1993), is not to the contrary. (See, e.g., Defs.’ Mem. at 36–38;
Defs.’ Reply at 22–23.) In IRS, the D.C. Circuit concluded that an OMB circular
directing agencies in the exercise of their prerogatives under the management rights
section of the FSLMRS qualified as a government-wide rule under section 7117. See
996 F.2d at 1250–51. The circular at issue addressed the implementing “agency’s own
internal appeal system,” id. at 1248, and in characterizing the circular’s tenets as a
“government-wide rule” that was exempted from bargaining under section 7117, the
Circuit observed that the union could not reasonably rely on the “general right to
grieve” under the FSLMRS to demand that the agency commence bargaining over
appeal processes, notwithstanding the circular, id. at 1251. This holding made
imminent sense, and was entirely consistent with Office of Personnel Management,
because the circular was directed at agency appeals, and not the collective bargaining
process. See Office of Pers. Mgmt., 864 F.2d at 170 (explaining that section 7117(a)(1)
may be used to “direct[] the exercise of existing management prerogatives in a specific
way, so that particular subjects or appropriate arrangements are identified as
inappropriate topics of bargaining”). In other words, the circular’s policy
pronouncement was not designed to thwart collective bargaining rights; at most, it had a
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merely incidental effect on workers’ collective bargaining rights. Nothing in the IRS
case, or in any other case involving section 7117 that Defendants have cited, authorizes
direct regulation of the scope of bargaining through the adoption of government-wide
rules. See, e.g., U.S. Dep’t of the Navy v. Fed. Labor Relations Auth., 665 F.3d 1339,
1347 (D.C. Cir. 2012) (appropriations law preventing bargaining over the provision of
free bottled water); Overseas Educ. Ass’n, 827 F.2d at 816–17 (State Department
regulations regarding overseas employees prohibited negotiating over em ployment
benefits).
Even if section 7117(a)(1) could be used to regulate collective bargaining
directly in the way that Defendants suggest, it cannot seriously be maintained that
Congress has authorized the President to abrogate the right to “bargain collectively” as
the challenged provisions of the Orders do here. See IRS, 996 F.2d at 1251 (observing
that “some important limitations on the government’s ability to diminish the scope of
collective bargaining through government-wide regulations” exist). To read section
7117 to permit the President to trump the statutory right to “bargain” would elevate
7117(a)(1) far above sections 7101(a), 7102(2), and 7103(a)(12), in a manner that
dwarfs Congress’s clear efforts to guarantee this right. Cf. Chertoff, 452 F.3d at 861
(“The problem with . . . the Government’s arguments . . . is that they elevate one
provision of the [statute] over another[.]”). Defendants appear to admit that the
President does not have that power. (See Defs.’ Reply at 31 (admitting that there exist
“statutory limitations on the President’s authority to act in this area”).) But the irony of
their section 7117 argument—i.e., that in the context of a statute that was motivated in
large part by Congress’s belief that it was necessary to prot ect federal collective
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bargaining processes from the vagaries of rogue presidential action (see Part IV.C.,
supra), Congress intended to insert an exception that authorized the President to target
and eliminate workers’ statutory bargaining rights—seems to be lost on them.
b. The Mistaken ‘Mere Guidance’ Characterization
The other ‘no conflict’ argument that merits discussion is Defendants’ repeated
suggestion that many provisions in these Orders merely provide goals for agencies to
strive towards, and therefore cannot conflict with the FSLMRS by nature. (See Defs.’
Mem. at 46 (suggesting that orders that do not constitute “hard -and-fast rules” cannot
conflict with the substantive rights conferred by statute) .) This counterargument also
fails to carry the day. Even if such provisions are “deliberately flexible[,]” and even if
nothing “precludes [agencies] from” deviating from the “objectives” within these
provisions (id.), such directives can violate the duty to bargain in good faith that the
FSLMRS prescribes nevertheless, and for the reasons laid out in Part IV.D.3, supra,
they do so.
Defendants’ argument fails to appreciate that the conflict at issue with respect to
these provisions is not in identifiable tension with a particular substantive requirement
over which agencies and unions must bargain (as is the case with the right to bargain
transgressions (see Part IV.D.2, supra)). Rather, for the purpose of this Court’s
analysis, the relevant conflict is the distinct (and admittedly general) statutory
obligation that the parties must undertake to negotiate in “good faith[.]” 5 U.S.C.
§ 7114(b). In other words, with respect to these types of provisions, the nature of the
President’s order (i.e., whether he seeks to give guidance as opposed to laying down a
hard-and-fast rule) makes no difference; instead, the key question is whether these
suggestions impair the ability of agency officials to keep an open mind, and to
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participate fully in give-and-take discussions, during collective bargaining negotiations.
See id.; see also United Steelworkers of Am., 983 F.2d at 245 (defining the duty of good
faith). This Court has concluded that the guidance the President has provided to federal
agency negotiators in the context of the Orders does just that. (See Part IV.D.3, supra.)
Finally, it makes no difference that the President’s guidance in the context of
these challenged Order provisions is packaged with “repeated directives that agencies
must continue to meet their statutory duty to bargain in good faith.” (Def s.’ Mem. at
73; see also id. at 45–46; 50–52.) See Exec. Order No. 13,836 §§ 5(a), 5(b); Exec.
Order No. 13,837 § 3(a); Exec. Order No. 13,839 § 3. That command does not abate
the conflict, for, as Part IV.D.3, supra, explains, prescribing specified goals and
suggesting fixed outcomes while simultaneously flashing the coercive implement of
mandatory reporting requirements, wreaks a kind of damage with respect to the
negotiating mindset of agency officials that a subsequent, generalized ‘follow the law’
directive simply can’t undo.
As the D.C. Circuit has recognized, “it takes more than mere surface bargaining”
for a party to act in good faith “for purpose[s] of collective bargaining.” Cap Santa
Vue, Inc. v. Nat’l Labor Relations Bd., 424 F.2d 883, 889 (D.C. Cir. 1970) (internal
quotation marks and citation omitted). And this Court has already found that, with
respect to the matters at issue, the suggested policies in the challenged executive order
provisions pay only lip service to the statutory duty to bargain in good faith. (See Part
IV.D.3, supra.) Having essentially demanded that agency representatives seek specific
ends, and use specific means, in a manner that prevents full and open collective
bargaining negotiation, the Orders cannot be saved due to their clever (albeit internally
112
inconsistent) directive that, notwithstanding these suggestions, an agency negotiator
should nevertheless act in the manner that the FSLMRS requires. Cf. Cap Santa Vue,
424 F.2d at 889 (“[B]ad faith is prohibited though done with sophistication and
finesse.” (internal quotation marks and citation omitted)).
The Remaining Challenged Provisions Of These Executive Orders Are
Legitimate Exercises Of The President’s Authority
This Court now arrives at the final stop in the epic journey that the parties’
various claims and arguments have required it to consider. Here, the Court reaches a
clear conclusion—not each and every provision that the Unions challenge within the
Orders runs afoul of a right protected within the FSLMRS or within the CSRA.
For example, with respect to the Unions’ claim that section 5(c) of the Collective
Bargaining Procedures Order is an unauthorized exercise of presidential power (see
AFSCME’s Mem. at 28–29), the Court discerns no conflict with the FSLMRS. This is
because Section 5(c) merely provides that, if union representatives delay or impede
negotiations in bad faith, federal agency representatives shall only “consider” filing an
unfair labor practice or unilaterally implementing a proposal. Exec. Order No. 13,836
§ 5(c). The FSLMRS plainly authorizes such filings in appropriate situations, and
nothing in the Order requires agencies to take steps incompatible with that statutory
authorization. See 5 U.S.C. § 7116(b)(5); U.S. Dep’t of the Justice, Immigration &
Naturalization Serv., 55 F.L.R.A. 892, 904 (1999) (explaining that an agency may
implement changes unilaterally if “implementation is necessary for the functioning of
the agency”). Thus, contrary to the Unions’ suggestion (see AFSCME’s Mem. at 28–
29), this Order provision does not contradict the statute.
Nor do section 2(j) of the Official Time Order or section 2(c) of the Removal
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Procedures Order (see NTEU’s Mem. at 31–34; AFGE’s Mem. at 20–21), present
statutory conflicts. These provisions are little more than general statements that define
other terms in the Orders, or they espouse abstract policy principles that are too
generalized to dictate particular outcomes. See, e.g., Exec. Order No. 13,837 § 2(j)
(defining the phrase “union time rate”); Exec. Order No. 13,839 § 2(c) (remarking, inter
alia, that “[e]ach employee’s work performance and disciplinary history is unique, and
disciplinary action should be calibrated to the specific facts and circumstances of each
individual employee’s situation”); see also id. § 7 (referring to the items under section
2 as “policies” as compared to the “requirements” in other sections). Such statements
do not have any independent operative legal effect. Cf. Sierra Club v. Envt’l Prot.
Agency, 873 F.3d 946, 951 (D.C. Cir. 2017) (“Policy statements are binding on neither
the public nor the agency, and the agency retains the discretion and the authority to
change its position[.]” (internal quotation marks and citation omitted)). Therefore, it is
unclear whether the Unions have Article III standing to challenge these types of
provisions, standing alone. See Lujan, 504 U.S. at 560 (standing requires “an invasion
of a legally protected interest”); id. at 561 (stating that plaintiffs must set forth
“evidence” demonstrating, via “specific facts[,]” the elements of Article III standing) .
Regardless, any challenge to the President’s expression of such abstract policy views
about ‘progressive discipline’—a topic that the FSLMRS commits entirely to the
discretion of management (see infra)—would necessarily fail on the merits.
The Unions have challenged section 4(b)(iii) of the Removal Procedures Order,
which specifically informs federal agencies that they must refuse to bargain over any
proposal “that limits the agency’s discretion to remove an employee from Federal
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service without first engaging in progressive discipline[,]” Exec. Order No. 13,839
§ 4(b)(iii), but this Court agrees with Defendants that this particular provision lines up
with the FSLMRS. Section 7106(a)(2) of Title 5 of the United States Code specifically
exempts from the duty to bargain in good faith issues regarding the power of
management “to suspend, remove, reduce in grade or pay, or take other disciplinary
action against [agency] employees[.]” 5 U.S.C. § 7106(a)(2)(A). In addition, the
FLRA has considered such a policy prescription, and has determined that a proposal
that requires an agency “to administer discipline in, among other things, a progressive
and consistent manner” need not be bargained over, because “[r]estrictions on an
agency’s ability to choose the specific penalty to impose in disciplinary actions directly
interfere with management’s right to discipline employees under section 7106(a)(2)(A)
of the [FSLMRS].” Am. Fed. of Gov’t Emps., AFL-CIO, Local 3732, 39 F.L.R.A. 187,
198 (1991); see also Patent Office Prof’l Ass’n, 47 F.L.R.A. 10, 53–54 (1993)
(concluding that a system of “progressive discipline” was nonnegotiable under section
7106(a) of Title 5 of the United States Code). As a result, and due to the Chevron
deference the FLRA receives, the Unions’ challenges to this provision (see AFSCME’s
Mem. at 19; NFFE’s Mem. at 36), have no merit.
The Unions’ challenges to section 4(c) of the Official Time Order and section 7
of the Removal Procedures Order are similarly deficient. (See NFFE’s Mem. at 34–35,
40; AFSCME’s Mem. at 37.) Congress has clearly vested OPM with the authority to
“execut[e], administer[], and enforc[e] the civil service rules and regulations of the
President and the Office and the laws governing the civil service[,]” 5 U.S.C.
§ 1103(a)(5)(A), and with the authority to “aid[] the President, as the President may
115
request, in preparing such civil service rules as the President prescribes,” id.
§ 1103(a)(7). This Court has already explained that the President himself has the
authority to issue executive orders within the sphere of federal labor -management
relations (see Part IV.C., supra), and he also has the undisputed authority to “empower
the head of any department or agency[,]” including OPM, to perform “any function
which is vested in the President by law,” 3 U.S.C. § 301. Thus, given the multiple
wellsprings of authority that OPM enjoys in this area, OPM can surely receive
directions from the President to promulgate regulations that are consistent with the
rights and duties that the FSLMRS or CSRA prescribe, and setting aside the invalidity
of some of the underlying substantive mandates, OPM ’s implementation of the Orders
themselves appears to be all that section 4(c) of the Official Time Order and section 7
of the Removal Procedures Order require.
Finally, one of the Unions has raised a constitutional Take Care Clause claim
against Defendants; at this point, the contention seems to be that, even if the Court
finds that the remaining executive order provisions do not create statutory conflicts
with FSLMRS, these provisions, too, must be enjoined as a violation of the President’s
duty to “take care that the laws be faithfully executed.” (AFSCME’s Mem . at 10 (“This
clause commands that the President shall execute this duty with ‘care’ and ‘faithfully’;
this duty is therefore one of good faith towards Congressional statutes[.]”).) At bottom,
this argument suggests that the manner in which the President has interpreted and
enforced the FSLMRS and the CSRA has not been in good faith, and thus, his act of
issuing these Orders violates the Constitution’s Take Care Clause. (See id. at 10–11.)
As an initial matter, it is not at all clear that a claim under the Take Care Clause
116
presents a justiciable claim for this Court’s resolution. See Citizens for Responsibility
and Ethics in Wash. v. Trump, 302 F. Supp. 3d 127, 138–40 (D.D.C. 2018) (debating
the justiciability of such claims). But even “assuming [that] some universe of viable”
and justiciable “Take Care Clause claims exists,” id. at 140, the claim that AFSCME
raises here has not been plausibly asserted, much less established, and thus cannot be
sustained. AFSCME merely alleges that the President cannot “dispense with the
requirement of good faith negotiations” and must “act in good faith in executing the
statute himself[.]” (See AFSCME’s Mem. at 16 – 17.) But the instant record contains
no evidence of intentional bad-faith decisionmaking on the part of the President. And
absent such evidence (or at least some indication that the Orders issued here exceed the
statutory authority of the President in a manner that clearly implicates his constitutional
duties and prerogatives that AFSCME says apply)—this Court will decline to hold that
there has been a Take Care Clause violation. See Dalton, 511 U.S. at 472 (“Our cases
do not support the proposition that every action by the President, or by another
executive official, in excess of his statutory authority i s ipso facto in violation of the
Constitution. On the contrary, we have often distinguished between claims of
constitutional violations and claims that an official has acted in excess of his statutory
authority.”).
* * *
The end is nigh. As explained in Part IV.D of this Memorandum Opinion, many
of the challenged provisions of the President’s Orders constitute an improper exercise
of his statutory authority to regulate federal employees’ labor relations, because they
conflict with the right to good-faith collective bargaining that the FSLMRS seeks to
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protect. The Orders that the President issued on May 25, 2018, and that have been
evaluated extensively in this Opinion, will not be invalidated in toto, however, given
the President’s clear intent that any invalid provisions within these orders should be
severable from the rest. See, e.g., Exec. Order No. 13,837 § 9(f); Exec. Order No.
13,839 § 8(e); cf. Ass’n of Am. R.R. v. U.S. Dep’t of the Transp., et al., 896 F.3d 539,
544 (D.C. Cir. 2018) (“[T]he remedy should be no more severe than necessary to cure
the disease.”). Furthermore, the Court has concluded that the challenged provisions of
the Orders that are addressed herein in Part IV.E are not invalid. Thus, along with the
unchallenged parts of the Orders, these provisions remain.
V. CONCLUSION
In their cross-motion for summary judgment, Defendants assert that the fact “that
the President’s policy choices about how best to guide the conduct of e mployees in the
Executive Branch do not align with Plaintiffs’ own policy preferences is not a proper
basis for seeking judicial review.” (Defs.’ Mem. at 71.) This is undoubtedly true. But
the core claim that the Unions make in the context of the instant case is that the
President’s policy choices as reflected in the challenged executive orders do not align
with the policy preferences of Congress, and in this Court’s view, that contention is
undoubtedly true as well.
In short, there is no dispute that the principle mission of the FSLMRS is to
protect the collective bargaining rights of federal workers, based on Congress’s clear
and unequivocal finding that “labor organizations and collective bargaining in the civil
service are in the public interest.” 5 U.S.C. § 7101(a). Congress did not intend for
union challenges to the validity of executive orders that threaten such collective
118
bargaining rights to be funneled to the FLRA. Upon exercising its subject-matter
jurisdiction over the ripe claims that the Unions bring here, this Court has concluded
that many of the challenged provisions of the Orders at issue here effectively reduce the
scope of the right to bargain collectively as Congress has crafted it, or impair the ability
of agency officials to bargain in good faith as Congress has directed, and therefore
cannot be sustained.
As a result, and as set forth in the accompanying Order, this Court will declare
the following provisions invalid, and will enjoin the President’s subordinates from
implementing or giving effect to: Executive Order 13,836 §§ 5(a), 5( e), 6; Executive
Order 13,837 §§ 3(a), 4(a), 4(b); and Executive Order 13,839 §§ 3, 4(a), 4(c). What
remains— Executive Order 13,836 § 5(c); Executive Order 13,837 §§ 2(j), 4(c); and
Executive Order 13,839 §§ 2(b), 2(c), 4(b)(iii), 7—are the few challenged directives
that have neither reduced the scope of protected collective bargaining rights nor
hampered good faith bargaining, and, thus, cannot be said to conflict with the FSLMRS.
Furthermore, given these conclusions, the parties’ various cross -motions for summary
judgment are GRANTED IN PART AND DENIED IN PART.
DATE: August 25, 2018 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
119
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837 F.2d 1089
Fabritusv.Unknown Assailants*
NO. 87-5598
United States Court of Appeals,Fifth Circuit.
JAN 14, 1988
1
Appeal From: W.D.Tex.
2
DISMISSED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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107 F.2d 987 (1939)
UNITED STATES (NOYES, Commissioner of Agriculture and Markets of State of New York, Intervener)
v.
ADLER'S CREAMERY, Inc.
No. 168.
Circuit Court of Appeals, Second Circuit.
November 13, 1939.
*988 Samuel Rubin, of New York City, for defendant-appellant.
John S. L. Yost and Robert M. Cooper, Sp. Assts. to Atty. Gen., and Margaret H. Brass, Sp. Atty., of Washington, D. C., for the United States.
Before SWAN, CHASE, and CLARK, Circuit Judges.
CHASE, Circuit Judge.
This suit was brought by the United States pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, 7 U.S.C.A. Sec. 601 et seq., to enforce an order, known as Order No. 27, which was issued by the Secretary of Agriculture by virtue of authority conferred upon him by the above mentioned statute. The appellee Noyes, as Commissioner of Agriculture and Markets of the State of New York, was duly permitted to intervene as a party plaintiff. The order first became effective on September 1, 1938; it was later suspended as of January 31, 1939; and still later on July 1, 1939, it was reinstated and since has been in effect.
The order undertook to regulate the handling of milk in the New York Metropolitan Marketing Area in so far as to cover such milk which is in the current of interstate commerce or which directly burdens, obstructs or affects such commerce and was applicable to all who were handlers of such milk as defined therein. The validity of the order was upheld in United States v. Rock Royal Co-operative, Inc., 59 S.Ct. 993, 83 L.Ed. 1446, and is no longer disputed.
The appellant during the period covered by the complaint operated two receiving plants in the State of New York where it received milk which was produced wholly within the State of New York and was transported within that state to the City of New York where it was sold to a distributor who prepared it for market and sold it either for use or resale, all within the City of New York. This milk was not physically commingled with any other milk before sale for consumption. The appellant complied with the provisions of Order No. 27 for the months of September and October, 1938. Competitors, however, questioned the validity of the order; refused to comply; and in November, 1938, in a suit brought in the District Court for the Northern District of New York, United States v. Rock Royal Co-op., 26 F.Supp. 534, the court declined to grant a preliminary injunction to compel compliance. Final *989 decision in the district court was a dismissal of the bill and that resulted in holding further attempts to enforce the order in abeyance until that decision was reversed by the Supreme Court in United States v. Rock Royal Co-operative, Inc., supra. Meanwhile the operation of Order No. 27 was suspended and later reinstated as noted above. The appellant did not make the payments as provided by the order for the period beginning with the month of November, 1938, and continuing to January 31, 1939, the effective date of the suspension. Since the order was re-instated, effective on July 1, 1939, the appellant has complied with it in so far as it covered the period since the effective date of its reinstatement.
The first question is whether or not the appellant is a handler subject to the provisions of Order No. 27. If so, we do not understand that there is any dispute as to the amounts for which it is liable for the three months it has failed and refused to comply with the order. Handler, as defined generally in the order, "means any person who engages in the handling of milk, or cream therefrom, which is received at a plant approved by any health authority for the receiving of milk to be sold in the marketing area, which handling is in the current of interstate commerce or directly burdens, obstructs, or affects interstate commerce." The appellant's primary contention that it was not such a handler during the period of its non-compliance is based on the fact that it was engaged solely in handling intrastate milk together with its claim that its handling of such milk did not directly burden, obstruct or affect interstate commerce. It also points out that Order No. 27 was expressly made effective only "* * * after the issuance by the Commissioner of Agriculture and Markets of the State of New York of an order containing provisions similar to the provisions of this order and to which the order shall be complementary * * *" and insists that if it is subject to any order, it is only to the state order which was duly issued and made effective as of September 1, 1938. Its other grounds for reversal are that the present enforcement of the order for the period from November 1, 1938, to January 1, 1939, violates the due process clause of the Fifth Amendment, U.S.C.A.Const., and that in any event a preliminary mandatory injunction in effect decided the whole cause before it had an adequate opportunity to be heard on the merits and was improper.
There was sufficient support for findings of fact which the court made to the effect that about one-third of the milk produced for sale in the New York Metropolitan Marketing Area comes from states other than New York and about one-sixth of the milk produced in the State of New York for sale in that marketing area crosses state lines on its way to that market. About one-half of all the milk produced for sale in that marketing area is actually moved in interstate commerce while being brought to market; such milk as that which the appellant handled, and now handles, is sold in that market in active competition with milk brought there in interstate commerce and the latter cannot compete with unregulated milk in the marketing area. These facts are, therefore, to be taken as established on this appeal. Guilford Const. Co. et al. v. Biggs, 4 Cir., 102 F.2d 46.
Accepting them, accordingly, we believe the appellant is a handler as defined in Order No. 27 in that its business involves dealing in milk in a way which directly burdens, obstructs and affects interstate commerce within the scope of the decision of the Supreme Court in United States v. Rock Royal Co-operative, Inc., supra. It is true that the milk with which the court was immediately concerned in that case had been moved in interstate commerce. But the power of Congress to protect interstate commerce from being burdened or obstructed is not confined to the regulation of actual movement across state lines. It extends to whatever action becomes necessary to free, or keep free, from obstruction the lawful passage of commodities from state to state. National Labor Relations Board v. Jones & Laughlin, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352; Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 59 S. Ct. 206, 83 L.Ed. 126. And the recognition that this may involve the incidental regulation of intrastate commerce is by no means new. Wisconsin R. R. Commission v. Chicago, B. & Q. R. R. Co., 257 U.S. 563, 42 S. Ct. 232, 66 L.Ed. 371, 22 A.L.R. 1086; Houston, E. & W. Texas R. Co. v. United States, 234 U.S. 342, 34 S.Ct. 833, 58 L.Ed. 1341.
We interpret the decision in United States v. Rock Royal Co-operative, Inc., supra, to mean that milk which has not crossed a state line but which is distributed in a marketing area in such a way that its marketing is merely part of what is from *990 the public standpoint one marketing operation which includes interstate milk may be the subject of federal regulation whenever that is necessary to prevent a direct burden upon or obstruction to the coming of interstate milk into the marketing area. While due regard is to be given to maintain purely intrastate affairs free from federal encroachment, Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947, and Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160, the regulation of interstate commerce through marketing control is lawful and, being so, the incidental power to protect interstate commerce so regulated from direct burdens or obstructions extends to what has become, or is reasonably sure to become, such a burden or obstruction because of the fact that interstate commodities can move in commerce only subject to marketing control. What is, or is likely to be, such a burden or obstruction must be determined from the nature of the need for protection and where that need has been created by lawful marketing control of interstate commodities the scope of such protection covers the field, when necessary, of the similar marketing control of intrastate commodities. Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441; Mulford v. Smith, 307 U.S. 38, 59 S.Ct. 648, 83 L.Ed. 1092. Accordingly, the facts justifiably found below are sufficient to require us to hold that the appellant is a handler of milk who is bound to comply with the provisions of Order No. 27.
Nor is the order invalid under the due process clause of the Fifth Amendment, U.S.C.A.Const., because it may be economically burdensome upon the appellant in respect to payments to be made for past months during which the market in which it sold was upset by the then prevailing conditions. The order was then in effect to the extent that it had been duly made and, though it may have been a hard choice under the circumstances, the appellant was free to conduct its business in compliance with the order; to cease doing business if it was unwilling to comply; or to keep on without compliance and run the risk of the consequences. It chose the latter course and must bear whatever loss that choice entails. Hegeman Farms Corp. v. Baldwin, 293 U. S. 163, 55 S.Ct. 7, 79 L.Ed. 259. True enough, the appellant is obliged to pay what its failure to pay on time has made a past obligation but there is nothing retroactive about the order which makes the enforcement of payment a taking, without due process, of the property of the appellant. Mulford v. Smith, supra.
Yet a majority of the court does not think a preliminary mandatory injunction should have been issued. Congress has, indeed, provided for the enforcement of such orders and for enjoining their violation. 7 U.S.C.A. § 608a(6). The usual equitable basis for the proceeding need not be alleged or proved. American Fruit Growers v. United States, 9 Cir., 105 F.2d 722. But while equitable remedies have been provided they are still to be exercised in accordance with established equitable procedure.
The purpose of an injunction pendente lite is to guard against a change in conditions which will hamper or prevent the granting of such relief as may be found proper after the trial of the issues. Its ordinary function is to preserve the status quo and it is to be issued only upon a showing that there would otherwise be danger of irreparable injury. Community Natural Gas Co. v. City of Cisco, 5 Cir., 65 F.2d 320. While it may be granted to restore the status quo ante, it ought not to be used to give final relief before trial. Sims v. Stuart, D.C., 291 F. 707; Securities & Exchange Commission v. Torr, 2 Cir., 87 F.2d 446.
In this instance the preliminary mandatory injunction required payment by the appellant in advance of trial and permitted a distribution of the payments so made merely upon affidavits and before final decree. It did so notwithstanding that the only violation of the order at the time the injunction was granted, actual or reasonably to be contemplated, was a failure to make past payments which were due from a handler not shown to be in danger of becoming unable to pay before a final decree could be entered. There was no reason to believe, therefore, that delay in payment until after a final decree could be obtained would injuriously affect the present or future marketing control made effective by the order or cause any irreparable injury. This case differs from H. P. Hood & Sons, Inc., et al. v. United States et al., 1 Cir., 97 F.2d 677 which dealt largely with future payments, though some past due payments seem to have been involved also, in that here the handler acquiesced in the validity of the order and was not contesting its liability *991 for current or future payments in accordance with its terms. Consequently, the plaintiffs had no rights which were endangered by any delay that would be made necessary by a joinder of issue and a disposition of the matter by final decree. That being so, the preliminary mandatory injunction was improvidently granted.
Apparently no appreciable delay would have been necessary after the defendant filed its answer as it is probable that a motion for a summary judgment could then have been successfully made. We but advance that thought, without expressing any opinion, merely to point out that, if so, a quick and effective remedy was available which made the granting of an injunction of doubtful propriety even if a sufficient basis for it had otherwise been shown.
Order reversed.
CLARK, Circuit Judge, dissents.
CLARK, Circuit Judge (dissenting).
As the opinion herewith makes clear, the ultimate outcome of this litigation cannot be in doubt, in view of the decision in United States v. Rock Royal Cooperative, Inc., 59 S.Ct. 993, 83 L.Ed. 1446. The moving papers herein, in showing the need of a preliminary injunction, stress the fact that "experience had demonstrated that marketing orders can work effectively only if promptly and vigorously enforced" and point to the demoralization of marketing control not merely in the Boston milk area after United States v. David Buttrick Co., D.C., 15 F.Supp. 655 (reversed in 1 Cir., 91 F.2d 66), but also in the New York area by the failure of summary enforcement against this defendant and other defendants prior to the decision of the Supreme Court in the Rock Royal case. Plaintiff claims that unless it can secure prompt enforcement of milk orders against the remaining recalcitrant handlers, like disorderly marketing conditions will be repeated with eventual general non-compliance.[1]
The almost insurmountable difficulties of milk regulation are so well known that they need not be recited. Indeed, the newspapers call our attention to them daily. From Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469, on, the problems appear recurrently in the decisions. State and federal legislatures have attempted to cope with them. Here the United States and the State of New York have united their efforts and have adopted identical regulations, in an endeavor to bring order to possibly the most chaotic distributing situation we have in this country. Congress has stated clearly its desire for speedy and summary enforcement of these orders. 7 U.S.C.A. § 608a (6), cited in the opinion. I do not know how successful the program will ultimately prove to be, but I am loath to put even temporary obstacles in its way, now that the responsibility of the administrators has been made clear by the Supreme Court's affirmance of the legislative mandate. I think the need of a preliminary injunction has been shown.
It seems to me inconsistent to hold that the defendant's position is now legally unsupportable and yet grant it a temporary respite to contest the governmental orders for a time, with the inevitable result of abetting the demoralization of control. Here on the hearing below the defendant's real and only hope is to induce the Supreme Court to limit the Rock Royal decision. We may aid it to seek a speedy test of that hope, as we have done by giving it the benefit of a stay pending appeal, but that is all that is necessary. It has taken nearly four months for this action to get to its present point; it will certainly be back to us in a few months with the issues no more clearly framed than now. I think we shall not have aided the parties to a settlement of litigation by now reversing.
While a preliminary mandatory injunction is, of course, normally unnecessary, yet it is well within the equity powers of the court when the situation does call for it. Toledo, A. A. & N. M. R. Co. v. Pennsylvania Co., C.C., 54 F. 730, 19 L.R.A. 387, cited in Peoria & P. U. R. Co. v. United States, 263 U.S. 528, 535, 44 S.Ct. 194, 68 L.Ed. 427. In H. P. Hood & Sons, Inc., et al. v. United States et al., 1 Cir., 97 F.2d *992 677, such an injunction was granted covering back as well as future payments. In that case the ruling below, United States v. Whiting Milk Co., D.C., 21 F.Supp. 321, was modified to provide for payments into court, rather than to the market administrator. That was done in view of the then contemplated appeal to the Supreme Court. Now that constitutionality has been determined and also since the Milk Administrator retains sufficient funds in his equalization pool to make repayment, should that ever be required, a like modification here is less necessary.
The course of decision herein discloses, I believe, a defect in the new summary judgment rule, Rule 56, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Under the rules of many jurisdictions a summary judgment may be entered for either plaintiff or defendant, on the appropriate showing, as soon as the action is brought to the court or the defendant appears. English Rules under the Judicature Act, O. 3, r. 6, O. 14, 14A, 15; Conn.Pr.Bk.1934, § 53, p. 34; Ill.Rev.Stat. 1939, c. 110, § 181; Mass.Gen.Laws1932, c. 231, § 59B; R.I.Gen.Laws 1938, c. 524, § 1; but not N. Y. Rule of Civil Practice 113; 1 N.J.Rev.Stat.1937, 2:27-124 to 129, N.J.S.A. 2:27-124 to 2:27-129, and Supreme Court Rule 80, N.J.S.A. tit. 2; and Mich.Stat.Ann.1935, § 27.989. The first published draft of the Federal Rules so provided. Preliminary Draft, May, 1936, Rule 43(a). But the novelty of the procedure to many lawyers led to suggestions limiting its scope, so that as adopted, though a defendant may move for such a judgment at any time, a plaintiff or claimant may move only after an answering pleading is filed. Subdivisions (a) and (b) of Rule 56. Under the circumstances no reason of substance barred a final judgment below, and it is unfortunate that mere limitations of procedure may have done so. Amendment of Rule 56(a) eliminating this restriction on the valuable remedy of the summary judgment appears to the writer hereof to be highly desirable in the interest of preventing the protraction of litigation.[2]
It is not clear, however, why the plaintiff did not suggest avoidance of this difficulty, and the court did not take steps to that end. For the time for answer apparently had expired at the time the order below was made, and the court could have proceeded at once on the basis of a default unless the defendant speedily filed a formal answer saying in general language what its affidavits said specifically.
I would affirm.
NOTES
[1] "Unless the defendant and other handlers who are in default are immediately enjoined from continued violation of the Order, the inevitable result will be a resumption of disorderly marketing conditions followed by general non-compliance, the lowering of prices to producers and the disruption and burdening of commerce between the states." Affidavit herein of O. M. Reed, Acting Chief of the Dairy Section, Division of Marketing and Marketing Agreements, United States Department of Agriculture.
[2] The power of the Supreme Court to amend the new rules seems conceded by all, but some disagreement has arisen as to whether the Court may proceed by simple promulgation of the amendment, as in section 1 of the enabling statute, or must follow the cumbersome and delaying course of section 2 of that statute (transmittal to the Attorney General and report by him to Congress at the beginning of a regular session, with the change remaining non-effective until after the close of such session). Act of June 19, 1934, c. 651, §§ 1, 2, 48 Stat. 1064, 28 U.S.C.A. §§ 723b, 723c. It is believed that the history of the legislation supports the construction indicated by the language of the statute itself that the procedure required by section 2 applies to the one act there provided for, namely, the uniting of the law and equity rules, and that any other changes are to be made pursuant to the simpler methods of section 1 and of other grants of rule-making authority to the Court. 45 Harv.L.Rev. 1303, 1309-10; 86 Pittsb.Leg.J. 8, 27; 15 Tenn.L. Rev. 584, 585; 3 Moore's Federal Practice 3448-3452; but see A. B. A. Proceedings at Institutes, Vol. I, p. 179; Vol. II, p. 227; 24 A.B.A.J. 675; H.R. Rep. No. 2743, 75th Cong., 3d Sess.(1938) 3; Hearings before Committee on the Judiciary on H.R. 8892, 75th Cong., 3d Sess.(1938) 71.
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 01-1518
___________
United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the Western
v. * District of Missouri.
*
Allen Lee Paris, * [UNPUBLISHED]
*
Appellant. *
___________
Submitted: September 11, 2001
Filed: September 20, 2001
___________
Before LOKEN, RICHARD S. ARNOLD, and FAGG, Circuit Judges.
___________
PER CURIAM.
After using impermissible billing practices at his now defunct medical laboratory,
Dr. Allen Lee Paris was convicted of conspiracy to defraud Medicare and the Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS) in violation of
18 U.S.C. § 371. Most of the impermissible billing involved unbundling bills for
chemical tests, that is, separately billing for individual chemical tests that are routinely
run, and billed for, as a group. Unbundled billing resulted in a higher rate of
reimbursement. Paris now appeals his conviction and sentence of 27 months
imprisonment, a $30,000 fine, and $222,654.66 in restitution imposed by the district
court.* Paris contends the evidence was insufficient to show there was a conspiracy to
defraud the government, the government improperly misstated the law in closing
argument, and the government did not adequately prove the amount of loss used to
calculate his sentence. Having considered the briefs and the record, we reject Paris’s
contentions and affirm.
Although Paris advances three arguments disputing the sufficiency of the
evidence underlying his conviction, we conclude the district court did not mistakenly
deny Paris’s motion for judgment of acquittal. Drawing all reasonable inferences in the
light most favorable to the jury’s verdict, there was sufficient evidence of a continuing
conspiracy to permit a jury reasonably to find Paris guilty beyond a reasonable doubt.
See United States v. Hart, 212 F.3d 1067, 1070-71 (8th Cir. 2000) (standard of
review), cert. denied, 121 S. Ct. 860 (2001); see also United States v. Peterson, 223
F.3d 756, 759-60 (8th Cir. 2000) (finding sufficient evidence of conspiracy to defraud
Medicare where employees submit impermissible claims per employer’s instructions),
cert. denied, 121 S. Ct. 1149 (2001). Because the district court’s curative jury
instruction provided the jury with a correct statement of law that conspiracy requires
two human participants, Paris was not deprived of a fair trial by the prosecutor’s single
mistaken comment in closing argument that Paris could conspire with his wholly-owned
corporation. See United States v. O’Dell, 204 F.3d 829, 835 (8th Cir. 2000). Finally,
having concluded that the district court’s finding of the amount of loss attributed to
Paris’s fraudulent billing practices is not clearly erroneous, we reject Paris’s contention
that his sentence is incorrect. See United States v. Berndt, 86 F.3d 803, 811 (8th Cir.
1996).
Finding no reversible error, we affirm Paris’s conviction and sentence.
*
The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.
-2-
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-3-
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06-5119-cr
USA v. Bermudez
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 August Term 2007
5 (Argued: March 10, 2008 Decided: June 17, 2008)
6 Docket No. 06-5119-cr
7 -----------------------------------------------------x
8 UNITED STATES OF AMERICA,
9
10 Appellee,
11
12 -- v. --
13
14 RICHIE BERMUDEZ,
15
16 Defendant-Appellant.
17
18 -----------------------------------------------------x
19
20 B e f o r e : WALKER, CALABRESI, Circuit Judges, and UNDERHILL,
21 District Judge.*
22 Appeal by Defendant Richie Bermudez from a judgment of
23 conviction, entered in the United States District Court for the
24 Southern District of New York (Gerard E. Lynch, Judge), for being
25 a felon in possession of a firearm, in violation of 18 U.S.C. §
26 922(g)(1). We conclude that the district court did not err in
27 admitting police testimony as to drug-related statements made by
28 defendant; that the “blind strike” method of jury selection is
29 both constitutional and consistent with Federal Rule of Criminal
30 Procedure 24(b); and that comments made during the government’s
31 closing arguments were not unfairly prejudicial.
*
1 The Honorable Stefan R. Underhill, United States District
2 Judge for the District of Connecticut, sitting by designation.
-1-
1 AFFIRMED.
2 Judge UNDERHILL dissents, in part, in a separate opinion.
3 ROGER BENNET ADLER, New York,
4 N.Y., for Defendant-Appellant.
5
6 LISA R. ZORNBERG, Assistant
7 United States Attorney, of
8 counsel, (Jonathan S.
9 Kolodner, Assistant United
10 States Attorney, of counsel,
11 on the brief), for Michael J.
12 Garcia, United States Attorney
13 for the Southern District of
14 New York, New York, N.Y., for
15 Appellee.
16 JOHN M. WALKER, JR., Circuit Judge:
17 Defendant-Appellant Richie Bermudez appeals from his
18 conviction on one count of possession of a firearm after having
19 previously been convicted of a felony, in violation of 18 U.S.C.
20 § 922(g)(1). He argues that a new trial is warranted on the
21 grounds that the district court (Gerard E. Lynch, Judge)
22 improperly admitted police testimony as to drug-related
23 statements purportedly made by Bermudez; the district court’s
24 usage of the “blind strike” method of jury selection violated
25 Federal Rule of Criminal Procedure 24(b) as well as Bermudez’s
26 constitutional rights; and two comments made by the government
27 during summation were unfairly prejudicial. We reject all three
28 of defendant’s arguments and affirm the judgment of conviction.
29 BACKGROUND
30 In light of the jury’s decision to convict Bermudez, we view
-2-
1 the facts of the case in the light most favorable to the
2 government. See Kosmynka v. Polaris Indus., Inc., 462 F.3d 74,
3 77 (2d Cir. 2006); see also Arlio v. Lively, 474 F.3d 46, 51 (2d
4 Cir. 2007). On June 26, 2004, New York City police officers –
5 including Sergeant Von Kessel, and Officers Guerrero, Eiseman,
6 Johnson, and Collura – conducted undercover surveillance near
7 several nightclubs in the Bronx, an area that had a history of
8 illegal drug activity and violence. During the surveillance
9 operation, Officer Eiseman noticed Bermudez walking from club to
10 club and speaking with various people on the street. Suspecting
11 that Bermudez might be involved in street-level narcotic sales,
12 Officer Eiseman continued to watch Bermudez. As Bermudez
13 approached the area where Officer Eiseman’s unmarked car was
14 parked, Officer Eiseman overheard Bermudez tell another man that
15 he had “fresh bricks back at his apartment,” which Officer
16 Eiseman understood to refer to kilograms of cocaine, and that
17 Bermudez could get 500 grams at ten o’clock the next morning.
18 By radio, Officer Eiseman and his partner, Officer Collura,
19 informed the team of the drug-related conversation that they had
20 overheard, prompting the other officers to focus their attention
21 on Bermudez. From a second car, Sergeant Von Kessel and Officer
22 Guerrero then watched Bermudez and another man, Carlos Delgado,
23 walk toward a Toyota Camry parked in a well-lit area nearby.
24 Both officers saw Bermudez open the trunk, pull out a gun, and
-3-
1 hand it to Delgado, who placed the gun in the waistband of his
2 pants. Sergeant Von Kessel radioed the team to report this
3 sequence of events, provided a description of the two men, and
4 told the team to move in and arrest them.
5 The officers converged on the scene and stopped Bermudez and
6 Delgado. When Officer Johnson arrived, he promptly approached
7 Delgado based on Sergeant Von Kessel’s description, frisked him,
8 and retrieved the gun. The police also found $2600 in Delgado’s
9 pants. Bermudez and Delgado were then arrested and each was
10 subsequently charged with one count of possession of a firearm
11 after having been convicted of a felony, in violation of 18
12 U.S.C. § 922(g)(1). Delgado pled guilty and did not appeal from
13 his conviction or his sentence of seventy months’ imprisonment.
14 Bermudez’s first trial began in September 2005 and ended
15 when the jury deadlocked. At his April 2006 retrial, the
16 foregoing evidence was presented to the jury. The defense called
17 Delgado as their only witness, but he invoked his Fifth Amendment
18 privilege and declined to testify. In lieu of Delgado’s trial
19 testimony, the district court allowed his testimony from an
20 earlier unsuccessful suppression hearing to be read to the jury.
21 At that hearing, Delgado admitted to possessing a gun but,
22 consistent with his claim of an absence of probable cause,
23 disputed the police officers’ entire account of how it came into
24 his possession. According to Delgado, it was not Bermudez, but a
-4-
1 man Delgado had just met who gave him the gun inside one of the
2 nightclubs. Delgado also denied walking with Bermudez to the
3 parked Toyota Camry and claimed instead that the police stopped
4 and searched him without probable cause as he was exiting a
5 nightclub. As for the $2600 found on his person at the arrest,
6 Delgado testified that it was “shopping money” for children’s
7 clothes. He claimed that he had come to New York from
8 Massachusetts because clothes were cheaper in New York.
9 The jury returned a guilty verdict against Bermudez on May
10 2, 2006, and, after denying his motion for a new trial, the
11 district court gave Bermudez the same sentence of seventy months’
12 imprisonment that it had given Delgado. Bermudez now appeals the
13 judgment of conviction.
14 DISCUSSION
15 Bermudez raises three issues on appeal. He argues that the
16 district court erred in admitting testimony about the drug-
17 related statements that he purportedly made, because they were
18 more prejudicial than probative; that the district court’s use of
19 the “blind strike” method of jury selection is unconstitutional
20 and inconsistent with Federal Rule of Criminal Procedure 24(b);
21 and that the government’s statements during closing arguments
22 unfairly prejudiced him.
23 I. The Admissibility of Bermudez’s Drug-Related Statements
24 Under Federal Rule of Evidence 403, relevant evidence “may
-5-
1 be excluded if its probative value is substantially outweighed by
2 the danger of unfair prejudice.” Fed. R. Evid. 403. District
3 courts have broad discretion to balance probative value against
4 possible prejudice, United States v. LaFlam, 369 F.3d 153, 155
5 (2d Cir. 2004), and we will not disturb that balancing “unless
6 there is a clear showing of abuse of discretion or that the
7 decision was arbitrary or irrational,” United States v. Ansaldi,
8 372 F.3d 118, 131 (2d Cir. 2004).
9 Bermudez argues that the district court erred in admitting
10 Officer Eiseman’s testimony that he overheard Bermudez make
11 statements suggestive of narcotics trafficking, namely that he
12 had “fresh bricks,” a common form of cocaine, in his apartment,
13 and that he could get 500 grams the following morning. Bermudez
14 claims that the testimony at best was marginally relevant and
15 that it was unnecessary for Officer Eiseman to testify as to what
16 specifically had prompted him to call the surveillance team to
17 focus their attention on Bermudez. Weighing against this
18 marginal probative value, Bermudez asserts, was the high risk
19 that the jury would view him as a drug dealer and be more
20 inclined to convict him on the gun charge based on this
21 irrelevant fact. Bermudez further argues that the district court
22 abused its discretion in admitting the testimony on direct
23 examination, and that the proper course would have been to admit
24 the statements only after the defense had “opened the door” to
-6-
1 the issue of credibility on cross-examination.
2 The district court, however, found the probative value of
3 the drug-related statements to be “significant” because the
4 primary issue at trial would be “whether the officers saw what
5 they say they saw with respect to the gun.” Critical to the
6 credibility of the officers’ account was the reason why they
7 chose to watch Bermudez so closely. The experienced district
8 judge further determined that the risk of prejudice from brief
9 references to drug-dealing was relatively low in this case: “I
10 don’t believe that references to drug dealing are somehow
11 shocking or more prejudicial in comparison to the gun charge in
12 the case.”
13 To minimize any potential prejudicial effect, the district
14 judge issued two limiting instructions – once after Officer
15 Guerrero testified that she received a radio communication
16 regarding the drug conversation overheard by Officer Eiseman and
17 his partner, and again after Officer Eiseman testified as to the
18 conversation itself. The district judge instructed the jury that
19 this testimony was only relevant “in evaluating the evidence to
20 try to judge the credibility of what the officers are telling
21 you,” as it explained why the officers were watching Bermudez,
22 and that it was “entirely irrelevant” as to whether Bermudez did
23 or did not possess a gun on this particular occasion. See Tr.
24 108-10 (“I just want to make doubly, triply, emphatically clear
-7-
1 to you that it’s not your responsibility to decide whether Mr.
2 Bermudez is involved in anything with respect to narcotics.
3 That’s not the charge.”).1
4 Under these circumstances, we conclude that the district
5 court’s decision to admit the testimony was not an abuse of
6 discretion. It was apparent from the beginning of the retrial
7 that the authenticity of the officers’ account would be
8 contested. At his prior suppression hearing, Delgado, the
9 defense’s only witness – and indeed, “the only potential
10 exculpatory witness,” as the district court noted – disputed
11 every aspect of what the officers claimed to have seen, including
12 their claim that he received the gun from Bermudez out of the
13 trunk of a Camry. The district court decided to admit this
14 testimony, over the government’s objection, in advance of
15 Bermudez’s first trial in September 2005. The defense therefore
16 knew that Delgado’s testimony would be admitted when it told the
17 jury during opening statements in the second trial that
18 credibility – specifically, whether the police had fabricated a
19 story to justify Bermudez’s arrest – was at the heart of the
20 case.
21 Given the properly anticipated centrality of the officers’
1
1 These instructions belie the dissent’s assertion that
2 “[n]one of the limiting instructions given in this case told the
3 jury that they could not consider whether Bermudez was a drug
4 dealer when deciding whether he was guilty of the gun charge.”
5 Dissent at 13.
-8-
1 credibility to the outcome of the case, the district court was
2 not required to wait for Bermudez to launch a direct credibility
3 attack on cross-examination before admitting the officers’
4 testimony as to Bermudez’s drug-related comments. Cf.
5 Supplemental App. at 50, 52 (permitting the government to elicit
6 the drug-related testimony at Bermudez’s initial September 2005
7 trial, and noting that “the whole issue is whether these officers
8 are to be believed anyway, . . . the defense will presumably be
9 saying all these guys aren’t telling the truth,” and “the
10 officers’ credibility is central”). We further note that at the
11 second trial, Bermudez did not request the district court to
12 defer the drug-related testimony until the defense had opened the
13 door; rather, he moved to preclude the testimony altogether.
14 To convince the jury that the officers’ story was credible,
15 it was important for the government to establish, as a foundation
16 for the actions taken by the surveillance team that night, why
17 the officers’ attention was focused on Bermudez as opposed to any
18 number of other individuals in the high crime area. Without a
19 reasonable explanation for singling out Bermudez, the officers’
20 testimony as to everything that followed could have been suspect.
21 Thus, providing this explanation to the jury was highly
22 probative, as the district court found, and contributed
23 importantly to the completeness of the officers’ account. See
24 United States v. Thai, 29 F.3d 785, 813 (2d Cir. 1994) (holding
-9-
1 that, where the defense theory was that government informants
2 were lying, testimony that corroborated the informants’ account
3 was properly admitted under Rule 403).
4 Moreover, any danger of unfair prejudice was minimized by
5 the district court’s two detailed limiting instructions, issued
6 immediately after Officers Guerrero and Eiseman testified to the
7 drug-related statements. Any argument that these instructions
8 were insufficient to eradicate the statements’ prejudicial effect
9 fails because “[a]bsent evidence to the contrary, we must presume
10 that juries understand and abide by a district court’s limiting
11 instructions.” United States v. Downing, 297 F.3d 52, 59 (2d
12 Cir. 2002); see also Zafiro v. United States, 506 U.S. 534, 540-
13 41 (1993) (“[E]ven if there were some risk of prejudice, here it
14 is of the type that can be cured with proper instructions, and
15 juries are presumed to follow their instructions.” (internal
16 quotation marks and citation omitted)). Under the circumstances
17 here, the jury could reasonably be expected to comply with the
18 limiting instructions; thus, the “instructions sufficed to cure
19 any possibility of prejudice.” Zafiro, 506 U.S. at 541; cf.
20 United States v. LaFlam, 369 F.3d 153, 157 (2d Cir. 2004)
21 (holding, in an armed robbery case, that the district court did
22 not abuse its discretion in admitting evidence of the defendant’s
23 uncharged drug use because the district court properly balanced
24 probative value against prejudice and “also gave a limiting
-10-
1 instruction to the jury that reduced any potential prejudice that
2 introduction of the uncharged other act evidence might have
3 caused”).
4 II. The “Blind Strike” Method of Jury Selection
5 Bermudez next challenges the district court’s employment of
6 the “blind strike” method of jury selection. Under this method,
7 both parties simultaneously, rather than alternately, exercise
8 their peremptory challenges and thus do not know which jurors the
9 other has struck. He claims that this method violated Federal
10 Rule of Criminal Procedure 24(b) and his constitutional rights to
11 due process and effective assistance of counsel. In particular,
12 Bermudez argues that because both he and the government struck
13 the same juror, he was effectively “deprived . . . of the full
14 and knowledgeable use of his allotted challenges.” Appellant’s
15 Br. at 18.
16 The Supreme Court’s express approval of the blind strike
17 method in Pointer v. United States, 151 U.S. 396 (1894),
18 forecloses Bermudez’s argument. In Pointer, the Court addressed
19 whether a defendant is “entitled of right to have the government
20 make its peremptory challenges first, that he might be informed,
21 before making his challenges, what names had been stricken from
22 the list by the prosecutor.” Id. at 409. The Court held that no
23 such right existed, and that a defendant is “only entitled of
24 right to strike [a certain number of names] from the list of
-11-
1 impartial jurymen furnished him by the court.” Id. at 412.
2 In a non-capital felony case, Federal Rule of Criminal
3 Procedure 24(b) sets the number of peremptory challenges to which
4 a defendant is entitled at ten and the government at six; it does
5 not prescribe any method for the exercise of those challenges.
6 See Fed. R. Crim. P. 24(b); United States v. Blouin, 666 F.2d
7 796, 798 (2d Cir. 1981). Rather, “trial courts retain a broad
8 discretion to determine the way peremptory challenges will be
9 exercised.” United States v. Thompson, 76 F.3d 442, 451 (2d Cir.
10 1996) (internal quotation marks and citation omitted).
11 Under Pointer and Rule 24(b), Bermudez had a right only to
12 reject ten jurors from the full list, and this right was fully
13 accorded to him by the method that Judge Lynch selected:
14 Being required to make all of his peremptory challenges at
15 one time, [defendant] was entitled to have a full list of
16 jurors . . . . Such a list was furnished to him, and he was
17 at liberty to strike from it the whole number allowed by
18 [Rule 24(b)], with knowledge that the first 12 on the list,
19 not challenged by either side, would constitute the jury . .
20 . .
21
22 It is true that, under the [blind strike] method
23 pursued in this case, it might occur that the defendant
24 would strike from the list the same persons stricken off by
25 the government; but that circumstance does not change the
26 fact that the accused was at liberty to exclude from the
27 jury all, to the number [ten], who, for any reason, or
28 without reason, were objectionable to him. No injury was
29 done if the government united with him in excluding
30 particular persons from the jury.
31 Pointer, 151 U.S. at 411-12. Thus, no constitutional deprivation
32 or violation of Rule 24(b) occurred when Bermudez struck the same
-12-
1 juror as the government.
2 We further note that all five circuits that have considered
3 similar challenges to the blind strike method have upheld it as
4 constitutional and consistent with Rule 24(b). See United States
5 v. Warren, 25 F.3d 890, 894 (9th Cir. 1994) (“Even when the
6 government and a defendant challenge the same juror, the blind
7 strike method does not impair a defendant’s full use of his or
8 her peremptory challenges. Rule 24(b) does not specify that a
9 defendant’s challenges may not overlap the government’s.”
10 (citations omitted)); United States v. Norquay, 987 F.2d 475, 478
11 (8th Cir. 1993), abrogated in part on other grounds by United
12 States v. Thomas, 20 F.3d 817, 823 (8th Cir. 1994); United States
13 v. Mosely, 810 F.2d 93, 96-97 (6th Cir. 1987); United States v.
14 Roe, 670 F.2d 956, 961 (11th Cir. 1982); United States v. Sarris,
15 632 F.2d 1341, 1343 (5th Cir. 1980). We join our sister circuits
16 in upholding the use of the blind strike method of exercising
17 peremptory challenges.
18 III. The Government’s Closing Arguments
19 Bermudez’s final contention is that he was unfairly
20 prejudiced by two statements made during the government’s closing
21 arguments. The first was a comment casting doubt on Delgado’s
22 claim that he traveled to New York to purchase discount
23 children’s clothing because “life experience tells you the cost
24 of the trip from Massachusetts to New York was more than any
-13-
1 discount on clothing he was going to find here.” The second was
2 the government’s rebuttal to the argument that it was hiding
3 something by not calling as a witness Officer Eiseman’s partner,
4 Officer Collura, who also allegedly overheard Bermudez’s drug-
5 related statements. The government stated, “What would Officer
6 Collura have told you, that he overheard the same thing?”
7 “[R]eversal on the basis of improper prosecutorial
8 statements during summation is warranted only when the
9 statements, viewed against the entire argument before the jury,
10 deprived the defendant of a fair trial.” United States v.
11 Myerson, 18 F.3d 153, 163 (2d Cir. 1994) (internal quotation
12 marks and citation omitted). In this case, Bermudez was not
13 substantially prejudiced by the government’s summation because
14 the district court promptly issued a curative instruction after
15 each comment to ensure that the jury did not draw any improper
16 inferences. See United States v. Thomas, 377 F.3d 232, 244-45
17 (2d Cir. 2004) (holding that the prosecutor’s statements were not
18 misconduct causing substantial prejudice where the district judge
19 provided an immediate curative instruction). Accordingly,
20 Bermudez’s challenge to the prosecution’s summation arguments
21 fails.
22 CONCLUSION
23 For the foregoing reasons, the judgment of conviction is
24 AFFIRMED.
-14-
1 UNDERHILL, District Judge, concurring in part and dissenting in
2 part:
3 I join parts II and III of the majority opinion, but
4 respectfully dissent from the affirmance of the District Court’s
5 evidentiary ruling. The pre-trial decision to admit Bermudez’s
6 overheard admission that he had a significant quantity of drugs
7 for sale — which the majority affirms on the ground that the
8 admission was permissible to bolster the credibility of police
9 officers expected to testify at trial – violated clearly
10 established precedent of this Court that bolstering evidence can
11 be admitted only after credibility has been attacked. In
12 addition, the result of the District Court’s Rule 403 balancing
13 fell outside the range of reasonable outcomes and therefore
14 amounts to an abuse of discretion. Because Bermudez suffered
15 substantial prejudice as a result of the erroneous evidentiary
16 ruling, I would vacate the judgment and remand the case for a new
17 trial.
18 I. Bolstering Evidence
19 The error in admitting Bermudez’s statements about illicit
20 drugs as bolstering evidence becomes clear by focusing on the
21 timing and substance of the challenged evidentiary ruling.1 Apr.
1
1 The entirety of the District Court’s ruling follows:
2
3 In the first place, I deny the defendant’s motion in limine
4 to exclude testimony regarding statements allegedly made by Mr.
5 Bermudez regarding drugs. As I ruled in the previous trial, the
-15-
1 27 Tr. at 3-4.2 The ruling was not made during trial in response
2 to an actual attack on any witness’s credibility or following the
3 admission into evidence of Carlos Delgado’s transcribed
4 testimony. Rather, the ruling was made when deciding a motion in
5 limine in advance of any testimony in Bermudez’s second trial,
6 indeed, before the jury was selected. At the time Bermudez’s
7 motion in limine was decided, the District Court had not admitted
8 Delgado’s statement. The District Court did not then even know
9 whether Delgado’s testimony would be offered by the defendant,
10 Apr. 27 Tr. at 4 (District Court: “I imagine Mr. Delgado’s
11 testimony is likely to be offered by the defense.”); indeed, the
12 District Court still did not know if Delgado’s testimony would be
1 probative value of these statements seems to me significant. The
2 whole issue is whether the officers saw what they say they saw
3 with respect to the gun that is charged.
4 The officers will be describing various movements of Mr.
5 Bermudez, particularly as I imagine Mr. Delgado’s testimony is
6 likely to be offered by the defense, those movements will be
7 contested. It would be highly peculiar, it seems to me, for a
8 jury to try to address whether the officers saw what they said
9 they saw without some understanding of why the officers would be
10 watching Mr. Bermudez. So I think there is significant probative
11 value to putting before the jury why the officers’ attention was
12 focused on Mr. Bermudez.
13 The prejudice, on the other hand, does not seem to me to be
14 significant. I don’t believe that references to drug dealing are
15 somehow shocking or more prejudicial in comparison to the gun
16 charge in the case. And whatever prejudice there is can and will
17 be further minimized by a limiting instruction which will be
18 given. Apr. 27 Tr. at 3-4.
2
1 The four-day trial took place on April 27 and 28 and May 1
2 and 2 of 2006. Citations to the trial transcript will indicate
3 the day of trial and transcript page.
-16-
1 offered as the government neared the end of its case in chief.
2 May 1 Tr. at 214 (“Now, if on the other hand you’re not going to
3 offer Delgado’s testimony . . . .”). Therefore, the decision to
4 admit the bolstering evidence was made before the District Court
5 could have known whether and how Bermudez would choose to attack
6 the police officers’ credibility.3
7 Significantly, despite the majority’s heavy reliance on the
8 need to admit the evidence to bolster the credibility of police
9 officers expected to testify at trial, the District Court never
10 mentioned credibility in its ruling on the motion in limine; the
11 first mention of credibility was in a limiting instruction.
12 Instead, when admitting the evidence, the District Court merely
13 anticipated that the prosecution and defense would offer two
14 conflicting versions of the events leading to Bermudez’s arrest,
15 Apr. 27 Tr. at 4 (Bermudez’s “movements will be contested”), and
16 believed that the officers’ motivation for watching Bermudez was
17 important, id. (“there is significant probative value to . . .
18 why the officers’ attention was focused on Mr. Bermudez”).
19 Simply offering an alternative version of events (or here, merely
3
1 The majority attempts to support the admission in the
2 second trial with descriptions of what occurred during the first
3 trial, an effort that I believe is inappropriate. See Sojak v.
4 Hudson Waterways Corp., 590 F.2d 53, 55 (2d Cir. 1978) (per
5 curiam) (“Because we cannot anticipate whether the question of
6 admissibility will arise in the same manner on the retrial, we
7 will not attempt to indicate in advance what the trial court’s
8 ruling should be.”).
-17-
1 anticipating that the defense will do so) does not amount to a
2 defense attack on the credibility of government witnesses,4 and
3 certainly does not justify the admission of bolstering evidence
4 during the government’s direct examination. If it did, the
5 government would be permitted to offer evidence to bolster the
6 credibility of its witnesses during their direct testimony in any
7 case in which the defendant intends to put on evidence.
8 No one suggests that Bermudez’s admitted drug dealing was
9 relevant to any of the substantive issues in this felon-in-
10 possession gun case. The only relevance cited by the District
11 Court was to provide the jury with “some understanding of why the
12 officers would be watching Mr. Bermudez.” Id. According to the
13 majority, the officers’ motivation is “[c]ritical to the
14 credibility of the officers’ account.” Majority at 7. Evidence
15 of Bermudez’s drug dealing, in other words, bolsters the
16 officers’ credibility. The majority now holds, without citation,
17 that the District Court could allow the government to bolster its
18 witnesses before an attack on their credibility in light of “the
19 properly anticipated centrality of the officers’ credibility.”
20 Majority at 8.
21 Never before has this Court held that anticipation is
4
1 This Court has recognized that even cross-examining a
2 witness’s direct testimony does not necessarily amount to an
3 attack on credibility. United States v. Fernandez, 829 F.2d 363,
4 366 (2d Cir. 1987) (per curiam).
-18-
1 sufficient to render bolstering evidence admissible. By so
2 holding, the majority significantly departs from this Court’s
3 many decisions that evidence to bolster a witness’s credibility
4 is not admissible unless and until the witness’s veracity is
5 attacked. E.g., United States v. Quinones, 511 F.3d 289, 312-13
6 (2d Cir. 2007); United States v. Porges, 80 Fed. Appx. 130, 132
7 (2d Cir. 2003) (summary order); United States v. Gaind, 31 F.3d
8 73, 78 (2d Cir. 1994); United States v. Pierre, 781 F.2d 329, 332
9 n.1 (2d Cir. 1986); United States v. Borello, 766 F.2d 46, 56 (2d
10 Cir. 1985); United States v. Jones, 763 F.2d 518, 522 (2d Cir.
11 1985); United States v. Edwards, 631 F.2d 1049, 1051 (2d Cir.
12 1980); United States v. Arroyo-Angulo, 580 F.2d 1137, 1146 (2d
13 Cir. 1978); see also 1 McCormick on Evidence § 33 at 147 (Kenneth
14 S. Broun ed., 6th ed. 2006) (hereinafter “McCormick”) (“[A]s a
15 general proposition, bolstering evidence is inadmissible. As of
16 the time of the direct examination, it is uncertain whether the
17 cross-examiner will attack the witness’s credibility; the counsel
18 might later waive cross-examination [or conduct limited cross-
19 examination]. . . . For that reason, the witness’s proponent
20 must ordinarily hold information favorable to the witness’s
21 credibility in reserve for rehabilitation”); id. at § 47. I see
22 no reason to break with this Court’s clearly established
23 precedent on the permissible use of bolstering evidence.
24 In this case, the government painted Bermudez as a drug
-19-
1 dealer in its opening statement and elicited evidence of
2 Bermudez’s “fresh bricks” conversation through its direct
3 examination of government witnesses Guerrero, Eiseman, and Von
4 Kessel before Bermudez cross-examined them. Thus, the bolstering
5 evidence was not admissible when presented. Moreover, even if
6 the District Court had properly precluded bolstering evidence
7 until redirect (or until the government’s rebuttal case, after
8 Bermudez presented Delgado’s testimony), the drug dealing
9 conversation still should not have been admitted unless Bermudez
10 attacked the officers’ credibility on the ground that they had no
11 motivation to watch his actions – the only conceivable basis of
12 admissibility.
13 Not every attack on credibility would justify admission of
14 evidence of Bermudez’s drug dealing; impeachment with prior
15 inconsistent testimony is an obvious example of an attack on
16 credibility that would not open the door to the bolstering
17 evidence admitted in this case. In determining whether the door
18 has been opened to rehabilitative evidence, “[t]he general test
19 of admissibility is whether [the bolstering evidence] is
20 logically relevant to explain the impeaching fact. The
21 rehabilitating facts must meet the impeachment with relative
22 directness. The wall, attacked at one point, may not be
23 fortified at another, distinct point.” McCormick, § 47 at 221
24 (emphasis added). The testimony that Bermudez had drugs to sell
-20-
1 was not “logically relevant to explain the impeaching fact”
2 unless and until the impeachment challenged the officers’
3 motivation to watch him – a line of impeachment never undertaken
4 by Bermudez.
5 Delgado’s testimony, which consisted of a transcript
6 available to the District Court in advance of its ruling, merely
7 contradicted, in a general sense, Eiseman’s testimony that
8 Bermudez handed a gun to Delgado. Nothing in Delgado’s
9 testimony, however, called into question the officers’ motivation
10 for surveilling Bermudez, so the fact that an officer may have
11 overheard Bermudez offer drugs for sale was not relevant to
12 rehabilitate the officers’ credibility. Unless and until the
13 defense attacked the officers’ motivation for watching Bermudez,
14 their motivation was entirely irrelevant.
15 Although the standard of review is abuse of discretion, this
16 Court has repeatedly held that a discretionary decision that is
17 legally erroneous “necessarily” amounts to an abuse of
18 discretion. E.g., Aqua Stoli Shipping Ltd. v. Gardner Smith Pty
19 Ltd., 460 F.3d 434, 439 (2d Cir. 2006). There is clearly
20 established precedent from this Court that credibility can be
21 bolstered only after it is attacked and only with evidence
22 addressing the basis of the attack. Because the ruling on the
23 motion in limine conflicts with that authority, I conclude that
24 the District Court committed legal error and therefore abused its
-21-
1 discretion by admitting Bermudez’s statements about drugs to
2 bolster the credibility of government witnesses before their
3 credibility had been attacked.
4 II. The Rule 403 Balancing
5 Rule 403 of the Federal Rules of Evidence provides that
6 “[a]lthough relevant, evidence may be excluded if its probative
7 value is substantially outweighed by the danger of unfair
8 prejudice.” A trial judge’s rulings with respect to Rule 403 are
9 entitled to considerable deference and will ordinarily not be
10 overturned absent an abuse of discretion. Costantino v. Herzog,
11 203 F.3d 164, 173 (2d Cir. 2000). The “improper admission of
12 evidence is grounds for reversal only where it affects ‘a
13 substantial right’ of one of the parties.” Id. at 174 (quoting
14 Fed. R. Evid. 103(a)).
15 This case meets that high standard. The drug evidence had
16 no probative value to any substantive issue in this gun case, yet
17 its admission subjected Bermudez to tremendous prejudice: (1)
18 that the jury would no longer decide whether the defendant on
19 trial had possessed a gun, but rather whether the drug dealer on
20 trial had possessed a gun, and (2) that Bermudez would be
21 required to defend against drug distribution charges never
22 brought against him.
23 The majority states that the officers’ motivation for
24 watching Bermudez was “critical to the[ir] credibility.”
-22-
1 Majority at 7. Yet it is unclear, at best, how an explanation of
2 the officers’ motivation for watching Bermudez is relevant to
3 whether the Eiseman “saw what he said he saw” that night. In my
4 view, the officers’ motivation for watching Bermudez was entirely
5 irrelevant, unless and until Bermudez attacked their credibility
6 on the ground that they were not motivated to watch him. If a
7 police officer testified that he was at the scene and saw what he
8 saw, without explaining why he watched, no jury would pause to
9 wonder why he watched – that’s his job.
10 Even if motivation became an issue on cross-examination –
11 which it did not – there was a plethora of possibilities
12 available to the District Court short of admitting the exact
13 conversation wholesale. See Old Chief v. United States, 519 U.S.
14 172, 184 (1997) (“[W]hat counts as the Rule 403 ‘probative value’
15 of an item of evidence, as distinct from its Rule 401
16 ‘relevance,’ may be calculated by comparing evidentiary
17 alternatives. . . . [W]hen a court considers ‘whether to exclude
18 on grounds of unfair prejudice,’ the ‘availability of other means
19 of proof may . . . be an appropriate factor.’”) (quoting Advisory
20 Committee’s Notes on Fed. R. Evid. 403). For example, the
21 District Court could have allowed the officers to testify why
22 they were conducting surveillance in that area,5 or that Eiseman
5
1 Officers Guerrero and Eiseman and Lieutenant Von Kessel
2 each testified that they were assigned to conduct surveillance at
3 the intersection because the area had a history of illegal drug
-23-
1 grew suspicious of Bermudez because of the way he was acting,6 or
2 even that he took an interest in Bermudez because he overheard
3 Bermudez discuss what Eiseman perceived to be some unspecified
4 illegal activity. The ready existence of multiple viable and
5 substantially less prejudicial means of proof further diminishes
6 any probative value the drug dealing comments may have had.
7 The pre-trial ruling that the “fresh bricks” conversation
8 would be admitted caused Bermudez immediate and acute prejudice.
9 Before the jury heard the first word of testimony, the government
10 had labeled Bermudez a big-time drug dealer in its opening
11 statement: “[T]he officers who were watching the intersection
12 that night, were very familiar with that intersection. They’ve
13 been there many, many times responding to reports of drug dealing
14 . . . . And then two of the officers who were sitting in the car
15 on Westchester Avenue overheard this man, Richie Bermudez, having
16 a conversation about a drug deal. They overheard him talking
17 like he was a big-time drug dealer.” Apr. 27 Tr. at 26-27. The
18 government then proceeded to elicit testimony about Bermudez’s
19 drug dealing throughout its case in chief. E.g., id. at 50
1 activity and violence associated with the nightclubs located on
2 the corners of the intersection. Apr. 27 Tr. at 43-44, May 1 Tr.
3 at 131, 180.
6
1 Eiseman testified that he focused on Bermudez initially
2 because Bermudez was “walking around from club to club, not going
3 inside anywhere,” which was “a little suspicious.” May 1 Tr. at
4 138-39.
-24-
1 (testimony of Officer Guerrero: recounting police radio
2 transmission that, “I can’t believe this guy just tried to make a
3 drug transaction, a drug deal, right in front of us”), Apr. 28
4 Tr. at 111 (Officer Guerrero did not see Bermudez possess drugs),
5 id. at 112 (query about whether drug dealers use stash houses),
6 id. at 113-15 (query whether officers could have obtained search
7 warrant based on Bermudez’s statements about drugs), May 1 Tr. at
8 140 (testimony of Officer Eiseman: “I heard . . . Mr. Bermudez,
9 tell the male Hispanic in the white shirt that he had fresh
10 bricks back at his apartment.”), id. at 141-42 (Question: “When
11 you overheard Mr. Bermudez talking about fresh bricks what did
12 you understand that to mean?” Eiseman: “Kilograms of cocaine.”;
13 “The male Hispanic in the white T-shirt stated that he needed 500
14 grams.”), id. at 186 (testimony of Lieutenant Von Kessel:
15 Bermudez was “telling the guy that he was with that he is a big
16 time guy, that he doesn’t deal with the little stuff. He only
17 deals with the big stuff.”). The testimony elicited by the
18 government cannot fairly be described as “brief references to
19 drug dealing.” Majority at 7. From the very beginning of the
20 trial, indeed from the government’s opening, Bermudez had to
21 defend against two charges: illegal gun possession and drug
22 distribution.
23 “The term ‘unfair prejudice,’ as to a criminal defendant,
24 speaks to the capacity of some concededly relevant evidence to
-25-
1 lure the factfinder into declaring guilt on a ground different
2 from proof specific to the offense charged. So, the Committee
3 Notes to Rule 403 explain, ‘[u]nfair prejudice’ within its
4 context means an undue tendency to suggest decision on an
5 improper basis, commonly, though not necessarily, an emotional
6 one.” Old Chief, 519 U.S. at 180 (internal citations and
7 quotations omitted). The risk in admitting prejudicial evidence
8 is that “a jury will convict for crimes other than those charged
9 – or that, uncertain of guilt, it will convict anyway because a
10 bad person deserves punishment.” Id. at 181 (internal quotation
11 and citation omitted). As such, prejudicial evidence invites
12 “preventive conviction even if [the defendant] should happen to
13 be innocent momentarily.” Id.
14 Here, when conducting the required balancing under Rule 403,
15 the District Court did not consider the most significant danger
16 of prejudice from admission of the drug dealing admission – that
17 the jury would decide Bermudez’s guilt on the gun charge based
18 upon his admitted drug dealing. As a result, the Rule 403
19 balancing performed was inadequate.
20 It is precisely because Bermudez was charged with gun
21 possession that the substantively irrelevant evidence of drug
22 dealing poses a particularly significant risk of prejudice. It
23 is axiomatic that drug dealing and guns go hand in hand. United
24 States v. Hernandez, 85 Fed. Appx. 269, 271 (2d Cir. 2004)
-26-
1 (summary order) (“guns are frequently tools of the drug trade”)
2 (citing United States v. Flaharty, 295 F.3d 182, 200 (2d Cir.
3 2002)). Thus, there is a very substantial danger that a jury
4 would misuse the drug dealing evidence to explain why Bermudez
5 possessed the gun, a purpose for which it was not offered, as
6 opposed to explaining why the officers were watching Bermudez,
7 its intended purpose.
8 The District Court’s limiting instructions were necessary,
9 but insufficient to overcome the prejudice to Bermudez. As noted
10 in the commentary to Federal Rule of Evidence 105:
11 If the prejudicial effect of evidence substantially
12 outweighs its probative value, despite a limiting
13 instruction, then the nonoffering party can argue
14 that the evidence should be completely excluded
15 because any limiting instruction would be
16 inadequate. Rules 403 and 105 are interrelated,
17 because a Judge in determining the prejudice to be
18 suffered from proffered evidence must necessarily
19 take into account whether this prejudice can be
20 sufficiently ameliorated by a limiting instruction.
21 The more effective the instruction in controlling
22 prejudice, the less prejudice is taken into account
23 in the Rule 403 balancing process. As the Advisory
24 Committee Note to Rule 403 observes, the prejudice
25 to be considered under that Rule is the prejudice
26 that is left after a limiting instruction has been
27 given.
28 Stephen A. Saltzburg, Daniel J. Capra, and Michael M. Martin,
29 Commentary to Federal Rule of Evidence 105, U.S.C.S. Court Rules:
30 Federal Rules of Evidence (Rules 101 - 700) at 93 (2007).
31 None of the limiting instructions given in this case told
32 the jury that they could not consider whether Bermudez was a drug
-27-
1 dealer when deciding whether he was guilty of the gun charge.
2 The first instruction given by the District Court was the
3 strongest, but it was untimely – given the day after the
4 testimony it addressed7 – and it was focused on the “narcotics
5 conversation”: “Even if you were to believe that he did engage in
6 such a narcotics conversation, you can’t use that as any evidence
7 that he likely had a gun.” Apr. 28 Tr. at 108-10. The second
8 instruction informed the jury that the evidence of other crimes
9 “is not relevant” and “anything else he may have done on any
10 other occasion or not done isn’t really to the point.” May 1 Tr.
11 at 141. No limiting instruction was given following Von Kessel’s
12 testimony that Bermudez was overhead explaining that he was a
13 “big time” drug dealer. Id. at 186. Each limiting instruction
14 should have expressly prohibited the jury from considering
15 whether Bermudez was a drug dealer when deciding the gun case.
16 Even if the limiting instructions had been perfect and
17 perfectly timely, they would have been insufficient in this case.
18 Although this Court generally presumes that juries follow
19 limiting instructions, that presumption “evaporates where there
20 is an overwhelming probability that the jury will be unable to
7
1 Not including the government’s opening statement, the
2 first mention of Bermudez’s drug dealing came during the direct
3 testimony of Officer Guerrero on April 27. Apr. 27 Tr. at 50.
4 The first limiting instruction was given at the end of the
5 defense cross-examination of Guerrero the following day. Apr. 28
6 Tr. at 108-10.
-28-
1 follow the court’s instructions and the evidence is devastating
2 to the defense.” United States v. Jones, 16 F.3d 487, 493 (2d
3 Cir. 1994). See also United States v. Becker, 502 F.3d 122, 130-
4 31 (2d Cir. 2007) (“[W]e have found it inappropriate to presume
5 that a district court’s limiting instructions were obeyed when
6 such instructions required jurors to perform ‘mental
7 acrobatics.’”); United States v. Colombo, 909 F.2d 711, 715 (2d
8 Cir. 1990) (finding overwhelming probability that, despite
9 limiting instructions, the jury was unable to dispassionately
10 consider evidence of rape and sodomy admitted as “background” in
11 a trial for RICO conspiracy and narcotics violations). We ask
12 too much of a jury first to hear that Bermudez was selling
13 kilogram quantities of cocaine, and then to expect them to ignore
14 that fact when deciding whether he possessed a gun.
15 “A district court ‘abuses’ or ‘exceeds’ the discretion
16 accorded to it when . . . its decision – though not necessarily
17 the product of a legal error or a clearly erroneous factual
18 finding – cannot be located within the range of permissible
19 decisions.” Zervos v. Verizon New York, Inc., 252 F.3d 163, 169
20 (2d Cir. 2001) (footnote omitted). I believe the result of the
21 Rule 403 balancing in this case was outside the range of
22 permissible decisions and thus amounts to an abuse of discretion.
23 III. Conclusion
24 The District Court abused its discretion when it admitted
-29-
1 the drug-related conversation, because the probative value, if
2 any, of that evidence was substantially outweighed by its
3 overwhelmingly prejudicial effect. Moreover, even if the
4 evidence were otherwise admissible under Rule 403 to rehabilitate
5 police officers’ credibility, the District Court erred when it
6 denied Bermudez’s motion in limine with prejudice before trial,
7 because evidence to bolster credibility is not admissible until a
8 witness’s credibility has been attacked. Accordingly, I
9 respectfully dissent from Part I of the majority decision and
10 would reverse the judgment and remand for retrial.
-30-
| {
"pile_set_name": "FreeLaw"
} |
391 F.Supp.2d 634 (2005)
Shadrack H. HUDGENS, Plaintiff,
v.
WEXLER AND WEXLER, Attorneys, and Norman Paul Wexler Defendants.
No. 00 C 5216.
United States District Court, N.D. Illinois, Eastern Division.
January 4, 2005.
*635 Jacqueline Marrie Battalora, Battalora & Associates, Shadrack H. Hudgens, *636 Moira S. Johnson, Attorney at Law, Chicago, IL, for Plaintiff.
Thomas J. Shanahan, Thomas J. Shanahan, Attorney at Law, Chicago, IL, for Defendant.
MEMORANDUM OPINION AND ORDER
FILIP, District Judge.
Plaintiff Shadrack A. Hudgens ("Plaintiff" or "Hudgens") filed an amended complaint (D.E.19[1]) on July 2, 2001, against Defendants Wexler and Wexler, Attorneys, and Norman Paul Wexler (collectively, "Defendants") alleging, inter alia, violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. ("Title VII"), for discriminatory discharge based on race and unlawful retaliation (Counts I and II), and a violation of the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161 et seq. ("COBRA") and the Employee Retirement Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA"), for failure to notify Plaintiff of his rights to continue his healthcare coverage (Count III). The case is before the Court on Defendants' Motion for Summary Judgment ("Motion") on all counts. (D.E.46.) For the reasons stated, infra, the Motion is granted in part and denied in part.
BACKGROUND
I. Local Rule 56.1
Before reciting the factual background of this case, the Court is compelled to comment on the parties' compliance (and non-compliance) with Northern District of Illinois Local Rule 56.1 ("L.R.56.1") in this case. L.R. 56.1 requires that statements of facts contain allegations of discrete material facts, and the factual allegations must be supported by admissible record evidence. See L.R. 56.1; Malec v. Sanford, 191 F.R.D. 581, 583-85 (N.D.Ill.2000) (Castillo, J.). The Seventh Circuit teaches that a district court has broad discretion to require strict compliance with L.R. 56.1. See, e.g., Koszola v. Bd. of Educ. of City of Chicago, 385 F.3d 1104, 1109 (7th Cir.2004); Curran v. Kwon, 153 F.3d 481, 486 (7th Cir.1998) (citing Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1316 (7th Cir.1995) (collecting cases)). The Seventh Circuit and district courts have not been wedded to enforcement of the local rule as a matter of mere formalism. Rather, precedent acknowledges that it is a "reasonable judgment" that "consistent, `bright-line' enforcement is essential" not only in promoting compliance with the local rule, but even more importantly "to ensuring that [the] long-run aggregate benefits in efficiency" that L.R. 56.1 is intended to produce are realized for the system of justice in the Northern District. Koszola, 385 F.3d at 1109 (collecting cases; citations and internal quotation marks omitted); accord, e.g., Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1316 (7th Cir.1995).
In this case, each of the parties variously has violated L.R. 56.1. For example, both parties have made numerous affirmative statements of fact without offering proper evidentiary support, and the Court will not consider those statements. See, e.g., Malec, 191 F.R.D. at 583 ("Factual allegations not properly supported by citation to the record are nullities."). Additionally, Defendants improperly filed a Reply to Plaintiff's Answer to Statement of Material Facts Under Rule 56. (See D.E. 59 at 1-4.) While Defendants are permitted to file a response to Hudgens's statement of additional facts, see L.R. 56.1(a), *637 nowhere does the rule state that a movant may reply to the responses of the non-movant. Thus, while the Court will consider the latter half of Defendants' Reply, which responds to Hudgens's additional statements of fact, the Court will not consider the unnecessary and improper "replies" to Plaintiff's responses. See Schulz v. Varian Med. Sys., Inc., 315 F.Supp.2d 923, 925 n. 1 (N.D.Ill.2004) (Castillo, J.); accord Kozlowski v. Fry, 238 F.Supp.2d 996, 1000 n. 2 (N.D.Ill.2002) (Keys, M.J.) (citing White v. Sundstrand Corp., No. 98 C 50070, 2000 WL 713739, at *2 (N.D.Ill. May 23, 2000) (Reinhard, J.), aff'd, 256 F.3d 580 (7th Cir.2001)). Each side also fails to provide foundation for numerous documents that it uses to support its statements and denials. But as neither side objects to these exhibits on an evidentiary basis, and those objections are thus arguably waived, see Fed.R.Evid. 103(a), the Court will consider the documents to the extent they are relevant and not plainly inadmissible.
The Court also notes L.R. 56.1's provision that deems admitted for purposes of summary judgment any statement of fact not controverted by the statement of the opposing party. See L.R. 56.1(a), (b)(3)(B). Both parties have improperly denied a number of factual assertions by failing to provide adequate or proper record support sometimes by failing to provide any record support at all for their denials. Thus, where those factual assertions are properly supported by evidence in the record, the Court deems them admitted. See, e.g., Malec, 191 F.R.D. at 584 ("[A] general denial is insufficient to rebut a movant's factual allegations."); id. (failure to adhere to L.R. 56.1 requirements, including citation to specific evidentiary materials justifying denial, is equivalent to admission). The Court will note such deemed admissions throughout its recitation of the relevant facts below.
II. Facts[2]
Mr. Shadrack H. Hudgens is an African-American male. (Defendants' Statement of Material Facts (D.E.47) ("Def.SF") ¶ 1 (admitted).) Defendant Wexler & Wexler is a firm operated by a sole proprietor, Norman P. Wexler, which employs over 20 full-time employees, and which in 1999 offered health insurance under a group plan. (Def. SF ¶ 2 (admitted); Plaintiff's Amended Local Rule 56 Statement of Additional Facts in Opposition to Summary Judgment (D.E.57) ("Pl.SAF") ¶ 2 (admitted).) Hudgens was hired by Wexler & Wexler in 1993 into the position of collector within the collections department. (Pl. SAF ¶ 1 (admitted).) Several days after he was hired, Hudgens was assigned to work as a skip tracer, locating debtors and debtor assets. (Pl. SAF ¶ 3 (admitted).) Within months, Hudgens was performing the duties of a person managing the skip tracing department. (Pl. SAF ¶ 4 (admitted).) Plaintiff was recognized by Wexler & Wexler as a manager of the skip tracing department in 1998. (Pl. SAF ¶ 5 (deemed admitted for lack of support for denial).) Throughout Hudgens's employment, including after he was recognized as a manager, until the last few months of his employment, Hudgens reported to a supervisor, Roy Yarber. (Pl. SAF ¶ 6 (deemed admitted for non-responsive denial); id. ¶ 7 (deemed admitted for lack of support for denial).) Gerald Levy served as the director of operations and had supervisory power over everyone at *638 Wexler & Wexler except for Norman Wexler. (Pl. SAF ¶ 8 (admitted).)
Plaintiff alleges that he was treated less favorably than other persons in a management position at Wexler & Wexler and also treated less favorably than non-management employees who were Caucasian. In support of this conclusion, Plaintiff points to the fact that he was the only person in the office with managerial responsibilities who was required to punch in and out of the office. (Pl. SAF ¶ 10.) Defendants dispute this by pointing out that Plaintiff admits that he was taken off the clock in March 1997, but they do not dispute that he was required to punch in and out until then. (Defendants' Reply to Plaintiff's Rule 56 Statement of Addition of [sic] Facts in Opposition to Motion for Summary Judgment (D.E.59) ("Def.Reply") ¶ 10; Pl. SAF ¶ 11.) Hudgens complained about this "unfair" treatment to Yarber, Patti Wexler (who handled time cards), Gerald Levy, and Norman Wexler. (Pl. SAF ¶ 11 (admitted).) Hudgens made complaints several times in 1995, in 1996, and in 1997 about being required to utilize a punch card and about management's failure to recognize him as a manager. (Id.)
According to Hudgens, African-American employees in the skip tracing department were treated differently than Caucasian employees.[3] He offers as evidence of this treatment that Norman Wexler and Mitchell Wexler (whose position in the law office is not clear from the summary judgment papers) would regularly greet and address in a friendly manner Patrick Pilewski, a white employee, while ignoring Hasson Garland, an African-American employee who accompanied Pilewski. (Pl. SAF ¶ 12 (deemed admitted for non-responsive denial).) From 1995 to 1998, Hudgens and Yarber, both African Americans, were the only managers who were not supplied private offices. (Pl. SAF ¶ 14 (deemed admitted for non-responsive denial).) Mara Salganik, a Caucasian female and manager of accounting, Gerald Levy, a Caucasian male and director of operations, Marty Bass, a Caucasian male and manager of the clerical department, and Norman Wexler, a Caucasian male and manager of the legal department, all had private offices. (Id.) In 1998, Hudgens was given a private office.[4] (Pl. SAF ¶ 15.) Yarber sometimes referred to senior management in ways that reflected his view that they were racist, such as by saying, "don't trust that white boy," "they are racist," and "they are prejudiced." (Pl. SAF ¶ 16 (deemed admitted for non-responsive denial).) (Yarber also specifically testified that Wexler & Wexler never engaged in racially motivated activity (Pl. SAF, Ex. 45 at 50:15-19), never made any hiring or firing decisions based on racial considerations *639 (id. at 50:11-14), and that while he did not always approve of Defendants' actions, their actions were "[n]ot racially motivated," but were "[m]oney motivated." (id. at 50:20-23; see also id. at 50:11-52:21).)
More than ten times from 1995 to 1999, Hudgens complained to Yarber about the treatment of non-Caucasians, including himself, by management at Wexler & Wexler. (Pl. SAF ¶ 18 (deemed admitted for non-responsive denial).) From at least December 31, 1996, Wexler & Wexler had in place a harassment policy and grievance procedure in its employee policy manual.[5] (Pl. SAF ¶ 19 (deemed admitted for non-responsive denial).) In response to Plaintiff's complaints to Yarber, Yarber told Plaintiff "to do his best job and to stay away from the Wexlers." (Id. (deemed admitted for non-responsive denial).) Plaintiff also brought his concerns to the attention of Norman Wexler in letters he says he sent in 1996 and 1997.[6] (Pl. SAF ¶ 20.) Defendants deny that Hudgens complained of treatment based on race and offer three letters sent by Hudgens to Wexler in 1997, 1998, and August 1999. (Def. Reply ¶ 20; D.E. 59 (Def. Reply Br.), Ex. K.) None of these letters makes any reference to race or race-based discrimination against Hudgens or any other employee at Wexler & Wexler. Norman Wexler did not discuss the concerns that Hudgens raised in his letters, and at one point, Wexler dismissively referred to one of the letters as a "love letter" while "thumping" the paper on the side of Plaintiff's head. (Pl. SAF ¶ 22 (deemed admitted for non-responsive denial).)
Hudgens was fired by Wexler & Wexler on December 7, 1999. (Def. SF ¶ 8 (admitted in pertinent part).[7]) After Hudgens was terminated, he was replaced by a Caucasian male.[8] (Pl. SAF ¶ 23 (deemed admitted for non-responsive denial and lack of support for denial).) Defendants state that Hudgens was fired for insubordination. Notes prepared by Levy state the following reasons that he terminated Plaintiff: "(1) Major lack of performance and drop in production, (2) Conflicts regarding his performance of my instruction and actual implementation [(A)] reporting; [(B)] termination of non producers; (3) poisoning the atmosphere in the skip tracing department and lowering morale; (4) taking time off without advance notice and also disappearing for long periods of time *640 during the day." (Def. SF ¶ 13 (deemed admitted for lack of support for denial).) Defendants offer payroll records that show that Hudgens's production (as measured by the amount of commission he earned) dropped $17,321 over two years. (Def. SF ¶ 14.) Plaintiff disputes that these payroll records are evidence of his lowered production. He claims that his commissions were based on the number of "hits" (not defined) that he and his department turned in, and that his decreased hits can be explained by other factors, such as his increased responsibility in non-hit-based work and the company's focus on different types of hits (which are apparently worth different commissions). (Plaintiff's Responses to Defendant's Background (D.E.57) ("Pl.Resp.") ¶ 14.)
The event that apparently precipitated Hudgens's termination was an act of alleged insubordination on his part. In December 1999, Levy instructed Hudgens to lay off the four "lowest producers" for that month in the skip tracing department. (Def. SF ¶ 15 (admitted in pertinent part).) Although the briefing is not explicit about which employees were laid off, the Court adduces that Angelica Calderon, William Campbell, Latrena Harthrone, and Fundador Quinones were laid off by Hudgens. (See Def. SF ¶ 15; id., Ex. F.) Wexler & Wexler offers what it calls "production sheets" (which appear to be payroll records that reflect commissions paid to each employee) for the pay period ending November 17, 1999, to support its claim that Hudgens disregarded Levy's instruction and laid off at least some high producers and not the four lowest ones. (Def.SF, Ex. F.) According to Defendants, had Hudgens followed the instructions that Hudgens said Levy gave him,[9] he would have laid off Maricela Aguilar, William Campbell, Hasson Garland, and Sarah Melendez. (Def. SF ¶ 15.) Plaintiff denies these facts by stating that Plaintiff relied on other "skip tracing reports he maintained" to determine skip tracer activity and that he then laid off the four lowest producers for that month.[10] (Pl.Resp.¶ 15.)
*641 After Hudgens was terminated, Wexler & Wexler paid the premium for his health benefits in January 2000. (Def. SF ¶ 23 (deemed admitted for lack of support for denial).) There is a dispute over whether Wexler & Wexler sent Plaintiff a notice of termination of his health insurance. Defendants claim that Plaintiff sent Hudgens a notification letter on December 9, 1999. (Def. SF ¶ 22; D.E. 46 (Def.Motion), Ex. ¶ 12.) Plaintiff denies that he received any letter from Defendants regarding his health benefits. (Pl. SAF ¶ 26.) The address to which Defendants allegedly mailed the letter was a post office box in Chicago. (D.E. 46 (Def.Motion), Ex. ¶ 12.) Plaintiff claims that the contact address listed on his employee information form and employment application with Wexler & Wexler is a street address on West 54th Place in Chicago, which was the address at which Plaintiff received all written communication from Defendants during his employment. (Pl. SAF ¶ 35.) Plaintiff also claims that on January 11, 2000, Plaintiff sent a letter to Wexler & Wexler requesting that his contact information be changed to his post office box address. (Id.) Defendants assert that they did have Plaintiff's post office box address, as evidenced by a W-4 IRS form (withholding allowance certificate) signed by Plaintiff, dated April 3, 1999, which listed post office box. (Def. Reply ¶ 35.)
Plaintiff first learned that his health insurance had been terminated after discovering that he was unable to get psychiatric care for lack of coverage in January or February 2000. (Pl. SAF ¶ 29 (deemed admitted for non-responsive denial).) Plaintiff contacted Defendants' insurance carrier about January 2000 and was instructed that he should contact Defendants regarding his right to COBRA (presumably referring to his right under COBRA to extend his health insurance by paying the premium himself). (Pl. SAF ¶ 30 (deemed admitted for non-responsive denial).) Hudgens then called Mara Salganik at Wexler & Wexler who told Hudgens that Defendants do not participate in COBRA. (Pl. SAF ¶ 30, 33.) Defendants deny this by offering testimony by Salganik that she terminated Plaintiff's coverage because Plaintiff called her, asked for a return of his share of the premium of January, and, when asked, told Salganik that he did not wish to continue his health coverage. (Def.Resp.¶ 33.) Plaintiff does not dispute that Hudgens called the office in January and asked for a refund of his share of the January premium. (Def. SF ¶ 24 (admitted).) Defendants' insurance carrier terminated Plaintiff's coverage effective upon the date of his termination, December 7, 1999. (Pl. SAF ¶ 31 (deemed admitted for lack of support for denial).)
SUMMARY JUDGMENT STANDARD
Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled *642 to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In determining whether there is a genuine issue of fact, the court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir.2004). To avoid summary judgment, the opposing party must go beyond the pleadings and "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is proper 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).
DISCUSSION
III. Discriminatory Discharge
Unfortunately, Hudgens's Title VII case as presented on summary judgment is "another case" in which, as the Seventh Circuit recently lamented, a litigant has "simply collected the sum total of all the unpleasant events in [his] work history since [1993], dumped them into the legal mixing bowl of this lawsuit, set the Title VII-blender to puree and poured the resulting blob on the court." Davis v. Con-Way Transp. Cent. Express, Inc., 368 F.3d 776, 782 (7th Cir.2004) (internal quotation and citation omitted). Although Hudgens complains of numerous ways that he was mistreated, he does not explain with any degree of precision how those acts translate into liability on the part of Wexler & Wexler, if at all. As best the Court can tell from his summary judgment response, Plaintiff ultimately puts forward two theories of liability related to his termination, one based on race and another for retaliation. (See D.E. 56 at 3, 12, 16-17.) In his discussion of his wrongful discharge claims, Hudgens does not separate out or specify which things that Wexler & Wexler allegedly did to him support a claim for race-based discrimination and which support a claim for retaliation. It is clear, however, that Hudgens does not make a claim that he was subjected to a racially hostile work environment. Plaintiff also explicitly concedes that he has no evidence to support a claim for failure to promote him. (D.E. 56 at 3.) As a result, to the extent the amended complaint presents a claim for failure-to-promote, it is dismissed.
Even more frustrating for the Court, Plaintiff has failed to provide any relevant law with which to address his various and diverse statements regarding his allegedly wrongful termination. In almost ten pages of argument on his allegedly unlawful discharge, Hudgens (who is represented) does not cite a single case in support of his cause, much less explain the legal relevance under applicable precedent of his roaming allegations and arguments.
"This court has no duty to research and construct legal arguments available to a party, especially when he is represented by counsel." Tyler v. Runyon, 70 F.3d 458, 466 (7th Cir.1995) (internal quotation omitted); accord, e.g., LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 921-22 (7th Cir.1997) (collecting cases). Moreover, at least for a represented party, the Court "is not equipped to act as auxiliary lawyer for a party," and "[t]he responsibility for the identification, framing, and argument of the issues ... is that of the lawyers, not of the judges." Tyler, 70 F.3d at 466; see also, e.g., Luddington v. Ind. Bell Tel. Co., 966 F.2d 225, 230 (7th Cir.1992) ("If we assume the lawyers' responsibilities, we unbalance the market for legal services and take time away from our consideration *643 and decision of other cases."). Rather than use its discretion to deem the entirety of Plaintiff's Title VII arguments waived as a matter of course see, e.g., LINC Finance Corp., 129 F.3d at 921 ("[T]he failure to cite authorities in support of a particular argument constitutes a waiver of the issue" (collecting cases)); Luddington, 966 F.2d at 230 (collecting cases) however, the Court will consider Plaintiff's arguments to the extent the Court is able to discern them.
On another general note, throughout their Motion, Defendants argue that Hudgens should not be able to rely on past actions that he alleges are discriminatory because they are time barred under National Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002). See 42 U.S.C. § 2000e-5(c) and (e) (employee must file a charge of discrimination within 180 or 300 days of unlawful employment practice, depending on whether state proceedings may be and have been commenced). The only discrete act of which Plaintiff complains at this point in the lawsuit is his termination, which Defendants do not dispute fell within the 300-day statutory period. National Railroad stands for the proposition that "discrete discriminatory acts are not actionable if time barred, even if they are related to acts alleged in timely filed charges." 535 U.S. at 113, 122 S.Ct. 1145. This rule does not, however, "bar an employee from using the prior acts as background evidence in support of a timely claim." Id. Plaintiff does not address this issue at all. The Court will look to the earlier allegedly discriminatory actions, to the extent they appear relevant, as evidence to support Plaintiff's claims of wrongful termination based on race and retaliation.
With those thoughts in mind, the Court now turns to Hudgens's claim for wrongful discharge.
A. Discharge Based on Race
In order for Hudgens to prevail on a claim of racial discrimination, he must present direct evidence of discriminatory intent or proceed under the McDonnell Douglas burden-shifting framework. See, e.g., Koszola v. Bd. of Educ. of City of Chicago, 385 F.3d 1104, 1107 (7th Cir.2004). As best the Court can tell from Plaintiff's summary judgment papers, Plaintiff is not presenting a case under the direct method of proof. If he were, however, the Court finds no evidence that would support such a claim. Hudgens has not put forth, for example, an "admission by the decision-maker that his actions were based on the prohibited animus," which would constitute direct evidence of discriminatory intent. Id. at 1109 (quoting Radue v. Kimberly-Clark Corp., 219 F.3d 612, 616 (7th Cir.2000)); see also Cerutti v. BASF Corp., 349 F.3d 1055, 1060 (7th Cir.2003) ("Direct evidence `essentially requires an admission by the decision-maker that his actions were based upon the prohibited animus.'") (quoting Rogers v. City of Chicago, 320 F.3d 748, 753 (7th Cir.2003)); Castleman v. Acme Boot Co., 959 F.2d 1417, 1420 (7th Cir.1992) (acknowledging that direct evidence will "rarely" be found).
Plaintiff may also prevail under the direct method if he presents "a `convincing mosaic' of circumstantial evidence that allows a jury to infer intentional discrimination by the decisionmaker." Koszola, 385 F.3d at 1109 (quoting Rhodes v. Ill. Dep't of Transp., 359 F.3d 498, 504 (7th Cir.2004))." `That circumstantial evidence, however, must point directly to a discriminatory reason for the employer's action'" at issue. Koszola, 385 F.3d at 1109 (quoting *644 Rhodes., 359 F.3d at 504). If the Court takes all the actions by Wexler & Wexler that Plaintiff has alleged are discriminatory, e.g., waiting until 1998 to offer Hudgens a private office while Caucasian managers had private officers earlier, and making Hudgens punch in and out while Caucasian managers did not have to do so, Plaintiff has not created a "convincing mosaic" that establishes a triable issue as to discriminatory intent for his termination. (The Court notes that Hudgens does not assert that he had more seniority than other managers with private offices; nor does Hudgens discuss their relative responsibilities at the firm or assert that he had more responsibilities than any of the others. These considerations surely matter (both here and for purposes of any comparators-analysis): for example, one of the Caucasian managers with private offices of whom Hudgens complains was Norman Wexler, the principal of the entire firm. (D.E. 57 at 10, ¶ 14.)) Hudgens's assertion that Norman Wexler regularly greeted Patrick Pilewski (a Caucasian employee) warmly and ignored Hassan Garland (an African-American employee), does not help to forestall summary judgment concerning Hudgens's termination, particularly given that it is undisputed that Norman Wexler personally talked to Hudgens and persuaded him not to resign in the summer of 1999 when Hudgens indicated that he might leave the firm. (Pl. SAF, Ex. 44 (Hudgens Dep.) at 93:19-95:4.) In sum, the remaining circumstantial evidence does not "point directly to a discriminatory reason for the employer's action" at issue, i.e., Hudgens's termination. Koszola, 385 at 1109 (internal quotation omitted); see also id. at 1111 ("As we have often stated, summary judgment is the `put up or shut up' moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of events.... [Plaintiff's] evidence falls ... short.") (collecting cases; internal quotes and citations omitted). Thus, the Court must determine whether Hudgens has made out a prima facie case of race discrimination under the indirect, burden-shifting approach.
To survive summary judgment under the burden-shifting paradigm set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), Hudgens must establish the following elements: "(1) he was a member of a protected class; (2) he was meeting his employer's legitimate expectations; (3) he suffered an adverse employment action; and (4) other similarly situated employees who were not members of his protected class were treated more favorably." Davis, 368 F.3d at 784. If Hudgens makes these showings, the burden of production shifts to Wexler & Wexler to provide a "legitimate, nondiscriminatory reason for terminating him." Id. (citing Cerutti, 349 F.3d at 1061). Hudgens must then rebut Defendants' proffered basis for his termination "with evidence that it is just a pretext for race discrimination." Davis, 368 F.3d at 784. "Despite these shifting burdens of production, the ultimate burden of persuasion always remains with the plaintiff." Essex v. United Parcel Serv., Inc., 111 F.3d 1304, 1309 (7th Cir.1997).
Plaintiff cannot prevail under this method, as Defendant contends. First, Plaintiff has not identified other similarly situated comparators of other races who were treated differently, as he must. In this regard, Hudgens has failed to demonstrate, as precedent instructs, "that there is someone who is directly comparable to him in all material aspects" who was treated differently concerning the disputed employment issue. Herron v. DaimlerChrysler Corp., 388 F.3d 293, 300 (7th Cir.2004) *645 (quoting Grayson v. O'Neill, 308 F.3d 808, 819 (7th Cir.2002) (collecting cases)).[11] This defect is fatal, and summary judgment is therefore appropriate on Count I.
In addition, Plaintiff cannot meet his burden concerning pretext. Defendants offer four reasons that Plaintiff was terminated: (1) lack of performance and drop in production; (2) conflicts regarding performance of Levy's instruction and actual implementation, including termination of non producers; (3) poisoning the atmosphere in the skip tracing department and lowering morale; and (4) taking time off without advance notice and disappearing for long periods of time during the day. (Def. SF ¶ 13.) Plaintiff does not offer properly supported evidence to create a triable issue concerning whether Defendants' articulated reasons for firing Hudgens are pretextual. See, e.g., Davis, 368 F.3d at 784 ("[A] pretext for discrimination... means something worse than a business error, pretext means deceit to cover one's tracks." (internal quotations and citations omitted)); Kulumani v. Blue Cross Blue Shield Ass'n, 224 F.3d 681, 685 (7th Cir.2000) ("[Pretext] means a dishonest explanation, a lie rather than an oddity or an error.").
First, Hudgens claims that Wexler & Wexler did not provide him with an explanation for why he was terminated at the time he was fired. This claim does nothing to indicate that the articulated reasons are lies or otherwise pretextual. Hudgens also claims that he did not exhibit a major lack of performance or a drop in production. To support this, however, he asserts without support that "production in skip tracing ebbed and flowed as a matter of course." (D.E. 56 (Pl.Resp.Br.) at 10.) He then points to the fact that when his production dropped (based on Defendants' own measure) in other years, he was not terminated. Plaintiff also states that he and his department were "confronted with major changes imposed without consultation that affected production in the last quarter of 1999." (D.E. 56 at 11.) Even if these characterizations of Plaintiff's performance are true, they do not prove pretext. Precedent instructs that this Court does "not sit as a superpersonnel department" that reexamines an entity's business decision and reviews the propriety of the decision. Davis, 368 F.3d at 785 (citation omitted). "The focus of a pretext inquiry is whether the employer's stated reason was honest, not whether it was accurate, wise, or well-considered." Id. at 784 (internal quotation and citation omitted). Hudgens's proffered evidence does not prove that Defendants' articulated reasons were dishonest. Plaintiff also offers a characterization of the lay offs that precipitated his termination that would indicate that he had, indeed, followed Levy's instructions. *646 ( D.E. 56 at 11.) But, at most, Plaintiff and Defendants have shown (with Defendants presenting the far more coherent and compelling account) that the two sides may have had access to different sets of commission records (Defendants Exhibits F & I, on the one hand, and Plaintiff's largely unintelligible Exhibit 13, on the other), by which people could come to different conclusions about who were the lowest producers in the month before the lay off. But precedent repeatedly has taught that arguing about who was right in such a situation is "a distraction" Green v. Nat'l Steel Corp., 197 F.3d 894, 900 (7th Cir.1999); Kariotis v. Navistar Int'l Trans. Corp., 131 F.3d 672, 677 (7th Cir.1997) because even if Defendants were wrong, that is not actionable under Title VI unless they were acting for racial reasons. Hudgens has not created a triable issue on that score; indeed, one could fairly question whether he has even created a triable issue about whether he fired the lowest producers based on his own view of the records. (See generally D.E. 46 (Def.Motion), Ex. 10 (post-termination letter from Hudgens to Norman Wexler) at 1-2 (suggesting that, when Hudgens went to fire the four lowest producing employees, he presided over meeting where higher producing employees quit and lower producers were allowed to stay).) In any event, however, the salient point is that Hudgens has failed to demonstrate that there is a triable issue about whether Defendants are lying and instead have acted for racial reasons.
In sum, Plaintiff has failed to create a triable issue regarding pretext as to whether the reasons offered by Wexler & Wexler for terminating his employment were not based in fact, or whether they did not honestly motivate Wexler & Wexler to discharge Hudgens.[12] Thus, Plaintiff has failed to establish an essential element of his case, i.e., that the legitimate, non-discriminatory basis Defendants offered for his termination was a pretext for race discrimination, and summary judgment is proper Count I.
B. Retaliatory Discharge
A plaintiff may establish a prima facie case of retaliation through either the direct or indirect method of proof. "Under the direct method, the plaintiff must present direct evidence of (1) a statutorily protected activity; (2) an adverse action taken by the employer, and (3) a causal connection between the two." Sitar v. Ind. Dep't of Transp., 344 F.3d 720, 728 (7th Cir.2003). "Under the indirect method, the plaintiff must show that (1)[he] engaged in a statutorily protected activity; (2)[he] performed [his] job according to [his] employer's legitimate expectations; (3) despite [his] satisfactory job performance, [he] suffered an adverse action from the employer; and (4)[he] was treated less favorably than similarly situated employees who did not engage in statutorily protected activity." Id. If the plaintiff establishes these elements, the burden shifts to the defendant to come forward with a legitimate, non-invidious reason for the adverse action. Id. "Although the burden of *647 production shifts to the defendant under this method, the burden of persuasion rests at all times on the plaintiff." Id. (internal quotation omitted). "Once the defendant presents a legitimate, non-invidious reason for the adverse action, the burden shifts back to the plaintiff to show that the defendant's reason is pretextual." Id.
Defendants' argument in regard to Plaintiff's retaliation claim is not a pinnacle of precision, but Defendants appear to argue that Plaintiff has not established a prima facie case of retaliation. In particular, Defendants argue that Plaintiff has provided no support for his allegation that he was retaliated against for complaining about not being promoted.[13] Defendants also argue that Plaintiff did not allege retaliation in his EEOC charge.
Unlike Plaintiff's race discrimination claim, discussed above, the Court cannot overlook Plaintiff's utter failure to properly brief his retaliation claim, and the Court will not attempt to construct an argument for him. Hudgens makes no response to Defendants' legal arguments regarding Hudgens's retaliation claim. Indeed, in his Memorandum of Law supporting his response to the Motion, Plaintiff only mentions retaliation in three places: once to summarize his Amended Complaint (D.E. 56 at 2); once in a heading titled "Wrongful Discharge & Retaliatory Discharge" (id. at 3); and in his conclusion, again generally summarizing his claims (id. at 16-17). The Supreme Court teaches that "[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses," Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548, and Plaintiff's failure to support his claim of retaliation with either facts or legal argument leads the Court to find that summary judgment is proper on Count II. See generally LINC Fin. Corp., 129 F.3d at 922 ("[Party's] utter failure to produce a single case or statute supporting his non-jurisdictional arguments, therefore, is sufficient to waive all of those arguments."); United States v. Berkowitz, 927 F.2d 1376, 1384 (7th Cir.1991) ("We repeatedly have made clear that perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are waived (even where those arguments raise constitutional issues)."); Luddington, 966 F.2d at 230 ("If we assume the lawyers' responsibilities, we unbalance the market for legal services and take time away from our consideration and decision of other cases. So, if an appellant fails to make a minimally complete and comprehensible argument for each of his claims, he loses regardless of the merits of those claims as they might have appeared on a fuller presentation.") (collecting cases).
"To avoid any appearance that [the Court is] `sacrificing substantive justice on the altar of administrative convenience,'" however, the Court will briefly address the substantive issues of Plaintiff's retaliation claim, as best the Court can divine them. LINC Fin. Corp., 129 F.3d at 922 (quoting Luddington, 966 F.2d at 230) (alteration omitted). Plaintiff never states in his response to the Motion that he complained to Wexler & Wexler of not being promoted on August 6, 1999 (the basis of his allegation of retaliation). Plaintiff does state that he "wrote his concerns in the form of a letter to company president Norman Wexler explicitly referencing a lack of *648 trust and appreciation"[14] (Pl. SAF ¶ 20), but this letter does not complain of either his failure to be promoted or any type of race-based discrimination (see D.E. 59, Ex. K).
In Plaintiff's statement of additional facts, he states in vague terms that he complained to Yarber more than ten times "about the treatment of non-Caucasians, especially himself and other African American employees by senior management." (Pl. SAF ¶ 18.) Plaintiff also states that he complained to various people at Wexler & Wexler about being required to utilize a punch card and Defendants' failure to recognize Plaintiff as a manager when he considered himself one. (Pl. SAF ¶ 11.) Nowhere, however, does Plaintiff provide any argument or legal authority that would establish that his complaints amounted to statutorily protected activity. Even if the Court were to conclude that any or all of these complaints are statutorily protected activity (which point the Court does not reach), Plaintiff does not provide any evidence that would establish a causal connection between those complaints and his termination. Indeed, Plaintiff's entire argument in his brief is directed toward his race discrimination claim.[15]
Even if Plaintiff were attempting to proceed under the indirect method of proof (which he has not informed the Court that he is), the Court finds that Plaintiff has failed to produce any evidence (much less point to sufficient evidence to create a triable issue) that he was treated differently than similarly situated persons who did not engage in statutorily protected activity. Hudgens has failed to identify any similarly situated persons for the Court. Additionally, Plaintiff makes no separate arguments regarding pretext in the context of retaliation other than those made in the context of race discrimination, and the Court therefore finds that, as described supra, Plaintiff has failed to demonstrate that Defendants' articulated reasons are pretextual. Because Plaintiff has failed to make a sufficient showing on these multiple essential elements of his case with respect to which he has the burden of proof, summary judgment is proper on Count II.
Alternately, the Court finds that Plaintiff's claim of retaliatory discharge is beyond the scope of his EEOC charge. Generally speaking, a plaintiff cannot bring claims in a lawsuit that were not included in his EEOC charge. Cheek v. W. and S. Life Ins. Co., 31 F.3d 497, 500 (7th Cir.1994) (citing Alexander v. Gardner-Denver Co., 415 U.S. 36, 47, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974)). "Although the rule is not jurisdictional, it is a condition precedent with which Title VII plaintiffs must comply." Cheek, 31 F.3d at 500 (citing Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 392, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982); Babrocky v. Jewel Food Co., 773 F.2d 857, 864 (7th Cir.1985)) (internal citations omitted). Understanding that most EEOC charges are filled out by laypersons rather than attorneys, the Seventh Circuit teaches that "a Title VII plaintiff need not allege in an EEOC charge each and every fact that combines to form the basis of each claim in [his] complaint." Id. Therefore, all Title VII *649 claims set forth in a complaint are cognizable that are "like or reasonably related to the allegations of the [EEOC] charge and growing out of such allegations." Id. (internal quotations omitted). Hudgens meets this test if "there is a reasonable relationship between the allegations in the charge and the claims in the complaint, and the claim in the complaint can reasonably be expected to grow out of an EEOC investigation of the allegations in the charge." Id.
Hudgens has failed to meet the first part of this test. "When an EEOC charge alleges a particular theory of discrimination, allegations of a different type of discrimination in a subsequent complaint are not reasonably related to them unless the allegations in the complaint can be reasonably inferred from the facts alleged in the charge." Cheek, 31 F.3d at 503. Although Plaintiff plainly alleges race discrimination in his EEOC charge, a claim of retaliation cannot reasonably be inferred from the facts alleged. See generally Sitar, 344 F.3d at 726-27 (sex discrimination claim not reasonably related to retaliation claim). In his Charge of Discrimination filed with the EEOC, Plaintiff checked the box marked "Race" under the heading "Cause of Discrimination Based On," and he left the box marked "Retaliation" blank. (See D.E. 19, Ex. B.) In his narrative description of the particulars of his charge, Plaintiff describes his discharge by Defendants and attributes it to his race. (See id.) Nowhere does he make mention of his complaints to the managers at Wexler & Wexler (even if they were protected activity). (See id.) Simply, his description of his alleged wrongful termination did not afford the EEOC and Defendants an opportunity to settle any dispute based on retaliation, nor did it give Wexler & Wexler some warning of the retaliatory conduct about which the Hudgens claims he suffered. See Cheek, 31 F.3d at 500. Thus, for the independent and alternate reason that Plaintiff failed to include his claim of retaliatory discharge in his EEOC complaint, Defendants are entitled to summary judgment on Count II.
IV. COBRA
Plaintiff alleges that after his termination, Defendants did not notify him of his right to continue his healthcare coverage (D.E. 19, Count III ¶ 6), and that he incurred substantial expenses for healthcare because he was not covered by insurance (id., Count III ¶ 9; see Pl. SAF, Ex. 43 (medical bills)). COBRA requires an employer who is a plan administrator to notify any "qualified beneficiary" of his right to continued healthcare coverage in the event of a "qualifying event." 29 U.S.C. §§ 1161, 1163(2), 1164(a)(4); accord Mlsna v. Unitel Communications, Inc., 41 F.3d 1124, 1127-28 (7th Cir.1994). An employee who does not receive the required notice may bring a civil action against the plan administrator, which may be liable "in the amount of up to $100 a day from the date of such failure [to notify] ... and the court may in its discretion order such other relief as it deems proper." 29 U.S.C. § 1132(c)(1).
Here, Defendants do not dispute either that Plaintiff was covered under a health plan that they administered or that Plaintiff's termination constituted a "qualifying event." Rather, Defendants argue that summary judgment is proper because they satisfied their duty under COBRA to notify Plaintiff of his right to continued healthcare coverage. In particular, Defendants point to evidence that they mailed a notice letter to Plaintiff on December 9, 1999, and argue that this letter is proof of *650 its notice to him. (Def. SF ¶¶ 22-23.) Defendants argue that this evidence entitles them to a presumption that the notice was received. Plaintiff, on the other hand, denies that he ever received this letter.[16] (Pl. SAF ¶ 26.) Thus, Plaintiff has established a genuine issue of material fact as to whether Plaintiff was notified of his right to continuation of coverage, and summary judgment is not proper on Count III.[17]
CONCLUSION
For the reasons stated above, Defendants' motion for summary judgment is granted with respect to Counts I and II and denied with respect to Count III.
So ordered.
NOTES
[1] The various docket entries are referred to as "D.E. __."
[2] The relevant facts are taken from each party's L.R. 56.1 statement of facts and exhibits and corresponding responses. Where the parties disagree over relevant facts, the Court sets forth the competing versions. The Court, as it must, resolves genuine factual ambiguities in Plaintiff's favor. Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir.2004).
[3] Hudgens states that Defendants did not want certain employees in the front (and therefore visible to the public) section of the offices because of the color of their skin. (Pl. SAF ¶ 17.) The evidence offered by Hudgens to support this statement, affidavit testimony from a former employee of Wexler & Wexler that no African-American employee was stationed in the front office during the affiant's time of employment, does not support the inference as to the state of mind of Wexler & Wexler management.
[4] Plaintiff states that the office was built for an attorney who failed to become an employee of Wexler & Wexler and that he was instructed by Mitchell Wexler that the office was only temporary. (Pl. SAF ¶ 15.) The record citation given by Hudgens does not support the statement that Hudgens was told the office was only his temporarily. (See Pl. SAF, Ex. 44 (Hudgens Dep.) at 63-65.) In contrast, Defendants' denial of Plaintiff's statement is supported by Norman Wexler's testimony that two offices were built: one for the head of skip tracing (Hudgens) and one for an attorney who did not become employed. (Def. Reply ¶ 15; see Pl. SAF, Ex. 47 (Wexler Dep.) at 31:3-21.)
[5] Hudgens states that this policy was in effect "during this time." (Pl. SAF ¶ 19.) Apart from the ambiguity of "this time," the exhibit used to support this claim is dated, in its earliest version, December 31, 1996. (See Pl. SF, Ex. 11.)
[6] Hudgens states that he brought his concerns to Wexler in 1996, 1998, and 1999. (Pl. SAF ¶ 20.) Hudgens's deposition testimony cited supports only that Hudgens gave letters to Wexler in 1996 and 1997.
[7] In Defendants' Ex. K, there is a fourth letter from Hudgens to Norman Wexler that post-dates Hudgens's firing. That letter, which is one and one-half pages in length, addresses several subjects, most of which do not refer to any possibility of racism. In the penultimate paragraph of the letter, however, Hudgens prays that "the truth to this mater [sic] be revealed to you [Wexler] my [sic] the Lord Almighty," and also prays "that the nasty word or idea of discrimination has not played a role in this matter...." (Id.) As stated, this letter was not sent during the period of Hudgens's employment.
[8] Hudgens states that "[o]nly after Plaintiff's immediate replacement quit, and after Wexler & Wexler received notice of Plaintiff's charge of discrimination with the EEOC, did Wexler & Wexler hire a non-Caucasian female to manage the skip tracing department." (Pl. SAF ¶ 24.) The record citations provided by Plaintiff do not support the notion of the timing of the hiring of a person named "Carmen" who apparently became the skip tracing manager. (See Pl. SAF, Ex. 45 (Yarber Dep.) at 11; id. Ex. 47 (improperly cited as Ex. 50) (Wexler Dep.) at 25-26.)
[9] Hudgens says that Levy instructed him in December 1999 to lay off the four lowest producers in the month prior to the layoff (Pl.Resp.¶ 15); Defendants contend that Levy did not direct Hudgens to lay off the four lowest producers for only the prior month and instead intended Hudgens to lay off the four lowest producers for 1999 as a whole (see, e.g., Def. SF 15). Although Hudgens's position is arguably implausible, the Court accepts his version of the directions. As explained further below, however, even under Hudgens's view of his directions, Defendants are entitled to partial summary judgment, i.e., on Counts I and II.
[10] Plaintiff provides the Court with what are apparently the records he relied upon in deciding whom to lay off, but those records are incomprehensible and Plaintiff makes no attempt to explain them or present them in intelligible form. (See Pl. SAF, Ex. 13.) Each "record" is labeled based on a particular "tracer number" (which, one might guess, presumably corresponds to a particular employee), but there is no identifying information to tie the records to Plaintiff's claims that he actually fired the lowest producers. (Pl. SAF ¶ 15.) Plaintiff also attaches affidavits from Angelica Calderon (Pl.SAF, Ex. 20), Hasson Garland (Pl.SAF, Ex. 21), and William Campbell (Pl.SAF, Ex. 22). As Plaintiff frames his argument (Pl. SAF ¶ 15), he appears to offer these affidavits for a purpose clearly prohibited by the hearsay rules i.e., to show that Levy told Hudgens to fire the lowest producers for the prior month (as opposed to the year), because the affiants heard Hudgens (and not Levy) say that Levy had so stated. The Court notes, sua sponte, however, that each of the identical affidavits states that, at the December 1999 meeting Hudgens called concerning the lay offs, "Hudgens produced the production sheets from the last month and showed the group that the lowest producers were [the persons he laid off]." (Pl.SAF, Ex. 20-22.) Reading this evidence generously in favor of Plaintiff, it provides at least some intelligible evidence (in contrast to Pl. SAF, Ex. 13) that Plaintiff had some basis for believing that he laid off the lowest producers for November 1999. As explained further below, however, Defendants have adduced sufficient evidence showing that they too reasonably believed that Plaintiff did not lay off the lowest producers, even for the single month before the lay off, and precedent does not require Defendants to show that their employment decision was correct on the merits, but merely that it was not a lie employed as a pretext for racial discrimination. See, e.g., Davis v. Con-Way Transp. Cent. Express, Inc., 368 F.3d 776, 784 (7th Cir.2004) ("The focus of a pretext inquiry is whether the employer's stated reason was honest, not whether it was accurate, wise or well-considered.") (internal quotation marks and citation omitted).
[11] To the extent Hudgens discusses treatment of other managers at all (and he does not do so a great deal, much less in the framework of the Title VII comparators-analysis specified by precedent), one incident he describes substantially undermines Hudgens's position. Specifically, Hudgens states that "[i]f Defendant were truly and legitimately concerned with a poisoning of the atmosphere in the company and a lowering of morale, then other Defendant employees proved much more legitimate targets. Yarber [another African-American manager] wore a gas mask in the office when there was an issue regarding an employee's personal hygiene. Yarber did not face the degree of unfavorable treatment that plaintiff faced. A critical difference between Yarber and Plaintiff is that the prior came to the company with clients and maintained clients for the Defendant." (D.E. 56 (Pl.Resp.Br.) at 10.) This passage does not support Plaintiff's cause. The passage suggests that the Defendant law firm like many law firms and other institutions, for better or worse gave more leeway to individuals who brought money into the institution, not that the institution is one motivated by racism.
[12] Plaintiff offers other reasons in his response brief that are not supported by a properly supported statement of fact in his L.R. 56.1 response or affirmative statement, so these reasons will not be considered by the Court. For example, Plaintiff claims in that he obtained his employee file from Wexler & Wexler in August 2000 with the assistance of the Illinois Department of Labor and that the file did not contain the Levy's notes that supposedly were drafted in December 1999 (which is presumably meant to infer that Levy made up these notes as part of this litigation). (See, e.g., D.E. 56 at 9 (citing Pl. Resp. ¶ 13).) Plaintiff offers no evidence (see Pl. Resp. ¶ 13) that he obtained that file, what was in the file, or what should have been in the file.
[13] Plaintiff's Amended Complaint alleges that on August 6, 1999, he complained to Wexler & Wexler about not being promoted and threatened to resign, and that he was terminated because of that complaint. (D.E. 19, Count II ¶¶ 4, 6.)
[14] The letter actually states "appreciation and respect." (Pl.SAF, Ex. 17.)
[15] Hudgens concludes the argument section apparently meant to address both race discrimination and retaliation by stating. "The reasons given by Defendant for terminating Plaintiff's employment are simply untrue and are after-the-fact pretextual justifications designed to cover up another reason: that Defendants' Caucasian male leadership would not accept and treat Plaintiff as equal to Caucasian managers." (D.E. 56 at 12.)
[16] Plaintiff also argues that even if he had received the letter, it provided him insufficient notice of his rights under COBRA. Because the Court finds that there is a genuine issue of material fact as to whether Plaintiff received the notice at all, the Court need not decide this issue.
[17] Defendants suggest that Plaintiff cannot prevail because he cannot show that Defendants did not make a good faith attempt to comply with the notification demands of COBRA. See D.E. 59 (Def. Reply Br.) at 12 (quoting Lawrence v. Jackson Mack Sales, Inc., 837 F.Supp. 771, 782 (S.D.Miss.1992) (stating that COBRA does not specifically prescribe required method of providing notice)). In this regard, although the Seventh Circuit has not addressed this issue, courts in this and other districts have held that "`a good faith attempt to comply with a reasonable interpretation of the statute is sufficient' to satisfy COBRA requirements," and have held that, accordingly, an employer need not prove actual receipt of the COBRA notice by the employee. Keegan v. Bloomingdale's, Inc., 992 F.Supp. 974, 977 (N.D.Ill.1998) (Denlow, M.J.) (quoting Smith v. Rogers Galvanizing Co., 128 F.3d 1380, 1383 (10th Cir.1997) (collecting cases)); accord Degruise v. Sprint Corp., 279 F.3d 333, 336 (5th Cir.2002); Powell v. Paterno Imports, Ltd., No. 03 C 8175, 2004 WL 2434225, at *8 (N.D.Ill. Oct.28, 2004) (Coar, J.). This issue is presented in meaningful form only in Defendants' Reply Brief, so it will not be considered here.
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5 N.Y.3d 763 (2005)
PEOPLE v. HARVEY
Court of Appeals of the State of New York.
June 27, 2005.
Application in criminal cases for leave to appeal denied. (Graffeo, J.)
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102 U.S. 641 (____)
KAHN
v.
SMELTING COMPANY.
Supreme Court of United States.
Mr. John R. McBride and Mr. George H. Williams for the appellant.
Mr. Samuel Shellabarger and Mr. Jeremiah M. Wilson, contra.
*642 MR. JUSTICE FIELD delivered the opinion of the court.
This is a suit to compel the defendants to account for the proceeds of a mining claim in Utah, known as the Montreal claim, and to pay over to the plaintiff the amount to which he may be entitled upon such accounting. The complaint alleges that on the 14th of December, 1874, the plaintiff and two other persons, by the name of Deronso and Berassa, were the owners and tenants in common of the claim, each having an undivided third; that they then entered into an arrangement to work the claim for the ores and metals it contained, and from that time until February, 1876, they were a mining partnership engaged in working the mine, bearing the expenses and sharing the profits equally, Deronso and Berassa having the immediate direction, control, and management of its working; that on the 1st of February, 1876, his associates sold and transferred their interest in the mine, and in the tools, implements, and appurtenances connected therewith, to the defendant, Isador Morris, through whom the other defendants immediately acquired all the rights they possess; that from that time until the 10th of April, 1876, the defendants were in full charge and possession of the property, and extracted from the mine and sold about sixteen hundred tons of ores, worth about $45,000, the expense of extracting and marketing of which did not exceed $10,000; that since the 1st of February the plaintiff has been a partner with the defendants in the mining claim and is entitled to his share of the profits made, being one-third of the whole, and has demanded of the defendants a statement of their work and an accounting, but they have refused to comply with his demand, or to give him any information on the subject or any share of the profits, and have denied him access to the books of account of the concern, and that the profits amount, according to his information and belief, to about $35,000. He therefore prays for a decree establishing the partnership between him and the defendants, and directing an accounting from them and the payment of the amount found due to him upon such accounting; and for such other and further relief as to the court may seem meet and equitable.
The answer of the defendants traverses the allegations of *643 the complaint, and avers that on the 31st of January, 1876, the defendant, Isador Morris, found Deronso and Berassa in the actual possession of a portion of the Montreal mine, of which they claimed to own two-thirds; that, believing they owned such interest, Morris paid to them $25,000 for it and received a quitclaim deed from them; that on the following day, for the like sum, he conveyed, by a similar deed, that interest to one Wadsworth in trust for such persons as a majority of the members of the Sandy Smelting Company of Salt Lake City might direct, and that afterwards such majority conveyed the same to the defendant, the Central Smelting Company, remaining, however, in the possession of and working the mine until about March 1, 1876, when the smelting company took possession of it and afterwards held it exclusively until the 1st of April following. The answer further avers that a short time prior to this last date the mine was claimed by another company, called the Old Telegraph Company, under an older location; that thereupon the Central Smelting Company and its vendors caused the prior location and the mining claim to be carefully examined by experienced miners, and upon that examination they became satisfied that the older location and the Montreal mine were one and the same vein or lode, and that the Montreal mine was owned by the holders of the earlier location; that having become thus satisfied of this fact, the Central Smelting Company abandoned the Montreal mine, and has not since held, used, or occupied the same, or exercised any acts of ownership over it.
The answer further avers that the defendants never worked the Montreal mine or extracted ore from it, under any agreement with the plaintiff, or by his advice or consent, or in conjunction with him or as his mining partners; that they have always refused to recognize him as a party in any work, labor, or management, or business of the mine; that the proceeds of the mine received by the Central Smelting Company and its immediate vendors, after deducting the expenditures, show a net profit of about $12,000, which the defendants hold until the determination of suits now pending between the plaintiff and the owners of the alleged earlier location; that those suits are brought to determine whether the Montreal mine and the *644 earlier location are one and the same lode, and which of the parties is entitled to its possession, and the proceeds; and the defendants pray for their protection that the prosecution of this suit may be restrained until those suits are determined.
On the trial, evidence was produced by both parties, and from it the court found as facts,
First, That there was no partnership between the plaintiff and the defendants, as charged in the complaint.
Second, That there was no such co-tenancy between them in the mine in controversy as entitled the plaintiff to an accounting; and held, as a conclusion of law, that he had no right to recover in the action, and that the suit should be dismissed.
These findings were filed Nov. 21, 1877, and judgment upon them was entered the same day. From this judgment the plaintiff appeals to this court. Fourteen days after its entry the judge who heard the case, at the request of the plaintiff, filed further findings of fact. It does not appear that any notice was given to the defendants of any intended application to the court to make any findings in addition to those originally filed; and to make such findings without such notice was irregular. The practice, if permitted would lead to great abuses. It is not absolutely necessary in any case that the findings should accompany the announcement of the decision of the court; but, when they are required, and by the practice established in Utah they are required in all cases where issues of fact are tried without a jury, they should be filed before the entry of the judgment or decree, as in such cases upon them the judgment or decree rests. If either party is dissatisfied with them and desires more full or additional ones, he should, within a reasonable time during the same term, and before an appeal is taken or a writ of error sued out, apply to the court, upon proper notice to the adverse party, to make such fuller or additional findings; and if the application is granted, the additional findings should show on their face why they are made. The additional findings in this case not having been thus made, were properly stricken from the transcript. Taking, then, the original findings, let us examine whether they meet the issues raised by the pleadings and support the decree; for under the practice of Utah, where, in a case seeking *645 equitable relief, the facts are found by the court (and not by a master or a jury where the findings are merely advisory) they will be taken as its conclusions upon the evidence, and their sufficiency for the decree rendered will be considered.
The plaintiff avers that his association with his co-tenants of the mine was a mining partnership, and seeks to enforce his rights as a member of such partnership, and to obtain such other and further relief as he may be equitably entitled to. The opinion of the judge before whom the case was heard shows that he did not recognize the existence of any partnership in mines differing from ordinary partnerships, and his finding that there was no partnership, as alleged, between the plaintiff and the defendants, necessarily followed. The allegations of the complaint, whilst asserting a mining partnership, show that no other partnership existed after the sale of Deronso's and Berassa's interest. Such sale would have ended any ordinary partnership.
Mining partnerships as distinct associations, with different rights and liabilities attaching to their members from those attaching to members of ordinary trading partnerships, exist in all mining communities; indeed, without them successful mining would be attended with difficulties and embarrassments, much greater than at present. In Skillman v. Lockman, the question of the relation existing between parties owning several interests in a mine came before the Supreme Court of California, and that court said that "whatever may be the rights and liabilities of tenants in common of a mine not being worked, it is clear that where the several owners unite and co-operate in working the mine, then a new relation exists between them; and, to a certain extent, they are governed by the rules relating to partnerships. They form what is termed a mining partnership, which is governed by many of the rules relating to ordinary partnerships, but also by some rules peculiar to itself, one of which is that one person may convey his interest in the mine and business without dissolving the partnership." 23 Cal. 203. The same doctrine is asserted in numerous other cases, not only in that court, but in the courts of England. Associations for working mines are generally composed of a greater number of persons than ordinary trading partnerships; *646 and it was early seen that the continuous working of a mine, which is essential to its successful development, would be impossible, or at least attended with great difficulties, if an association was to be dissolved by the death or bankruptcy of one of its members, or the assignment of his interest. A different rule from that which governs the relations of members of a trading partnership to each other was, therefore, recognized as applicable to the relations to each other of members of a mining association. The delectus person, which is essential to constitute an ordinary partnership, has no place in these mining associations. Duryea v. Burt, 28 Cal. 569; Settembre v. Putnam, 30 id. 490; Taylor v. Castle, 42 id. 367. There are other consequences resulting from this peculiarity of a mining partnership, particularly as to the power of individual members to bind the association, upon which there is no occasion now to express any opinion. Skillman v. Lockman, supra; Dickinson v. Valpy, 10 B. & C. 128; Ricketts v. Bennett, 4 C.B. 686.
But if the relation of the plaintiff to his associates could not be considered as one of a mining partnership, he was still entitled to an accounting from them, if, as alleged by him, he was joint owner with them in the mine. They went into possession of the property under a conveyance from his co-tenants, and admit that whatever proceeds they have received from it were taken under a claim of ownership derived from that source. They have, upon their own averments, only a claim, in any event, to two-thirds of the proceeds; and if the plaintiff was a tenant in common with them, they can only refuse his demand to the other third by repudiating their own right to any portion. If a co-tenant, he had a right to call for an accounting, whatever might be the ultimate result of the claim of third parties to the whole proceeds as the owners of the mine under a prior location. He was, therefore, entitled to a finding on the question of his co-tenancy. The judge of the District Court seemed to recognize this position, for, after finding that there was no partnership, following in this respect his peculiar notions as to the non-existence of such an association as a mining partnership, he passed upon the claim to an accounting as a tenant in common of the mine with the defendants, and found "that there was no such co-tenancy *647 between the plaintiff and defendants in the mine in controversy as entitled the plaintiff to an account." This is not a sufficient finding of fact upon which to base a decree; it does not state that there was no co-tenancy between the parties; it implies that there was a co-tenancy; it only states that there was not such a one as entitled the plaintiff to an accounting. This is a mere legal inference, not the finding of a fact. If a co-tenancy of any kind existed, it is a question of law whether or not it entitles one co-tenant to an accounting from the others.
In considering the whole case, we think that justice will be subserved by a new hearing. The defendants recognize the possibility of the plaintiff ultimately establishing his right to a portion of the proceeds of the mine in their hands against the claimants of the alleged earlier location. They aver that they hold the proceeds subject to the determination of pending suits between those parties. The present decree, if affirmed, would cut off any claim of the plaintiff even should he prevail in that litigation.
The decree will be, therefore, reversed, and the cause remanded with direction to the Supreme Court of the Territory to send it to the District Court for a new hearing, the parties to be at liberty to produce new proofs; and it is
So ordered.
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366 So.2d 1318 (1978)
Joseph L. SMITH
v.
STATE of Louisiana, Through DEPARTMENT OF PUBLIC SAFETY.
No. 62182.
Supreme Court of Louisiana.
December 15, 1978.
Michael C. Barron, Baton Rouge, Special Counsel, Dept. of Public Safety, for defendant-respondent.
Charles W. Rea, Baton Rouge, amicus curiae in support of plaintiff-applicant.
Donald R. Wilson, Marksville, for plaintiff-applicant.
*1319 DENNIS, Justice.
The issue in this case is whether the five-year revocation of an habitual offender's driving privileges under the Motor Vehicle Habitual Offender Law, La.R.S. 32:1471-81, is absolute or subject to modification for good cause within the court's discretion.
Petitioner, Joseph L. Smith, was declared to be an habitual offender and ordered to surrender his driver's license. Shortly afterward, in a separate proceeding, Smith brought the instant suit to have his driving privileges restored. Following a hearing in which it was found that Smith's employment as an offshore diesel mechanic required him to respond at any hour to emergency calls, the district court restored limited driving privileges enabling Smith to fulfill his employment obligations. The Department of Public Safety appealed, and the court of appeal reversed. Smith v. Department of Public Safety, 358 So.2d 996 (La.App. 2d Cir. 1978). We granted writs to review the intermediate court's interpretation of the Motor Vehicle Habitual Offender Law as prohibiting a district court from restoring any driving privileges to an habitual offender prior to the lapse of the five-year revocation period.
A summary of the Motor Vehicle Habitual Offender Law was set forth in State v. Love, 312 So.2d 675 (La.App. 2d Cir. 1975) by the court of appeal:
"Adopted in 1972, the Motor Vehicle Habitual Offender Law defines an habitual offender as one who has accumulated within a five year period three or more convictions of certain listed offenses, or ten or more convictions of certain other traffic offenses. When any person has accumulated sufficient convictions to meet the definition of habitual offender under the Law, the Department of Public Safety must submit transcripts of the convictions to the District Attorney for the Judicial District in which the person resides, who then is directed to file a petition alleging that the person is an habitual offender. The court then is required to issue a show cause order against it is found that the person is the one who was convicted and that the requisite convictions are included, then the person is ordered to surrender his driver's license. He may not obtain a new license for five years or until a court authorizes it. An appeal may be taken from any final action or judgment entered under the Law in the same manner and form as appeals in civil actions. During the period his license is revoked and ordered surrendered, he is not entitled to drive a motor vehicle on the public highways and, if he does, he may be prosecuted and subjected to imprisonment for not less than one nor more than five years. The law provides also that if any person shall be convicted in Louisiana of an offense which would render him an habitual offender he shall, in addition to the penalty otherwise prescribed by law, be fined not less than $100 nor more than $1,000 and be imprisoned for not less than 30 days nor more than 12 months. R.S. 32:1471-81." Id. at 676.
The section of the law providing for the revocation of an habitual offender's driving privileges and the prerequisites for their restoration, La.R.S. 32:1479, stipulates as follows:
"No license to operate motor vehicles in this state shall be issued to an habitual offender, nor shall a nonresident habitual offender operate a motor vehicle in this state:
"(1) For a period of five years from the date of the order of the court finding such person to be an habitual offender; and
"(2) Until such time as financial responsibility requirements are met; and
"(3) Until upon petition, and for good cause shown, such court may, in its discretion, restore to such person the privilege to operate a motor vehicle in this state upon such terms and conditions as the court may prescribe, subject to other provisions of law relating to the issuance of operators' licenses."
*1320 The court of appeal concluded that the statute means that all three requisites must be met before an habitual offender may obtain a new license, viz., (1) the lapse of the five-year revocation period; (2) the fulfillment of financial responsibility requirements by the habitual offender; and (3) a court order, to be issued within judicial discretion upon a showing of good cause, restoring driving privileges upon such terms and conditions as the court may prescribe. The interpretation of the appeals court is a literal one, based primarily upon an exact reading of the conjunctive "and" joining the three subparagraphs, and adverting to nothing beyond the rules of grammar and the basic purpose of the statute to remove dangerous drivers from the highways.
In the construction of a civil statute, however, this Court has held that judges are not bound to a strict adherence "to the niceties of grammar rules," but that it is their duty to discover, if possible, the intent of the lawmakers and "the true meaning of the law." Edwards v. Daigle, 201 La. 622, 634, 10 So.2d 209, 212 (1942). In the same opinion this Court stated:
"* * * The Civil Code lays down the following rules for the `Construction of laws':
"`Art. 14. Usual Sense Gives Terms. The words of a law are generally to be understood in their most usual signification, without attending so much to the niceties of grammar rules as to the general and popular use of the words.'
"`Art. 16. Context. Where the words of a law are dubious, their meaning may be sought by examining the context with which the ambiguous words, phrases and sentences may be compared, in order to ascertain their true meaning.'
"`Art. 18. Reason and Spirit. The universal and most effectual way of discovering the true meaning of a law, when its expressions are dubious, is by considering the reason and spirit of it, or the cause which induced the Legislature to enact it.'"
In determining whether the words of a law are "dubious," this Court has always followed the rule that it would not impute to a statute a meaning which would lead to an absurd result or extend a statute to a situation which the legislature never intended to be covered thereby. See, Emmons v. Agriculture Insurance Co., 245 La. 411, 158 So.2d 594 (1963), and cases cited therein.
The interpretation given the statute by the court of appeal would lead to unreasonable consequences which we cannot lay to the account of the legislature. Under the intermediate court's construction, even after expiration of the five year revocation, the restoration of any driving privileges to a financially responsible habitual offender would rest solely within the sound discretion of the district judge. Since there is no statutory guide for the exercise of the district judge's discretion, except for the requirement that the offender must show "good cause" for restoration, the judge would be forced to rely primarily upon his personal opinion in deciding whether the license should be restored and in formulating the terms and conditions of its reissuance. Accordingly, the district judge could, within his sound discretion, withhold a license, or impose stringent conditions upon its restoration, for an indefinite period of time after the expiration of the five-year revocation. Considering the number of judges in the state who would be called upon to make such decisions, the "good cause" burden probably would vary substantially among judicial districts and individual judges. Some judges might think that restoration should be virtually automatic for a financially responsible offender who has suffered a five-year revocation, whereas other jurists may as a general rule view a declaration of habitual offender status as warranting a much longer revocation of driving privileges. Without the formulation of additional rules by the four circuit courts of appeal, and ultimately by this Court, it would be difficult to say when a district judge had abused his discretion in granting or denying, or in imposing terms and conditions upon, the restoration of driving privileges of financially responsible offenders who had completed their five-year revocations.
*1321 We do not think that the legislature intended to delegate to the courts the task of formulating rules for the regulation and licensing of financially responsible habitual offenders after completion of their revocation periods. Nor, in our opinion, did the lawmakers intend for the relicensing decision to be made without reference to any standard other than each judge's notion of whether there is "good cause" to terminate revocation at the end of five years. We cannot attribute to the legislature the intention to commit such a vast area of legislative responsibility to the judiciary.
Accordingly, we conclude that an interpretation of the statute adhering strictly to the "niceties of grammar rules" leads to an absurd or unreasonable result making such a construction of the legislation dubious. Following the Civil Code rules for the construction of laws, therefore, we will seek the true meaning of the law by examining the context of the dubious wording and by considering the reason and spirit of the statute or the cause which induced its enactment.
From a reading of the statutory provisions as a whole it is evident that the lawmakers intended for an otherwise qualified financially responsible habitual offender to have the right to obtain a new license after the lapse of his five-year revocation period. The discretion granted courts to determine when good cause exists for a conditional restoration of driving privileges is restricted and may be exercised only during the revocation term. The statute requires the courts to play their customary role of providing limited relief in hardship cases, see, La.R.S. 32:415.1,[*] and does not commit to them a carte blanche for the drafting of a post-revocation policy for the issuance of drivers' licenses.
For the reasons assigned, the judgment of the court of appeal is reversed, and the case is remanded to the court of appeal for its further review to determine whether the district court acted within its discretion in finding that good cause exists for the limited restoration of Smith's driving privileges during his revocation period. All costs are assessed to the respondent.
REVERSED AND REMANDED.
SUMMERS, J., concurs.
DIXON, J., concurs with reasons.
DIXON, Justice (concurring).
I respectfully concur for the reason that the restoration by a court of the privilege of driving after a five year prohibition is not a judicial function, but a ministerial one.
NOTES
[*] See, La.C.C. art. 17: "Laws in pari materia, or upon the same subject matter, must be construed with a reference to each other; what is clear in one statute may be called in aid to explain what is doubtful in another."
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341 Mass. 86 (1960)
166 N.E.2d 902
BOSTON EDISON COMPANY, petitioner.
CHARLES CIFRE, trustee,
vs.
BOSTON EDISON COMPANY.
Supreme Judicial Court of Massachusetts, Norfolk.
March 7, 1960.
May 10, 1960.
Present: WILKINS, C.J., SPALDING, WILLIAMS, WHITTEMORE, & CUTTER, JJ.
Frank B. Frederick, (Victor H. Kazanjian with him,) for Boston Edison Company.
Gregory Sullivan, for Cifre.
CUTTER, J.
A petition under G.L.c. 79 for the assessment of damages occasioned by a taking by the respondent (Edison) was referred to an auditor, whose findings were to be final. Edison, in accordance with Rule 90 of the Superior Court (1954), filed objections to the auditor's report and requested that he summarize the evidence with respect to each objection. After the auditor filed his report, Edison, on May 22, 1957, filed three motions: (a) to discharge the report and for a new trial; (b) to recommit the report to require the evidence to be reported; and (c) to recommit the report for proper summaries. Pursuant to Rule 46 of the Superior Court (1954) Edison's counsel submitted an affidavit referring to the testimony pertinent to Edison's objections. The judge denied all three motions. On July *88 8, 1957, Edison filed a bill of exceptions (bill no. 1) relating to the denial of these motions.
On September 4, 1957, Edison filed a motion for a new trial or for recommittal. On November 22, 1957, the judge (1) overruled Edison's objections to the report, (2) denied the motion for a new trial or to recommit, and (3) ordered judgment for the petitioner in the sum fixed by the auditor. Edison with respect to these rulings filed a second bill of exceptions (bill no. 2).
On February 14, 1958, the judge (possibly feeling that the motion of September 4, 1957, took the place of those of May 22, 1957) disallowed bill no. 1. He allowed bill no. 2. Edison on March 6, 1958, within the twenty days allowed by Rule 22[1] of the Rules for the Regulation of Practice before the Full Court (1952), as amended on November 4, 1955 (332 Mass. 790), filed in this court a petition to establish the truth of the exceptions stated in bill no. 1. A commissioner found that bill no. 1 did conform to the truth.
As of October 8, 1959 (when bill no. 3, mentioned below, was allowed), Edison had never given the clerk of the courts any order for preparation of papers for this court with respect to bill no. 2, under G.L.c. 231, § 135, as amended through St. 1941, c. 187, § 1 (later amended by St. 1959, c. 109). On December 1, 1958, bill no. 2 in effect was dismissed[2] by a judge of the Superior Court because of Edison's failure to comply with § 135. On February 4, 1959, this court (see G.L.c. 231, § 133, and c. 211, § 11) granted leave to Edison to claim exceptions to, and to appeal from, the order dismissing bill no. 2. Edison seasonably filed a third bill of exceptions (bill no. 3) relating to the dismissal of bill no. 2. Edison also claimed an appeal from this order but this appeal has not been perfected.
*89 1. No one of the three bills of exceptions purports to incorporate, either in the text or by reference, the auditor's report, the defendant's objections to the auditor's report, the auditor's summaries of evidence appended to his report, Edison's motions referred to in bill no. 1, Edison's counsel's affidavit under Rule 46 relating to these motions, or Edison's motion for a new trial or for recommittal. On January 7, 1960, this court denied Edison's motion to extend the record to include certain of these papers. Although Edison has printed these papers in an appendix to its brief, they are not properly before us for purposes of the bills of exceptions. See Sarkesian v. Cedric Chase Photographic Laboratories, Inc. 324 Mass. 620, 622-623. See also Staples v. Collins, 321 Mass. 449, 450-451. In New England Gas & Elec. Assn. v. Ocean Acc. & Guar. Corp. Ltd. 330 Mass. 640, 644-645, and Wasserman v. Roach, 336 Mass. 564, where questions relating to the reports of auditors whose findings were to be final were reviewed upon bills of exceptions, the original papers show that the auditor's reports and related papers were incorporated by reference in the bills of exceptions. Cf. an appeal under G.L. (Ter. Ed.) c. 231, § 96, from an order for judgment upon an auditor's report with findings of fact final, United States Fid. & Guar. Co. v. English Constr. Co. 303 Mass. 105, 108-110, where the auditor's report would be part of the record on appeal. Cf. also Untersee v. Untersee, 299 Mass. 417, 420; Harrington v. Anderson, 316 Mass. 187, 190-192. Even if under the third paragraph of G.L.c. 231, § 135 (as amended through St. 1941, c. 187, § 1), we could order these papers transmitted to us for consideration, such a power should be exercised sparingly where necessary papers should have been incorporated verbatim or by reference in the several bills of exceptions. Without these papers we are in no position upon bill no. 1 to determine (a) whether the judge abused his discretion in denying the motions for a new trial, to discharge the report, and to recommit in order to require the evidence to be reported (see Barrows v. Checker Taxi Co. 290 Mass. 231, 235; Ravage v. *90 Johnson, 316 Mass. 558, 562; Shaw v. United Cape Cod Cranberry Co. 332 Mass. 675, 679) or (b) whether the summaries of evidence were inadequate. Although it does appear in bill no. 1 that, with reference to two objections to the auditor's report, the auditor refused to give any summary of evidence, since the objections themselves are not properly in the record, we are not in a position to determine whether such summaries were required under Rule 90 of the Superior Court (1954).
2. Bill no. 3 questions the correctness of the order of December 1, 1958, by which bill no. 2 was dismissed. Bill no. 2 was allowed, and bill no. 1 disallowed, on February 14, 1958. Under G.L.c. 231, § 135 (as amended through St. 1941, c. 187, § 1), "the party having the obligation to cause the necessary papers ... to be prepared shall give to the clerk ... within ten days after the case becomes ripe for final preparation and printing of the record for the full court, an order in writing for the preparation of such papers and copies of papers for transmission to the full court." There appears to be no direct precedent controlling in the somewhat unusual situation created by the disallowance of bill no. 1. The judge who dismissed bill no. 2 had little in the statute, court rules, or decided cases to guide him. Bill no. 1 did not become ripe for final preparation of the record at least until the case was ripe for final disposition because of an order for judgment or other order decisive of the case. See Anti v. Boston Elev. Ry. 247 Mass. 1, 3-4; Driscoll v. Battista, 311 Mass. 372, 373; Rines v. Justices of the Superior Court, 330 Mass. 368, 373-374, app. dism. 346 U.S. 919; Bean v. 399 Boylston St. Inc. 335 Mass. 595, 596. Cf. Vincent v. Plecker, 319 Mass. 560, 563. As stated by Rugg, C.J., in Capano v. Melchionno, 297 Mass. 1, 13, "the public welfare and the rights of parties require that questions of law arising at a single trial ought to come before the full court by one record and ought not to be split into two or more separate proceedings." In accordance with this principle, when bill no. 2 was allowed on February 14, 1958, bill no. 1, if it also had been allowed, *91 could have been included in the same record. See Brooks v. Shaw, 197 Mass. 376, 378-379; Stoneham Trust Co. v. Aronson, 296 Mass. 154, 156. Cf. Gifford v. Commissioner of Pub. Health, 328 Mass. 608, 617-619. When bill no. 1, however, was disallowed, the possibility existed that Edison would file within twenty days, under Rule 22, as it then read (332 Mass. 790), of the Rules for the Regulation of Practice before the Full Court (1952), a petition to establish the truth of the exceptions. This was, we think, sufficient to prevent the case from being ripe for judgment. Certainly, if, at the expiration of ten days after the disallowance of bill no. 1 and the allowance of bill no. 2, judgment had been entered on the docket, and then within twenty days of the disallowance, as in fact was done, Edison had filed its petition to establish the truth of its exceptions in bill no. 1, it would have been necessary to vacate the judgment or to correct the docket to conform to the fact. See Everett-Morgan Co. v. Boyajian Pharmacy, 244 Mass. 460, 462. Cf. Higgins v. First Natl. Stores, Inc. 340 Mass. 618, 619-621. Accordingly, we hold that the possibility of the filing of that petition prevented bill no. 2 from being ripe for the final preparation of papers under § 135. Cf. Home Owners' Loan Corp. v. Sweeney, 309 Mass. 26, 30, where the pendency of an appeal which would not lie (see p. 27) under G.L.c. 231, § 96, was held not to prevent the allowance of a bill of exceptions from making a case "ripe" for final preparation of the papers. In the circumstances, Edison's failure to give within ten days of the allowance of bill no. 2 a written order under § 135 for the preparation of the papers relating to that bill did not constitute ground for the order dismissing bill no. 2.
3. If the exceptions in bill no. 3 were sustained, bill no. 2, before its presentation to us, would await final disposition of bill no. 1 or sufficient action with respect to it to allow its inclusion with bill no. 2 in a record for transmission to this court. If we were to remand bill no. 1 to the Superior Court for inclusion in a record covering both bill no. 1 and bill no. 2, we assume that it would be open to Edison *92 to move to amend these bills by including in each the auditor's report and related papers. Accordingly, to avoid unnecessary further proceedings we consider them as printed in Edison's brief, as if they were properly here.
There was no error in the denial of the motions to discharge the auditor's report and to recommit the report for the purpose of requiring a full report of the evidence. Denial of these motions was a matter of discretion. See Morin v. Clark, 296 Mass. 479, 483; Minot v. Minot, 319 Mass. 253, 258.
The auditor's summaries of evidence furnished in purported compliance with Rule 90 were meager. If all the evidence claimed to be relevant had not been placed informally before us by reproduction in Edison's brief of its affidavit under Rule 46 (and the evidence incorporated in that affidavit by reference), we would have serious question whether recommittal to obtain adequate summaries was not required, so that Edison could present the questions of law saved by its objections under Rule 90. Although Edison in its affidavit under Rule 46 did not follow the course suggested as desirable in Cantor v. Cantor, 325 Mass. 719, 721, of "showing what would be a proper summary," it did refer accurately to the relatively few pages of evidence relevant to each objection. These afford us adequate basis for review of the substantive questions of law presented.
Rule 90, of course, did not require the auditor to summarize a colloquy of counsel involving no testimony to which Edison referred as relevant to a particular objection.
Several of Edison's objections to the report relate to the auditor's action in permitting an expert witness to make use of a plan of a proposed subdivision of the petitioner's land. The auditor did not exceed the bounds of the reasonable discretion which he had to permit an expert witness to state the reasons for his opinion and to explain those reasons with reference to potential uses of the land and to plans or chalks illustrative of such uses. So long as such an expert witness is not permitted to explore unreasonably the details of particular plans of development still essentially *93 speculative or is not unfairly precluded from giving testimony bearing upon relevant aspects of value, a judge or auditor has reasonable discretion in determining the extent to which the witness may explain the reasons supporting his conclusions. See Brush Hill Dev. Inc. v. Commonwealth, 338 Mass. 359, 362; Southwick v. Massachusetts Turnpike Authy. 339 Mass. 666, 669-672. See also Ford v. Worcester, 339 Mass. 657, 659-662. Objections to the testimony of another expert witness on the ground that it was based upon unwarranted assumptions, or too closely upon a particular plan of proposed subdivision used as a chalk, went only to the weight of that testimony. See Southwick v. Massachusetts Turnpike Authy., supra, at pp. 670-671.
One substantial question was raised by the auditor's interrogation of one McSweeney, an expert witness, to obtain his opinion of the diminution in value of the petitioner's land caused by the taking, which was of an easement. In asking this opinion, the auditor said, "I ... don't want to ask you ... what it [the land] was worth before [the taking] and what it was worth afterwards." After the question had been answered the auditor said, "I don't care what the witness thinks it is worth before and ... what he thinks it is worth after the poles are in, but in view of his familiarity with this type of development he has an opinion as to what that set of poles has diminished the value of the property." The auditor allowed this line of inquiry to remain in the record subject to Edison's objection.
The usual course of proving damage caused by a partial taking or the taking of an easement is to prove (a) the value of the affected property before the taking, and (b) its value after the taking.[3] The question permitted the witness to express an opinion about the diminution in value of the property caused by the taking without showing, as Edison was entitled to have him do, that he had considered first *94 the value of the property before the taking and the value after the taking. See Valentino v. Commonwealth, 329 Mass. 367, 368; Lombardi v. Bailey, 336 Mass. 587, 594 (and authorities cited); Ford v. Worcester, 339 Mass. 657, 659-660; Southwick v. Massachusetts Turnpike Authy. 339 Mass. 666, 671. The auditor probably incorrectly thought that an expert could determine the diminution in value caused by the easement in a vacuum wholly apart from any determination of the value of the injured property. It appears, however, from the auditor's summary of evidence relating to this objection that he treated the witness's opinion as "arrived at by taking the value of the land before and after the taking of the easement," although "there were other ways of assessing the damage." The witness also testified that one method he used in computing the damage was by determining the value of the land before and after the taking, and that the other method used by him was "just a check on the arithmetic of the" first method. In view of this, we conclude that there was in the circumstances no prejudicial error.
4. Since there is no merit in the substantive exceptions set out in bill no. 1 and in bill no. 2, there is no need for further consideration of the case in the Superior Court. Accordingly, the truth of the exceptions stated in bill no. 1 is established and the exceptions in bill no. 1 and bill no. 3 are overruled.
So ordered.
NOTES
[1] Repealed March 29, 1960, effective April 14, 1960, by reason of St. 1960, c. 207, § 4, amending G.L.c. 231, § 117. See 340 Mass. 790.
[2] We intentionally use the word "dismissed" rather than the term "overruled," somewhat confusing when used in this sense, found in G.L.c. 231, § 133 (as amended through St. 1933, c. 300, § 2). See Home Owners' Loan Corp. v. Sweeney, 309 Mass. 26, 28.
[3] We need not consider whether in rare cases such a taking may destroy some item of property intrinsically having an ascertainable value so that this single element of damage can be determined separately and without reference to the value of the affected land as a whole. This is clearly not such a case.
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i i i i i i
MEMORANDUM OPINION
No. 04-08-00835-CR
Sonia SUAREZ,
Appellant
v.
The STATE of Texas,
Appellee
From the 399th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CR-9375
Honorable Juanita A. Vasquez-Gardner, Judge Presiding
PER CURIAM
Sitting: Sandee Bryan Marion, Justice
Phylis J. Speedlin, Justice
Rebecca Simmons, Justice
Delivered and Filed: March 4, 2009
DISMISSED
The trial court signed a certification of defendant’s right to appeal stating that this “is a plea-
bargain case, and the defendant has NO right of appeal.” See TEX . R. APP . P. 25.2(a)(2). Rule
25.2(d) provides, “The appeal must be dismissed if a certification that shows the defendant has the
right of appeal has not been made part of the record under these rules.” TEX . R. APP . P. 25.2(d).
04-08-00835-CR
Accordingly, on January 6, 2009, this court issued an order stating this appeal would be dismissed
pursuant to Rule 25.2(d) unless an amended trial court certification that shows defendant has the
right of appeal was made part of the appellate record. See Daniels v. State,110 S.W.3d 174 (Tex.
App.—San Antonio 2003, order); TEX . R. APP . P. 25.2(d); 37.1.
No amended certification has been filed. In light of the record presented, Rule 25.2(d)
requires this court to dismiss this appeal. Accordingly, this appeal is dismissed.
PER CURIAM
DO NOT PUBLISH
-2-
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 08-30076
Plaintiff-Appellee,
D.C. No.
v.
1:06-cr-00155-RFC-
JUAN GABRIEL FLORES, AKA 1
Abraham Goytia,
OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the District of Montana
Richard F. Cebull, Chief District Judge, Presiding
Submitted January 21, 2009*
Seattle, Washington
Filed March 18, 2009
Before: Thomas M. Reavley,** Senior Circuit Judge,
Richard C. Tallman and Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Reavley
*The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
**The Honorable Thomas M. Reavley, Senior United States Circuit
Judge for the Fifth Circuit, sitting by designation.
3525
3528 UNITED STATES v. FLORES
COUNSEL
Palmer A. Hoovestal, Hoovestal Law Firm, PLLC, Helena,
Montana, for the plaintiff-appellant.
James E. Seykora, Assistant United States Attorney, Billings,
Montana, for the defendant-appellee.
OPINION
REAVLEY, Senior Circuit Judge:
Defendant-Appellant Juan Flores appeals the sentence
imposed by the district court, asserting that the Government
wrongfully refused to move for a substantial assistance sen-
tencing reduction under U.S.S.G. § 5K1.1, even though he
allegedly provided information useful to the investigation of
criminal activity, and that the district court erred in denying
his request for an evidentiary hearing to evaluate the extent of
his assistance. We affirm.
I. Background
Defendant pleaded guilty to a charge of conspiracy to pos-
sess cocaine with intent to distribute, in violation of 21 U.S.C.
§§ 841 and 846, pursuant to a plea agreement in which the
Government promised to dismiss two other charges and to
recommend a sentencing reduction for Defendant’s accep-
tance of responsibility. The agreement also contemplated a
“[p]otential [d]eparture” for Defendant’s substantial assis-
tance in the form of a motion under either U.S.S.G. § 5K1.1,
Fed. R. Crim. P. 35, or both. “Substantial assistance” is
defined in the agreement as “complete, truthful, forthright,
material, important, valuable and meaningful information.”
The Government’s obligations are prescribed in the agree-
ment as follows:
UNITED STATES v. FLORES 3529
The United States will consider and evaluate any
written proffer or nature of information and the rec-
ommendations of law enforcement. If the prosecu-
tion concludes that the assistance provided is
substantial, truthful, and complete, as required, a
departure motion determined by the government to
be appropriate under the circumstances will be made.
By this agreement the defendant is not offered or
promised that a departure motion, or any specific
type of motion, will be filed by the [G]overnment.
The defendant acknowledges that no promise has
been made and accepts this agreement that no such
motion will be filed if the [G]overnment determines
that the information is either untruthful, willfully
incomplete, of little value, or insubstantial.
(second emphasis added). Defendant acknowledged at his
subsequent re-arraignment that the Government had neither
offered nor promised a departure motion under the plea agree-
ment.
It is undisputed that Defendant met with and provided
truthful information to two DEA agents and the prosecutor.
Based on this cooperation, Defendant stated in his pre-
sentence submission that he expected the Government to
move for a departure based on his substantial assistance.
However, the Government notified Defendant that it would
not file a § 5K1.1 motion.
At his sentencing, Defendant asserted that the Government
had refused in bad faith to file a § 5K1.1 motion and
requested an evidentiary hearing at which he sought to prove
his substantial assistance through the testimony of the DEA
agents and the prosecutor. The prosecutor acknowledged that
Defendant had begun to cooperate, but explained that his
assistance was not substantial as of that date because the Gov-
ernment had not yet indicted or arrested anyone based on the
information he provided. The district court accepted the Gov-
3530 UNITED STATES v. FLORES
ernment’s representation, and, relying on United States v.
Jones, 264 F. App’x 616 (9th Cir. 2008) (unpublished deci-
sion), denied Defendant’s request for an evidentiary hearing.
Without specifically addressing Defendant’s further request
that a reduction for substantial assistance was warranted under
18 U.S.C. § 3553(a) despite the Government’s failure to
request it, the court then imposed a within-Guidelines sen-
tence of 170 months’ imprisonment.
II. Discussion
We review the legality of Defendant’s sentence de novo,
but the district court’s factual findings regarding the Govern-
ment’s reasons for refusing to file a § 5K1.1 motion are
reviewed for clear error. United States v. Murphy, 65 F.3d
758, 762 (9th Cir. 1995). “Whether the district court is
required to enforce a plea agreement is a question of law sub-
ject to de novo review.” United States v. Patterson, 381 F.3d
859, 863 (9th Cir. 2004). However, “there is a conflict in our
case law concerning the proper standard to be applied to a dis-
trict court’s interpretation of a plea agreement.” United States
v. Transfiguracion, 442 F.3d 1222, 1227 (9th Cir. 2006) (cit-
ing conflicting authorities prescribing either de novo or clear
error review). We need not resolve this conflict, however,
because the result is the same under either standard. See
United States v. Franco-Lopez, 312 F.3d 984, 988-89 (9th Cir.
2002).
Defendant contends that he provided information material
to the investigation of other criminal activity, and the district
court erred by deferring to the Government’s characterization
of his assistance as insubstantial merely because it had not
resulted in any arrests or indictments. In Defendant’s view,
the court should have granted his request for an evidentiary
hearing to determine whether his assistance was substantial
because the absence of any arrests or indictments are attribut-
able to the Government’s own failure to act on the informa-
tion he provided. Defendant further construes the
UNITED STATES v. FLORES 3531
Government’s inaction as a breach of its obligations under the
plea agreement.
[1] Section 5K1.1 permits a district court to depart from the
Guidelines “[u]pon motion of the government stating that the
defendant has provided substantial assistance in the investiga-
tion or prosecution of another person who has committed an
offense.” U.S.S.G. § 5K1.1. This provision empowers the
government to move for a departure when a defendant has
substantially assisted, but it imposes no duty to do so. See
Wade v. United States, 504 U.S. 181, 185, 112 S. Ct. 1840
(1992); United States v. Arishi, 54 F.3d 596, 597 (9th Cir.
1995). Even if a defendant has provided substantial assis-
tance, we may not grant relief unless the government’s refusal
to file a § 5K1.1 motion was based on impermissible motives,
constituted a breach of a plea agreement, or was not rationally
related to a legitimate governmental purpose. See United
States v. Treleaven, 35 F.3d 458, 461 (9th Cir. 1994) (citing
Wade, 504 U.S. at 185-86, 112 S. Ct. 1840). Our precedent
also requires the Government to make a good faith evaluation
of a defendant’s assistance as of the date of sentencing to
determine the appropriateness of a § 5K1.1 motion. See
United States v. Quach, 302 F.3d 1096, 1102 (9th Cir. 2002).
Thus, the Government may not defer its evaluation of a defen-
dant’s pre-sentence assistance by relying on the possibility of
a post-sentencing departure motion under Fed. R. Crim. P. 35.
See id. at 1102 (construing such a deferral as an improper
conflation of the temporal distinction between pre- and post-
sentence assistance under § 5K1.1 and Fed. R. Crim. P. 35,
respectively); see also United States v. Awad, 371 F.3d 583,
586, 589-90 (9th Cir. 2004) (holding the district court abused
its discretion by imposing a sentence based on the govern-
ment’s incomplete evaluation of the defendant’s admittedly
substantial pre-sentence assistance and allowing the govern-
ment to revisit the issue at a later date). But whether the assis-
tance provided was actually substantial is a decision that
better rests with the prosecutor, not the court. United States v.
Burrows, 36 F.3d 875, 884 (9th Cir. 1994).
3532 UNITED STATES v. FLORES
[2] Here, the Government evaluated Defendant’s assistance
and deemed it insubstantial because it had not resulted in any
arrests or indictments as of the time of sentencing. Although
the Government also noted that Defendant’s information
might eventually lead to arrests or indictments of others, this
observation does not detract from the fact that the Govern-
ment fulfilled its limited obligation to timely assess the qual-
ity of his assistance. Having made the requisite determination,
the Government did not improperly defer its assessment of the
assistance provided, as it did in Awad and Quach.
[3] The Government’s broad discretion to determine the
appropriateness of a substantial assistance motion is also
embodied in the plea agreement. As Defendant acknowl-
edged, both in the agreement and orally at his re-arraignment,
the agreement plainly disclaimed any obligation or promise
on the part of the Government to file a substantial assistance
motion, and further cautioned that no such motion would be
filed if the Government were to find the information to be
“untruthful, willfully incomplete, of little value, or insubstan-
tial.” Because these terms vest discretion in the Government
to evaluate the quality of Defendant’s assistance, the most
Defendant could expect was a good faith evaluation of the
information he provided. This is what he received. In a recent
unpublished case, we construed identical language in a plea
agreement not to require a § 5K1.1 motion when the Govern-
ment deemed the information provided to be “of little value
because it did not result in any arrests, indictments, or convic-
tions.” Jones, 264 F. App’x at 617. We similarly conclude
here that the Government acted within its express discretion
under the agreement when it determined that the absence of
arrests, indictments, or convictions resulting from Defen-
dant’s information rendered his assistance insubstantial as of
the time of sentencing. The Government’s refusal to move for
a substantial assistance reduction therefore did not breach the
plea agreement.
[4] Finally, Defendant’s insistence that he provided sub-
stantial assistance does not entitle him to an evidentiary hear-
UNITED STATES v. FLORES 3533
ing. See Wade, 504 U.S. at 186, 112 S. Ct. 1840 (“[A] claim
that a defendant merely provided substantial assistance will
not entitle a defendant to a remedy or even to discovery or an
evidentiary hearing.”). To warrant a hearing, Defendant must
make a substantial threshold showing that the Government’s
refusal to file a § 5K1.1 motion was unconstitutional, arbi-
trary, or breached the plea agreement. Treleaven, 35 F.3d at
461. As noted above, the Government acted within its discre-
tion under the plea agreement when it found Defendant’s
assistance insubstantial and accordingly refused to move for
a reduction. Defendant has also not alleged, much less shown,
that the Government’s decision was based on an unconstitu-
tional motive. He merely asserts that the Government’s failure
to arrest or indict anyone based on the information he pro-
vided suggests arbitrariness or bad faith. That the Govern-
ment’s investigation had not culminated in arrests or
indictments as of the time of sentencing, by itself, does not
suggest the presence of an illicit motive, and Defendant failed
to present any evidence substantiating the type of misconduct
from which bad faith may be inferred. See, e.g., United States
v. Khoury, 62 F.3d 1138, 1141-43 (9th Cir. 1995) (concluding
the Government’s refusal to file a § 5K1.1 motion in retalia-
tion for the defendant’s exercise of his right to jury trial per-
mitted the court to exercise its own discretion to grant a
downward departure); Treleaven, 35 F.3d at 461-62 (holding
the defendant was entitled to have the district court consider
a possible substantial assistance departure in spite of the Gov-
ernment’s failure to file a § 5K1.1 motion because of the Gov-
ernment’s misconduct in communicating ex parte with the
defendant and subpoenaing his grand jury testimony without
informing his counsel, thereby impeding his ability to negoti-
ate for a departure motion). Indeed, the Government may
properly base its decision not to file a § 5K1.1 motion on
nothing more than “its rational assessment of the cost and
benefit that would flow from moving,” regardless of the assis-
tance rendered. Wade, 504 U.S. at 187, 112 S. Ct. 1840.
Accordingly, the district court did not err in deferring to the
3534 UNITED STATES v. FLORES
Government’s stated reason for refusing to file a § 5K1.1
motion or denying Defendant’s request for a hearing to prove
the quality of his assistance.
AFFIRMED.
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749 S.W.2d 591 (1988)
JOHN CHEZIK BUICK COMPANY, Appellant,
v.
FRIENDLY CHEVROLET CO., Appellee.
No. 05-87-00666-CV.
Court of Appeals of Texas, Dallas.
April 12, 1988.
*592 Jeffrey L. Clark, Dallas, for appellee.
Charles F. Holmans, Dallas, for appellant.
Before ENOCH, C.J., and WHITHAM and ROWE, JJ.
ROWE, Justice.
John Chezik Buick Company (Buick) appeals a trial court judgment in excess of $37,000.00 in favor of Friendly Chevrolet Company (Chevrolet). Judgment was based on a jury finding that a Corvette automobile was purchased "for the account of" Buick. Buick brings sixteen points of error asserting that the jury instructions assumed an agency relationship and therefore commented on the evidence, that there was no or insufficient evidence to support a finding of agency, and that the trial court erred in failing to submit Buick's issue on attorney fees. We hold that there is no evidence of agency as a matter of law and therefore reverse and render a judgment in favor of Buick. However, we also hold that Buick is not entitled to counterclaim *593 for a declaratory judgment and therefore is not entitled to attorney fees. Consequently, we overrule that point of error concerning Buick's attorney fees.
This case arises out of the purchase of a Corvette from Chevrolet, a Dallas dealership. The record reflects that on April 19, 1983, Jay Tschirner came to the business premises of Chevrolet in Dallas and negotiated the wholesale transfer of a new '84 model Corvette from Chevrolet to Buick, a Kansas City dealership. Chevrolet called the General Motors regional office and verified that Buick was a valid dealership in good standing. Next, Chevrolet called Buick and ascertained that Buick would honor a draft for the wholesale price of the car. The Corvette was then released to Jay Tschirner, and the draft was subsequently honored by Buick. The sale was handled as an interdealer transfer where no taxes are charged, no commissions or profits are made, and no title is issued.
Nine days after this first sale, Jay Tschirner again came to Chevrolet's premises seeking to make another purchase in a manner similar to the first transfer. Chevrolet agreed to the sale but made no attempt to verify Tschirner's authority to again "finance" the purchase through Buick. The Corvette was released to Tschirner from whom it was ultimately stolen and wrecked. Buick refused to honor the draft on the second sale. The sales document on this second transfer was captioned as a "retail" form and stated that the Corvette was sold to Jay Tschirner of Roanoke, Texas, and was signed by Jay Tschirner as purchaser. The only mention of Buick was found under the customer financing portion of the form. Again the car was sold at cost, and no taxes or other charges were added.
The main issue at the trial court was one of agency. At trial and again on appeal, Chevrolet argues that Buick is precluded from challenging the agency relationship because it failed to deny the relationship in a verified pleading as required by Rule 93 of the Texas Rules of Civil Procedure. The trial court overruled this objection to the defense. We agree that this disposition was proper.
Chevrolet does not specifically identify which subsection of Rule 93 is applicable; but after review, we find two possibilities. Section 2 of Rule 93 requires that an assertion "that the defendant is not liable in the capacity in which he is sued" must be verified. In this case, Chevrolet sued Buick as a principal liable for a transaction entered into by its agent. Buick denied this principal status and therefore asserted that it is not a party to the contract sued upon. Rule 93(2) refers to mistaken legal capacity and does not require a party to allege in a verified pleading that he is not a party to the contract. Miles v. Plumbing Services of Houston, Inc., 668 S.W.2d 509, 512-513 (Tex.App.- Houston [14th Dist.] 1984, writ ref'd n.r.e.). Furthermore, it has long been the rule that an agency relationship need not be denied in verified pleadings. Risinger v. Fidelity and Deposit Company of Maryland, 437 S.W.2d 294, 297 (Tex.Civ.App.-Dallas 1969, no writ).
Rule 93(7) may also be applicable here. This section requires that when suit is based on a written instrument charged to have been executed by a party or his authority, denial of that execution must be verified. Miles is again applicable in its holding that a denial of being a party to a contract need not be verified. Miles, 668 S.W.2d at 512. In addition, the penalty for not denying an instrument is that the instrument is received into evidence as fully proved. Bangor Punta Acceptance Corp. v. Palm Center R. V. Sales, Inc., 661 S.W. 2d 237, 239 (Tex.App.-Houston [1st dist.] 1983, no writ). The written instrument in this case does not, on its face, prove a contract to which Buick was a party. Therefore, no liability can be established from the instrument without linking Jay Tschirner to Buick, i.e. through an agency relationship. Consequently, Buick was not required to make a verified pleading before asserting the defense of lack of agency.
The fact that Jay Tschirner was not an employee of Buick is undisputed. The question at trial was whether Tschirner *594 had apparent authority to bind Buick to the contract, thus making Buick liable for the cost of the second Corvette. Buick's first fourteen points of error, as well as point of error sixteen, all complain in one manner or another of the evidence supporting the implied agency finding in the trial court's judgment. We focus on the ninth point of error which asserts that the "court below erred in denying Defendant's Motion for New Trial because there was no evidence that Defendant, by its words or conduct, held out JAY TSCHIRNER to be its agent for purchasing a Corvette automobile on or about April 28, 1983."
In order to find apparent authority, there must be evidence of a pattern of conduct by the alleged principal that would lead a reasonable person to believe that the alleged agent had authority to act in favor of the principal. Ames v. Great Southern Bank, 672 S.W.2d 447, 450 (Tex.1984). The principal must knowingly permit the agent to hold himself out as having authority or the principal's conduct must clothe the agent with the indicia of authority. Id. In this case, the record shows that Buick directly participated in only one transaction. It affirmatively guaranteed and later honored the draft on the first Corvette sale. Buick and Chevrolet only communicated once concerning any transaction involving Tschirner. One prior transaction, as a matter of law, is insufficient evidence to establish an agency relationship. Id. The Ames Court, considering a similar problem, held the following:
The record reveals only one uncontroverted prior transaction where Dealy is alleged to have acted on behalf of Ames personally. We, therefore, hold there is no evidence of a pattern of conduct by Ames such as would lead a reasonable bank using due diligence to believe Suzanne Dealy had authority to deal with Ames' personal bank account or her personal certificate of deposit.
This one prior transaction rule has long been recognized in Texas. One similar business transaction, involving an entirely different and independent matter, is not sufficient by itself to justify an assumption of agency on all future transactions. Owens v. Hughes, 71 S.W. 783, 783 (Tex.Civ. App.1903, no writ). Consequently, we hold that there was no evidence to support an implied agency finding and therefore sustain Buick's ninth point of error. Accordingly, although this point on its face complains of error asserted in a new trial motion, we reverse and render judgment in favor of Buick based thereon because the procedural predicate for the point clearly shows that it challenges the legal insufficiency of evidence respecting agency. See Olin Corp. v. Dyson, 678 S.W.2d 650, 657 (Tex.App.-Houston [14th Dist.] 1984), rev'd on other grounds, 692 S.W.2d 456 (Tex.1985). Having sustained Buick's ninth point of error which is dispositive of this appeal, we do not expressly rule on the remaining agency points.
Buick's fifteenth point of error complains of the trial court's failure to submit to the jury an issue on its attorney fees. Buick bases its right to recover attorney fees on its counterclaim for declaratory judgment. The Texas Declaratory Judgment Act provides that the petitioner may recover attorney fees. TEX.CIV. PRAC. & REM.CODE ANN. § 37.009 (Vernon 1986). However, the Declaratory Judgment Act is not available to settle disputes already pending before a court. Johnson v. Hewitt, 539 S.W.2d 239, 240-241 (Tex.Civ.App.-Houston [1st Dist.] 1976, no writ); Joseph v. City of Ranger, 188 S.W.2d 1013, 1014 (Tex.Civ.App.-Eastland 1945, writ ref'd w.o.m.). In this case, Buick brought a counterclaim in which it prayed for a declaratory judgment as to any agency relationships, thus determining the rights of the parties. This controversy was already before the trial court under Chevrolet's action for relief under the sales contract. Consequently, Buick was not entitled to relief under the Declaratory Judgment Act in the form of a counterclaim. The identical conclusion was heretofore reached by this Court in Narisi v. Legend Diversified Investments, 715 S.W.2d 49, 51-52 (Tex.App.-Dallas 1986, writ ref'd n.r.e.). In Narisi we recognized that a counterclaim under the Declaratory Judgment Act, presenting no new controversies *595 but brought solely to pave an avenue to attorney fees, was not proper. However, the party's failure to specifically object to the award of attorney fees precluded the appellate court from granting relief. In our current case, the trial court properly denied Buick's issue on attorney fees, and we follow Johnson, Joseph, and Narisi in overruling Buick's fifteenth point of error complaining of that denial.
Buick directs this Court to the recent case of Placid Oil Co. v. Louisiana Gas Intrastate, Inc., 734 S.W.2d 1, 5-6 (Tex. App.-Dallas 1987, writ ref'd n.r.e.), in which this Court allowed the recovery of attorney fees under a Declaratory Judgment counterclaim. However, Placid Oil is distinguishable in that the Declaratory Judgment counterclaim in that case had greater ramifications than the original suit. Placid Oil originated the suit for underpayment of gas royalties by Louisiana Gas Intrastate, Inc. (L.G.I.). However, the contract being sued upon was an ongoing and continuing relationship. The original suit only requested relief for alleged underpayments that had accrued in the past. L.G.I. counterclaimed for a contract interpretation that would settle all future disbursements of royalties. Because this further remedy was sought in the counterclaim, an award of attorney fees was properly authorized in that case. In our current case, the harm sued upon was a one time occurrence that is fully covered by Chevrolet's original suit. Accordingly, Buick's fifteenth point of error is overruled.
Having found that there is no evidence of an agency relationship to support the jury finding that the Corvette in question was purchased for the account of Buick, we reverse the trial court's judgment and render a judgment that Chevrolet take nothing in this suit. Furthermore, since Buick's Declaratory Judgment Act counterclaim was not properly brought in this case, we disallow any award of attorney fees under that act.
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376 Pa. Superior Ct. 461 (1988)
546 A.2d 119
TYSON METAL PRODUCTS, INC., Appellee,
v.
Marcie McCANN, an Individual, and Stainless Manufacturing, Inc., a Corporation, Appellants.
Supreme Court of Pennsylvania.
Argued May 5, 1988.
Filed August 15, 1988.
*462 Ralph A. Finizio, Pittsburgh, for appellants.
Harold Gondelman, Pittsburgh, for appellee.
Before CIRILLO, President Judge, and BECK and POPOVICH, JJ.
POPOVICH, Judge:
This is an appeal from the order of the Court of Common Pleas of Allegheny County, sitting in equity, granting a preliminary injunction against the appellant/Marcie McCann on motion of the plaintiff/Tyson Metal Products, Inc. We reverse.
*463 The record discloses that a hearing was conducted on August 11-12, 1988, to assess the plaintiff's motion for a preliminary injunction. At the proceeding, the vice-president of Tyson Metal Products, Inc., Harvey Tyson, appeared and testified in substance that, during McCann's employ with the plaintiff, she had access to prices charged by suppliers to the plaintiff for some 6-20 vital items which went into proposals ("bids") submitted to its largest customer, Burger King Corporation, which constituted 20-30% of its gross sales of $12,000,000.00 a year in its manufacture of food service equipment.
It was Mr. Tyson's contention that, with McCann securing employment with its main rival in the business, the appellant/Stainless Manufacturing, Inc., her disclosure of the "price list", accumulated over the years through adroit negotiations to afford an advantage, would tip the scales in favor of Stainless and negate whatever leverage the plaintiff had over its competition. More particularly, it was the position of the plaintiff that because of the lower price it was able to secure from a supplier on a product, it was able to pass on the savings to its customers and, thus, obtain a larger share of the market.
If Stainless learned of this "price list", it, supposedly, would contact the supplier to obtain the same low price, equalize the competition and cut into the 2-5 million dollars in sales it had with Burger King Corporation.
Mr. Tyson also testified that he specifically informed McCann that the "price list" was confidential. Yet, during the years of McCann's employment for the plaintiff, it was only within a "couple of weeks" of the hearing date that availability to the information at issue was restricted.
When McCann took the stand, she recounted how she had never been advised of the confidentiality of the "price list". Further, when she refused to sign an employment agreement with the plaintiff she was still promoted to Sales Administrator, which encompassed easy access to the forty-one pages, as well as eleven pages of supplementation, making up the "price list". Finally, McCann stated that she had no intention to disclose such information to Stainless *464 because it could discover this listing on its own if it wanted to do so.
At the completion of the hearing, the Chancellor heard argument and received briefs on behalf of the respective litigants. The next day, the Chancellor entered the following order:
AND NOW, this 12th day of August, 1987, upon consideration of Plaintiff's Motion for Preliminary Injunction and of the testimony and authorities provided by the parties, it is hereby ORDERED that Defendant Marcie McCann is preliminarily enjoined from disclosing the following information to Defendant Stainless Manufacturing, Inc.:
The prices charged to Plaintiff Tyson Metal Products, Inc. for equipment, which prices are used by Tyson in formulating bids and proposals to Burger King Corporation, by equipment suppliers who charge Tyson a lower price for said equipment than they charge all of Tyson's competitors.
Bond in the sum of $5,000 to be posted.
This appeal ensued and challenges the order on the grounds that (1) the "price list" was not a trade secret, and, even if it were, (2) it was not communicated to McCann under circumstances which created an obligation of secrecy.
The starting point in every case of this sort is not whether there was a confidential relationship, but whether, in fact, there was a trade secret to be misappropriated.[1]Van Products Co. v. General Welding and Fabricating Co., 419 Pa. 248, 213 A.2d 769 (1965). Moreover, this is the *465 course to pursue because there was no evidence that a restrictive covenant was executed between the parties. See Felmlee v. Lockett, 466 Pa. 1, 351 A.2d 273 (1976).
In Pennsylvania, the courts have adopted the definition of a trade secret given in the Restatement of Torts § 757, Comment b (1939):
A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers.
See Felmlee, supra, 466 Pa. at 9, 351 A.2d at 277; Van Products Co., supra, 419 Pa. at 258-59, 213 A.2d at 775. In addition, the Third Circuit in SI Handling Systems, Inc. v. Heisley, 753 F.2d 1244 (1985) offered:
Some factors to be considered in determining whether given information is a trade secret are: (1) the extent to which the information is known outside of the owner's business; (2) the extent to which it is know by employees and others involved in the owner's business; (3) the extent of measures taken by the owner to guard the secrecy of the information; (4) the value of the information to the owner and to his competitors; (5) the amount of effort or money expended by the owner in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Restatement of Torts § 757 comment b (1939); International Election Systems Corp. v. Shoup, 452 F.Supp. 684, 706 (E.D.Pa. 1978), aff'd, 595 F.2d 1212 (3d Cir. 1979).
753 F.2d at 1256.
One cannot dispute that the "price list" in the possession of the plaintiff is a "compilation of information which is *466 used in [its] business, and . . . gives [it] an opportunity to obtain an advantage over competitors who do not know or use it." Restatement of Torts § 757. However, that is only the beginning of the inquiry. Like all terminology, it is subject to application premised upon its interpretation, which, in turn, is controlled by the particular facts of the case under review.
As was made mention of in Comment b to Section 757 of the Restatement of Torts, "the ease or difficulty with which the information could be properly acquired or duplicated by others" is a factor in weighing its status as a "trade secret".
To that end, we observe instantly that, on cross-examination, the vice-president of Tyson admitted that the competition, specifically Stainless, could contact a mutual customer and ask why its bid was rejected in favor of Tyson's. Once it was discovered that the discrepancy related to a particular item, the competition could proceed to contact the supplier of the item (contained on Tyson's "price list") and ask what price it was charging Tyson in contrast to the competitor. Tyson's vice-president agreed that this could be done. The fact of whether the supplier would disclose its price to Tyson was another matter; nonetheless, the scenario just reconstructed to access the information sought was possible and not improbable.
Thus, if the information the plaintiff seeks to keep confidential could be obtained by legitimate means by its competitors, the enjoining of McCann from disseminating the same information makes little sense, either in law or logic. In other words, "they [`price lists'] are matters which any industrious person [c]ould learn in [the manufacturing food service] field in [Stainless'] position. [Consequently, t]hey are not of such character as to be classified as trade secrets." Van Products Co., supra, 419 Pa. at 262, 213 A.2d at 777.
In a context akin to the one before us, the Federal Third Circuit concluded that knowledge of the lower prices *467 charged by suppliers to SI Handling Systems, Inc. would not be recognized as a trade secret. In doing so, it wrote:
Here the information SI wishes to enjoin appellants from using (the identity of the vendors and the price of their merchandise) is already in the hands of third parties i.e., the bearing suppliers who have every incentive, and every right, to disclose it to their customers. To prevent appellants from using this information would put an undue burden on the innocent vendors, as well as place an artificial constraint on the free market. As the Pennsylvania Supreme Court recognized in Van Products, supra, "material sources and costs" are "something that would be learned in any productive industry, . . ." 419 Pa. at 261, 213 A.2d at 776. See also Jewish Employment and Vocational Service v. Pleasantville Educational Supply Corp., 220 U.S.P.Q. 613, 626-27 (E.D.Pa. 1982). The district court erred as a matter of law in holding that knowledge of alternate suppliers of parts, and their prices, is protectible as a trade secret. (Language to the contrary in Sims v. Mack Truck Corp., 488 F.Supp. 592, 601 (E.D.Pa. 1980) is not supported by the cases cited therein and we reject that language.)
753 F.2d at 1257. Accord Van Products Co., supra, 419 Pa. at 261, 213 A.2d at 776; United Boiler and Engineering Co. v. Gordon, 50 Erie L.J. 71, 80-82 (1966) (Knowledge and information, such as price lists and costs are not trade secrets).
Instantly, as in SI Handling Systems, Inc., the prices a supplier charges to the plaintiff/customer are known to the supplier, who has every right to disclose this information, if it so chooses, to inquiring competitors of the plaintiff a fact which even the vice-president of Tyson did not discount as a possible event.
Because the information sought to be kept secret could be discovered through legitimate channels (contacting the suppliers personally) by energetic, conscientious and eager members of the competition, we fail to discern how the prohibition of the disclosure of the identical data *468 through McCann renders it trade secret information subject to protection by means of an injunction.
As for the measures implemented by the plaintiff to guard against any potential pilfering of the "price list", see SI Handling Systems, Inc., supra, Tyson's vice-president conceded that the first steps to keep the "price list" confidential transpired a mere "couple of weeks" before the preliminary injunction hearing. Prior thereto, any employee in the company could have made a copy of the information at issue by means of a computer read-out, since there was no mechanism in place to screen those permitted to view this document.
Accordingly, for the reasons herein stated, we find the Chancellor's preliminary injunction is unwarranted under the facts and the law.
Order reversed. Jurisdiction relinquished.
NOTES
[1] More particularly, to be entitled to an injunction against use or disclosure of information, under Pennsylvania law, a plaintiff must show:
(1) that the information constitutes a trade secret; (2) that it was of value to the employer and important in the conduct of his business; (3) that by reason of discovery or ownership the employer had the right to the use and enjoyment of the secret; and (4) that the secret was communicated to the defendant while employed in a position of trust and confidence under such circumstances as to make it inequitable and unjust for him to disclose it to others, or to make use of it himself, to the prejudice of his employer.
SI Handling Systems, Inc. v. Heisley, 753 F.2d 1244, 1255 (3rd Cir. 1985) (Citations omitted).
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24 Ill. App.3d 1052 (1974)
322 N.E.2d 579
THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,
v.
LACARTTLE JONES, Defendant-Appellant.
No. 73-95.
Illinois Appellate Court Fifth District.
December 18, 1974.
*1053 Robert Farrell, of Mt. Vernon, and Lynn Sara Frackman, of Chicago, both of State Appellate Defender's Office, for appellant.
Robert H. Rice, State's Attorney, of Belleville, for the People.
Judgment affirmed.
Mr. JUSTICE CREBS delivered the opinion of the court:
This is an appeal from a denial of post-conviction relief after an evidentiary hearing in the Circuit Court of St. Clair County. In 1967 petitioner was convicted of murder and armed robbery and he was sentenced to the penitentiary for terms of 99 to 100 years and 50 to 75 years respectively, said sentences to run concurrently. On direct appeal this court affirmed his convictions in People v. Jones, 125 Ill. App.2d 168. Petitioner contends here that he was denied his constitutional right to be effectively present at his trial because medication he was then taking for relief of pain caused him to doze off intermittently during the proceedings. In addition, he attributes error to the judge in his post-conviction proceeding for failure to recuse himself in that he may have been a material witness on the issue presented by the petition.
The allegation in the petition giving rise to the present issue states:
"That as a result of bullet wounds suffered at the time of his arrest and subsequent medical treatment, the petitioner was administered drugs to alleviate his pain and was suffering the affects [sic] of *1054 these drugs throughout the time of trial so that he was unable fully to understand the proceedings against him."
This allegation was not contained in petitioner's original pro se petition but was added later in an amended petition filed after appointment of counsel.
Petitioner was the only witness at the hearing. He stated that he was arrested on July 30, 1966, and that he was hospitalized for 1 week for treatment of gun shot wounds in his chest and side. Thereafter, until his trial approximately 8 months later on March 27, 1967, he took two pills a day for relief of pain. Though he did not know what they were, he believed they were depressants because they made him sleepy. The pills were supplied by the nurse at the jail on defendant's request. At his trial he was still taking the pills and, he said, he would find himself dropping off into a semi-conscious sleep unable to hear or remember what the witnesses had said. He did not know whether these periods would last a minute or a half an hour. Specifically, he remembered that he had dozed off during the testimony of the coroner and the ballistics expert. He considered himself able to discuss matters with his attorney and stated that he did not fall asleep during his own testimony and was able to give his version of the events surrounding the shooting. On cross-examination he admitted that he did not at any time during the 5-day trial complain to either the judge or his attorney that he was not hearing all of the evidence because, he said, he believed his attorney had sufficient legal expertise to defend him.
Petitioner here contends that his alleged intermittent dozing during the course of his trial caused him to miss portions of the testimony and made it impossible for him to discuss this evidence with his attorney and that, therefore, he was denied his constitutional right to be personally present at all times during his trial. About the best we can say of this argument is that it is a novel one. Actually, we believe it is misstated. It is not his presence, physically or mentally, that is in question. Rather it is whether, while under the alleged medication, defendant was competent, i.e., whether he could hear, understand and cooperate with his counsel in his defense as constitutionally required.
1 It is well established that in a post-conviction proceeding the burden is on the defendant to set forth clearly in what respects his constitutional rights were violated and he must support those allegations with affidavits, records or other evidence which establish a violation of those rights, and mere allegations of conclusions to that effect are not sufficient even to require an evidentiary hearing. (People v. Farnsley, 53 Ill.2d 537; People v. Ashley, 34 Ill.2d 402.) In People v. Andrus, 41 Ill.2d 543, the defendant claimed that at the time he pleaded guilty he had been deprived of a *1055 certain relaxant drug which he had taken for years to alleviate a mental condition, and that the headaches resulting from such deprivation made it impossible for him to understand the proceedings. The court found that the only issue raised by such allegations in a post-conviction proceeding is whether any facts were established which, if presented to the trial court at the time of his plea, would have raised a bona fide doubt as to his sanity, which in turn would have required a hearing as to his competency. It was concluded that such self-serving and unsupported statements, even if they had been brought to the attention of the trial court, would not have been sufficient to create a bona fide doubt as to competency and the petition was properly dismissed. In People v. Pridgen, 37 Ill.2d 295, the same result was reached in a case involving a claim that defendant was suffering from amnesia at the time of trial and was unable to cooperate with counsel. In People v. Brown, 41 Ill.2d 230, it was held that a defendant was not entitled to an evidentiary hearing on his post-conviction petition based merely on allegations that he was under the influence of drugs, or intoxicated at the time he waived his rights and entered his plea of guilty, where there was nothing in the record to suggest that the court was placed on notice that defendant was under any disability, and the defendant did not suggest that any facts were brought to the attention of the court which would have required a competency hearing. See also People v. Rendleman, 11 Ill. App.3d 214 (involving a claim that defendant's capacity to assist counsel was impaired prior to trial because of medicines and drugs prescribed and administered to him by a physician); People v. Durham, 10 Ill. App.3d 911 (involving claim of drugged condition due to pills taken for hemorrhoid problem); People v. Lego, 32 Ill.2d 76 (involving claim of blackout spells).
2 After reviewing the trial court record, and applying the reasoning in the above cases, we find petitioner's claim of a denial of his constitutional rights is without merit. In effect, it is a self-serving claim of mental impairment, self-imposed, conclusionary, and without any support in the record or by any other evidence. By defendant's own admission he did not call his alleged condition to the attention of the court or his counsel. Nor does the trial record contain any indication at any time during the 5 days that it continued that his condition was other than normal. He consulted with counsel and testified extensively in his own behalf, and, though he mentioned his pain at the time of the shooting, he made no reference to suffering from any pain at his trial. We conclude that the allegations contained in his petition were unsupported by any evidence, and even if they had been raised at his trial, they would have been insufficient to raise a bona fide doubt of his mental condition, his "mental presence," or his competence to understand and assist counsel in *1056 his defense. Therefore, the dismissal of his petition was proper. With such a finding we consider it unnecessary to consider the veiled contention that sleepiness induced by medication constitutes a form of insanity within the meaning of the law.
3 Next defendant contends the judge should have excused himself sua sponte from hearing the post-conviction proceeding because he also presided at defendant's trial and should have recognized, based on the allegations made, that he could be a material witness with knowledge outside the record of their truth or falsity. This precise question has been considered previously and held without merit in People v. Peaslee, 7 Ill. App.3d 312 (abstract opinion). There, as here, the defendant was fully aware of the fact that it was the same judge sitting but, nonetheless, he did not move for a substitution of judges as was his right, nor did he voice any objection or make any motion to seek the judge's disqualification, nor did he at any time during the post-conviction hearing request that the trial judge appear as a witness. Under such circumstances, and after considering some of the cases cited by petitioner here, the court held that the point was waived and could not be presented for the first time on appeal. We agree. In addition, regardless of the position of the judge and whatever knowledge he may have had from the original trial, and however that knowledge may have affected his decision to dismiss the petition, it is abundantly clear that petitioner's unsupported, self-serving allegations were insufficient to warrant granting his petition.
The judgment of the Circuit Court of St. Clair County if affirmed.
Affirmed.
G. MORAN, P.J., and EBERSPACHER, J., concur.
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414 N.W.2d 588 (1987)
In Re the Marriage of Margaret Louise LEWIS, petitioner, Appellant,
v.
Richard Wayne LEWIS, Respondent.
No. C1-87-970.
Court of Appeals of Minnesota.
November 3, 1987.
*589 Barry L. Blomquist, North Branch, for petitioner.
Richard Wayne Lewis, pro se.
Considered and decided by WOZNIAK, P.J., and CRIPPEN and STONE[*], JJ., with oral argument waived.
OPINION
CRIPPEN, Judge.
This appeal is from a judgment dissolving a 19 year marriage. Appellant challenges the amount and duration of her maintenance award. We remand for further findings.
FACTS
Appellant Margaret Louise Lewis and respondent Richard Wayne Lewis were married in 1968. Appellant is 49 years old, has a tenth grade education and limited employment experience. Her monthly expenses total $1224, and she currently has net income of $378 per month from a 20 hour per week housekeeping job. With $588.75 monthly child support, which is not at issue, her expenses exceed her earnings by $160. She foresees further unmet needs when the parties' minor child reaches age 18 in 1991.
Respondent is 41 years old, a high school graduate with two years of college, and receives $2355 per month from his employment as a maintenance worker, his additional earnings in another job, and Veteran's Administration benefits. His monthly mortgage payments total $606.37 and he stipulated his other monthly expenses equal $638. In addition, he was ordered to pay the parties debts totaling $4695.
The trial court concluded there was "a great disparity in the income and the potential for income" for Richard and Margaret. On that observation, the court awarded appellant maintenance of $100 per month for two years and $290 for the following two years, after which maintenance terminates. There are no findings explaining why the first two years of maintenance was $190 lower than the next two years or why maintenance terminates in four years.
ISSUE
Did the trial court abuse its discretion in determining the amount and duration of the maintenance award?
*590 ANALYSIS
A trial court's determination of the amount and duration of spousal maintenance is final unless the court abused its wide discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn.1982). The discretion of the court must be examined in light of the controlling standards contained in Minn.Stat. § 518.552 (1986). Id. at 38.
A trial court may award spousal maintenance if the court finds the spouse seeking maintenance lacks sufficient property to provide for her reasonable needs, or if she is unable to adequately support herself. Minn.Stat. § 518.552, subd. 1. In determining the amount and duration of the maintenance award, the court must consider the needs and resources of each party, taking into account the duration of the marriage, the standard of living established during the marriage, benefits foregone during the marriage by the party seeking maintenance, and contributions of each spouse to the acquisition and preservation of marital property. Minn.Stat. § 518.552, subd. 2. Although there are seven statutory factors, "the issue is basically the financial condition of [appellant] and her ability to meet those needs balanced against the financial condition of [respondent]." Erlandson, 318 N.W.2d at 39-40.
The duration of the award is also discussed in Minn.Stat. § 518.552:
Nothing in this section shall be construed to favor a temporary award of maintenance over a permanent award, where the factors under subdivision 2 justify a permanent award.
Where there is some uncertainty as to the necessity of a permanent award, the court shall order a permanent award leaving its order open for later modification.
Minn.Stat. § 518.552, subd. 3. See McClelland v. McClelland, 359 N.W.2d 7, 10 (Minn.1984); Abuzzahab v. Abuzzahab, 359 N.W.2d 12, 14 (Minn.1984) (permanent maintenance applicable to older, dependent spouse in lengthy "traditional" marriage where there is little likelihood dependent spouse will become self-sufficient).
Particularized findings are necessary to facilitate meaningful appellate review, to show that the trial court considered all the relevant statutory factors, and to satisfy the parties that the trial court fairly resolved their case. Rosenfeld v. Rosenfeld, 311 Minn. 76, 82, 249 N.W.2d 168, 171 (1976); see Kroening v. Kroening, 390 N.W.2d 851, 854 (Minn.Ct.App.1986) (particularized findings necessary in setting the amount and duration of maintenance); see also Riley v. Riley, 369 N.W.2d 40, 45 (Minn.Ct.App.1985), pet. for rev. denied (Minn. Aug. 29, 1985). Taking into account the broad discretion of the trial court on issues in marital cases, "it is especially important that the basis for the court's decision be set forth with a high degree of particularity if appellate court review is to be meaningful." Wallin v. Wallin, 290 Minn. 261, 267, 187 N.W.2d 627, 631 (1971).
Because it is unclear from the findings whether the trial court considered the relevant statutory factors in setting maintenance, we remand for the court's redetermination of its maintenance award. If the trial court elects to set varying amounts and allow only temporary maintenance, the findings should reflect its reasons, based on one or more of the statutory standards.
DECISION
We are unable to adequately review the trial court's maintenance award due to lack of particularized findings explaining the award. We therefore remand and direct the court to make findings consistent with this opinion.
Remanded.
NOTES
[*] Acting as judge of the Court of Appeals by appointment pursuant to Minn. Const. art. 6, § 2.
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769 F.2d 72
Arthur B. POWERS, Plaintiff-Appellant,v.Austin J. McGUIGAN and Glenn E. Coe, Defendants-Appellees.
No. 1274, Docket 85-7211.
United States Court of Appeals,Second Circuit.
Argued May 30, 1985.Decided July 29, 1985.
Timothy C. Moynahan, Waterbury, Conn. (Moynahan & Ruskin, Waterbury, Conn., of counsel), submitted a brief for plaintiff-appellant.
David S. Golub, Stamford, Conn. (Leora Herrmann, Silver, Golub and Sandak, Stamford, Conn., John M. Massameno, Office of the Chief State's Atty., Wallingford, Conn., on the brief), for defendants-appellees.
Before KAUFMAN and KEARSE, Circuit Judges, and MISHLER, District Judge.*
KEARSE, Circuit Judge:
1
In this, his second, appeal to this Court in this matter, plaintiff Arthur B. Powers appeals from a final judgment of the United States District Court for the District of Connecticut, T.F. Gilroy Daly, Chief Judge, summarily dismissing his complaint brought under 42 U.S.C. Sec. 1983 (1982), against defendants Austin J. McGuigan, Chief Attorney for the State of Connecticut, and Glenn E. Coe, McGuigan's former chief trial counsel, for various relief on account of defendants' alleged bad faith prosecution of Powers, former Commissioner of the State of Connecticut Department of Transportation ("CDOT"), on charges of corruption. On Powers's first appeal, challenging a judgment dismissing his complaint for failure to state a claim upon which relief could be granted, this Court reversed in part, ruling that Powers was entitled to attempt to show that his constitutional right to a fair trial in the criminal prosecution had been violated by alleged news leaks by the defendants. Powers v. Coe, 728 F.2d 97 (2d Cir.1984) ("Powers I "). Following the remand in Powers I, further proceedings were held, culminating in the court's granting a motion by the defendants for summary judgment dismissing the complaint on the ground that, regardless of any alleged conduct of the defendants, Powers could not show that such conduct caused him to be deprived of a fair trial. On this appeal, Powers contends that summary judgment was foreclosed by our decision in Powers I and that he was improperly precluded from conducting discovery needed to oppose defendants' summary judgment motion. Finding no merit in Powers's arguments, we affirm.
I. BACKGROUND
2
The background of this action is set out in detail in Powers I, familiarity with which is assumed, and will be briefly summarized here. In 1981, McGuigan began an investigation into charges of corruption in CDOT, of which Powers was then Commissioner. After one of Powers's appearances before the one-person grand jury that had been convened to look into the charges, McGuigan agreed that if Powers resigned from his office he would not be prosecuted, provided that no evidence was subsequently uncovered showing that Powers had engaged in serious felonious conduct in the performance of his duties. Powers resigned.
3
Thereafter, Powers had several telephone conversations with one Joseph Hirsch, a prospective witness of the grand jury who was a contractor who did business with CDOT. Hirsch was a close friend of Powers and godfather to one of Powers's children; he had consented to a wiretap on his calls to Powers. As a result of these conversations, Powers was arrested on state charges of attempted obstruction of justice. Both the Connecticut press and the electronic media had carried reports on the entire Powers matter from the beginning.
4
On the day before his criminal trial was to begin in state court, Powers commenced the present federal action, seeking an injunction against the prosecution, along with declaratory and monetary relief, on the theory, inter alia, that the defendants had deliberately leaked to the press information about the CDOT investigation. Powers asserted that the publicity had made it impossible for him to have a fair trial on the criminal charges. The district court denied Powers an injunction, see Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and the criminal trial began as scheduled. Three weeks later, Powers pleaded guilty to two misdemeanor counts pursuant to a plea bargain under which the other charges against him were dismissed.
A. Powers I
5
Shortly after the entry of Powers's guilty plea, the district court dismissed his complaint in the present action on the ground that it failed to state a claim upon which relief could be granted. Although we agreed with the court's conclusions as to most of the claims asserted, we reversed insofar as the complaint alleged that defendants had deprived him of a fair trial by systematically leaking to the press information relating to their investigation. We ruled that Powers was entitled to have an opportunity to prove that claim, and we remanded for further proceedings.
6
In making our ruling, we outlined certain factors that Powers would have to prove in order to prevail on the surviving claim. In addition to showing that there were leaks that were unnecessary in scope, nature, and number, we stated that Powers would have to show that he had " 'in fact been denied [his] due process rights.' Martin v. Merola, 532 F.2d [191,] 194 [ (2d Cir.1976) (per curiam) ] (emphasis added)." 728 F.2d at 105. Finally, we pointed out that
7
the showing that must be made involves more than a showing that there were improper leaks and that there was deprivation of a fair trial. While there need not be a showing that the defendant(s) herein knew that the leaks would tend to cause such a deprivation or intentionally gave them to the media, ... there must be a showing that other remedies were not available, or were used to no avail, to alleviate the effects of the leaks, e.g., a thorough voir dire, utilization of challenges both peremptory and for cause, a motion to disqualify a biased judge (we do not suggest that there was such in this case), a motion to change venue, or the like. In other words, there must be a showing of causation; if Powers was deprived of a fair trial he has to show that such deprivation was not "too remote a consequence" of the improper leaks to the press.
8
Id. at 105 (citations omitted). We ended our discussion of this claim by stating that "anything we have said, of course does not foreclose, on appropriate papers, summary judgment." Id. at 106.
B. Proceedings on Remand
9
On remand, Powers immediately sought to take McGuigan's deposition in order to establish, inter alia, that defendants were the source of the news leaks about the investigation. Defendants moved for a protective order on the ground that such discovery was unnecessary because Powers could not establish that the news leaks had in fact deprived him of a fair trial. On that premise, defendants moved for summary judgment dismissing Powers's remaining claim.
10
In support of their motion for summary judgment, defendants asserted that Powers could not show that the jury selected at his criminal trial was in fact prejudiced against him or that he had used any legal measures at his disposal to alleviate any prejudice he may have perceived. Defendants submitted a copy of the state court transcript of the jury selection proceedings showing, inter alia, that during the voir dire, defense counsel inquired of each prospective juror concerning the effects, if any, of the publicity about the case. The results of this questioning suggested that there was no adverse effect from the prior publicity. No prospective juror indicated that he or she had any preconception about the case due to exposure to pretrial publicity; no prospective juror indicated any knowledge of the particular facts of the case or any familiarity with the contents of any particular news report; every juror selected stated that he or she would be impartial and presumed Powers to be innocent; no one selected as a juror had prior knowledge of the facts of the case.
11
The jury selection process proceeded expeditiously, taking some seven hours; the jury and alternates were selected after examination of 22 prospective jurors. Powers did not challenge any prospective juror for cause, and he did not use all of his peremptory challenges. At the end of the selection process, two of Powers's original eight peremptory challenges remained unused.
12
Although prior to trial Powers had brought a motion to dismiss the charges against him on the ground, inter alia, that improper prosecutorial leaks to the media had denied him the opportunity for a fair trial, at no time prior to or during the trial did Powers suggest that any particular juror or alternate was biased. At no time prior to or during the trial did he move for a change of venue.
13
The evidence presented by defendants in support of their motion also showed that some three weeks after the trial had begun, Powers entered into a plea bargain pursuant to which he pleaded guilty to two misdemeanor offenses. He stated that his pleas were being entered without coercion and that he was aware that he was constitutionally entitled to a trial by jury. Neither Powers nor his counsel made any claim at that time that Powers's pleas were in any way brought about by a perception that Powers could not obtain a fair trial.
14
In opposition to defendants' motion for summary judgment, Powers submitted an affidavit stating that he had "pled guilty ... because [he] felt it was impossible to obtain a fair trial" because of the prejudicial publicity. He contended that the jurors' statements that they were uninfluenced by the publicity were "unreliable," that "[e]ight peremptory challenges were completely useless ..." to alleviate the claimed juror prejudice, and that he had "instructed [his] attorney not to file a motion to change venue" because he believed it impossible to obtain a fair trial anywhere in the State of Connecticut.
C. The Ruling of the District Court
15
Defendants' motion was referred to United States Magistrate Thomas P. Smith, who recommended that it be granted. After reviewing the guidance given by this Court in Powers I, and the parties' respective submissions, the magistrate concluded that Powers's guilty plea, coupled with the fact that he had chosen not to avail himself of any of the traditional means of avoiding or alleviating possible prejudice resulting from pretrial publicity, made it virtually impossible for him to demonstrate that that publicity had in fact caused him to be deprived of a fair trial. The magistrate found that Powers had not made a sufficient showing of disputed material facts to withstand the entry of summary judgment against him:
16
Aside from plaintiff Powers' offering 79 newspaper articles to demonstrate the undeniably extensive publicity in this case and affidavits alleging secret meetings between defendant McGuigan and reporters, Powers offers no concrete particulars to support his allegations of "futility" or to demonstrate a causal link between the nature of this publicity and the alleged denial of a fair trial. Although constitutional questions should not be decided on an incomplete factual basis, summary judgment may be rendered where the record is adequate for the constitutional question presented and there is no genuine issue of material fact....
17
Here, the record is adequate and plaintiff has failed to show that questions of material fact exist.
18
(Magistrate's Report dated January 4, 1985, at 5-6.) The magistrate concluded that
19
the conclusory allegations offered by the plaintiff are inadequate to defeat summary judgment. As observed by the Supreme Court, "it is not asking too much that the burden of showing essential unfairness be sustained by him who claims such injustice and seeks to have the result set aside, and that it be sustained not as a matter of speculation but as a demonstrable reality."
20
(Id. at 9 (quoting United States ex rel. Darcy v. Handy, 351 U.S. 454, 462, 76 S.Ct. 965, 970, 100 L.Ed. 1331 (1956)).) The magistrate rejected Powers's argument that summary judgment should not be entered before he had had an opportunity to take the deposition of McGuigan on the ground that McGuigan had no role in the jury selection process or in the trial to the jury.
21
The district court adopted, approved, and ratified the recommendation of the magistrate, and ordered that judgment be entered dismissing the complaint. This appeal followed.
II. DISCUSSION
22
On this appeal, Powers contends that the entry of summary judgment against him was foreclosed by our opinion in Powers I, that summary judgment could not properly be granted without giving him an opportunity to conduct discovery, and that the district court made its ruling by impermissibly finding a fact that could be decided only after a trial in this action, i.e., that Powers had received a fair criminal trial. We reject all of these contentions.
23
First, our opinion in Powers I in no way foreclosed the possibility of summary judgment. Indeed, we stated explicitly that such a summary disposition could occur upon an appropriate showing.
24
Second, a party may properly seek a continuance under Fed.R.Civ.P. 56(f) in order to seek discovery for the purpose of opposing a motion for summary judgment; however, where the discovery sought would not meet the issue that the moving party contends contains no genuine issue of fact, it is not an abuse of discretion to decide the motion for summary judgment without granting discovery.
25
Finally, Powers's contention that the district court impermissibly found as a matter of fact that he had received a fair trial misconstrues the decision of that court. The basis for the district court's decision was not that Powers had in fact received a fair trial but that he had not shown any facts suggesting that there was any causal link between the pretrial publicity and the claimed unfairness of his trial. (See Magistrate's Report at 3, 6.) This ruling was not erroneous.
26
Powers's trial did not reach the stage of a decision by the jurors; rather, two weeks after trial commenced, Powers pleaded guilty. As we indicated in Powers I, this made his task of showing that the pretrial publicity had deprived him of his rights more difficult, since he had to show that that publicity caused him to be found guilty. The defendants presented undisputed evidence that when Powers pleaded guilty, he did not in any way indicate that he did so because of pretrial publicity or because he did not believe he could be tried fairly. This, together with the facts, also undisputed, (a) that Powers had pursued none of the traditional avenues for neutralizing the effects of adverse pretrial publicity, such as moving for a change of venue, (b) that the responses of the jurors during the voir dire suggested that the pretrial publicity would not interfere with their ability to decide the case impartially and objectively, (c) that Powers ventured no challenges for cause on the ground of juror exposure to publicity, (d) that Powers left a substantial percentage of his peremptory challenges unused, and (e) that Powers's guilty plea was not entered until after he had heard some two weeks' worth of the evidence against him, presented a strong picture of a defendant whose guilty plea was not caused by the pretrial publicity.
27
Powers's substantive response to the summary judgment motion was, as the district court found, inadequate to meet the requirements of Fed.R.Civ.P. 56(e). His affidavit stated that the traditional avenues had, in effect, not been available to him because they would have been futile: the jurors' responses were unreliable, the use of peremptory challenges would have been useless, and the publicity had been so pervasive that he could not have received a fair trial anywhere in the State of Connecticut. The district court properly considered these assertions speculative and conclusory; and since they were not supported by any factual presentation, they were insufficient to defeat summary judgment. Powers's argument that he had presented evidence of some 69 pretrial news articles bearing on his case misses the mark. The existence of the publicity merely provides the occasion for an inquiry into whether it caused an unfair trial; the publicity is an insufficient basis for answering that question in the affirmative or for opposing a motion that strongly suggests that the publicity itself did not cause the conviction.
28
We have considered all of Powers's arguments on this appeal and have found them to be without merit.
CONCLUSION
29
The judgment of the district court is affirmed.
*
Senior Judge of the United States District Court for the Eastern District of New York, sitting by designation
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245 F.Supp.2d 741 (2003)
BERNHARDT L.L.C., Plaintiff,
v.
COLLEZIONE EUROPA USA, INC., Defendant.
No. CIV.l:01-CV-00957.
United States District Court, M.D. North Carolina.
February 21, 2003.
*742 H. Stephen Robinson, Norwood Robinson, Robinson & Lawing, Winston-Salem, NC, for plaintiff.
Teresa Raquel Robinson, Peter Joseph Juran, Blanco Tackabery Combs & Matamoros, P.A., Winston-Salem, NC, Nicholas Mesiti, Brett M. Hutton, Heslin Rothenberg Farley & Mesiti, P.S., Albany, NY, for defendant.
MEMORANDUM OPINION
BULLOCK, District Judge.
Plaintiff Bernhardt, L.L.C. ("Plaintiff) brings this action against Defendant Collezione Europa USA, Inc. ("Defendant") alleging that Defendant infringed upon six of Plaintiffs patents which claim ornamental designs of individual pieces that are part of a suite of furniture named the "Coronado Collection." Along with its answer, Defendant filed counterclaims against Plaintiff. This action is presently before the court on Defendant's motion for partial summary judgment regarding the invalidity of four of Plaintiffs patents, namely United States Patents Nos. D439,-770; D441.560; D441,975; and D441,980.
FACTS
Plaintiff is a North Carolina limited liability company that owns six design patents covering furniture pieces that are part of a suite of furniture sold by Plaintiffs license under the name "Coronado Collection." Each of the six design patents protects the ornamental design of an individual piece of furniture in the Coronado Collection. The design patents at issue in this motion are as follows: D439,770 (the " '770 patent"); D441,560 (the " '560 patent"); D441.975 (the "'975 patent"); and D441.980 (the " '980 patent") (collectively the "Coronado Patents"). The earliest patent application of the Coronado Patents was filed October 10, 2000.[1]
Defendant is a New Jersey corporation that produces furniture "knock-offs." Defendant has its own furniture designers, but a significant portion of its product lines is derived from the designs of others. Defendant searches the furniture market for designs created by other companies that Defendant believes will sell. If Defendant can create a similar design and produce a product below the retailer's cost of the original, it will do so. As long as the product designs that Defendant replicates are not covered by a valid patent or other legal protection, this practice does not violate the law. If the replicated designs are *743 patent-protected, however, Defendant may be liable for patent infringement.
Plaintiff introduces its new furniture design to all dealers at the International Home Furnishings Market ("Market"), which is held twice a year in April and October in High Point, North Carolina. About a month before Market, Plaintiff shows a limited group of invitees mock-ups or samples of some of the pieces in its new collections.[2] The purpose of this "premarket" is not to solicit sales or introduce specific products, but rather to give a limited number of key customers a general idea as to the stylistic direction of the company. In addition to the key customers, a representative from the publication "Furniture Today" attends, as does Plaintiffs sales and marketing management and sales representatives. No one outside of Plaintiffs employees is required to sign a confidentiality agreement restricting or limiting the dissemination of what was shown.
At pre-market all of these invitees are escorted by Plaintiffs employees and shown pieces of Plaintiffs collections. Only representative pieces, not the entire collection, are shown at pre-market and those that are shown may be different than the final designs ultimately introduced at Market. Even when a final sample of a piece is prepared in time for premarket, it may not be shown. Similarly, a sample or mock-up may be shown at premarket even though Plaintiff knows that the piece it will introduce at Market will be significantly different.
The pre-market to the 1999 October International Home Furnishings Market ("the 1999 Pre-Market") was held over three days on September 13-15, 1999. At least sixty invitees attended as well as a representative from "Furniture Today." Plaintiff admits to showing some individual items within the Coronado Collection at that time.
Prior to the 1999 Pre-Market, on August 24, 1999, one of Plaintiffs employees created a document titled "October '99 Pre-Market List." This was a "wish list of the pieces [Plaintiff] would like to have for premarket to show, and it serves as sort of a target for [Plaintiffs] internal team to try to get these pieces ready in time for premarket." (Robinson Aff. Opp'n Def.'s Mot. Summ. J. of Invalidity, Ex. B, W. Collett Dep. at 23, lines 16-20.) This list contained "stock keeping unit" (SKU) numbers that Plaintiff uses to identify its pieces. The first three digits of a SKU identify the group or collection (e.g., 355 for the Coronado Collection) and the last three digits identify the type of piece (e.g., a poster bed or an end chair). A SKU number is assigned to the designer's initial sketch of a piece early in the design process and it follows the design through all subsequent re-designs as long as it continues to be the same piece.
Many of the relevant SKUs on the October '99 Pre-Market List have the notation "(new)" beside them and one was marked "(existing)." (Pl.'s Resp. Def.'s Mot. Summ. J. of Invalidity at 6.) "(New)" meant that Plaintiff wanted a new sample incorporating some design change for the pre-market that had been ordered but had not yet been manufactured. (Robinson Aff. Opp'n Def.'s Mot. Summ. J. of Invalidity, *744 Ex. B, W. Collett Dep. at p. 24 line 24 through p. 25 line 7.) "(Existing)" meant that Plaintiff intended to show an existing mock-up or sample that had been built during the product development process even though it might not be the same as the final design that would be offered for sale at Market. (Id. at p. 28 lines 5-12.) If Plaintiff was indifferent to whether it showed a new sample or an existing sample or mock-up, it would mark an item "(existing or new if here in time)." (Pl.'s Resp. Def.'s Mot. Summ. J. of Invalidity at 6.) When the last revision was made to the October '99 Pre-Market List on September 7, 1999, all but one of the SKUs at issue were still identified as "(new)."
After the 1999 Pre-Market, a "Premarket Wrap-up" document was prepared by Plaintiffs Senior Case-goods Designer, Linda McLean. This document brings together all outstanding issues, notes and comments on new collections that need to be addressed before Market. It also includes all comments collected from customers concerning the furniture shown at the 1999 Pre-Market.
Plaintiff believes that Defendant has infringed, and is presently infringing, the Coronado Patents by manufacturing, importing, and selling pieces of furniture that are confusingly similar to the ornamental designs protected by the Coronado Patents. Plaintiff filed a complaint against Defendant alleging patent infringement and seeking monetary and injunctive relief against Defendant. Defendant responded to Plaintiffs complaint by filing an answer and asserting counterclaims of (1) noninfringement, invalidity and unenforceability, and (2) patent misuse. Pursuant to Federal Rule of Civil Procedure 12(b)(6), Plaintiff filed a motion to dismiss Defendant's counterclaims for failure to state a claim upon which relief may be granted. In an order dated July 3, 2002, this court granted Plaintiffs motion as to the declaration of unenforceability and patent misuse. This case is presently before the court on Defendant's motion for partial summary judgment regarding the invalidity of the '770, '560, '975, and '980 patents.
DISCUSSION
Summary judgment must be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The moving party bears the burden of persuasion on the relevant issues. Celotex Corp. v. Catrett, All U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The non-moving party may survive a motion for summary judgment by producing "evidence from which a [fact finder] might return a verdict in his favor." Anderson v. Liberty Lobby, All U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When the motion is supported by affidavits, the non-moving party must set forth specific facts showing that there is a genuine issue for trial. See Fed.R.Civ.P. 56(e); see also Cray Communications, Inc. v. Novatel Computer Sys., Inc., 33 F.3d 390, 393-94 (4th Cir.1994) (moving party on summary judgment motion can simply argue the absence of evidence by which the non-movant can prove her case). In considering the evidence, all reasonable inferences are to be drawn in favor of the nonmoving party. Anderson, All U.S. at 255, 106 S.Ct. 2505. However, "[t]he mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the [fact finder] could reasonably find for the plaintiff." Id. at 252,106 S.Ct. 2505.
Defendant claims that the '770, '560,'975, and '980 patents are invalid under the "public use" bar of 35 U.S.C. § 102(b). Defendant also claims that the '975 patent is invalid because it claims two patentably *745 distinct designs in a single patent. Plaintiff claims that Defendant has failed to show sufficient evidence of a "public use" and that the '975 patent is a valid design with two embodiments.
A. "Public Use" of the Coronado Patents
A patent carries a presumption of validity. 35 U.S.C. § 282. To overcome this presumption, Defendant must prove by clear and convincing evidence that the patent is invalid. Minnesota Mining and Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed.Cir.2002). Clear and convincing evidence is that evidence which produces "an abiding conviction that the truth of [the] factual contentions are `highly probable.' " Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81 L.Ed.2d 247 (1984). "The burden of proving invalidity always remains with the party asserting invalidity; the burden never shifts to the patentee." Harrington Mfg. Co., Inc. v. Powell Mfg. Co., 815 F.2d 1478, 1482 (Fed. Cir.1986). Nevertheless, "even in summary judgment proceedings, once an alleged infringer has presented sufficient facts to establish a prima facie case of public use, it is incumbent on the patentee to come forward with some evidence that there is a genuine issue of material fact in dispute." Id
Under 35 U.S.C. § 102(b), a person is entitled to a patent, inter alia, unless "the invention was ... in public use ... in this country, more than one year prior to the date of the application for the patent in the United States." The Court of Appeals for the Federal Circuit has described "public use" as including "any use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor." In re Smith, 714 F.2d 1127, 1134 (Fed.Cir.1983). "Whether a public use has occurred is a question of law." Baxter Int'l, Inc. v. Cobe Labs., Inc., 88 F.3d 1054, 1058 (Fed.Cir.1996). In considering whether a particular use was a public use within the meaning of Section 102(b), the court must consider the "totality of the circumstances in conjunction with the policies underlying the public use bar." Id. These policies include:
(1) discouraging the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available; (2) favoring the prompt and widespread disclosure of inventions; (3) allowing the inventor a reasonable amount of time following sales activity to determine the potential economic value of a patent; and (4) prohibiting the inventor from commercially exploiting the invention for a period greater than the statutorily prescribed time.
Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192,1198 (Fed.Cir.1994).
Before the court may analyze the circumstances to determine whether the alleged "use" was "public," however, it must first determine whether there was a "use" by Plaintiff of the patented designs and, if so, whether this "use" occurred more than a year prior to the date of the patent application. The earliest patent application filing of the relevant Coronado Patents is October 10, 2000. The 1999 Pre-Market was held on September 13-15, 1999. Because the 1999 Pre-Market was held more than one year prior to the earliest patent application filing, any "public use" or "sale" of furniture with the relevant Coronado Patents' designs at the 1999 Pre-Market would render these patents invalid.
Defendant alleges that its evidence proves that the Coronado Patents' designs were on display at the 1999 Pre-Market, thus constituting a "use" under Section 102(b). Using the October '99 Pre-Market *746 List and its SKU numbers and the Premarket Wrap-up, Defendant alleges that these documents, plus deposition testimony, prove the Coronado Patents' designs were on display at the 1999 Pre-Market.
After reviewing the evidence and viewing all reasonable inferences in the light most favorable to Plaintiff, the court finds that genuine issues of material fact remain as to whether there was a "use" by Plaintiff as to the Coronado Patents in dispute. Defendant relies heavily upon the October '99 Pre-Market List and the Premarket Wrap-up documents to support its allegation that these particular Coronado Patents were displayed at the 1999 Pre-Market. Defendant's interpretation of these documents, however, differs substantially from that of Plaintiff.
Defendant views the October '99 Pre-Market List as a list of items to be on display at the 1999 Pre-Market and claims that the SKUs on the list match up with the Coronado Patents at issue. Defendant also claims that the notes and comments in the Premarket Wrap-up must have been from customers who viewed the Coronado Patents at the 1999 Pre-Market. Lastly, Defendant claims that deposition testimony from Plaintiffs employees supports its allegations.[3]
In contrast, Plaintiff contends that the October '99 Pre-Market List is nothing more than an internal "wish list" of items which it hoped to have for display. Also, it disputes that the SKUs on the list referred specifically to the Coronado Patents. Plaintiff explains that all but one of the alleged Coronado Patent SKUs had "(new)" next to it, indicating that the piece was still on order less than a week before the 1999 Pre-Market. Plaintiff further claims that the Premarket Wrap-up is not a compilation of comments by pre-market invitees or customers, but is a document created after the 1999 Pre-Market that brought together all comments, issues, and notes on all new collections. Plaintiff states that many of the notes and comments would have come from internal sources and may well have been made weeks in advance of pre-market. Thus, Plaintiff avers that a comment about a particular SKU on the Premarket Wrapup does not necessarily mean that a piece of that type was actually shown at the 1999 Pre-Market. Lastly, Plaintiff contends that the deposition testimony does not support Defendant's claims and that the answers are uncertain at best. Plaintiff notes that Defendant has produced no testimony from any witnesses who saw or *747 have actual knowledge that the Coronado Patents' furniture was on display.
Each of these points of disagreement is a factual issue that is material to the ultimate resolution of this case and must be left for the ultimate fact-finder to decide at trial. At most, Defendant's evidence proves that there is a possibility that some pieces of the Coronado Collection were on display at the 1999 Pre-Market. As a result, the court will deny summary judgment as a matter of law on Defendant's claim of invalidity based on prior "public use" as to the '770, '560, '975, and '980 patents.
B. Validity of the '975 Patent
In its second claim, Defendant alleges that the '975 Patent is invalid because it embodies two patentably distinct designs in a single patent. Plaintiff argues that the '975 patent is simply a valid design with two different embodiments.
The '975 Patent covers the design of a type of chair. The patent shows five "drawing sheets" of the chair, including four drawings of the chair without arms ("Fig. 1" through "Fig. 4") and one drawing showing the chair with arms ("Fig.5"). (Compl., Ex. E.) The inventors of the '975 Patent designs are Thomas M. McDaniel and D. Scott Coley.
Defendant asserts that the '975 Patent claims two "patentably distinct designs" because it shows a chair with arms and a chair without arms. Defendant claims that the arms are a "point of novelty" of the arm chair design in the '975 Patent and thus each design is patentably distinct from the other.[4] Defendant supports this allegation by pointing to the deposition testimony of both McDaniel and Coley, in which each testified that they considered the arm to be "new." Furthermore, Defendant claims that neither McDaniel nor Coley made his opinion known to the Patent Office Examiner during the prosecution of the patent application. Lastly, Defendant claims that the addition of the arms to the chair is not in the form of a modification of the shape of an element in the chair design, but rather an addition of a new element. As a result, Defendant argues that the '975 Patent impermissibly claims more than one design and is, as a matter of law, invalid.
It is the responsibility of every court working with patents to be "satisfied that the party challenging validity has properly carried its burden of overcoming the statutory presumption of validity of a patent." Structural Rubber Prods. Co. v. Park Rubber Co., 749 F.2d 707, 714 (Fed.Cir.1984); see also 35 U.S.C. § 282. In the absence of any evidence "more pertinent" than that actually considered by the Patent and Trademark Office, substantial deference is due to the Patent and Trademark Office decision to issue the patent. Kloster Speedsteel AB v. Crucible, Inc., 793 F.2d 1565, 1571 (Fed.Cir.1986); see also American *748 Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed.Cir.1984) ("Deference is due the Patent and Trademark Office decision to issue the patent with respect to evidence bearing on validity which it considered but no such deference is due with respect to evidence it did not consider.").
To be valid, a design or invention must be both novel, under 35 U.S.C. § 102, and "nonobvious," under 35 U.S.C. § 103. "Thus, included within the presumption of validity is a presumption of novelty, [and] a presumption of nonobviousness ..., each of which must be presumed to have been met." Structural Rubber Prods., 749 F.2d at 714. "The question of obviousness is distinct from that of novelty. A device may be new and useful and yet still not be patentable if an examination of the technology of the prior art and the ordinary skill of the artisan reveals that the new and useful innovation is obvious." Burgess Cellulose Co. v. Wood Flong Corp., 431 F.2d 505, 509 (2d Cir.1970).
If two embodiments of the same design are considered valid and patentably distinct from one another, they do not constitute a single inventive concept and thus may not be included in the same design application. See In re Plainer, 155 U.S.P.Q. 222 (Comm'r Pat. & Trademarks 1967). Multiple embodiments of a single inventive concept, however, may be included in the same design application only if they are patentably indistinct. See In re Rubinfield, 47 C.C.P.A. 701, 270 F.2d 391, 123 U.S.P.Q. 210 (Cust & Pat.App.1959).
The primary patent examiner of the '975 Patent, Gary D. Watson, understood that he was including more than one design under the '975 Patent. In his "examiner's amendment," he found two embodiments of the '975 Patent design. Supporting his conclusion to include two embodiments in the same patent, Watson stated:
The above identified embodiments are considered by the examiner to present overall appearances that are not distinct from one another. The only difference between embodiments being that one has arms and the other does not but the design of the arms is considered obvious in the art. Accordingly, they are deemed to comprise a single inventive concept and are being retained and examined in the same application.
(Robinson Aff. Opp'n Def.'s Mot. Summ. J. of Invalidity, Examiner's Notice of Allowability, Ex. G, at 2 (emphasis added).)
In light of the relevant law and the deference afforded to a patent examiner's decision, the court finds that Defendant has not carried its burden of persuasion. Defendant simply has not offered sufficient evidence to persuade the court that the Primary Patent Examiner's opinion is incorrect and that it is entitled to judgment as a matter of law.
CONCLUSION
Defendant has failed to establish that no genuine issue of material fact exists in this case and that Defendant is entitled to summary judgment as a matter of law. Therefore, for the reasons discussed above, Defendant's motion for summary judgment will be denied.
An order in accordance with this memorandum opinion shall be entered contemporaneously herewith.
ORDER
For the reasons set forth in the memorandum opinion filed contemporaneously herewith,
IT IS ORDERED that Defendant's motion for summary judgment [Doc. # 39] is DENIED.
*749 IT IS FURTHER ORDERED that Plaintiffs motion to strike [Doc. # 58] is DENIED as moot.
NOTES
[1] The following is a list of the application dates for the relevant Coronado Patents: '770 patent (October 10, 2000); '975 patent (October 12, 2000); '980 patent (October 13, 2000); and '560 patent (October 13, 2000).
[2] A "sample" is a fully functional piece of furniture. A "mock-up" is just an exterior shell. Numerous samples and mock-ups may be made during the design development process. Plaintiff typically does not show a sample at Market that was shown at pre-market. It builds new samples of every piece in the collection for Market. (Robinson Aff. Opp'n Def.'s Mot. Summ. J. of Invalidity, Ex. C, McLean Dep. at p. 43 lines 13-24, at p. 63 line I through p. 64 line 4.)
[3] In its Brief in Support of its Motion for Partial Summary Judgment, Defendant also relies upon the statements and conclusions made by Bruce W. Dunkins to support its allegations as to both claims of invalidity against the Coronado Patents. Plaintiff has moved to strike this testimony as inadmissible expert opinion.
Federal Rule of Evidence 702 permits the admission of expert testimony covering "scientific, technical, or other specialized knowledge [which] will assist the trier of fact to understand the evidence or to determine a fact in issue." See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) (emphasis omitted). Dunkins has been retained and compensated by Defendant as a "design patent expert." (Bruce W. Dunkins Decl. Supp. Def.'s Mot. Partial Summ. J. at 2, para. 4.) Although patent law qualifies as "scientific, technical, or other specialized knowledge," the court finds little of Dunkins' testimony to be helpful. Even Defendant characterizes Dunkins' testimony as consisting only of "factual summary, synthesis, and analysis." (Def.'s Opp'n Pl.'s Mot. to Strike Decl. of Bruce W. Dunkins in Supp. of Def.'s Mot. Summ. J. of Invalidity, at 3.) Although Dunkins' factual summaries may be helpful, any legal conclusions are for the court. Because the court does not find Dunkins' testimony determinative, Plaintiff's motion to strike will be denied as moot.
[4] Defendant alleges that Plaintiff has admitted to the "novelty" of the '975 Patent's arm design in its answers to Defendant's interrogatories. At best, this allegation is arguable. Before listing any information about the "armchair embodiment" of the chair (subsection f), Plaintiff specifically limits its answer:
Interrogatory 20. Identify and describe with particularity each point of novelty of United States Design Patent No. D441,975 entitled "Dining Room Chair."
RESPONSE: Subject to the general objections and limitations set forth herein, Plaintiff responds as follows. The design elements that comprise the design protected by U.S. Design Patent No. D441.975, and in whose particular expression and/or use in combination may be found the points of novelty of said patented design, consist of the following.
(Hutton Decl. Supp. Def.'s Mot. Partial Summ. J. of Invalidity, Ex. G, Pl.'s Resp. Def.'s Second Interrogs. at 10.)
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
JAMES R. SHORT, )
)
)
Plaintiff, )
)
v. ) Civil Action No. 07-2260 (RMC)
)
UNITED STATES ARMY CORPS OF )
ENGINEERS, )
)
Defendant. )
)
MEMORANDUM OPINION
James R. Short sought records from the U.S. Army Corps of Engineers (the “Army
Corps” or “Corps”) under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. The Army
Corps released documents to Mr. Short and now moves for summary judgment. Mr. Short opposes,
alleging that the search and the affidavits describing the search must be inadequate because he
speculates that the Corps has other documents it did not release to him. As explained below, mere
speculation is insufficient to rebut the declarations filed by the Corps. Summary judgment therefore
will be granted in favor of the Army Corps.
I. FACTS
Mr. Short’s FOIA request arises from his frustration in attempting to change a
wetlands designation on property he seeks to develop. Mr. Short is a real estate developer who is
involved in developing Ocean Pines, a 3500 acre residential community in Worcester County,
Maryland. In 1994, Ocean-Pines LLC - Balfour Holdings, Inc, applied for a permit to develop
various sections of Ocean Pines, including Section 15B. As part of the permit process, a
conservation easement was placed on Section 15B and a Jurisdictional Determination1 was issued
for this Section. In 2002, Mr. Short filed an application with the Army Corps for a Jurisdictional
Determination that certain features in Section 15B, including Lot 64, were not wetlands. Because
the Corps failed to act on his application and he allegedly was unable to obtain information regarding
the processing of the application,2 on January 16, 2007, Mr. Short submitted a FOIA request for
documents related to Lot 64 in Section 15B as follows:
RE: JD Determination — Tracking No. 20036062
Dear Mr. Fraer:
Thank you for speaking with me today. As discussed, this is a request
made pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C.
§ 552, et seq., as amended.
My firm represents Mr. James R. Short in connection with his joint
application for a jurisdictional determination on a parcel of property
located in Worchester [sic] County, Maryland. The JD application
was first submitted to the U.S. Army Corps of Engineers by the
Maryland Department of Environment on or about October 11, 2002.
The JD application concerns a parcel located in Ocean Pines Section
15B, Lot 64, Tax Map 21, Parcel 68 (the “Parcel”).3
1
A Jurisdictional Determination is a “written Corps determination that a wetland and/or
water body is subject to regulatory jurisdiction under Section 404 of the Clean Water Act.” 33
C.F.R. § 331.2. Section 404 is codified at 33 U.S.C. § 1344.
2
The record is unclear regarding the current status of the 2002 application for a Jurisdictional
Determination, but this background information is not germane to the FOIA issue before this Court.
3
While the letter referred to “James R. Short” and property in “Worchester County,” the
Corps interpreted the request for documents as referring to Robert J. Short, the Jurisdictional
Determination applicant, and to his interest in property in Worcester County. Def.’s Reply, Ex. 1
(“Lorenz Decl.”) ¶ 8. As of September 3, 2008, Lot 64 appers to have been owned by Build Pines,
L.L.C. Id. ¶ 10. Mr. Short alleges that he owns lot 64. Pl.’s Counterstatement of Material Facts
(“Pl.’s Facts”) ¶ 1.
-2-
We hereby request that you provide us with copies of all documents
in the possession, custody or control of the Corps with respect to the
Parcel, including but not limited to any and all wetlands delineations,
conservation easements, correspondence generated by the Corps in
response to the JD application, and any internal memorandum or
other documents generated by the Corp in connection with the JD
application.
Def.’s Mot. to Dismiss or for Summ. J. (“Def.’s Mot.”), Ex. A (“Fraer Decl.”), Ex. 2.
On February 1, 2007, Michael Fraer, the FOIA coordinator for the Corps’ Baltimore
District Regulatory Branch, wrote to Mr. Short indicating that a preliminary determination had been
made to grant Mr. Short’s FOIA request and Mr. Fraer forwarded the request to the Baltimore
Branch. Fraer Decl., Ex. 2 & 3. The Baltimore Branch has custody and control over all regulatory
permit matters for the State of Maryland, where Lot 64 is located, and thus the Baltimore Branch is
the only location where the requested records could be located. Id. ¶ 9; Def.’s Statement of Material
Facts Not in Dispute ¶ 3. The request was misplaced for some time, but the Corps was reminded
when Mr. Short filed this lawsuit on December 17, 2007. Def.’s Mot., Ex. B (“Gaffney-Smith
Decl.”) ¶ 3. The Corps then conducted its search and on January 4, 2008, released 438 pages of
documents and 19 oversize drawings. The Corps did not withhold or redact any documents. Id. ¶¶
7-8.4
Mr. Short, through counsel, contacted the Corps charging that the Corps failed to
produce certain documents. Pl.’s Facts, Ex. 13. In response, the Corps informed Mr. Short that all
4
Mr. Short complains that Ms. Gaffney-Smith did not conduct the FOIA search herself and
that her affidavit is not based on personal knowledge. However, in FOIA litigation the affidavit of
one who supervised a search for records is sufficient. SafeCard Servs., Inc. v. SEC, 926 F.2d 1197,
1201 (D.C. Cir. 1991); Meeropol v. Meese, 790 F.2d 942, 951 (D.C. Cir. 1986). Further, as
discussed in detail below, the Army Corps submitted the Declaration of Mr. Woodson Francis, Jr.,
the keeper of the relevant records who actually conducted the record search. Def.’s Reply, Ex. 2.
-3-
records possessed by the agency responsive to his request had been provided. Lorenz Decl. ¶¶ 15
& 16. The parties have filed cross motions for summary judgment.5
II. STANDARD OF REVIEW
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment must be
granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247 (1986). Moreover, summary judgment is properly granted against
a party who “after adequate time for discovery and upon motion . . . 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 (1986). In
ruling on a motion for summary judgment, the court must draw all justifiable inferences in the
nonmoving party’s favor and accept the nonmoving party’s evidence as true. Anderson, 477 U.S.
at 255. A nonmoving party, however, must establish more than “the mere existence of a scintilla of
evidence” in support of its position. Id. at 252.
FOIA cases are typically and appropriately decided on motions for summary
judgment. Miscavige v. IRS, 2 F.3d 366, 368 (11th Cir. 1993); Rushford v. Civiletti, 485 F. Supp.
477, 481 n.13 (D.D.C. 1980). In a FOIA case, a court may award summary judgment solely on the
basis of information provided by the agency in declarations when the declarations describe “the
5
The Army Corps moved in the alternative to dismiss as moot because it had released all
relevant documents. Because Mr. Short challenges the adequacy of the search, the motion to dismiss
as moot must be denied. Accordingly, this Opinion focuses on the parties’ cross motions for
summary judgment.
-4-
documents and the justifications for nondisclosure with reasonably specific detail, demonstrate that
the information withheld logically falls within the claimed exemption, and are not controverted by
either contrary evidence in the record nor by evidence of agency bad faith.” Military Audit Project
v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981).
III. ANALYSIS
FOIA requires agencies of the federal government to release records to the public
upon request, unless one of nine statutory exemptions applies. See NLRB v. Sears, Roebuck & Co.,
421 U.S. 132, 136 (1975); 5 U.S.C. § 552(b). To prevail in a FOIA case, the plaintiff must show that
an agency has (1) improperly (2) withheld (3) agency records. United States Dep’t of Justice v. Tax
Analysts, 492 U.S. 136, 142 (1989).
The adequacy of a search is measured by a standard of reasonableness and depends
on the individual circumstances of each case. Truitt v. Dep’t of State, 897 F.2d 540, 542 (D.C. Cir.
1990). The question is not whether other responsive documents may exist, but whether the search
itself was adequate. Steinberg v. Dep’t of Justice, 23 F.3d 548, 551 (D.C. Cir. 1994). Before it can
obtain summary judgment in a FOIA case, “an agency must show, viewing the facts in the light most
favorable to the requester, that . . . [it] has conducted a search reasonably calculated to uncover all
relevant documents.” Id. There is no requirement that an agency search every record system, but
the agency must conduct a good faith, reasonable search of those systems of records likely to possess
the requested information. Oglesby v. Dep’t of Army, 920 F.2d 57, 68 (D.C. Cir. 1990). Once an
agency has provided adequate affidavits, the burden shifts back to the plaintiff to demonstrate a lack
of a good faith search. Maynard v. CIA, 986 F.2d 547, 560 (1st Cir. 1993).
An agency may prove the reasonableness of its search via the declaration of
-5-
responsible agency officials, so long as the declaration is reasonably detailed and not controverted
by contrary evidence or evidence of bad faith. Military Audit Project, 656 F.2d at 738. The Army
Corps filed the detailed declaration of Woodson Francis, Jr., describing the document search. Def.’s
Reply, Ex. 2 (“Francis Decl.”). Mr. Francis is a Regulatory Project Manager and Biologist for the
Army Corps in the Baltimore District in charge of activities related to Ocean Pines in Worcester
County. Francis Decl. ¶¶ 1 & 2. His duties include jurisdictional determinations and permitting,
and he files the records related to the development of Ocean Pines. Id. ¶ 3. Mr. Francis indicates
in his Declaration, “[s]ince I was the employee [who] had filed the records associated with efforts
to effect the build-out of Ocean Pines . . . I knew without question where to look for records that
were potentially responsive to the FOIA [request].” Id. ¶ 5. Mr. Francis searched for responsive
records among his hard files “because all records are included there.” Id. ¶ 8. He also searched
emails. If he receives emails or electronic submissions, he routinely prints them and places them in
the hard files. Id. He originally did not search the information technology system used by the Army
Corps because it did not exist at the time of the 2002 application for Jurisdictional Determination
and because anything there would be duplicative of the hard file. Id. ¶ 9. In an abundance of
caution, however, Mr. Francis later searched this system and its predecessor system; these searches
produced no new records. Id. Mr. Francis then repeated the search of his hard files, emails, archived
emails, and electronic files. He found 5 more pages of emails and 27 digital photos which were
released to Mr. Short. Id. ¶ 10. Mr. Francis searched the terms “Short” and “Section 15B Ocean
Pines.” He also searched “Pending Actions” using his own name as a filter because he would have
made any entry related to Ocean Pines. Id. ¶ 11. In sum, the Declaration of Mr. Francis describes
a more than adequate search for records by the record-keeper himself.
-6-
Mr. Short speculates that the search was not adequate because the Corps failed to
produce certain documents. On January 18, 2008, Mr. Short’s attorney wrote a letter to the Army
Corps listing six categories of records that had not been provided:
1. Permit application for Permit No. CENAB-OP-RS(SECTION
15B) 94-67271-1;
2. Permit application for Permit No. CENAB-OP-RS(OCEAN
PINES L.L.C. - BALFOUR HOLDINGS INC.) 94-65634-1;
3. All easements and/or covenants concerning tidal and/or non-
tidal wetlands that were accepted by the Corps on October 12,
1995 - as identified at paragraph 13 of permit no. CENAB-
OP-RS(SECTION 15B) 94-67271-1;
4. All exhibits designated as Exhibit “H” of the November 2,
1995 Declaration and Agreement of Easement between Ocean
Pines, L.L.C. and Ocean Pines Association (the “Easement”);
5. State of Maryland Nontidal Wetlands and Waterways Permit
No. 199465634 identified at paragraph 3 of the Easement;
6. All wetland delineation reports, including but not limited to
all figures, aerial photographs, maps, soil and plant surveys
and field notes used in preparation of Exhibit G – Section
15B Boundary Survey and Wetlands Location dated October
1993 and prepared by Atlantic Consulting.
Pl.’s Facts, Ex. 13.
Counsel for the Corps indicated that it had provided all responsive records, that the
additional items were beyond the scope of the original request, and that the Corps would not have
13-year-old permit applications (those from 1995 and earlier) in its possession anymore. Lorenz
Decl. ¶¶ 15 & 16; see also Pl.’s Facts, Ex. 14. Mr. Short’s speculation that the Army Corps
maintains other documents in its records that were not released to him is insufficient to rebut the
-7-
presumption of good faith accorded the Declarations of Mr. Francis and Mr. Lorenz.6 An agency’s
declarations are accorded “a presumption of good faith, which cannot be rebutted by purely
speculative claims about the existence and discoverability of other documents.” SafeCard Servs. v.
SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (internal citation and quotation omitted). Further, an
agency is not required to undertake a search that is so broad as to be unduly burdensome. Nation
Magazine v. U.S. Customs Serv., 71 F.3d 885, 890 (D.C. Cir. 2003). “[I]t is the requester’s
responsibility to frame requests with sufficient particularity to ensure that searches are not
unreasonably burdensome . . . [because] FOIA was not intended to reduce government agencies to
full-time investigators on behalf of requesters.” Judicial Watch, Inc. v. Export-Import Bank, 108 F.
Supp. 2d 19, 27 (D.D.C. 2000) (quotation and citation omitted). Moreover, an agency is “not
obligated to look beyond the four corners of the request for leads to the location of responsive
documents.” Kowalczyk v. Dep’t. of Justice, 73 F.3d 386, 389 (D.C. Cir. 1996).
In sum, the Declaration of Mr. Francis reveals a search reasonably calculated to
uncover all relevant documents in response to Plaintiff’s FOIA request. See Steinberg, 23 F.3d at
551. Mr. Short has cited no contrary evidence. Nor has he submitted evidence of bad faith. Because
the Corps has shown that it conducted an adequate search, its motion for summary judgment will be
granted, and Mr. Short’s cross motion will be denied.
6
Because he had not received copies of documents from 1995 and earlier, on January 24,
2008, Mr. Short requested a copy of the Army Corps’ document retention policy. Mr. Short’s
January 2007 FOIA request did not seek the document retention policy, and that request is not part
of this litigation.
-8-
IV. CONCLUSION
For the foregoing reasons, the motion for summary judgment filed by the U.S. Army
Corps of Engineers [Dkt. # 7] will be granted, and Mr. Short’s motion for summary judgment [Dkt.
# 11] will be denied. A memorializing order accompanies this Memorandum Opinion.
Date: January 6, 2009 __________/s/______________________________
ROSEMARY M. COLLYER
United States District Judge
-9-
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830 So.2d 244 (2002)
Levon WILSON, Appellant,
v.
STATE of Florida, Appellee.
No. 4D01-1832.
District Court of Appeal of Florida, Fourth District.
November 13, 2002.
Carey Haughwout, Public Defender, and James W. McIntire, Assistant Public Defender, West Palm Beach, for appellant.
Richard E. Doran, Attorney General, Tallahassee, and Donna L. Eng, Assistant Attorney General, West Palm Beach, for appellee.
STONE, J.
We reverse Wilson's sentence as a habitual felony offender and remand for re-sentencing. In all other respects, Wilson's conviction for delivery of cocaine within one thousand feet of a school is affirmed.
The state concedes that the case should be remanded for re-sentencing because of its failure to provide sufficient evidence of Wilson's prior convictions to support its claim that he qualified for habitual felony offender status. This evidence became necessary when defense counsel announced that Wilson was exercising his right to dispute the alleged convictions. In an attempt to prove that Wilson actually was convicted previously, the state presented two certified copies of previous convictions *245 and informed the court that the fingerprint analysis had positively identified the fingerprints as Wilson's. However, no witnesses were called to authenticate the fingerprints and defense counsel objected based on an improper foundation.
When the defendant challenges the accuracy of his prior record, both on hearsay grounds and accuracy of the information, the state is required to provide corroborating evidence establishing both the historical fact of the predicate convictions and the identity of the appellant as the person named in those judgments of conviction. Moment v. State, 773 So.2d 577 (Fla. 4th DCA 2000); Brown v. State, 701 So.2d 410 (Fla. 1st DCA 1997). Therefore, the state's failure to provide authenticated fingerprint analysis to prove that the person named in the certified convictions was Wilson is reversible error.
Upon re-sentencing, Wilson may again be sentenced as a habitual felony offender if the state can establish both the historical fact of the predicate convictions and the identity of the appellant as the person named in those judgments of conviction. See Brown, 701 So.2d at 410.
HAZOURI and MAY, JJ., concur.
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134 F.3d 369
Ruizv.U.S.*
NO. 97-20124
United States Court of Appeals,Fifth Circuit.
Dec 16, 1997
Appeal From: S.D.Tex. ,No.H94CV1353
1
Affirmed.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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801 F.2d 1170
41 Fair Empl.Prac.Cas. 1849,41 Empl. Prac. Dec. P 36,627, 55 USLW 2261
Daryl Ford VALENZUELA, Plaintiff-Appellee,v.KRAFT, INC., Defendant-Appellant.
No. 85-6348.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted June 6, 1986.Decided Oct. 8, 1986.
Cecil E. Ricks, Jr., Anaheim, Cal., for plaintiff-appellee.
John W. Prager, Jr., P.C., Santa Ana, Cal., for defendant-appellant.
Appeal from the United States District Court for the Central District of California.
Before REINHARDT and HALL, Circuit Judges, and MUECKE*, District Judge.
CYNTHIA HOLCOMB HALL, Circuit Judge:
1
Defendant-appellant Kraft, Inc., appeals from the decision of the district court denying its motion for judgment on the pleadings. We affirm.
2
* On March 3, 1983, plaintiff-appellee Daryl Valenzuela filed a complaint in California state court alleging sex discrimination by Kraft in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e-2. The state court action was filed within 90 days from Valenzuela's receipt of a right to sue letter from the Equal Employment Opportunity Commission (EEOC). Kraft removed the action to the United States District Court for the Central District of California. The district court dismissed the action, finding that the federal courts have exclusive jurisdiction over Title VII actions, and therefore concluding that it lacked removal jurisdiction because the state court did not have jurisdiction over the action before removal. On July 31, 1984, this court affirmed the dismissal on the same grounds. Valenzuela v. Kraft, Inc., 739 F.2d 434 (9th Cir.1984) (Valenzuela I ).
3
Valenzuela then filed her current Title VII action in the district court on August 16, 1984, before the mandate issued in Valenzuela I. Kraft moved for judgment on the pleadings, arguing that the district court lacked jurisdiction over the complaint because it was not filed within 90 days of the issuance of Valenzuela's right to sue letter as required by 42 U.S.C. Sec. 2000e-5(f)(1). Relying on Fox v. Eaton Corp., 615 F.2d 716 (6th Cir.1980), cert. denied, 450 U.S. 935, 101 S.Ct. 1401, 67 L.Ed.2d 371 (1981), the district court found that Valenzuela's action in state court tolled the running of the 90-day filing requirement, and denied Kraft's motion. The district court subsequently granted Kraft's request for certification of this issue pursuant to 28 U.S.C. Sec. 1292(b) because of the potential conflict between its application of Fox and previous decisions of this court, and we agreed to hear the appeal.
II
4
Title VII contains several distinct filing requirements which a claimant must comply with in bringing a civil action.1 We are concerned with the requirement that an action be filed within ninety days from the issuance of the right to sue letter by the EEOC. 42 U.S.C. Sec. 2000e-5(f)(1). There is no question that Valenzuela's action was filed in the district court more than ninety days after the EEOC issued Valenzuela's right to sue letter, so we address two issues. First, whether the 90-day filing period is subject to equitable tolling. This question of statutory construction is an issue of law which we review de novo. See United States v. McConney, 728 F.2d 1195, 1200-01 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). Second, if the 90-day filing period is subject to equitable tolling, whether Valenzuela's state court action tolled the filing period under the circumstances of this case. Because the facts which Valenzuela relies on to establish tolling are not disputed, this is also a question of law which we review de novo. Cf. Acri v. International Association of Machinists, District Lodge 115, 781 F.2d 1393, 1395 (9th Cir.1986) (holding that accrual of cause of action was question of law when evidentiary facts regarding accrual were not in dispute).
III
5
Filing periods, such as the 90-day period for filing actions against private employers under Title VII, 42 U.S.C. Sec. 2000e-5(f)(1), are either statutes of limitations or jurisdictional prerequisites to filing an action. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 392, 398, 102 S.Ct. 1127, 1135, 71 L.Ed.2d 234 (1982). If the time period is a statute of limitations non-compliance may be excused by equitable doctrines such as waiver or tolling, but this is not true if the filing period is jurisdictional. Id. We have held that the 90-day period is a jurisdictional requirement. See, e.g., Millard v. La Pointe's Fashion Store, Inc., 736 F.2d 501, 502-03 (9th Cir.1984); Cleveland v. Douglas Aircraft Co., 509 F.2d 1027, 1029-30 (9th Cir.1975) (30-day limit for filing actions against private party at that time).
6
The Supreme Court, however, has applied equitable tolling analysis to the 90-day time limit for filing civil actions against private employers under Title VII. The Court first indicated that the 90-day period for filing an action in the district court is not jurisdictional in Mohasco Corp. v. Silver, 447 U.S. 807, 811, 100 S.Ct. 2486, 2489, 65 L.Ed.2d 532 (1980). In considering another filing period under Title VII the Court noted that the plaintiff filed his action 91 days after receiving a right to sue notice from the EEOC. 447 U.S. at 811, 100 S.Ct. at 2489. But, rather than dismissing the action sua sponte as the Court would have done if the 90-day period were jurisdictional, the Court noted that the defendant had not raised the plaintiff's failure to comply with the 90-day filing period. Id. at 811 n. 9, 100 S.Ct. at 2490 n. 9. The Court thus implied that it considered the 90-day period a statute of limitations subject to equitable doctrines such as waiver, rather than a jurisdictional requirement. See Zipes, 455 U.S. at 398, 102 S.Ct. at 1135 (noting the lack of sua sponte dismissal in Mohasco as support for holding that 180-day period for filing charges with the EEOC is not jurisdictional).
7
In Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 349-54, 103 S.Ct. 2392, 2397-98, 76 L.Ed.2d 628 (1983), the Court applied equitable principles to the 90-day period in the context of class action litigation. The plaintiff in Crown, Cork & Seal received a right to sue letter from the EEOC while a class action by other employees was pending against his employer. Plaintiff was a potential member of the class, but class action certification was ultimately denied. Plaintiff then filed a separate action in the district court more than 90 days after he received the right to sue notice, but less than 90 days after class certification was denied. The Court held that the pendency of the class action tolled the 90-day filing period for all potential members of the class. 462 U.S. at 350, 103 S.Ct. at 2395 (extending rule of American Pipe & Construction Company v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), which held that pendency of class action tolled the limitations period for class members who intervened in action after class certification was denied). The Court reasoned that tolling the 90-day filing period for all potential class members was consistent with the policy of repose underlying statutes of limitations, because the pendency of the class action informed the defendant of the nature of the claim and the need to preserve evidence. 462 U.S. at 352-53, 103 S.Ct. at 2396-97. Although much of the Court's reasoning in Crown, Cork & Seal focused on the peculiar nature of a class action, the Court's application of these principles to the 90-day filing period demonstrates that the period is a statute of limitations subject to equitable tolling, not a jurisdictional requirement.
8
The Court's equitable tolling analysis in Baldwin County Welcome Center v. Brown, 466 U.S. 147, 104 S.Ct. 1723, 80 L.Ed.2d 196 (1984) (Baldwin County ), is further evidence that the 90-day filing requirement is not jurisdictional. The plaintiff in Baldwin County filed her right to sue letter with the district court and informally requested that counsel be appointed. A magistrate warned her that she had to file her action within 90 days of receiving the right to sue notice, and that her request for counsel had to be submitted on the appropriate court form. When plaintiff failed to file a complaint or an appropriate request for counsel, the district court dismissed for failure to file within 90 days of the EEOC notice. The Court of Appeals for the Eleventh Circuit reversed, holding that the filing of the right to sue letter with the district court tolled the 90-day filing period.
9
The Supreme Court held that the filing of the right to sue letter with the district court did not commence an action against the defendant for purposes of Title VII, 466 U.S. at 149-50, 104 S.Ct. at 1725 and rejected the appellate court's conclusion that the right to sue letter tolled the 90-day filing period, id. at 150-52, 104 S.Ct. at 1726-27. In rejecting the tolling argument the Court held that "neither waiver nor tolling" was available on the facts before it; the Court did not hold that the 90-day period is never subject to equitable tolling. Id. at 152 & n. 6, 104 S.Ct. at 1726 & n. 6. In so ruling, the Baldwin County Court cited with approval cases which had tolled the 90-day filing period, but distinguished the facts of those cases from the filing of the right to sue letter and the informal request for counsel which it was addressing.
10
This is not a case in which a claimant has received inadequate notice, see Gates v. Georgia-Pacific Corp., 492 F.2d 292 (CA9 1974); or where a motion for appointment of counsel is pending and equity would justify tolling the statutory period until the motion is acted upon, see Harris v. Walgreen's Distribution Center, 456 F.2d 588 (CA6 1972); or where the court has led the plaintiff to believe that she had done everything required of her, see Carlile v. South Routt School District RE 3-J, 652 F.2d 981 (CA10 1981). Nor is this a case where affirmative misconduct on the part of defendant lulled the plaintiff into inaction. See Villasenor v. Lockheed Aircraft Corp., 640 F.2d 207 (CA9 1981); Wilkerson v. Siegfried Insurance Agency, Inc., 621 F.2d 1042 (CA10 1980); Leake v. University of Cincinnati, 605 F.2d 255 (CA6 1979). The simple fact is that Brown was told three times what she must do to preserve her claim, and she did not do it. One who fails to act diligently cannot invoke equitable principles to excuse that lack of diligence.
11
Id. at 151, 104 S.Ct. at 1725.
12
Taken as a whole these cases firmly establish that the 90-day filing period is a statute of limitations subject to equitable tolling in appropriate circumstances.2 We conclude that the Court's analysis in these decisions has effectively overruled our previous decisions holding that the 90-day period is a jurisdictional requirement which is not subject to equitable tolling, see, e.g., Cleveland v. Douglas Aircraft, 509 F.2d at 1030; Wong v. Bon Marche, 508 F.2d 1249, 1250-51 (9th Cir.1975); see also Cooper v. Bell, 628 F.2d 1208, 1213 & n. 10 (9th Cir.1980) (holding that initial 180-day period for filing charges with EEOC is not jurisdictional, but distinguishing decisions finding filing periods for commencing actions in district court jurisdictional).3
IV
13
To determine whether equitable tolling is available in a particular case we examine "whether congressional purpose is effectuated by tolling the statute of limitations in given circumstances." Burnett v. New York Central Railroad, 380 U.S. 424, 427, 85 S.Ct. 1050, 1054, 13 L.Ed.2d 941 (1965). We conclude that Valenzuela's state court action tolled the running of the 90-day filing period on the facts before us.
14
In Fox v. Eaton Corp. the Sixth Circuit faced a tolling question in circumstances nearly identical to those we address today. Relying on decisions which held that state and federal courts have concurrent jurisdiction in Title VII cases, the plaintiff in Fox mistakenly filed a Title VII action in state court. When the Title VII action was dismissed by the state court the plaintiff expeditiously pursued her action in federal court, but the complaint was filed more than 90 days after plaintiff's receipt of a right to sue notice because of the time expended in dismissing her state court action. The Sixth Circuit concluded that the 90-day filing period was tolled by the pending state court action.
15
Accordingly, we hold that Fox's commencement of a Title VII action in state court was sufficient to toll the ninety day period within which she was required to commence a civil action. This result is consistent with the rationale of the Supreme Court in Burnett v. New York Central Railroad Company, [380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941] and American Pipe & Construction Company v. Utah, [414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713]. Certainly the purpose underlying the [90-day] time period was satisfied. Eaton was not confronted by a stale claim. Nor was it deprived of an opportunity to preserve the appropriate evidence. Throughout these proceedings, Fox has exercised great diligence, however unartfully, in pursuing her claim. Her only misfortune lay in the selection of an inappropriate forum. That selection, however, was not without a reasonable basis. Under these circumstances, we think the tolling of the ninety day time period is consistent not only with the specific purpose of that time period but also with the general remedial purposes of Title VII.
16
615 F.2d at 720 (footnote omitted).
17
We agree with the Fox court's analysis of the tolling issue. At the time Valenzuela filed her action in state court it was unclear whether federal courts had exclusive jurisdiction over Title VII claims. See Valenzuela I, 739 F.2d at 435 n. 1 (citing conflicting authorities). Valenzuela should not be denied a chance to present her case because she chose the wrong line of precedent. Valenzuela's filing in the state court demonstrated the due diligence which statutes of limitations are designed to engender, and put Kraft on notice that it had to maintain the evidence necessary to its defense. See Fox, 615 F.2d at 720. There is no evidence that Kraft has been prejudiced by the passage of time between the issuance of the EEOC right to sue letter and the filing of Valenzuela's second action in the district court. Tolling the 90-day filing period in this case is consistent with the remedial purpose of Title VII legislation. See Zipes, 455 U.S. at 398, 102 S.Ct. at 1135.
18
Kraft's argument that equitable tolling is not available because the action Valenzuela relies on to establish tolling was filed in a court without subject matter jurisdiction is unpersuasive. The purpose of the statute, the notice to defendant, and the diligence demonstrated by the plaintiff determine the availability of tolling, not the presence or absence of subject matter jurisdiction. See Burnett, 380 U.S. at 427, 85 S.Ct. at 1054. In addition to the Fox decision tolling the 90-day filing period when plaintiff's action was mistakenly but reasonably filed in a court without subject matter jurisdiction, courts have equitably tolled statutes of limitations based on actions mistakenly filed in courts without personal jurisdiction, see Platoro Ltd. v. Unidentified Remains of a Vessel, 614 F.2d 1051, 1054-55 (5th Cir.), cert. denied, 449 U.S. 901, 101 S.Ct. 272, 66 L.Ed.2d 131 (1980); Reynolds v. Logan Charter Service, Inc., 565 F.Supp. 84, 85-86 (N.D.Miss.1983).4
V
19
The decision of the district court is affirmed.5
*
Honorable C.A. Meucke, Senior United States District Judge for the District of Arizona, sitting by designation
1
See, e.g., 42 U.S.C. Sec. 2000e-5(e) (plaintiff must file charges with the EEOC within 180 days of the alleged act of discrimination); 42 U.S.C. Sec. 2000e-5(f)(1) (plaintiff must file a civil action against private party within 90 days of the issuance of a right to sue letter by the EEOC); 42 U.S.C. Sec. 2000e-16(c) (plaintiff must file civil action against federal government within 30 days from the issuance of a right to sue letter by the EEOC)
2
We note that the other circuit courts which have considered the issue have also held that the 90-day filing period is subject to equitable tolling. See Brown v. J.I. Case Co., 756 F.2d 48, 49-50 (7th Cir.1985); Espinoza v. Mo. Pac. R.R., 754 F.2d 1247, 1250-51 (5th Cir.1985); Fox v. Eaton Corp., 615 F.2d 716, 718 (6th Cir.1980)
3
In Millard, 736 F.2d at 502-03, this court reiterated its position that the 90-day filing period is jurisdictional in a decision which post dates the above Supreme Court decisions. However, this aspect of the Millard decision is dicta which we are bound to ignore in light of the binding Supreme Court precedent to the contrary. The Millard court held, consistent with the Supreme Court's position in Baldwin County, that the plaintiff's conversation with the clerk of the district court and apparent tendering of her right to sue letter to the clerk did not constitute a filing. Id. at 503. There is no indication in the Millard opinion that the plaintiff claimed that her actions tolled the 90-day filing period, or that this court considered the possibility of tolling. The Millard court's statement that the 90-day filing period is jurisdictional was not essential to its resolution of the case
4
Statements by the Supreme Court in Burnett noting that the action which tolled the limitations period in that case was filed in a state court of competent jurisdiction, 380 U.S. at 428, 429, 432, 434, 85 S.Ct. at 1054, 1055, 1056, 1057, do not require a contrary conclusion. In Burnett the Court held that the filing of an action in state court which was dismissed for improper venue tolled the relevant statute of limitations. Id. at 434-35, 85 S.Ct. at 1057-58. The court did not address the question of whether the same result would be reached if the court where the initial action was filed lacked subject matter jurisdiction
5
Because Valenzuela filed her action in the district court before the mandate in Valenzuela I issued, we need not determine whether the filing in state court tolled the statute for a reasonable length of time to permit Valenzuela to file her complaint in federal court, see Baldwin County, 466 U.S. at 151 n. 5, 104 S.Ct. at 1725 n. 5 (noting that appellate court must have held that the 90-day period was tolled for a " 'reasonable time' "), or whether the 90-day period is tolled only for the pendency of the state court action, see Crown, Cork & Seal, 462 U.S. at 348, 103 S.Ct. at 2394 (noting that plaintiff filed his action within 90 days of denial of class certification when EEOC charges were issued after class action which tolled 90-day period was pending). Valenzuela's action is timely under either tolling measurement
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T.C. Memo. 2002-274
UNITED STATES TAX COURT
JOSE A. PEREZ, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5937-01L. Filed October 30, 2002.
Jose A. Perez, pro se.
T. Richard Sealy III and Catherine S. Tyson, for respondent.
MEMORANDUM OPINION
GALE, Judge: This case arises from a petition for review
under section 6330(d)1 of respondent’s determination to proceed
with a proposed levy to collect petitioner’s 1984, 1985, 1986,
and 1987 Federal income tax liabilities. The issue for decision
1
Unless otherwise noted, section references are to the
Internal Revenue Code as amended.
- 2 -
is whether respondent may proceed with the proposed levy. We
hold that he may.
Background
Many of the facts have been stipulated and are so found.
The parties’ stipulations of fact and the accompanying exhibits
are incorporated herein by this reference.
At the time the petition was filed, petitioner resided in El
Paso, Texas.
Petitioner filed his Federal income tax returns for 1984,
1985, and 1986 on April 5, 1988, and for 1987 on April 15, 1988.
Petitioner did not submit payment of any of the amounts shown as
due on the returns, and respondent assessed the amounts shown on
each return as due on June 6, 1988, including late filing
penalties and interest. These assessments will hereinafter be
referred to as the “return assessments”.
On June 6, 1988, respondent sent petitioner notice and
demand for payment with respect to the return assessments.
On April 17, 1989, respondent placed a lien on certain
property of petitioner’s with respect to the return assessments.
Upon examination of petitioner’s returns, respondent
concluded that petitioner’s filing status should be changed from
head of household to married filing separately, resulting in
additional tax liabilities and penalties for 1984, 1985, 1986,
and 1987. Petitioner consented to the immediate assessment of
- 3 -
the foregoing additional tax liabilities and penalties by signing
a Form 4549, Income Tax Examination Changes, for 1984 and 1985 on
July 26, 1989; a Form 4549 for 1986 on an unknown date;2 and a
CP-2000, Notice of Proposed Changes, for 1987 on March 5, 1990.
Respondent assessed the additional tax and penalties for 1984,
1985, and 1986 on September 11, 1989, and for 1987 on June 11,
1990. The foregoing assessments will hereinafter be referred to
as the “examination assessments”. Respondent sent petitioner
notices of intent to levy on March 18, 1991, and June 19, 1995,
with respect to the examination assessments.
On May 14, 1997, petitioner signed a Form 900, Tax
Collection Waiver, extending the period of limitations on
collection activities for, inter alia, 1984, 1985, 1986, and
1987, to December 31, 2000. On March 3, 2000, respondent mailed
petitioner a Letter 1058, Final Notice of Intent to Levy and Your
Right to a Hearing, covering unpaid taxes for the years 1984
through 1987. On March 7, 2000, petitioner submitted a Form
12153, Request for a Collection Due Process (CDP) Hearing,
2
Respondent was unable to produce at trial a signed Form
4549 covering 1986. However, the Form 4340, Certificate of
Assessments, Payments, and Other Specified Matters, for 1986
indicates that the examination assessment for 1986 was made at
the same time as those for 1984 and 1985. Based on the timing of
this assessment, and on the testimony of one of respondent’s
employees with knowledge of respondent’s certified transcripts of
taxpayers’ master files, we conclude that petitioner signed a
Form 4549 for 1986 at some date prior to respondent’s Sept. 11,
1989, assessment of petitioner’s additional liabilities resulting
from examination for 1986.
- 4 -
covering the years 1984 through 1987, which listed as the
taxpayer both himself and his spouse. In an addendum to the Form
12153, petitioner alleged four errors with respect to
respondent’s proposed collection actions: (1) That he had not
received Forms 23C for the years 1984 through 1987; (2) that he
had not received notices of deficiency for the years 1984 through
1987; (3) that the Form 900 executed by him was invalid; and (4)
that the IRS had failed to publish pertinent data concerning Form
900 in the Federal Register. Petitioner did not raise any
spousal defenses or offer any collection alternatives.
Petitioner, but not his spouse, signed the Form 12153.
Petitioner’s hearing was conducted by an Appeals officer of
respondent. A face-to-face meeting between petitioner and the
Appeals officer was held. At the hearing, petitioner raised an
additional issue to the effect that a levy served on his employer
on or about March 18, 1997, was invalid due to lack of proper
notice.
During the meeting with petitioner, the Appeals officer
provided petitioner with a MFTRA-X version of his transcript of
account. Relying on the codes contained in the MFTRA-X
transcript, the Appeals officer determined that the respondent
had properly assessed petitioner’s tax liabilities for 1984,
1985, 1986, and 1987.
- 5 -
On September 7, 2000, the Appeals officer issued petitioner
a Notice of Determination Concerning Collection Action Under
Section 6320 and/or 6330. Therein, the Appeals officer
determined that the requirements of all applicable laws and
administrative procedures were met. With respect to the issues
raised by petitioner, the Appeals officer determined that: (1)
The validity of the assessments of petitioner’s taxes for 1984
through 1987 need not be established by a Form 23C, but may
instead be shown by means of a Form 4340; (2) that notices of
deficiency were unnecessary with respect to the years in issue
because petitioner had consented to assessment by executing Forms
4549;3 (3) that the Form 900 signed by petitioner was a valid
extension of the period of limitations on collections; and (4)
that petitioner’s transcript indicated the levy issued to his
employer on March 18, 1997, was preceded by three notices. In
addition, the Appeals officer determined that consideration of
alternative means of collection was prevented by petitioner’s
continued challenges to the validity of the assessments. The
determination concluded that enforced collection was appropriate.
On October 7, 2000, petitioner filed suit in the U.S.
District Court for the Western District of Texas, El Paso
3
The Appeals officer examined Forms 4549 executed by
petitioner for 1984 and 1985 and, while not retrieving such forms
for 1986 and 1987, noted that the latter 2 years involved the
same adjustment to filing status as the earlier years and were
audited and closed at the same time.
- 6 -
Division (District Court case). In the District Court case,
petitioner sought review under section 6330(d) of the Appeals
officer’s determination, and also sought to quiet title to his
property that was subject to the lien placed in April 1989 with
respect to his tax liabilities for the years 1984 through 1987.
On April 16, 2001, the District Court dismissed the request for
review under 6330(d) for lack of jurisdiction but retained
jurisdiction over the quiet title action pursuant to 28 U.S.C.
sec. 2410(a).
On May 7, 2001, petitioner filed his petition in the instant
case.
In the District Court case, petitioner argued that the lien
at issue was invalid because: (1) Respondent had not properly
assessed his tax liabilities for 1984, 1985, 1986, and 1987; (2)
even if the assessments had been made, he did not receive notice
thereof; (3) no notices of deficiency were issued for 1984, 1985,
1986, and 1987; and (4) the period of limitations on collections
for 1984, 1985, 1986, and 1987 had expired.
On October 11, 2001, the District Court granted summary
judgment in favor of the United States. Perez v. United States,
89 AFTR 2d 2002-1884, 2001-2 USTC par. 50735 (W.D. Tex. 2001).
In so ruling, the District Court held that: (1) Respondent had
properly assessed petitioner’s tax liabilities for the years
1984, 1985, 1986, and 1987 on June 6, 1988 (i.e., the return
- 7 -
assessments); (2) respondent had given petitioner notice of the
return assessments as required by section 6303; (3) that notices
of deficiency were not required with respect to the return
assessments for 1984 through 1987 because the assessments covered
amounts reported as due on petitioner’s returns; and (4) that the
Form 900 executed by petitioner was valid, extending the period
of limitations for collection for the years 1984 through 1987 to
December 31, 2000.
In his petition in the instant case, petitioner asserts:
(1) That the proposed collection is time-barred; (2) that
respondent failed to properly assess his tax liabilities or
notify him of the assessments for the years 1984 through 1987;
(3) that he did not receive notices of deficiency for the years
in issue; and (4) that respondent failed to conduct a fair
hearing (a) by refusing to explain how the proposed levy was
balanced with petitioner’s interests; (b) by directing the
Appeals officer not to address the “23C Summary Record of
Assessment” issue, (c) by refusing to grant a hearing to
petitioner’s spouse; and (d) by refusing to explain why Form 4340
was given “evidentiary precedence” over petitioner’s individual
master file.
Discussion
Section 6331(a) provides that if any person liable to pay
any tax neglects or refuses to pay such tax within 10 days after
- 8 -
notice and demand, the Secretary may collect such tax by levy on
the person’s property. Section 6331(d) provides that at least 30
days before enforcing collection by levy on the person’s
property, the Secretary must provide the person with a final
notice of intent to levy, including notice of the administrative
appeals available to the person.
Section 6330 generally provides that the Secretary cannot
proceed with collection by levy on any property of any person
until the person has been given notice and the opportunity for an
administrative review of the matter (in the form of an Appeals
Office hearing) and, if dissatisfied, with judicial review of the
administrative determination. Davis v. Commissioner, 115 T.C.
35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179 (2000).
Where the underlying tax liability is not at issue, the Court
will review the Appeals officer’s determination for abuse of
discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000).
Collateral Estoppel
In an effort to show that respondent’s determination to
proceed with collection was an abuse of discretion, petitioner
raises several contentions, namely, that with respect to the 1984
through 1987 taxes for which collection is sought, no proper
assessment of the taxes occurred; that even if assessment
occurred, petitioner received no notice thereof; that no notices
of deficiency were issued; and that petitioner’s extension of the
- 9 -
period of limitations for collection was invalid and such period
has therefore expired. It is respondent’s contention that
petitioner is collaterally estopped from raising the issues of
the validity of the assessments, the sufficiency of the notice of
the assessments, the requirement of notices of deficiency, and
the expiration of the period on limitation on collections.
With respect to the return assessments, we agree with
respondent. The foregoing issues as raised by petitioner in the
instant case, insofar as they relate to the return assessments,
are identical to those raised by him in the District Court case,
the controlling facts and applicable legal rules are the same,
and, except with respect to the examination assessments (as more
fully discussed below), the issues were litigated, essential to
the prior decision, and finally determined in the District Court
case. See Peck v. Commissioner, 90 T.C. 162, 166-167 (1988),
affd. 904 F.2d 525 (9th Cir. 1990). The District Court
concluded, with respect to the return assessments, that they were
validly entered, adequately noticed, and not dependent upon the
prior issuance of notices of deficiency (because the assessments
covered amounts reported on petitioner’s returns). The District
Court likewise concluded that petitioner’s May 14, 1997,
execution of the Form 900 was a valid extension of the period of
limitations on collection to December 31, 2000. We hold that
petitioner is collaterally estopped from further litigating these
- 10 -
issues in the instant section 6330 proceeding with respect to the
return assessments.
Excepting the issue of the period of limitations on
collection,4 we disagree with respondent concerning the
application of collateral estoppel with respect to the
examination assessments. Those assessments were not the subject
of petitioner’s claim to quiet title in the District Court case.
The District Court considered assessments made on June 6, 1988,
the date of the return assessments, and not assessments made on
September 11, 1989, and June 11, 1990, the dates on which the
examination assessments were made, in reaching its determination.
The District Court’s conclusion that no notices of deficiency
were required was premised on the fact that the amounts assessed
had been reported on petitioner’s returns, a condition not
present in the case of the examination assessments. Thus,
petitioner is not collaterally estopped from contesting the
validity of, adequacy of notice concerning, or requirement of
notices of deficiency preceding, the examination assessments,
because the conditions for collateral estoppel do not exist for
those issues.
4
Since petitioner is collaterally estopped from asserting
the invalidity of the Form 900 extending the period of
limitations on collections for the 1984 through 1987 tax years to
Dec. 31, 2000, and respondent’s notice to petitioner of his
hearing rights under section 6330 and petitioner’s request for a
hearing occurred before that date, the period of limitations for
collection of those years remains open. See sec. 6330(e)(1).
- 11 -
Examination Assessments
While petitioner is not foreclosed from contesting the
examination assessments,5 his arguments are unavailing.
Petitioner argues herein that the assessments were invalid
because the Appeals officer did not rely on or provide to him a
Form 23C, Summary Record of Assessment, for purposes of verifying
that the assessments were valid. This argument is without merit.
The Appeals officer used an MFTRA-X transcript, a copy of which
she provided to petitioner at the hearing, to verify that the
assessments petitioner challenges, including the examination
assessments, were validly made. Absent some showing of
irregularity in respondent’s assessment procedures that raises a
question about the validity of respondent’s assessments of
petitioner’s tax liabilities, which petitioner has not made, it
is not an abuse of discretion for an Appeals officer to verify an
assessment by means of an MFTRA-X transcript. Standifird v.
Commissioner, T.C. Memo. 2002-245; Holliday v. Commissioner, T.C.
Memo. 2002-67. The MFTRA-X transcripts contain all information
necessary to the recordation of an assessment under respondent’s
regulations, including the identification of the taxpayer, the
character of the liability assessed, the taxable period, and the
5
Certain of the issues raised by petitioner in the instant
proceedings under sec. 6330(d) were not raised by him in his
request for a hearing or at the hearing. Since all such issues
lack merit, we need not decide whether petitioner is entitled to
raise them in the instant proceedings.
- 12 -
amount of the assessment.6 See sec. 301.6203-1, Proced. & Admin.
Regs. The MFTRA-X transcripts further indicate that the
examination assessments were made on September 11, 1989, with
respect to 1984, 1985, and 1986, and June 11, 1990, as to 1987.
Petitioner next contends that even if the assessments were
properly made, he was not given notice thereof as required by
section 6303. He also claims he was not given proper notice of
intent to levy as required by section 6331. Both claims are
meritless. Forms 4340 for each of the years at issue are in the
record and show that petitioner was sent “Statutory Notices of
Intent to Levy” on March 18, 1991, and June 19, 1995. Either of
these notices is sufficient to satisfy the notice requirement of
section 6331. In addition, a notice of intent to levy can
satisfy the notice requirement of section 6303. Hughes v. United
States, 953 F.2d 531, 536 (9th Cir. 1992); Standifird v.
Commissioner, supra. Petitioner’s contentions concerning his
notice under sections 6303 and 6331 demonstrate no abuse of
discretion.
Petitioner’s contention that he did not receive notices of
deficiency with respect to the examination assessments likewise
has no merit. By signing Forms 4549 and CP-2000, petitioner
consented to the immediate assessment of the tax liabilities set
6
The MFTRA-X transcripts for 1985 and 1986 introduced as
exhibits are illegible in some respects, but legible copies are
contained elsewhere in the record.
- 13 -
forth therein, plus penalties and interest. See Aguirre v.
Commissioner, 117 T.C. 324 (2001).
Additional Issues
1. Impartiality of the Appeals Officer
Petitioner raises other issues not considered in the
District Court case, including a claim that section 6330(b)(3)
and (c)(2)(A) was violated because the Appeals officer was
instructed not to consider his claims concerning the failure of a
Form 23C to be provided or considered. As previously noted, a
Form 23C is not necessary to establish the validity of the
assessments. Accordingly, an instruction to the Appeals officer
to refuse to consider petitioner’s “Form 23C” arguments, which
are based solely on the premise that a Form 23C is indispensable
to a valid assessment, does not violate petitioner’s right to
raise “any relevant issue” relating to the proposed levy under
section 6330(c)(2)(A). Similarly, the instruction did not cause
the Appeals officer not to be “impartial” within the meaning of
section 6330(b)(3). The operative terms of section 6330(b)(3)
indicate that “impartial” as used in the heading of that
provision concerns the Appeals officer’s prior involvement with
respect to the unpaid tax before the hearing.7 In sum, neither
7
Sec. 6330(b)(3) provides as follows:
SEC. 6330(b). Right to Fair Hearing.
(continued...)
- 14 -
the instructions to the Appeals officer concerning, nor her
refusal to consider, petitioner’s arguments based on Form 23C
constituted an abuse of discretion.
2. Consideration and Balancing of Collection Alternatives
Petitioner next contends that the Appeals officer failed to
comply with section 6330(c)(3)(C), which requires the officer to
consider whether the proposed collection action balances the need
for the efficient collection of taxes with the legitimate concern
of the taxpayer that any collection action be no more intrusive
than necessary. This requirement was addressed in the Notice of
Determination which states: “The proposed levy action is
intrusive. However, where the taxpayer continues to challenge
the validity of the assessments there is no room to search for
alternative collection measures to alleviate the intrusiveness of
a levy action.” Neither in his request for a hearing nor at the
hearing did petitioner challenge the appropriateness of or offer
an alternative to the proposed levy. In these circumstances, we
7
(...continued)
* * * * * * *
(3) Impartial officer.--The
hearing under this subsection shall
be conducted by an officer or
employee who has had no prior
involvement with respect to the
unpaid tax specified in subsection
(a)(3)(A) before the first hearing
under this section or section 6320.
A taxpayer may waive the
requirement of this paragraph.
- 15 -
find no abuse of discretion in the Appeals officer’s
determination concerning the requirements of section
6330(c)(3)(C). See Magana v. Commissioner, 118 T.C. 488 (2002).
3. Conduct of Discovery
Petitioner alleges that it was error for the Appeals officer
to fail to allow petitioner the opportunity to conduct discovery
in connection with the hearing. At the outset, we note that
there does not appear to be anything in the record to indicate
that petitioner ever attempted to conduct discovery, or that the
Appeals officer refused a request to do so. In any event, the
hearing process contemplated in section 6330 is informal and does
not require the compulsory production of documents. See Davis v.
Commissioner, 115 T.C. at 41-42; Lindsay v. Commissioner, T.C.
Memo. 2001-285; Wylie v. Commissioner, T.C. Memo. 2001-65. Any
refusal to afford petitioner the opportunity for formal discovery
was not an abuse of discretion.
4. Spouse’s Hearing Rights
Petitioner argues that it was error for the Appeals officer
not to allow his spouse to participate in the hearing. We infer
from petitioner’s various submissions that he believes his spouse
was entitled to a hearing under section 6330 because she holds a
community property interest in any property of his that might be
subject to the proposed levy.
- 16 -
Section 6330(a)(1) provides that “No levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of their right to a hearing”.
(Emphasis added.) Section 6330(b)(2) provides: “A person shall
be entitled to only one hearing under this section with respect
to the taxable period to which the unpaid tax * * * relates.”
(Emphasis added.) Regulations issued by respondent clarify that
the “person” described in section 6330(a)(1) is the same person
described in section 6331(a); namely, the person liable to pay
the tax due after notice and demand who has refused or neglected
to pay. Sec. 301.6330-1(a)(2), Q&A-1, Proced. & Admin. Regs.8
Since petitioner and his spouse did not file joint returns
for 1984 through 1987, his spouse is not liable for the unpaid
taxes that are the subject of the instant collection action.
8
Q&A-1 of sec. 301.6330-1(a)(3), Proced. & Admin. Regs.,
provides as follow:
Q-1. Who is the person to be notified under section
6330?
A-1. Under section 6330(a)(1), a pre-levy or
post-levy CDP Notice is required to be given only to
the person whose property or right to property is
intended to be levied upon, or, in the case of a levy
made on a state tax refund or a jeopardy levy, the
person whose property or right to property was levied
upon. The person described in section 6330(a)(1) is
the same person described in section 6331(a)--i.e., the
person liable to pay the tax due after notice and
demand who refuses or neglects to pay (referred to here
as the taxpayer). A pre-levy or post-levy CDP Notice
therefore will be given only to the taxpayer.
- 17 -
Therefore, she is not the “person” referred to in section
6330(a)(1); accordingly, section 6330 confers no hearing rights
upon her and respondent issued no notice to her, under section
6330(a). Although petitioner’s spouse is listed as a taxpayer on
the Form 12153 by which petitioner requested a hearing under
section 6330, she did not sign the document, and it in any event
confers no rights on her that do not exist under the statute.
Accordingly, the Appeals officer’s refusal to allow petitioner’s
spouse to participate in the hearing was not an abuse of
discretion.9
Conclusion
Having considered each of petitioner’s allegations of error,
we conclude that there was no abuse of discretion by the Appeals
officer. We hold that respondent may proceed with the proposed
levy. To reflect the foregoing,
Decision will be entered for
respondent.
9
In a separate order, we previously denied petitioner’s
spouse’s motion to join as a party to the proceedings before this
Court, on the grounds that she had failed to show that any
interests in property that she sought to protect were
inadequately protected by petitioner or would be impaired absent
joinder or intervention.
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398 F.Supp. 64 (1975)
Ward E. HARDY, on behalf of himself and persons similarly situated, Plaintiff,
v.
BUCYRUS-ERIE COMPANY, Defendant.
No. 74-C-203.
United States District Court, E. D. Wisconsin.
June 20, 1975.
*65 Terrance L. Pitts, Milwaukee, Wis., for plaintiff.
Fred G. Groiss, Quarles & Brady, Milwaukee, Wis., for defendant.
DECISION AND ORDER
WARREN, District Judge.
On May 22, 1974, plaintiff Ward E. Hardy commenced an action against Bucyrus-Erie Company on behalf of himself and all persons similarly situated alleging that the defendant company, together with United States Steel Workers of America, Local No. 1343 (hereinafter "Local 1343"), has engaged in racially discriminatory practices in violation of section 703, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 and section I of the Civil Rights Act of 1866, 42 U.S.C. § 1981. In particular, plaintiff charges that, by virtue of and pursuant to its collective bargaining agreement with Local 1343, the defendant company has established a promotional and seniority system whose design is to *66 preserve a policy of limiting the employment and promotional opportunity of black employees and black applicants. Additionally, he cites harassment, demotion, discriminatory testing and discriminatory exclusion from apprenticeship programs jointly operated and maintained by Local 1343 and the defendant company, in redress whereof he seeks injunctive relief and back pay.
Defendant has responded to plaintiff's complaint by the filing of a motion to dismiss the action pursuant to Rule 12(b)(7) of the Federal Rules of Civil Procedure, stating as grounds therefor plaintiff's failure to join parties in whose absence complete relief cannot be accorded. That motion, which has been fully briefed by the parties, constitutes the subject of disposition herein.
Plaintiff's complaint discloses that a charge of employment discrimination was filed with the Equal Employment Opportunity Commission (hereinafter "EEOC") against the defendant Bucyrus-Erie Company on November 7, 1971. Thereafter, on December 9, 1971, the EEOC deferred plaintiff's charge to the appropriate state agency and did not assume jurisdiction until sometime after March 21, 1972. Plaintiff then received a "Notice of Right to Sue" from the Milwaukee District Office of the EEOC on February 28, 1974, after which he commenced this action.
Dismissal of an action for want of an indispensable party is authorized by Rule 19 of the Federal Rules of Civil Procedure. Under Rule 19 however, the term "indispensable" is conclusory in nature in the sense that it does not constitute the starting point of analysis. As explained by the Seventh Circuit Court of Appeals in Le Beau v. Libby-Owens-Ford Company, 484 F.2d 798, 800 (7th Cir., 1973), Rule 19 "mandates two separate but interrelated inquiries. First, is the absent party a person `to be joined if feasible;' and, second, if not feasible should the court in equity and good conscience allow the action to proceed or treat the absent party as indispensable."
Rule 19(a), Fed.R.Civ.P. mandates joinder of any person who is subject to service of process and whose joinder will not deprive the court of subject matter jurisdiction if, in his absence, complete relief cannot be accorded among those who are already parties or if his nonjoinder would prejudice his interests or subject other parties in the action to a substantial risk of incurring inconsistent obligations. In the event such person cannot be made a party, however, Rule 19(b) authorizes the court to determine whether, in equity and good conscience, the action should proceed among the parties before it or should be dismissed, the absent party being thus regarded as indispensable. Among the factors to be considered by the court in determining the indispensability of a party and the concomitant propriety of dismissal are:
". . . first, to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder." Fed.R. Civ.P. 19(b).
As heretofore noted, the instant complaint charges that the defendant company, by virtue of its collective bargaining agreement with Local 1343, which agreement "governs and controls" "[a]ll matters regarding compensation, terms, conditions, promotions, demotions, suspensions and privileges of employment of the plaintiff and the class he represents," has pursued a course of racial discrimination against the named plaintiff and members of his class. Plaintiff's prayer for mandatory injunctive *67 relief seeks to correct defendant's allegedly discriminatory practices by requiring defendant to: (1) recruit, hire, assign, and promote black applicants and employees on the same basis as white applicants and employees; (2) adopt and implement qualification standards and procedures for hiring, assigning and promoting employees without the utilization of discriminatory tests and discriminatory educational requirements; (3) provide equal opportunities for training and advancement; (4) hire and promote sufficient blacks to overcome the present effects of past discrimination, and (5) provide monetary compensation to plaintiff and other black employees for the loss they allegedly sustained as a result of defendant's failure to promote and employ them on a basis equal to that upon which white persons are promoted and employed. Having considered plaintiff's prayer for relief in light of the fact that all matters of compensation, conditions of employment, training and promotion at the defendant company are governed by a contract between it and Local 1343, this Court is of the opinion that Local 1343 must be made a party to this action. The injunctive relief sought by plaintiff, in that it would revamp existing programs and practices contracted by the union, would certainly affect the interests of the union and would create a situation in which the defendant company's obligations under the collective bargaining agreement with the union might be substantially inconsistent with the obligations imposed upon it by the Court as a result of this lawsuit. As noted under similar circumstances in Waters v. Wisconsin Steel Wks. of Int'l. Harvester Co., 301 F.Supp. 663, 666 (N. D.Ill., 1969), reversed on other grounds, 427 F.2d 476 (7th Cir., 1970):
"In their claim under Title VII, the plaintiffs seek injunctive relief against both the Company and the Union to prohibit enforcement of existing seniority provisions in their collective bargaining agreement, to require publication by both defendants of job openings, to `restructure' the existing seniority system established by their collective bargaining agreement, and to give the plaintiffs seniority over all other bricklayers hired since the date of the alleged acts of discrimination. Under such circumstances, . . . the Union . . . must be before the court. . . ."
See also, Gilmore v. Kansas City Terminal Ry. Co., 509 F.2d 48, 52-53 (8th Cir., 1975). It therefore remains to determine what, if any, impediments exist to joinder of Local 1343 in this action.
Plaintiff's complaint alleges a cause of action under Title VII of the Civil Rights Act of 1964 as well as a cause of action under 42 U.S.C. § 1981. Defendant's motion to dismiss must therefore be decided as against each of plaintiff's stated causes of action. Section 706(e) of Title VII of the Civil Rights Act as amended, 42 U.S.C. § 2000e-5(f)(1), provides that if, after a charge of discrimination is filed, the EEOC is unable to achieve compliance with the Act, the person claiming to be aggrieved may, after a specified period of time, commence a civil action "against the respondent named in the charge." The phrase "against the respondent named in the charge," however, has been construed by most courts, including the Seventh Circuit Court of Appeals, to impose a jurisdictional limitation upon the district courts such that a Title VII action may not be commenced against any person who has not been the subject of a prior charge before the EEOC:
"Previously in construing section 706(e) this court has held that: `It is a jurisdictional prerequisite to the filing of a suit under Title VII that a charge be filed with the EEOC against the party sought to be sued. 42 U.S.C. § 2000e-5(e). Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 719 (7th Cir., 1969).
"Other courts which have considered the question have also held that the `charged party' language of section *68 706(e) prohibits Title VII suits in the district court against persons not previously charged before the EEOC. . . ." Waters v. Wisconsin Steel Wks. of Internat'l, Harvester Co., 427 F.2d 476, 485 (7th Cir., 1970), cert. den. 400 U.S. 911, 91 S.Ct. 137, 27 L.Ed.2d 151.
Accord: Le Beau v. Libby-Owens-Ford Co., supra at 799; Equal Emp. Op. Com'n v. Mac Millan Bloedel Containers, Inc., 503 F.2d 1086, 1092 (6th Cir., 1974); Thornton v. East Texas Motor Freight, 497 F.2d 416, 423 (6th Cir., 1974). Moreover, the charging requirement is important in two respects:
". . . First, it notifies the charged party of the asserted violation. Secondly, it brings the charged party before the EEOC and permits effectuation of the Act's primary goal, the securing of voluntary compliance with the law. . . ." Bowe v. Colgate-Palmolive Company, 416 F.2d 711, 719 (7th Cir., 1969).
The record herein discloses that no charge of discrimination against Local 1343 was ever filed by plaintiff with the EEOC. Even were the Court to afford plaintiff's charge before the EEOC the liberality suggested by Sanchez v. Standard Brands, Inc., 431 F.2d 455, 462 (5th Cir., 1970):
". . . the only procedural requirement which should confront a Title VII complainant is the requirement that he state, within the ninety-day period, facts sufficient to trigger a Commission investigation,"
and its progeny,[1] the facts stated to the Commission were not sufficient to warrant a Commission investigation of discriminatory practices by the union. Despite the fact that the "Charge of Discrimination" form provided by the EEOC specifically asked, "Who discriminated against you? Give the name and address of the employer, labor organization, employment agency and/or apprenticeship committee. If more than one, list all," (emphasis added), plaintiff mentioned only the Bucyrus-Erie Company. Nor did he include within the description of the "unfair thing done to you" appended to the charge any factual allegation which even alluded to the unfair employment practices complained of against the union in the instant action. In fact, the only mention of any union involvement in the proceedings was plaintiff's single statement to the EEOC that, "I filed a grievance, but later withdrew it because of the harassment I experienced," which this Court deems wholly inadequate and which allegation of harassment the EEOC understandably attributed to the company. As indicated by the EEOC determination rendered on February 28, 1975, the issue raised by plaintiff's charge was whether the Bucyrus-Erie Company "discriminated against him with respect to job assignment and with respect to warnings, because of his race, Negro, and because he filed a charge of discrimination." It is evident from the EEOC determination that Local 1343 was never notified of or investigated for any violation of plaintiff's civil rights, nor has plaintiff made any showing that the union was otherwise aware of his allegations. Cf. Thornton v. East Motor Freight, supra at 423-424. The union was thus "denied the opportunity to participate in conciliation proceedings aimed at voluntary compliance under EEOC auspices." Williams v. General Foods Corp., 492 F.2d 399, 405 (7th Cir., 1974). Having determined, therefore, that there exists a jurisdictional impediment to joinder of the union in plaintiff's cause of action under Title VII, the Court must next consider the propriety of dismissal of such cause of action.
In the opinion of this Court, each of the first three factors enumerated by Rule 19(b), Fed.R.Civ.P. is persuasive of a finding of indispensability of the union and dismissal of plaintiff's Title VII cause of action. Since plaintiff's charges against the defendant *69 company attack the employment and promotional structures which are controlled by a labor contract with Local 1343, no relief could be framed which would not intimately affect the union and its membership. Thus, any judgment sustaining plaintiff's charges and granting such injunctive relief as prayed for herein would necessarily prejudice the union, and this Court is aware of no manner of protective order whereby such prejudice could be minimized. Furthermore, since the union would not be bound by any judgment of this Court if not joined as a party defendant in this action, see Provident Bank v. Patterson, 390 U.S. 102, 110, 88 S.Ct. 733, 19 L.Ed.2d 936 (1967), its interests could not be conclusively litigated. In the event the now defendant company were ordered to implement procedures in conformity with the injunctive relief sought herein and in violation of its contractual obligations with the union, the company's inconsistent obligations created by virtue of the court order would be resolved only in subsequent litigation with the union. Thus, any judgment rendered herein would not be "adequate," as that term is employed by Rule 19(b):
"Fourth, there remains the interest of the courts and the public in complete, consistent, and efficient settlement of controversies. We read the Rule's third criterion, whether the judgment issued in the absence of the nonjoined person will be `adequate,' to refer to this public stake in settling disputes by wholes, whenever possible . . ." Id., 390 U.S. at 111, 88 S. Ct. at 739.
The Court is of a similar mind with regard to the existence of an adequate remedy to the plaintiff in the event his Title VII action is dismissed for non-joinder in that such a remedy is available to plaintiff in the form of the § 1981 action commenced simultaneously herein. 42 U.S.C. § 1981 provides in part:
"All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens . . .."
Commenting upon the relationship of Title VII and § 1981, the United States Supreme Court in its recent decision in Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 95 S.Ct. 1716, 44 L. Ed.2d 295 (May 19, 1975) noted the independence and comparative breadth of § 1981:
"Despite Title VII's range and its design as a comprehensive solution for the problem of invidious discrimination in employment, the aggrieved individual clearly is not deprived of other remedies he possesses and is not limited to Title VII in his search for relief. . . . In particular, Congress noted `that the remedies available to the individual under Title VII are coextensive with the individual's [sic] right to sue under the provisions of the Civil Rights Act of 1866, 42 U. S.C. § 1981, and that the two procedures augment each other and are not mutually exclusive.' H.R.Rep.No.238, 92d Cong., 1st Sess., 19 (1971) . . ..
"Title 42 U.S.C. § 1981, being the present codification of § 1 of the century-old Civil Rights Act of 1866, 14 Stat. 27, on the other hand, on its face relates primarily to racial discrimination in the making and enforcement of contracts. Although this Court has not specifically so held, it is well-settled among the federal courts of appeals and we now join them that § 1981 affords a federal remedy against discrimination in private employment on the basis of race. An individual who establishes a cause of action under § 1981 is entitled to both equitable and legal relief, including compensatory and, under certain circumstances, punitive damages. . . . And a backpay award under § 1981 is not restricted to the two years specified for *70 backpay recovery under Title VII." (Emphasis added). 421 U.S. at 459, 95 S.Ct. at 1719, 44 L.Ed.2d 295.
See also, Boles v. Union Camp Corp., 57 F.R.D. 46, 52 (S.D.Ga., 1972). It is thus clear that plaintiff would suffer no deprivation of adequate remedy by proceeding under § 1981 as opposed to Title VII.
A question arises, however, as to whether plaintiff's failure to charge Local 1343 before the EEOC and thus exhaust his EEOC remedies also precludes his maintenance of a § 1981 cause of action against the union. Adopting a minority position,[2] the Seventh Circuit Court of Appeals in Waters v. Wisconsin Steel Wks., supra, 427 F.2d at 487 ruled:
"Because of the strong emphasis which Congress placed upon conciliation, we do not think that aggrieved persons should be allowed intentionally to by-pass the Commission without good reason. We hold, therefore, that an aggrieved person may sue directly under section 1981 if he pleads a reasonable excuse for his failure to exhaust EEOC remedies. . . ."
(Emphasis added).
In a later opinion, however, the Seventh Circuit arguably retracted its decision that exhaustion of Title VII remedies or reasonable excuse for the failure to do so constituted a jurisdictional prerequisite to the maintenance of a cause of action under § 1981:
". . . The evidence adduced at trial supports plaintiffs' allegation that the collective bargaining agreement amendment occurred after the EEOC charge was filed thereby justifying the by-pass of the EEOC. Moreover, we note and are somewhat inclined to agree with the recent decisions which hold that exhaustion of Title VII remedies, or reasonable excuse for failing to do so, is not a jurisdictional prerequisite to an action under section 1981. See, e. g., Long v. Ford Motor Co., 496 F.2d 500 (6th Cir., 1974)." (Emphasis added). Waters v. Wisconsin Steel Wks. of Int. Harvester Co., 502 F.2d 1309, 1315 (7th Cir., 1974).
This latter pronouncement, moreover, reflects the same position as that most recently adopted by the United States Supreme Court:
". . . [I]t has been noted that the filing of a Title VII charge and resort to Title VII's administrative machinery are not prerequisites for the institution of a § 1981 action. . . .
"We are satisfied, also, that Congress did not expect that a § 1981 court action usually would be resorted to only upon completion of Title VII procedures and the Commission's efforts to obtain voluntary compliance. . . . Under some circumstances, the administrative route may be highly preferred over the litigatory; under others, the reverse may be true. We are disinclined, in the face of congressional emphasis upon the existence and independence of the two remedies, to infer any positive preference for one over the other, without a more definite expression in the legislation Congress has enacted, as, for example, a proscription of a § 1981 action while an EEOC claim is pending." (Emphasis added). Johnson v. Railway Express Agency, supra, 421 U.S. at 460, 95 S.Ct. at 1720, 44 L. Ed.2d 295.
Premised upon that determination, the Supreme Court further ruled that commencement of Title VII proceedings by timely filing of a charge of employment discrimination with the EEOC would not toll the running of the period of limitation applicable to an action, based on the same facts, instituted under 42 U.S.C. § 1981. Commenting upon petitioner's argument that such a determination would force a plaintiff into premature and expensive litigation *71 which would destroy any chance for administrative conciliation, the Supreme Court noted:
". . . [I]t is conceivable, and perhaps almost to be expected, that failure to toll will have the effect of pressing a civil rights complainant who values his § 1981 claim into court before the EEOC has completed its administrative proceeding. One answer to this, . . . is that plaintiff in his § 1981 suit may ask the court to stay proceedings until the administrative efforts at conciliation and voluntary compliance have been completed. But the fundamental answer to petitioner's argument lies in the fact . . . that Congress clearly has retained § 1981 as a remedy against private employment discrimination separate from and independent of the more elaborate and time consuming procedures of Title VII. Petitioner freely concedes that he could have filed his § 1981 action at any time after his cause of action accrued . . ." (Emphasis added). Id. 465, 95 S.Ct. at 1722, 44 L. Ed.2d 295.
It is the opinion of this Court, in view of the above statements, that the maintenance of a § 1981 action is not dependent upon an exhaustion of Title VII remedies. This Court therefore declines to require such exhaustion or any statement of reasonable excuse by plaintiff in justification of his failure to file a charge against Local 1343 before the EEOC as a jurisdictional prerequisite to his maintenance of a cause of action under § 1981, thereby leaving the § 1981 action which has been commenced herein wholly viable. In any event, such reasonable excuse could certainly be found in the fact that plaintiff filed his charges before the EEOC as a layman without the assistance of legal counsel and without a view to what administrative procedures might be necessary to preserve his legal remedies. As noted by the Seventh Circuit in Waters, supra, 427 F.2d at 487:
"It is inconceivable that Congress would have intended to do away with the right to sue directly under section 1981 in these circumstances. To do so would bind complainants by the four corners of an informal charge and defeat the effective enforcement of the policies underlying Title VII. . . . At the administrative stage the charge is usually drafted by laymen untrained in the law. A requirement that the complainant charge every person who may be involved in the alleged acts of discrimination would be unnecessarily harsh. . . ."
Having thus determined that plaintiff possesses an equally effective remedy under 42 U.S.C. § 1981, this Court finds that Local 1343 is an indispensable party to the Title VII action, in whose absence a final determination would be inconsistent with equity and good conscience and in whose absence the action must be dismissed. However, although the presence of the union is equally important to the maintenance of plaintiff's § 1981 cause of action, dismissal of that action under Rule 19(b) need not be considered. Since no jurisdictional impediment exists with regard to joinder of the union as a party defendant to the § 1981 cause of action, the Court may simply order the union to be joined by virtue of Rule 19(a).
Now, therefore, it is ordered that defendant's motion to dismiss plaintiff's cause of action under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. be and hereby is granted.
It is further ordered that defendant's motion to dismiss plaintiff's cause of action under section I of the Civil Rights Act of 1866, 42 U.S.C. § 1981, be and hereby is denied and that plaintiff file within 20 days of the date of this order an amended complaint naming United States Steel Workers of America, Local No. 1343 a party defendant to said action.
NOTES
[1] See Van Hoomissen v. Xerox Corporation, 368 F.Supp. 829, 834-835 (N.D.Cal., 1973).
[2] See Long v. Ford Motor Co., 496 F.2d 500, 503 (6th Cir., 1974).
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565 F.Supp. 1568 (1983)
PENNSYLVANIA ACCESSORIES TRADE ASSOCIATION, INC.; Lazy J, Ltd., A Pennsylvania Corporation; Quickdraw Accessories, Inc., a Pennsylvania Corporation; Record Outlet; Merchandising Service of America, Inc., A Pennsylvania Corporation; U.B.C. Grain Company, Inc., A Pennsylvania Corporation; David A. Talmas, Individually and as a director of the Pennsylvania Accessories Trade Association, Inc.; James A. Bauer, Individually and as a director of the Pennsylvania Accessories Trade Association, Inc.; Lenwood Stephens, Individually and as a director of the Pennsylvania Accessories Trade Association, Inc.; Martin Paul Millmond, Individually and as a director of the Pennsylvania Accessories Trade Association, Inc.; and Wayne A. Deakin, Individually and as a director of the Pennsylvania Accessories Trade Association, Inc., Plaintiffs,
v.
Richard THORNBURGH, Governor of the Commonwealth of Pennsylvania and LeRoy S. Zimmerman, Attorney General of the Commonwealth of Pennsylvania, Defendants.
Civ. A. No. 81-0126.
United States District Court, M.D. Pennsylvania.
June 22, 1983.
*1569 *1570 Joseph M. Devecka, Robert C. Rayman, Devecka & Rayman, State College, Pa., Leonard I. Sharon, Sharon & Sharon, Pittsburgh, Pa., for plaintiffs.
Marybeth Stanton, Mary Ellen Krober, Deputy Attys. Gen., Harrisburg, Pa., for defendants.
OPINION
HERMAN, District Judge.
I. INTRODUCTION AND BACKGROUND
Drug paraphernalia statutes and ordinances are a response to the development of an extensive multi-million dollar industry that promotes and glamorizes the illegal use of drugs through the manufacture and sale of implements for preparing and using illicit drugs, primarily marijuana and cocaine. See Hearings Before the House Select Comm. on Narcotics Abuse And Control, 96th Cong., 1st Sess. (November 1, 1979) (statement of Dep. Ass't. Atty. Gen'l. Irvin B. Nathan). See also Levas and Levas v. Village of Antioch, 684 F.2d 446, 449 (7th Cir.1982); Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 380 (5th Cir.1982). The Model Drug Paraphernalia Act (hereinafter referred to as "The Model Act"), drafted by the Drug Enforcement Administration of the United States Department of Justice at the request of the Drug Policy Office of the President's Domestic Policy Council, Record Revolution No. 6, Inc. v. City of Parma, 638 F.2d 916, 919 (6th Cir.1980), vacated and remanded, 456 U.S. 968, 102 S.Ct. 2227, 72 L.Ed.2d 840 (1982), represents an attempt to write a statute that would be broad enough to deal with the problem effectively, but which would avoid the constitutional infirmities that resulted in successful challenges to various state and local drug paraphernalia laws. Stoianoff v. Montana, 695 F.2d 1214, 1217 (9th Cir.1983); Levas, 684 F.2d at 449; Tobacco Accessories, 681 F.2d at 380 & n. 3; Casbah, Inc. v. Thone, 651 F.2d 551, 555 (8th Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1642, 71 L.Ed.2d 874 (1982). Pennsylvania's Drug Paraphernalia Act of December 4, 1980, P.L. 634, No. 186, codified at 35 P.S. §§ 780-102(b), 780-113(a)(32)-(34), & 780-113(i) (Purdon Supp.1983) (hereinafter referred to as "Act 186") adopts verbatim the language of the Model Act. See Appendix.
Act 186 was to become effective as an amendment to Pennsylvania's Controlled Substance, Drug, Device and Cosmetic Act, 35 P.S. §§ 780-101, et seq., on February 2, 1981. Prior to the effective date, on January 26, 1981, Plaintiffs[1] filed this action attacking the statute as facially unconstitutional. After a hearing on January 30, 1981, this court granted Plaintiffs' application for a temporary restraining order. A hearing on Plaintiffs' request for a preliminary injunction was held on February 18, 1981. On February 27, 1981, we enjoined Defendants Richard Thornburgh[2] and LeRoy Zimmerman[3] from enforcing Act 186 until a decision could be rendered on the merits of Plaintiffs' constitutional challenge. *1571 The Parties then proceeded to conduct discovery.
On March 3, 1982, the United States Supreme Court handed down its unanimous decision in Village Of Hoffman Estates v. Flipside, 455 U.S. 489, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). Although the ordinance in Flipside was not patterned after the Model Act, the lower courts have considered pre-enforcement, facial challenges to versions of the Model Act in light of the analytical framework set forth in Flipside. But see B. Gerson, "Head Shops: A Legal Haze," Nat'l L.J. at 8 (Aug. 23, 1982) (Flipside provides little guidance). To date, nine circuit courts have upheld statutes based on the Model Act. In seven of the circuits the cases were decided after the Supreme Court rendered its decision in Flipside.[4] Consequently, on November 2, 1982, Defendants moved for summary judgment on the basis that Plaintiffs' facial challenge involves only the legal question of whether or not Act 186 conflicts with the United States Constitution, which question Defendants assert should be resolved in their favor. Supporting and opposing memoranda were duly filed. We held oral argument on March 28, 1983. After careful review of the extensive case law in this area, the briefs and arguments of counsel, we now grant Defendants' motion for summary judgment for the reasons set forth below.
II. DISCUSSION
A. Overbreadth and Vagueness
The Supreme Court in Flipside enunciated the following analysis to be used in resolving facial challenges to the overbreadth and vagueness of a law:
a court's first task is to determine whether the enactment reaches a substantial amount of constitutionally protected conduct. If it does not, then the overbreadth challenge must fail. The court should then examine the facial vagueness challenge and, assuming the enactment implicates no constitutionally protected conduct, should uphold the challenge only if the enactment is impermissibly vague in all of its applications. A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to others. A court should therefore examine the complainant's conduct before analyzing other hypothetical applications of the law.
455 U.S. at 494-95, 102 S.Ct. at 1191. The Supreme Court also noted that in evaluating a state law a federal court must consider any limiting construction that a state court or enforcement agency has proffered. Id. at 494 n. 5, 102 S.Ct. at 1191 n. 5.
We will follow this scheme in our examination of Act 186. The volume of recent case law in which versions of the Model Act have been subjected to scrutiny for overbreadth and vagueness, and upheld,[5] makes our task an easier one. We will not repeat the analysis, therefore, with the same depth of detail that appears in other discussions. We will, however, attempt to highlight those areas in which Plaintiffs claim this case is distinguishable from decisions adverse *1572 to their position by the various appellate courts.
1. Overbreadth
In considering an overbreadth challenge to a statute, the concern is not with a law's uncertainty, but with its potential for punishing constitutionally protected conduct. "A law is facially overbroad if it does not aim specifically at evils within the allowable area of [government] control, but ... sweeps within its ambit other activities that constitute an exercise of constitutionally protected rights." Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 382 (5th Cir.1982), quoting Thornhill v. Alabama, 310 U.S. 88, 97, 60 S.Ct. 736, 741, 84 L.Ed. 1093 (1940). The concepts of vagueness and overbreadth are interrelated, however. The Supreme Court has recognized that ambiguous meanings cause citizens to "steer far wider of the unlawful zone ... than if the boundaries of the forbidden areas were clearly marked." Baggett v. Bullitt, 377 U.S. 360, 372, 84 S.Ct. 1316, 1322, 12 L.Ed.2d 377 (1964), quoting Speiser v. Randall, 357 U.S. 513, 526, 78 S.Ct. 1332, 1342, 2 L.Ed.2d 1460 (1958). Thus, a court should evaluate the ambiguous as well as the unambiguous scope of the enactment to determine if it is overbroad. Flipside, 455 U.S. at 494 n. 6, 102 S.Ct. at 1191 n. 6.
Plaintiffs in this case complain that Act 186 is overbroad because it inhibits speech encouraging change in the marijuana laws. They point to the provision in the definition of drug paraphernalia in which the court and law enforcement officials are directed to consider the following factors as circumstantial evidence that an item is drug paraphernalia:
statements by an owner or by anyone in control of the object concerning its use ... descriptive materials accompanying the object which explain or depict its use ... the manner in which the object is displayed for sale ... expert testimony concerning its use.
35 P.S. § 780-102(b). We fail to see the relationship between "statements," "descriptive materials," or "expert testimony" concerning an object's use and expressions of disagreement with the current drug laws. The only factor that might possibly implicate such expressions would be "the manner in which the object is displayed for sale." The context in which the phrase appears, however, indicates that it was intended to apply to display relating to the use of the object, and not to display in proximity to expressive materials legitimately encouraging the legalization of marijuana. Moreover, this provision does not, by its terms, directly prohibit or otherwise regulate literature advocating change in the drug laws. A statute that imposes indirect restrictions on speech is not unconstitutionally overbroad unless there is a substantial potential for its application to protected speech. The fact that some unconstitutional applications of the law can be imagined is insufficient to invalidate the statute on overbreadth grounds. Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973). See also Flipside, 455 U.S. at 496, 102 S.Ct. at 1192; The General Stores, Inc. v. Bingaman, 695 F.2d 502, 504 (10th Cir.1982).
Plaintiffs also argue that consideration by the police of "descriptive materials which explain or depict its [the object's] use" or "the manner in which the object is displayed" will inhibit symbolic speech. Plaintiffs contend that they will be forced to refrain from making symbolic statements in support of repealing the marijuana laws through the sale or manufacture of items bearing drug-related designs, logos or slogans. The Supreme Court addressed this argument in Flipside and rejected it:
Although drug-related designs or names on cigarette papers may subject those items to regulation, the village does not restrict speech as such, but simply regulates the commercial marketing of items that the labels reveal may be used for an illicit purpose. The scope of the ordinance therefore does not embrace non-commercial speech.
Flipside, 455 U.S. at 496, 102 S.Ct. at 1192. Commercial speech is entitled to First Amendment protection, Virginia Board of Pharmacy v. Virginia Citizens Consumer Counsel, 425 U.S. 748, 761-62, 96 S.Ct. 1817, *1573 1825, 48 L.Ed.2d 346 (1976), but commercial speech does not trigger as high a level of judicial scrutiny as other varieties of expression. Ohralik v. Ohio State Bar Assoc., 436 U.S. 447, 456 & 457, 98 S.Ct. 1912, 1918 & 1919, 56 L.Ed.2d 444 (1978). In Flipside, the Supreme Court summarily dismissed the commercial speech interests of the plaintiff retailer:[6]
[I]nsofar as any commercial speech interest is implicated here, it is only the attenuated interest in displaying and marketing merchandise in the manner that the retailer desires. We doubt that the village's restriction on the manner of marketing appreciably limits Flipside's communication of information with one obvious and telling exception. The ordinance is expressly directed at commercial activity promoting or encouraging illegal drug use. If that activity is deemed "speech," then it is speech proposing an illegal transaction which a government may regulate or ban entirely.
Flipside, 455 U.S. at 496, 102 S.Ct. at 1192 (citations omitted).
We see no reason why the same analysis should not apply in this case, and equally as well to the manufacturing plaintiffs as to the retailer plaintiffs. Furthermore, even if we were to treat the sale and manufacture of items bearing drug-related designs as noncommercial speech, it would constitute symbolic speech, that is, speech mixed with conduct. When speech and nonspeech elements are combined in the same course of conduct, a sufficiently important governmental interest regulating the nonspeech element can justify incidental limitations on First Amendment freedoms. United States v. O'Brien, 391 U.S. 367, 376, 88 S.Ct. 1673, 1678, 20 L.Ed.2d 672 (1968) (draft card burning). The regulation of drug paraphernalia furthers the important state interest in discouraging the unauthorized use of addictive drugs and other substances determined to be deleterious to the health and well-being of its citizens. The regulation is not directed at the suppression of free expression, and the effect on the expression of ideas is minimal. Id. at 377, 88 S.Ct. at 1679. See also The General Stores, Inc. v. Bingaman, 695 F.2d 502, 504 (10th Cir.1982).
Section 2 of Act 186, in contrast, directly restricts speech by prohibiting
The placing in any newspaper, magazine, handbill or other publication any advertisement, knowing, or under circumstances where one reasonably should know, that the purpose of the advertisement in whole or in part is to promote the sale of objects designed or intended for use as drug paraphernalia.
35 P.S. § 780-113(a)(34). Plaintiffs have not specifically challenged the advertising ban in their brief opposing summary judgment, but in Paragraph 27 of their Complaint they allege that "[t]he challenged Act has a chilling effect on the free expression of the Plaintiffs in that the Plaintiffs are unable to determine, based on the guidelines in the Act, what statements in their advertising materials are prohibited."[7]
Since the ordinance attacked in Flipside did not contain an advertising ban, we do not have the guidance of the Supreme Court on this issue. A number of circuit courts, however, have addressed the question. See Kansas Retail Trade Co-Op v. Stephen, 695 F.2d 1343, 1347 (10th Cir. 1982); New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 3-5 (1st Cir.1982); Florida Businessmen For Free Enterprise v. City of Hollywood, 673 F.2d 1213, 1217 (11th Cir.1982); Casbah, Inc. v. Thone, 651 F.2d 551, 563-64 (8th Cir.1981), cert. denied, 445 U.S. 1005, 102 S.Ct. 1642, *1574 71 L.Ed.2d 874 (1982); Record Revolution No. 6, Inc. v. City of Parma, 638 F.2d 916, 936-37 (6th Cir.1980), vacated and remanded, 456 U.S. 968, 102 S.Ct. 2227, 72 L.Ed.2d 840 (1982). With the exception of the Record Revolution case, the advertising provision passed constitutional muster in each instance.
A careful reading of the provision reveals that, like the factors listed in the definitional section, this prohibition is directed only at commercial speech. It forbids "advertisement[s]" that "promote the sale of objects designed or intended for use as drug paraphernalia." (emphasis added). By its terms, the statute does not address advertisements glorifying the drug culture or advocating reform of the drug laws, without an invitation to purchase proscribed items. Florida Businessmen, 673 F.2d at 1217; Casbah, 651 F.2d at 563. But see Record Revolution, 638 F.2d at 937. Thus, the forbidden speech is commercial speech proposing an illegal transaction. Such speech is not protected by the First Amendment. Central Hudson Gas and Electric Corp. v. Public Service Commission, 447 U.S. 557, 564, 100 S.Ct. 2343, 2350, 65 L.Ed.2d 341 (1980).[8]
2. Vagueness
The analytical framework established by the Supreme Court in Flipside dictates that after consideration of the overbreadth challenge, "[t]he court should then examine the facial vagueness challenge and, assuming the enactment implicates no constitutionally protected conduct,[9] should uphold the challenge only if the enactment is impermissibly vague in all of its applications.... A court should ... examine the complainant's conduct before analyzing *1575 other hypothetical applications of the law." Flipside, 455 U.S. at 494-95, 102 S.Ct. at 1191-1192. Defendants have not urged that particular conduct of Plaintiffs is clearly proscribed by Act 186.[10] Consequently, we must proceed directly to the test for facial vagueness.
In Flipside, the Court applied the standards enunciated in Grayned v. City of Rockford, 408 U.S. 104, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972):
First, because we assume that man is free to steer between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning. Second, if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them. A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory applications.
Id. at 108, 92 S.Ct. at 2298 (footnotes omitted).
In regard to the first prong of the vagueness test, the "notice" prong, Plaintiffs allege in a general fashion that they are unable to understand the definition of "drug paraphernalia" contained in Act 186. See Complaint, ¶¶ 19-24. The definition in the Act is tri-partite. First, drug paraphernalia is generally defined as "all equipment, products and materials of any kind which are used, intended for use or designed for use..." with a controlled substance. Second, it enumerates twelve groups of items as examples of drug paraphernalia. Last, the definition specifies thirteen factors that should be considered when determining whether an item is to be considered drug paraphernalia. See 35 P.S. § 780-102(b). In Section 2 of the Act, the statute bans the use of, possession with intent to use, delivery of, possession with intent to deliver, or manufacture with intent to deliver drug paraphernalia,[11] as defined in Section 1.
Facial vagueness occurs when a law contains no core meaning that can be reasonably understood by the person of ordinary intelligence. Brache v. County of Westchester, 658 F.2d 47, 50-51 (2d Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1643, 71 L.Ed.2d 874 (1982). "A finding of unconstitutional vagueness cannot be based on uncertainty at the margins, or on a parade of bizarre hypothetical cases: problems of that order can be resolved in challenges as applied." Levas and Levas v. Village of Antioch, 684 F.2d 446, 451 (7th Cir.1982) (citations omitted). Act 186 is not a model of precision, and we acknowledge some difficulties with portions of the law, but a fair reading of the statute as a whole reveals a core of clearly prohibited conduct. The Act makes criminal (1) the use of tangible items of any kind with prohibited drugs; (2) the delivery of items, whether or not they have other lawful uses, with the intent that they will be used with prohibited drugs; and (3) the manufacture of items for use with prohibited drugs. The Plaintiffs do not complain that they do not have notice of the proscribed "controlled substances." They *1576 are enumerated elsewhere in Pennsylvania's Controlled Substance, Drug Device and Cosmetic Act. See 35 P.S. § 780-104. The Act includes a specific intent requirement, Cf. New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 7 (1st Cir. 1982) (ordinance did not require proof of specific intent), to differentiate innocent transfers of multi-purpose items from illegal transfers of drug paraphernalia,[12] and the list of examples, while not exhaustive, gives some substance to the term "drug paraphernalia." Levas and Levas v. Village of Antioch, 684 F.2d 446, 452 (7th Cir.1982).
Nevertheless, Plaintiffs object that they cannot determine "whose `intent' is at issue in relation to the definition of paraphernalia." Complaint, ¶ 26. They fear prosecution based on the "transferred intent" of another person.[13] Each of the substantive criminal offenses described in Section 2, however, incorporates the definition of drug paraphernalia. An item is not drug paraphernalia unless it is "used, intended for use or designed for use" with controlled substances. Therefore, an individual cannot commit one of the offenses described in Section 2, unless he possesses the pertinent mental state. As a general principle of criminal law the "mens rea" must be that of the criminal defendant. The only reasonable and logical conclusion and the one supported by the comments to the Model Act, which refer to the potential defendant as the "person in control" of the item, "Comment [Article I], Model Drug Paraphernalia Act," Hearings Before the House Select Comm. on Narcotics Abuse and Control, 96th Cong., 1st Sess. (Nov. 1, 1979), at 91-92, is that the Act permits a person to be arrested, prosecuted or convicted only for that person's own use, intent or design.[14]See Record Revolution No. 6, Inc. v. City of Parma, 638 F.2d 916, 928-29 & n. 14 (6th Cir.1980). Not only has this construction been accepted by the circuit courts that have considered the issue, see, e.g., Stoianoff v. Montana, 695 F.2d 1214, 1220 (9th Cir.1983); General Stores, Inc. v. Bingaman, 695 F.2d 502, 504 (10th Cir.1982); New England Accessories Trade Assoc. v. Tierney, 691 F.2d 35, 36 & n. 2 (1st Cir. 1982); Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 383 (5th Cir.1982); New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 5-6 (1st Cir.1982); Florida Businessmen For Free Enterprise v. City of Hollywood, 673 F.2d 1213, 1218-19 (11th Cir. 1982); Casbah, Inc. v. Thone, 651 F.2d 551, 559 (8th Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1642, 71 L.Ed.2d 874 (1982); *1577 Record Revolution No. 6, Inc. v. City of Parma, 638 F.2d 916, 928-29 & n. 14 (6th Cir.1980) vacated and remanded, 456 U.S. 968, 102 S.Ct. 2227, 72 L.Ed.2d 840 (1982), but it may also be the interpretation required by Pennsylvania law, see Commonwealth v. Wilson, 449 Pa. 235, 238, 296 A.2d 719, 721 (1972) (defendant may only be convicted for acts of another if there is liability based upon shared criminal intent); Commonwealth v. Teada, 235 Pa.Super.Ct. 438, 444, 344 A.2d 682, 684-85 (1975) (if inconsistent interpretations of statute are both reasonable, benefit of doubt inures to defendant); 1 Pa.C.S.A. § 1928(b)(1) (penal statutes strictly construed), as Plaintiffs themselves have persuasively argued. See Brief Opposing Defendants' Motion for Summary Judgment, at 10-12.
Plaintiffs also argue that the specific intent requirement does not "cure" the vagueness of the Act. See Flipside, 455 U.S. at 499, 102 S.Ct. at 1194 (scienter requirement may mitigate vagueness). They contend that "it is impossible for one to intend to violate a law when he cannot understand the meaning of the law." Lazy J, Et Al. v. Borough of State College, Civ. No. 80-1167 (M.D.Pa.1981), slip op. at 7. Under the traditional definition of scienter, the knowing performance of an act with an intent to bring about certain results, knowledge of the fact that deliberately causing such results is proscribed is immaterial. Id. n. 7; Levas and Levas v. Village of Antioch, 684 F.2d 446, 453 (7th Cir.1982). This type of scienter, it is true, provides no clarification to a vague law. As the court in Levas pointed out, the scienter requirement in statutes patterned after the Model Act goes further:
Here the scienter requirement is not simply a circular reiteration of the offense an intent ... [to manufacture, distribute or possess] something that may be classifiable as drug paraphernalia. Rather the scienter requirement determines what is classifiable as drug paraphernalia: the violator must design the item for drug use, intend it for drug use, or actually employ it for drug use. Since very few of the items a paraphernalia ordinance seeks to reach are single-purpose items, scienter is the only practical way of defining when a multi-purpose object becomes paraphernalia. So long as a violation of the ordinance cannot be made out on the basis of someone other than the violator's knowledge, or on the basis of knowledge the violator ought to have had but did not,[15] this sort of intent will suffice to distinguish "the paper clip which holds the pages of this memorandum of opinion from an identical clip which is used to hold a marijuana cigarette." Record Revolution No. 6, Inc. v. City of Parma, supra, 492 F.Supp. 1157, 1166.
Levas, 684 F.2d at 453. Moreover, as the Plaintiffs acknowledge, every circuit case after Flipside has accepted the specific intent element in Model Act legislation as sufficient to cure notice vagueness.
Turning to the second prong of the vagueness test, the question of enforcement standards, Plaintiffs charge that the definition of drug paraphernalia is so vague that it leaves the determination of whether or not an object is drug paraphernalia to the subjective, ad hoc judgment of the police. Several courts have construed Flipside as teaching that a claimant may not raise the *1578 danger of arbitrary and discriminatory enforcement in a pre-enforcement challenge, but must wait until the law has been enforced against him. Stoianoff v. Montana, 695 F.2d 1214, 1222 (9th Cir.1983); Florida Businessmen For Free Enterprise v. City of Hollywood, 673 F.2d 1213, 1220 (11th Cir. 1982); High Ol' Times v. Busbee, 673 F.2d 1225, 1231 (11th Cir.1982). The court in Record Head Corp. v. Sachen, however, distinguished the possibility of isolated cases of unjust enforcement, which are more appropriately considered in "as-applied" postenforcement challenges, from the potential for enforcement solely at the discretion of the arresting or prosecuting authorities because the statute provides no guidance as to what the prohibited offense is. Record Head Corp. v. Sachen, 682 F.2d 672, 678 (7th Cir.1982). Record Head concluded that "nothing in ... [Flipside] shows that the Justices intended any departure from Grayned's treatment of fair notice and arbitrary enforcement [in the latter sense] as co-equal dangers." Record Head, 682 F.2d at 677-78. We must agree. Nevertheless, emphasis upon the notice prong of the vagueness test is "almost inescapable in reviewing a pre-enforcement challenge to a law." Flipside, 455 U.S. at 503, 102 S.Ct. at 1195. Because no evidence can be introduced to indicate whether a law has been enforced in a discriminatory manner, Id., we think that the risk of arbitrary enforcement must be more than speculation in order to render a statute void for vagueness; it must be a clear and concrete danger.
Act 186 contains a nonexhaustive list of factors to guide law enforcement authorities and the courts in determining whether an object is drug paraphernalia, that is, whether it is possessed, delivered or manufactured with the requisite intent. Thus, discretion in enforcement is not unconstrained. Plaintiffs attack these factors, contending they are themselves vague, indefinite and irrelevant to proof of intent. Although all of the factors are not equally relevant and specific, taken as a whole, see New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 6 (1st Cir.1982) (piecemeal analysis unnecessary), they channel enforcement activities by providing objective measures for the evaluation of a particular factual situation. Levas and Levas v. Village of Antioch, 684 F.2d 446, 454 (7th Cir.1982). See also Casbah, Inc. v. Thone, 651 F.2d 551, 560 (8th Cir.1981) ("valuable guides"). As such, they are "likely to be susceptible to appropriate reevaluation: The prosecution can assess the arresting officer's case, the trial court can put the prosecutor to his proof, and the reviewing court can examine the trial court's findings." Levas, 684 F.2d at 454. Furthermore, as long as these objective measures exist, the fact that different minds may reach different results in applying the standards to a particular case does not render the statute void for vagueness. The General Stores, Inc. v. Bingaman, 695 F.2d 502, 504 (10th Cir.1982). In addition, the possibility that a police officer might seek to rely upon a factor inappropriate for the particular case is a speculative danger more properly reserved for a post-enforcement proceeding. See Flipside, 455 U.S. at 503, n. 21, 102 S.Ct. at 1196, n. 21.
B. Plaintiffs' Other Constitutional Objections
In meeting Defendants' motion for summary judgment, Plaintiffs have offered no arguments in support of the other grounds asserted in their complaint, which Defendants contend are legally insufficient. After examining these claims we agree that they are without merit.
We have already considered Plaintiffs' Fourth Amendment concerns in connection with the vagueness analysis. See note 9 supra. The Act does not purport to eliminate the requirements of probable cause and due process, and any challenge based on the Fourth Amendment is premature. Similarly, Plaintiffs' claim under the Eighth Amendment is not ripe for adjudication.
Plaintiffs also allege that the Act constitutes a bill of attainder because it "allows an individual to be convicted based on past unrelated crimes." Complaint, ¶ 42. Presumably they are referring to that portion of the Act which allows consideration *1579 of past convictions as one of the factors utilized in determining whether an object is drug paraphernalia. "A bill of attainder is a legislative Act which inflicts punishment without a judicial trial." United States v. Lovett, 328 U.S. 303, 315, 66 S.Ct. 1073, 1078, 90 L.Ed. 1252 (1946). To label Act 186 as a bill of attainder is clearly absurd. An individual cannot be subjected to the penalties prescribed by the Act unless the Commonwealth proves beyond a reasonable doubt that he designed an item for drug use, delivered an item intending it for drug use or actually employed an item for drug use.
Plaintiffs' claims based upon the commerce clause and the equal protection clause are wholly without merit. The effect that drug paraphernalia laws have on interstate commerce is incidental compared to the legitimate public benefits derived from the drug paraphernalia legislation; they do not impermissibly burden interstate commerce. Delaware Accessories Trade Assoc. v. Gebelein, 497 F.Supp. 289, 296 (D.Del.1980); World Imports, Inc. v. Woodbridge Township, 493 F.Supp. 428, 434 (D.N. J.1980). Under the equal protection clause, when legislation does not implicate any fundamental rights or create any suspect classifications, it must only satisfy a rational relationship test. City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976). While we have difficulty finding that the Act sets up any classification according to store,[16]see Stoianoff v. Montana, 695 F.2d 1214, 1223 (9th Cir.1983), as Plaintiffs allege, Complaint ¶ 38, assuming arguendo that it does, the Act easily meets the rational relationship test. The Commonwealth of course has a legitimate interest in combatting drug abuse. "One need not squint in the dark to perceive a link between the illegal use of drugs ... and items used to facilitate drug use." Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 386 (5th Cir.1982). In deciding upon the specific means to address the problem, the legislature can rely on actual or hypothetical facts, and can attack only certain aspects of the problem without having to justify its failure to fashion a comprehensive solution. Williamson v. Lee Optical Co., 348 U.S. 483, 487-89, 75 S.Ct. 461, 464-65, 99 L.Ed. 563 (1955). See Record Head Corp. v. Sachen, 682 F.2d 672, 679 (7th Cir.1982). Certainly, it is not irrational that a dealer in tobacco products would sell to his customers a multi-purpose item for use with tobacco, rather than for use with drugs.
Finally, we fail to see on what federal grounds Plaintiffs' are attacking the forfeiture provision of the Act. Complaint, ¶ 41. It does not offend the just compensation and due process requirements of the Fifth and Fourteenth Amendments. Casbah v. Thone, 651 F.2d 551, 562 (8th Cir. 1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1642, 71 L.Ed.2d 874 (1982). See also One 1965 Buick 4-Door Sedan v. Commonwealth, 46 Pa.Commw.Ct. 189, 408 A.2d 157 (1979) (forfeiture provision of Controlled Substances Act meets due process requirements).
III. CONCLUSION
Based on the foregoing discussion, we have concluded that no genuine issue of material fact exists for trial and that under the applicable principles of law Defendants are entitled to summary judgment. We will grant Defendants' motion by entry of an appropriate order.
APPENDIX
DRUG PARAPHERNALIA
ACT NO. 1980-186
S.B. NO. 634
An Act amending the act of April 14, 1972 (P.L. 233, No. 84), entitled
*1580 "An act relating to the manufacture, sale and possession of controlled substances, other drugs, devices and cosmetics; conferring powers on the courts and the secretary and Department of Health, and a newly created Pennsylvania Drug, Device and Cosmetic Board; establishing schedules of controlled substances; providing penalties; requiring registration of persons engaged in the drug trade and for the revocation or suspension of certain licenses and registrations; and repealing an act," prohibiting the possession, manufacture, delivery and advertisement of drug paraphernalia and providing for the seizure of drug paraphernalia.
The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:
Section 1.
Subsection (B) of section 2, act of April 14, 1972 (P.L. 233, No. 64), known as "The Controlled Substance, Drug, Device and Cosmetic Act," is amended by adding a definition to read:
Section 2. Definitions[3] * * *
(B) As used in this act:
* * * * * *
"Drug paraphernalia" means all equipment, products and materials of any kind which are used, intended for use or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling or otherwise introducing into the human body a controlled substance in violation of this act. It includes, but is not limited to:
(1) Kits used, intended for use or designed for use in planting, propagating, cultivating, growing or harvesting of any species of plant which is a controlled substance or from which a controlled substance can be derived.
(2) Kits used, intended for use or designed for use in manufacturing, compounding, converting, producing, processing or preparing controlled substances.
(3) Isomerization devices used, intended for use or designed for use in increasing the potency of any species of plant which is a controlled substance.
(4) Testing equipment used, intended for use or designed for use in identifying or in analyzing the strength, effectiveness or purity of controlled substances.
(5) Scales and balances used, intended for use or designed for use in weighing or measuring controlled substances.
(6) Diluents and adulterants, such as quinine hydrochloride, mannitol, mannite, dextrose and lactose, used, intended for use or designed for use in cutting controlled substances.
(7) Separation gins and sifters used, intended for use or designed for use in removing twigs and seeds from or in otherwise cleaning or refining marihuana.
(8) Blenders, bowls, containers, spoons and mixing devices used, intended for use or designed for use in compounding controlled substances.
(9) Capsules, balloons, envelopes and other containers used, intended for use or designed for use in packaging small quantities of controlled substances.
(10) Containers and other objects used, intended for use or designed for use in storing or concealing controlled substances.
(11) Hypodermic syringes, needles and other objects used, intended for use, or designed for use in parenterally injected controlled substances into the human body.
(12) Objects used, intended for use or designed for use in ingesting, inhaling or otherwise introducing marihuana, cocaine, hashish or hashish oil into the human body, such as:
(I) Metal, wooden, acrylic, glass, stone, plastic or ceramic pipes with or without screens, permanent screens, hashish heads or punctured metal bowls.
(II) Water pipes.
(III) Carburetion tubes and devices.
(IV) Smoking and carburetion masks.
(V) Roach clips; meaning objects used to hold burning material such as a marihuana *1581 cigarette, that has become too small or too short to be held in the hand.
(VI) Miniature cocaine spoons and cocaine vials.
(VII) Chamber pipes.
(VIII) Carburetor pipes.
(IX) Electric pipes.
(X) Air-driven pipes.
(XI) Chillums.
(XII) Bongs.
(XIII) Ice pipes or chillers.
In determining whether an object is drug paraphernalia, a court or other authority should consider, in addition to all other logically relevant factors, statements by an owner or by anyone in control of the object concerning its use, prior convictions, if any, of an owner, or of anyone in control of the object, under any State or Federal law relating to any controlled substance, the proximity of the object, in time and space, to a direct violation of this act, the proximity of the object to controlled substances, the existence of any residue of controlled substances on the object, direct or circumstantial evidence of the intent of an owner, or of anyone in control of the object, to deliver it to persons who he knows, or should reasonably know, intend to use the object to facilitate a violation of this act, the innocence of an owner or of anyone in control of the object, as to a direct violation of this act should not prevent a finding that the object is intended for use or designed for use as drug paraphernalia, instructions, oral or written, provided with the object concerning its use, descriptive materials accompanying the object which explain or depict its use, national and local advertising concerning its use, the manner in which the object is displayed for sale, whether the owner, or anyone in control of the object, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products, direct or circumstantial evidence of the ratio of sales of the objects to the total sales of the business enterprise, the existence and scope of legitimate uses for the object in the community, and expert testimony concerning its use.
* * * * * *
Section 2.
Subsection (a) of section 13 of the act is amended by adding clauses and the section is amended by adding a subsection to read:
Section 13. Prohibited Acts; Penalties[4]
(a) The following acts and the causing thereof within the Commonwealth are hereby prohibited:
* * * * * *
(32) The use of, or possession with intent to use, drug paraphernalia for the purpose of planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packing, repacking, storing, containing, concealing, injecting, ingesting, inhaling or otherwise introducing into the human body a controlled substance in violation of this act.
(33) The delivery of, possession with intent to deliver, or manufacture with intent to deliver, drug paraphernalia, knowing, or under circumstances where one reasonably should know, that it would be used to plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, conceal, inject, ingest, inhale or otherwise introduce into the human body a controlled substance in violation of this act.
(34) The placing in any newspaper, magazine, handbill of other publication any advertisement, knowing, or under circumstances where one reasonably should know, that the purpose of the advertisement, in whole or in part is to promote the sale of objects designed or intended for use as drug paraphernalia.
* * * * * *
(i) Any person who violates clauses (32), (33) and (34) of subsection (a) is guilty of a misdemeanor and upon conviction thereof shall be sentenced to pay a fine not exceeding two thousand five hundred dollars ($2,500) or to imprisonment not exceeding *1582 one (1) year, or to both. Any person who violates clause (33) by delivering drug paraphernalia to a person under eighteen (18) years of age who is three (3) or more years his junior shall be guilty of a misdemeanor of the second degree and upon conviction thereof shall be sentenced to pay a fine not exceeding five thousand dollars ($5,000) or to imprisonment not exceeding two (2) years, or to both.
Section 3.
Clause (1) of subsection (a) of section 28 of the act is amended to read:
Section 28. Forfeiture[5]
(a) The following shall be subject to forfeiture to the Commonwealth and no property right shall exist in them:
(1) All drug paraphernalia, controlled substances or other drugs which have been manufactured, distributed, dispensed, or acquired in violation of this act.
* * * * * *
Section 4.
The act is amended by adding a section to read:
Section 41.1. Effect on Local Ordinances[6]
Nothing in this act relating to drug paraphernalia shall be deemed to supersede or invalidate any consistent local ordinances, including zoning and nuisance ordinances, relating to the possession, sale or use of drug paraphernalia.
Section 5.
This act shall take effect in 60 days.
Approved the 4th day of December A.D. 1980.
NOTES
[1] There are eleven plaintiffs in this action. They may be classified into three groups. The organizational plaintiff, Pennsylvania Accessories Trade Association (hereinafter referred to as "PATA"), is a trade association of enterprises that sell or manufacture items that are or may be drug paraphernalia. The commercial plaintiffs consist of five enterprises that are PATA members. They are Lazy J, Ltd., Quickdraw Accessories, Inc., Record Outlet, Merchandising Services of America, Inc., and U.B.C. Grain Co. The five individual plaintiffs, David Talmas, James Bauer, Lenwood Stephens, Martin Millmond and Wayne Deakin, are members of the PATA Board of Directors.
[2] Richard Thornburgh is Governor of the Commonwealth of Pennsylvania; he has held that office from the time that Act 186 was introduced until the present.
[3] LeRoy Zimmerman was elected the State's Attorney General in November of 1980. He was sworn into office in January of 1981.
[4] See Stoianoff v. Montana, 695 F.2d 1214 (9th Cir.1983); Weiler v. Carpenter, 695 F.2d 1348 (10th Cir.1982); Kansas Retail Trade Co-Op v. Stephen, 695 F.2d 1343 (10th Cir.1982); The General Stores, Inc. v. Bingaman, 695 F.2d 502 (10th Cir.1982); New England Accessories Trade Assoc. v. Tierney, 691 F.2d 35 (1st Cir. 1982); Levas & Levas, Inc. v. Village of Antioch, 684 F.2d 446 (7th Cir.1982); Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378 (5th Cir.1982); New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1 (1st Cir.1982); Florida Businessmen For Free Enterprise v. City of Hollywood, 673 F.2d 1213 (11th Cir.1982); National Organization For The Reform Of Marijuana Laws v. Kloch, 691 F.2d 495 (4th Cir.1982) (per curiam).
Casbah, Inc. v. Thone, 651 F.2d 551 (8th Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1643, 71 L.Ed.2d 874 (1982), and Brache v. County of West Chester, 658 F.2d 47 (2d Cir. 1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1643, 71 L.Ed.2d 874 (1982), were decided before the Supreme Court issued its opinion in Flipside. The Tenth Circuit also upheld a drug paraphernalia statute based on the Model Act before Flipside, Hejira Corp. v. MacFarlane, 660 F.2d 1356 (10th Cir.1981), in addition to the cases it decided after Flipside: Weiler, Kansas Retail Trade Co-Op., and General Stores, supra.
[5] See note 4 supra.
[6] Plaintiffs have maintained that the instant case is distinguishable because they are asserting their own first amendment rights, and not merely those of others not before the court. It is clear from this passage in Flipside that the Supreme Court dealt with the plaintiff's own rights in analyzing the first amendment claim in that case.
[7] In essence, Plaintiffs argue that the ambiguity, or vagueness, of the statute causes it to reach constitutionally protected conduct. This contention is an appropriate overbreadth argument. See our discussion at 1572 supra. See also Record Head Corporation v. Sachan, 682 F.2d 672, 674 (7th Cir.1982) (when constitutionally protected rights are threatened vagueness and overbreadth analyses are cognate).
[8] Some courts have expressed concern that the language "in whole or in part" may be used to suppress speech urging reform of drug laws or espousing the drug culture. New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 4 (1st Cir.1982); Record Revolution, 638 F.2d at 937. While a federal court may not remedy a defective state statute by supplying a limiting construction, Id. at 926, the court may employ traditional tools of statutory interpretation to "extrapolate its allowable meaning." Grayned v. City of Rockford, 408 U.S. 104, 110, 92 S.Ct. 2294, 2300, 33 L.Ed.2d 222 (1972), quoted in Casbah, 651 F.2d at 558. See also New England Accessories Trade Assoc. v. Tierney, 691 F.2d 35, 36 & nn. 1 & 2 (1st Cir.1982).
In this case, not only is the Act literally couched in terms of speech proposing a commercial transaction, but the comments to the Model Act also indicate that the provision was not meant to reach protected non-commercial speech:
Printed matter criticising the drug laws, glorifying the drug culture, glamorizing the use of drugs, or providing information or instructions on illicit drugs is not affected. The target of this Section is commercial advertising.
"Comment [Article II], Model Drug Paraphernalia Act," Hearings Before the House Select Comm. on Narcotics Abuse and Control, 96th Cong., 1st Sess. (Nov. 1, 1979), at 94.
Certainly, when the Pennsylvania legislature adopted the Model Act verbatim, our reading of the statute to exclude restriction of constitutionally guaranteed expression is the appropriate and "allowable" interpretation. See also Casbah, 651 F.2d at 558 & 564 (constitutional interpretation favored). Accord New England Accessories Trade Assoc. v. Tierney, 691 F.2d 35, 36 n. 2 (1st Cir.1982).
[9] Plaintiffs contend that the statute violates their Fourth Amendment rights by permitting unreasonable searches and seizures. Plaintiffs are apparently urging that Act 186 thereby implicates constitutionally protected conduct, triggering a stricter vagueness analysis. See Flipside, 455 U.S. at 495, 102 S.Ct. at 1192 ("assuming the enactment implicates no constitutionally protected conduct"). We do not think that Plaintiffs have properly interpreted the Supreme Court's comments in Flipside. The challenged statute must not, by virtue of its vagueness, infringe upon the exercise of constitutional rights, such as freedom of speech, see Flipside, 455 U.S. at 495 n. 7, 102 S.Ct. at 1191 n. 7 (regarding vagueness challenges to statutes which do not involve First Amendment freedoms); See also Smith v. Goguen, 415 U.S. 566, 573, 94 S.Ct. 1242, 1247, 39 L.Ed.2d 605 (1974) (greater specificity required when statute reaches First Amendment expressions), but in the pre-enforcement context the question of whether the statute allows unreasonable searches and arrests in violation of the Fourth Amendment and the due process clause is an integral part of the traditional vagueness analysis. See Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298, 33 L.Ed.2d 222 ("if arbitrary and discriminatory enforcement is to be prevented"). We will not, therefore, consider Plaintiffs' Fourth Amendment argument as an issue separate from the vagueness challenge.
[10] It is true, as Plaintiffs assert, that Flipside was decided adversely to the business in that case because at least some of the items sold by the store were clearly covered by the ordinance. Nevertheless, the fact that the Supreme Court's advice against upholding the vagueness challenge unless "the enactment is impermissibly vague in all of its applications" appears in dictum, Flipside, 455 U.S. at 495, 102 S.Ct. at 1192, does not vitiate its precedential value here. The language in Flipside was consistent with prior holdings of the Court. A complainant must prove that the enactment is vague "not in the sense that it requires a person to conform his conduct to an imprecise but comprehensive normative standard, but rather in the sense that no standard of conduct is specified at all." Coates v. City of Cincinnati, 402 U.S. 611, 614, 91 S.Ct. 1686, 1688, 29 L.Ed.2d 214 (1971), quoted in Flipside, 455 U.S. at 495, at n. 7, 102 S.Ct. at 1191 at n. 7; See also United States v. Powell, 423 U.S. 87, 92, 96 S.Ct. 316, 319, 46 L.Ed.2d 228 (1975) (vague law "proscribed no comprehensible course of conduct at all").
[11] In addition, Section 2 includes an advertising ban, as previously discussed.
[12] As the Supreme Court observed in Flipside, the plain meaning of "designed for use" refers to the objective features of the items as a manifestation of the intent of the manufacturer. 455 U.S. 489, 501, 102 S.Ct. 1186, 1194, 71 L.Ed.2d 362. This language, therefore, addresses the manufacture of items whose sole or dominant purpose is for use with illicit drugs, and not multi-purpose items adapted for drug use at some later time by someone other than the manufacturer. "A business person of ordinary intelligence would understand that this term ["designed for use"] refers to the design of the manufacturer, not the intent of the retailer or customer." Id. See also Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 385 & n. 15 (5th Cir.1982) (interpretation supported by comments to Model Act).
Plaintiffs also argue that the "designed for use" language is vague because it gives no notice of what physical characteristics render an object designed for use with drugs. It is clear from the foregoing discussion that items suitable principally for lawful purposes, such as ordinary pipes, vials and spoons, are not "designed for use" with illegal drugs. Flipside, 455 U.S. at 501, 102 S.Ct. at 1194. We do not think it necessary, or indeed possible, for the statute to specify the myriad characteristics that might be employed in fashioning an object for illicit drug use, particularly when selection of those features depends upon the intentional action of the manufacturer in the creative process. "[M]ost statutes must deal with untold and unforeseen variations in factual situations, and the practical necessities of discharging the business of government inevitably limit the specificity with which legislators can spell out prohibitions." Boyce Motor Lines v. United States, 342 U.S. 337, 340, 72 S.Ct. 329, 330, 96 L.Ed. 367 (1952).
[13] An extreme, but highly illustrative, example of transferred intent would be the conviction of an innocent seller of a garden hose because the buyer intended to use the hose to water a garden of marijuana plants. Stoianoff v. Montana, 695 F.2d 1214, 1220 (9th Cir.1983).
[14] See also note 12 supra.
[15] In Levas, the language "should reasonably have known" was excised from the ordinance as permitting conviction based on an impermissibly vague negligence standard. See also Tobacco Accessories & Novelty Craftsmen Assoc. v. Treen, 681 F.2d 378, 385 (5th Cir.1982); New England Accessories Trade Assoc. v. City of Nashua, 679 F.2d 1, 7 (1st Cir.1982); Record Revolution No. 6, Inc. v. City of Parma, 638 F.2d 916, 935-36 (6th Cir.1980). Other courts have recognized, however, that because the definition of drug paraphernalia in the Model Act is incorporated into the proscriptive sections, the state must first prove that the defendant intended an item for use with drugs before it reaches the question of whether he knew or reasonably should have known that the buyer of the item would thereafter use it for illegal purposes. See Stoianoff v. Montana, 695 F.2d 1214, 1221 (9th Cir.1983); New England Accessories Trade Assoc. v. Tierney, 691 F.2d 35, 37 (1st Cir.1982); Casbah, Inc. v. Thone, 651 F.2d 551, 561 (8th Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1642, 71 L.Ed.2d 874 (1982). Thus, Act 186 does not allow prosecution "on the basis of knowledge the violator ought to have had but did not." Levas, 684 F.2d at 453.
[16] The Act merely allows consideration of circumstantial evidence in determining whether an object is drug paraphernalia. Among the circumstantial factors to be considered is "whether the owner, or anyone in control of the object is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products...." 35 P.S. § 780-102(b). The prohibited acts, defined in 35 P.S. § 780-113(a)(32)-(34), are not described in terms of the type of store.
[3] 35 P.S. § 780-102.
[4] 35 P.S. § 780-113, cls. 32 to 34 of subsec. (a), subsec. (1).
[5] 35 P.S. § 780-128, cl. 1 of subsec. (a).
[6] 35 P.S. § 780-141.
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COURT OF APPEALS FOR THE
FIRST DISTRICT OF TEXAS AT HOUSTON
ORDER
Appellate case name: Hector Cortez v. Veronica Garza Cortez
Appellate case number: 01-19-00296-CV
Trial court case number: 12-DCV-199184
Trial court: 505th District Court of Fort Bend County
On September 3, 2019, appellant, Hector Cortez, filed his appellant’s brief. Appellee,
Veronica Garza Cortez, had a briefing deadline of October 3, 2019, in which to file her brief, but
no brief has been filed. On October 9, 2019, we notified appellee that we would set the case for
submission without an appellee’s brief unless appellee: (1) filed a motion to extend time to file her
brief; or (2) filed her brief accompanied by a motion to extend time. Appellee has neither filed a
motion to extend time nor filed her appellee’s brief. Accordingly, this appeal is hereby set at issue.
The time for filing the APPELLEE’s brief has expired. See TEX. R. APP. P. 38.6(b). Further,
the deadline has expired for appellee to respond to the notice issued by the Clerk of this Court on
October 9, 2019, requiring appellee to file either a brief or a motion to extend time to file a brief.
Accordingly, this case is now at issue and ready to be set for submission.
It is so ORDERED.
Judge’s signature: /s/ Evelyn V. Keyes
Acting individually Acting for the Court
Date: __December 19, 2019____________________
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